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Focus on youth jobs may undermine $4-billion digital-adoption program, business groups say

Focus on youth jobs may undermine $4-billion digital-adoption program, business groups say
Written by Publishing Team

Prime Minister Justin Trudeau, Minister of Economic Development Mary Ng and President and CEO of EDC Isabelle Hudon, left, listen to Sheena Russell, founder of Made with Local, speak via videoconference at a news conference on the Canadian Digital Adoption Program at Bayview Yards in Ottawa, March 3.Justin Tang/The Canadian Press

Business groups say they are concerned that a new $4-billion federal program intended to upgrade the technology used by small enterprises may be corrupted by its dual focus on boosting youth employment.

The federal government announced the Canada Digital Adoption Program earlier this month. It includes micro-grants to fund website creation, larger grants to fund the development of business plans, and loans of up to $100,000 for businesses to use for technology upgrades, such as robotics or inventory-management software.

The program also aims to create up to 28,000 jobs for young people through two streams. One stream, largely modelled after an Ontario non-profit called Digital Main Street, aims to employ 11,200 young Canadians as a sort of tech-support team for small business owners. The workers will be hired at a dozen non-profit organizations across the country, one of which will be Digital Main Street itself.

The other stream aims to place 16,800 undergraduate students or recent graduates in temporary or permanent jobs with businesses that are upgrading their technology. The young people will be hired directly by the firms, and the government will provide $7,300 wage subsides to employers for each position.

Groups that represent small businesses say they welcome the grants and loans from the government, but are unsure whether the young people hired through the program will come to the workplace with the right skills.

Dan Kelly, president of the Canadian Federation of Independent Business, said while young Canadians may be more comfortable with social media than older business owners, the hard part of adopting digital technologies is how they change business operations, which is an area students may not know about.

“It’s not that hard to set up a website or an e-commerce site, and there are services that do that. But you have to re-engineer your whole system behind that to be able to fulfill those orders,” Mr. Kelly said.

“Just knowing technology as a consumer doesn’t mean you’re going to be able to bridge the gap to the business that is having to set up to appeal to that consumer. It’s the business processes that are the tricky part here.”

Leah Nord, senior director of work force strategies and inclusive growth at the Canadian Chamber of Commerce, said the government may not be taking into account that employing young workers can present costs in the form of staff time to hire and mentor the new recruits.

“If you’re covering the cost of the student, that’s fantastic,” Ms. Nord said. “But that focuses on the student. There is a capacity issue, right, about onboarding, sorting through resumes, making sure people fit in, as well. There is both a time and financial cost to that for businesses that isn’t always covered.”

Youth that come through the tech-support stream will be given 35 hours of training, according to Digital Main Street. The training modules will include Lessons on interpersonal skills (such as how to deliver constructive feedback) and e-commerce (such as how to set up an online store through the Square or Shopify platforms).

Mark Patterson, executive director of the non-profit Magnet, which is handling the work placesments, said he is hopeful that young hires will prove their utility once they are on the job, and that temporary jobs will become permanent by the end of the program.

Mr. Patterson said Magnet is being paid $139-million for its part in helping source candidates for the jobs and find them placesments. Of that amount, $122-million is budgeted for the wage subsides. A company will receive its $7,300 subsidy once it has paid out at least that amount in salary to a worker.

Mary Ng, the federal Minister of International Trade, Export Promotion and Small Business, said she hopes adopt firms become more profitable as they new technology, which would provide the revenue needed to keep the new employees on.

“Let’s create a win-win,” she said.

The minister’s office was not able to say how much money had been budgeted for the tech-support positions.

Small business owners who have spoken to The Globe and Mail over the past year about the Digital Main Street program have said their experiences with it were generally positive, although the quality of tech support they received varied.

Katelyn Pierre, owner of home-based bakery Baked by Kay in Brampton, Ont., said she had some miscommunications with the first support person she was matched with. But the program then assigned her a different adviser, who she said was “amazing.”

“She covered a lot of really good information,” Ms. Pierre said.

Labor-market experts say there is a need to boost job opportunities for young Canadians because of continued weakness in sectors that traditionally hire younger workers, such as food services.

Tony Bonen, acting executive director of the Labor Market Information Council, said that, in general, young Canadians could benefit from having job-ready digital skills.

“These Gen Z kids are often referred to as digital natives, but being a digital native doesn’t magically become a business-ready competency you have some practice in the real world,” Mr. Bonen said.

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