Catherine Fife MPP, Waterloo

Government of Ontario

Contracting out employment services to foreign multinationals will hurt job matching

Published on February 18, 2020

QUEEN’S PARK — The Doug Ford government is gutting OW and ODSP employment services with its new scheme to contract out the program to multinational companies — one of which is a for-profit corporation — and the Ontario NDP is worried that will mean fewer Ontarians successfully supported into the job or program that’s best for them.  

“Today, municipalities and District Social Services Administration Boards with deep roots in their communities handle employment services by getting to know their clients, knowing their communities, and understanding the local job market,” said Catherine Fife, Official Opposition critic for Economic Growth and Job Creation. “Hiring a multinational firm owned by Australian and American companies to navigate local Ontario job markets is a recipe for failure.”

The Ford government has announced the amalgamation and contracting out of employment services for the Muskoka-Kawarthas, the Peel region and the Hamilton-Niagara region. The Hamilton-Niagara contract has been awarded to American firm Fedcap. The Peel region’s services will be contracted to WCG, a for-profit subsidiary of Australian company APM. 

“The amalgamation will cut and erode service levels. And to add to the pain, local providers anticipate layoffs among the dedicated employment services workers we have today,” said Fife. 

Under the new model, providers only get paid when a job-match is made, with fees set according to the difficulty of the case. That’s leading to concerns that the contractors could decide that more challenging cases are not worth the fee, that inappropriate job placements are good enough, so job-seekers end up right back where they started, or that individuals not ready to work are placed anyway. In similar privatization experiments in Australia and the United Kingdom, results were bad because companies moved people into jobs to collect the fee — whether they were ready or not, and whether the job was right or not.

The NDP fears using a for-profit company could turn Ontario’s social services budget into a cash cow for the Australian firm. 

“Those receiving support through social services have already been under siege by the Ford government,” said Lisa Gretzky, Official Opposition critic for Community and Social Services. “After Ford slashed modest OW and ODSP planned increases and scrapped the basic income pilot project, they have every reason to worry that this latest change will sink them deeper into a struggle with poverty, rather than helping them build their best lives.”