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

Prime Minister Justin Trudeau, Economic Development Minister Mary Ng and EDC President and CEO Isabelle Hudon, left, listen to Sheena Russell, founder of Made with Local, speak via videoconference during a press conference on Canada’s 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 to modernize the technology used by small businesses could be undermined by its dual purpose of boosting youth employment.

The federal government announced the Canadian Digital Adoption Program earlier this month. It includes micro-grants to fund the creation of websites, larger grants for finance 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 components. One strand, largely inspired by an Ontario nonprofit called Digital Main Street, aims to employ 11,200 young Canadians as a kind of tech support team for small business owners. Workers will be hired at a dozen nonprofits across the country, one of which will be Digital Main Street itself.

The other component aims to place 16,800 undergraduates or recent graduates in temporary or permanent jobs with companies that are upgrading their technology. Young people will be hired directly by companies and the government will provide $7,300 in wage subsidies to employers for each position.

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

Dan Kelly, president of the Canadian Federation of Independent Business, said that while younger Canadians may be more comfortable with social media than older business owners, the hardest part of adoption of digital technologies is how they change business operations, an area that students may not be familiar with. on.

“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 redesign your whole system behind it to be able to run those commands,” Kelly said.

“Just knowing the technology as a consumer doesn’t mean you’ll be able to bridge the gap with the company that needs to move in to attract that consumer. It’s the business processes that are the tricky part here.

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

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

Young people who complete the technical support stream will receive 35 hours of training, according to Digital Main Street. Training modules will include courses on interpersonal skills (eg how to provide constructive feedback) and e-commerce (eg how to create an online store through the Square or Shopify platforms).

Mark Patterson, executive director of the non-profit Magnet, which runs the internships, said he hoped the young recruits would prove their usefulness once in the job and that the temporary jobs would become permanent upon completion. from the program.

Mr Patterson said Magnet receives $139 million for its part in helping find candidates for the jobs and finding them internships. Of this amount, $122 million is budgeted for wage subsidies. A business will receive its $7,300 subsidy once it has paid at least that amount in wages to a worker.

Mary Ng, federal minister for international trade, export promotion and small business, said she hoped businesses would become more profitable by adopting new technologies, which would provide the revenue needed to retain new employees.

“Let’s create a win-win,” she said.

The minister’s office was unable to say how much money had been earmarked for technical support positions.

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

Katelyn Pierre, owner of Baked by Kay home bakery in Brampton, Ont., said she had communication issues with the first support person she was matched with. But the program then assigned her another counselor, who she called “incredible.”

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

Labor market experts say there is a need to increase job opportunities for young Canadians due to continued weakness in sectors that traditionally hire young workers, such as food service.

Tony Bonen, acting executive director of the Labor Market Information Council, said that in general, young Canadians could benefit from ready-to-use 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 skill unless you have some real-world practice,” said Mr Bonen.

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