The Harper government will create a billion-dollar fund to send workers from hard-hit industries back to school as a key plank of its economic recovery plan in Tuesday's federal budget.

The Conservatives say the program will apply Canada-wide, helping workers in struggling sectors like forestry, agriculture and manufacturing gain more marketable skills.

The budget is expected to leave Canada with its first deficit in more than a decade – as much as $64 billion over the next two years.

Ottawa introduced a similar retraining program, the billion-dollar Community Development Trust fund to help single-industry towns, just over a year ago, and parallel efforts at the provincial level have met with mixed results.

The community trust was aimed at training workers and getting communities to diversify their economies. A government official said the new federal fund would match the dollar size of the existing one, but would be a completely separate program.

Ontario created a $1.5-billion Skills to Jobs program last year and was promptly ridiculed by the Harper government for introducing such a costly program instead of using that money to cut business taxes.

However, the Conservatives say the new federal fund will benefit Canada in the long run, leaving the country more productive and its workers in a better position when the economic storm finally subsides.

The Tories aren't saying yet how the funds would be delivered, how workers would apply, and what federal or provincial departments would be involved.

There has been speculation Ottawa might expand Employment Insurance and use that fund for worker training.