Provincial and territorial ministers responsible for overseeing the Canada Job Grant have reached an agreement on a counter-proposal they are sending to federal Employment Minister Jason Kenney ahead of an expected meeting with him next week, CBC News has learned.

In an interview with CBC News, Brad Duguid, Ontario's minister of training, colleges and universities, said the provinces agreed to a set of principles during a conference call on Tuesday that would see Ottawa give the provinces more flexibility in the way the program would be funded and make it easier for small businesses to participate in the grant program.

"What we're proposing is something that I think respects the spirit of the Canada Job Grant and the need for business participation in these programs​," Duguid told CBC News Wednesday.

The provinces currently receive $500 million a year in funding from Ottawa under existing labour market agreements that are set to expire on March 31.

But under the proposed Canada Job Grant, the provinces would lose $300 million, or nearly 60 per cent, of Ottawa's contribution.

"It should be up to the provinces to determine whether the funding comes out of the labour market agreement which funds our programs for our more marginalized workers, whether they come out of the labour market development agreement, or whether a province or territory has another source of funding for the programs," Duguid said.

Duguid said he expects a "very positive response" from Kenney, "if the federal government is really serious about moving forward with a Canada Job Grant that's going to be effective and meets the needs in our labour markets across Canada."

Using Kenney's own words, Duguid said the counterproposal is "blindingly" reasonable and fair to the federal government.

"We think our position now is inherently, blindingly reasonable, fair to the federal government, but more importantly fair and effective to businesses across the country and out of work Canadians," Duguid said.

In a speech to the Toronto Board of Trade last Thursday, Kenney said he didn't understand why the Canada Job Grant wasn't more widely accepted.

"It's just so blindingly sensible," Kenney said.

'Weaknesses' in grant

Duguid said the counter-proposal also addresses what the provinces see as "a few other areas of weakness" in Kenney's revised offer.​

The original Canada Job Grant plan, as it was introduced in last year's federal budget, would have provided up to $15,000 per worker toward skills training to find a new or better job, with the provinces and employers matching the government's contribution of $5,000.

Under the revised offer Kenney sent the provinces on Christmas eve, the federal government would now fund up to $10,000, with employers kicking in the other $5,000.

The Ontario minister said he heard from small businesses who said it "wasn't very practical" to have them invest $5,000 to fund somebody's skills development.

"There needs to be more flexibility to ensure that small businesses can participate in this program," Duguid said.

Kenney told the business audience gathered in Toronto last Thursday that Canadian businesses spend about 35 per cent less on workplace training than their American counterparts.

"You increase the private sector investment in training, you get a guaranteed job at the end of it, you get better bang for the taxpayers' buck."

Duguid said another "weakness" in the offer they received from Kenney in December would have left the provinces "on the hook for any funding shortfalls that may result from lack of business participation in the program."

"We just don't think the provincial and territorial taxpayers should be taking on that kind of liability for a program that is still untested and untried. So that's part of our counter-proposal as well," Duguid said.

"I hope we'll be able to get to an agreement," Kenney said last Thursday in Toronto.

The provinces and territories received the support of Liberal Leader Justin Trudeau, who asked Prime Minister Stephen Harper about the Canada Job Grant during question period both Monday and Tuesday this week.

"Will the prime minister listen to the premiers and scrap this plan?" Trudeau asked on Tuesday.

Harper said the Canada Job Grant has been well received by Canadians who want to upgrade their skills and employers who are looking for skilled workers.

"For that reason we remain fully committed to making sure that we do everything we can to build on the very good job creation record of this country but to make that record even better," Harper said.