Ottawa to scrap controversial jobs fund

The federal government will announce it's axing the controversial Canada Jobs Fund this morning after months of scandal and criticism from opposition parties.

The $110-million fund will be shifted to regional job creation agencies, such as the Atlantic Canada Opportunities Agency, and off the back of embattled Human Resources Development Minister Jane Stewart.

One source told CBC Radio the move will be a huge relief because the jobs fund program has caused so much political grief for Stewart and the Liberal government.

Since last November, the Opposition has accused Stewart's department of mismanaging grant money, and of using the fund to buy votes in Liberal ridings.

Opposition parties have demanded Stewart resign, claiming she showered her own riding with grants when neighbouring areas had higher unemployment rates.

About 20 police investigations are under way into job grants across the country, including several in the prime minister's Quebec riding.

An internal audit released in January also found serious administrative problems in more than $1 billion worth of spending, not just in the jobs fund.

Diance Ablonczy, the Canadian Alliance's human resources critic, says getting rid of the jobs grants program doesn't fix the spending problem in the Human Resources Department.

"So getting rid of one particularly smelly program with 20 police investigations doesn't change the basic approach to the way this government spends money," she said in an interview with CBC Radio.

The redistribution of the jobs fund money to four regional agencies diffuses responsibility and makes it harder for critics to focus on one target.

"They're just going to do it in a different way through different ministers so it's going to be more difficult to find out how it's misused," says Ablonczy.

Stewart is expected to highlight:

  • how the switch will free up her department to focus on its core program of social policy and not job creation
  • how regional agencies are better suited to deal with areas with high unemployment
  • how national unemployment has declined, decreasing the need for a job grants program
But Stewart and Prime Minister Jean Chrtien will have to explain why they're finally acting now after months of defending the jobs fund program.