Flaherty previews budget themes in letter to MPs

Finance Minister Jim Flaherty offered a preview ofthree key themesforThursday's federal budgetin a letter sent to MPs Monday and released publicly Tuesday.

The two-page message, billed as athank you forConservative MPs'contributions to the pre-budget consultation process, was circulated to the media and offers a taste of the government's messaging for the minister's 2013 budget speech.

Flahertywrites that this year's budget is focused on:

• Matching skills training programs with available jobs.
• Investing more in infrastructure.
• Supporting "value-added" jobs in manufacturing.

The letter saysthis year's budget will continue to be billed as the Harper government's "Economic Action Plan 2013." While touting the jobs created since the government took office, the finance minister also repeats his oft-heard warning that Canada'seconomic recovery is "fragile."

While major trading partners like the United States and the European Union continue to be burdened with debt and slow economic growthand arecession, Flaherty also notes that "emerging economies are becoming stronger and more competitive."

Flaherty writes that "too many jobs go unfilled" because Canadian workers lack the right skills. "We can do better" on job skills training, the finance minister suggests, noting that inadequate training means "higher unemployment and slower economic growth."

Skills training under review

The 2013 budget is expected tohave anational skills training strategyas its centrepiece.

Currently, the federal government transfers over $2 billion to provinces to fund regionally-distinct skills training programs. But business leaders continue to reportlabour shortages in key sectors.

With the agreements setting the terms for those transfers set to expire next year, the federal government would like to see better results for that money and wants to negotiate changes.

Other measures may focus on strengthening apprenticeship programs for skilled trades and improving the recognition of professional credentials across provincial and international borders areas wheregovernments havestruggled to make progress for years.

When asked during Tuesday's question period about encroaching on provincial jurisdiction withthe anticipatedskills training changes, Flaherty mocked New Democrats for releasing their alternative budget proposalswithout any specific numbers.

"There will be numbers on Thursday. I encourage the members to wait... just two more sleeps," he said to cheers from the Conservative backbench.

Provincesanticipate changes

Following reports that skills training funding could be overhauled in this week's budget, provincial premiers convened a conference call last Friday to discuss their shared concerns. All were present except for Quebec Premier Pauline Marois, who was represented by her finance minister.

"We've all heard some rumours of directions that the federal government could be taking,"New Brunswick Premier David Alward told CBC News on Monday.

"We hear about the skills gap that exists," Alward said. "I would have real concerns if the federal government was trying to take back the good work that is going on."

"We don't want to change the deal. It's a good one. It's good for the economy. The national assembly is unanimous on that, so why would we change something that is working?" Quebec's intergovernmental affairs minister, Alexandre Cloutier, told reporters in Quebec City.

"If the federal government wants to change the Constitution, it just has to change it," Cloutier said. "If not, labour is a Quebec jurisdiction."

Quebec negotiated its own labour agreement with the federal government in 1997, he pointed out. "We will make sure we respect it,"the Quebec ministersaid.

Cloutier saidhis Parti Qubcois government needed to see whatactually is in the federal budget before considering what legal actions it might take for intruding on its provincial jurisdiction.

"We'd love to see programs targeted to very specific groups of people that we think could play a much more active role in the economy than what we see today," Alberta Premier Alison Redford told CBC News Network's Power & Politics on Monday.

"From our perspective, we're pleased to see the federal government is taking a look at existing programs to see how to make them more effective," she said.

Infrastructure funds to be renewed?

The finance minister's letter also notes that earlier infrastructure investments have funded 43,000 projects across Canada. "We will do more," he pledges.

The government's 2007 Building Canadainfrastructure program is set to expire this spring, so the 2013 budget would need to allocate new money in order for similar projects to continue.

The letter also takes credit for a "rebound" in Canada's manufacturing sector following the global recession.

"There is more we can and will do to support this important sector of the Canadian economy," Flaherty writes.

Thursday's budget is expected to includetax breaks to promote "high-end manufacturing jobs."

Flaherty's department has launched its Economic Action Plan 2013 website, counting down to Thursday's budget speech with a YouTube video and aunique Twitter hashtag for the event. When the budget is tabled, Finance Canada promiseslive video and graphic features, customized for mobile devices, to make it easier for Canadians to learn what's in it.

Asked by reporters on his way into question period whether this federal budget would hold any surprises, Flaherty said with a smile, "there are always some things in the budget that people find interesting."

Flaherty is headingto the Roots Leather Factory in TorontoWednesday morningfor his customary pre-budget photo call a nod, Flaherty said, tothe government'sfocus on increasing manufacturing jobs and growth in Canada.