The Ontario NDP says a pilot project from the Ford government to contract out employment services in three parts of the province will erode social services and risks turning them into a "cash cow."

A media release from the Ministry of Labour dated Feb. 14 describes the move as a "locally-focused model" that will create a more "seamless and effective" employment service system.

Hamilton-Niagara, Peel and Muskoka-Kawarthas are the three regions where prototypes have been launched.

The idea is to bring together the employment services previously offered separately by Ontario Works, the Ontario Disability Support Program (ODSP) and Employment Ontario.

New service managers have been selected in each of the three regions and will be paid based on their results, according to the government.

"This change to the process will go largely unnoticed by job seekers and employers," said Minister Monte McNaughton in a media release. "At the ground level, things will work better, move faster."

'Amalgamation will cut and erode service levels'

But the NDP argues the move will mean fewer people finding the right job.

The party says the new model only pays providers when job matching happens and fees will depend on the difficulty of the case, which raises fears contractors could pass on challenging cases they feel aren't worth the fee.

There are also concerns about pressing people into poor-fitting job placements or forcing them back to work before they're ready.

The NDP pointed to other "privatization experiments" in Australia and the UK which were met with bad results because companies were motivated to collect a fee, not helping people find the right role.

Catherine Fife, MPP for Waterloo and critic for economic growth and job creation, said communities are currently served by District Social Services Administration Boards that understand their clients and the local job markets.

"Hiring a multinational firm owned by Australian and American companies to navigate local Ontario job markets is a recipe for failure," she said in a statement that pointed out services in the Peel region have been handed over to WCG, a "for-profit subsidiary" of on Australian company called APM.

A media release from the NDP says the party fears using a for-profit company could turn the province's social services into a "cash cow."

"The amalgamation will cut and erode service levels. And to add to the pain, local providers anticipate layoffs among the dedicated employment services workers we have today," Fife added.

Company says it will enhance local capacity

For Hamilton-Niagara that supplier will be a consortium led by Fedcap — a non-profit organization that provides vocational training.

In its own media release announcing its new role, the global group notes it's played a role in similar changes to employment programs in the United States and United Kingdom.

"We're delighted to be able to help support people back to work, or even into work for the first time in the Hamilton-Niagara area. However, this is just the start – we are extremely ambitious and will be enhancing local capacity and amplifying the good work and best practices already underway," said Fedcap Inc. president Grant Collins.

He added the aim is to "transform the lives of as many people as possible."

The organization will take over services in Hamilton-Niagara as of April 1. The government says it will provide regular communication to help people prepare for any changes, which would begin in October.