An internal memo reveals Employment Minister Jason Kenney's department cut spending on labour market information by over 20 per cent at a time when the government was coming under fire over the quality of its jobs data.

Spending on "Learning and Labour Market Information" – which includes gathering, analyzing and sharing labour data – dropped to $66.9-million in 2013-14, down from $80.8-million the year before and $84.9-million in 2011-12, according to the memo to the minister's office.

Debate over the quality of Canada's jobs data has heated up in recent months as the Conservative government launches a new Canada Job Grant training program, reforms employment insurance and will soon announce major changes to the temporary foreign worker program. Critics – including bank economists, provincial ministers and the Parliamentary Budget Officer – have warned that these changes are taking place in the absence of clear data about the state of Canada's labour market.

Story continues below advertisement

"Things are getting done in the opposite direction," said economist Don Drummond, who will release a paper Wednesday for the Institute for Research on Public Policy calling on Ottawa to tackle Canada's long-standing labour market data problems. "Normally you create an information infrastructure and that informs the policy. But here we've had dramatic changes in policy with the temporary foreign worker program and the Canada Job Grant, while we're undermining the lousy information infrastructure we already had."

Mr. Drummond chaired a 2009 panel on labour market information and says many of the panel's recommendations have not yet been fully implemented.

A spokesperson for Mr. Kenney said the minister has repeatedly noted the need for better labour market information in Canada and is looking for ways to achieve this. Meanwhile, a spokesperson for Employment and Social Development Canada explained the spending reduction by stating that the department has modernized its data portfolio in a "tighter fiscal environment," in part by stopping low-priority surveys to fund higher-priority research.

The recent debate over labour data has focused in part on the government's decision to reduce funding for Statistics Canada, which gathers labour data through phone surveys of employers, while relying more on private-sector data based on scans of Internet job boards.

The internal memo, which was released under Access to Information legislation, shows the department began a contract in August, 2011 with Wanted Technologies to provide "Private Sector Job Postings Data." The company has received about $88,000 a year for the past two years.

The Conservative government's use of data from Wanted Analytics – a division of Wanted Technologies – has been a source of controversy over the past year. The company's database of job postings is populated by software that scans online job boards. The government used this data to conclude in March that Canada's job vacancy rate was over 4 per cent – much higher than Statistics Canada's numbers, which have been hovering below 1.5 per cent in recent months.

However the Parliamentary Budget Officer has noted that much of the difference can be attributed to double counting in the Wanted data, which relies on websites such as Kijiji, where the same job can appear in various sections of the website.

Story continues below advertisement

The memo to the minister's office shows funding for Statistics Canada surveys for regional labour market data has dropped from $17.1-million in 2011-12 to $14.9-million in 2013-14.

Spending on Learning and Labour Market Information by ESDC

SOURCE: Internal memo from the Chief Financial Officer Branch of Employment and Social Development Canada