Anti-poverty advocates are raising red flags over the Ontario government's decision to contract out the management of employment services in the Hamilton area to a U.S.-based organization.

"I think it's a recipe for disaster," said Tom Cooper, director of the Hamilton Roundable for Poverty Reduction, about the pilot project.

Meanwhile, the city is smarting from the province's selection of Fedcap Inc. over the municipality as the area's new service system manager.

In the fall, the city applied to become the service system manager for Hamilton, Niagara, Haldimand-Norfolk and Brant under the province's new model for Ontario.

"We put a lot of time and effort into our submission, so we were certainly disappointed that we weren't selected in this region," said Paul Johnson, general manager of healthy and safe communities.

On Friday, the government announced a consortium led by Fedcap, a non-profit employment services provider, was "best positioned" to manage the "prototype" region. It will work with others, including Community Living Toronto, Operation Springboard and the Canadian Council on Rehabilitation and Work.

The province selected WCG, a Canadian subsidiary of APM Group, an Australia-based private sector firm, for Peel, and Fleming College for Muskoka-Kawarthas.

The pilot projects are part of the government's plan to "modernize" employment services through a model that integrates social assistance services into Employment Ontario.

Currently, employment services are offered through Ontario Works, the Ontario Disability Support Program and Employment Ontario. Municipalities and local non-profits have helped deliver these services.

But a 2016 report by the auditor general found the province's employment and training programs were "not effective in helping Ontarians find full-time employment."

As part of its reform, the province says the new service system managers will be "paid based on their results."

"At the ground level, things will work better, move faster. But from a system perspective, the shift is a big one. Government is getting out of the way, and allowing local communities to tailor the program to their specific needs," Monte McNaughton, Minister of Labour, Training and Skills Development, said in a news release.

In its news release, Fedcap said it's ready to deliver "more locally responsive, employment services" in the Hamilton area by April 1.

"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," president Grant E. Collins II states in the release.

Johnson called it "curious at best" that no municipalities were selected as system service managers given their experience with housing, Ontario Works and children's services.

The Hamilton Roundtable for Poverty Reduction and Niagara Poverty Reduction Network expressed concerns in a joint statement that Fedcap has "no ties" to the region and "no apparent understanding of local community needs."

They pointed to a report by the Maytree Foundation, an anti-poverty organization, that found "service delivery transformation" with private players in the United Kingdom and Australia has resulted in "largely poor outcomes."

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Johnson said the city's failed bid doesn't come with job losses, but how changes for Ontario Works affect the city remains to be seen. "We don't know the full impact of that."

tmoro@thespec.com

905-526-3264 | @TeviahMoro