HUMA Committee Meeting

    Good morning, ladies and gentlemen. Welcome to meeting number 20 of the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities. Today is Thursday, May 1, 2014.

    I will quickly mention that we have set aside some time at the end of today's meeting to deal with some housekeeping issues.

    Joining us for the first hour of our study on the main estimates, we have the Honourable Jason Kenney, Minister of Employment and Social Development, along with the Honourable Candice Bergen, Minister of State for Social Development. Welcome. Thank you, ministers, for taking time to be with us today.

    From the departmental side, the ministers are joined by Mr. Ian Shugart, deputy minister of the Department of Employment and Social Development, and Alain Séguin, chief financial officer.

    From Service Canada we have Paul Thompson, assistant deputy minister from the processing and payment services branch. We also have Mr. Evan Siddall, president and CEO of Canada Mortgage and Housing Corporation.

    Welcome to all of you. Members, since the meeting will be split into two one-hour sessions, we will go with five-minute rounds of questioning when we get to that point.

     I'd now like to open it up to Minister Kenney to begin his remarks.

    Thanks very much, Chairman, and good morning colleagues. I'm pleased to be here with the team that has been introduced. Particularly let me welcome Mr. Siddall, who has recently been appointed president of Canada Mortgage and Housing Corporation. They are very important responsibilities and he's off to a great start.

    I'm pleased to be with you today to discuss the 2014-15 main estimates for Employment and Social Development Canada and to highlight some of our key areas of investment.

    In this fiscal year, we are planning expenditures of $44.5 billion in income security. This amount includes payments through old age security, the guaranteed income supplement, the registered disability savings plan and the national child benefit.

    Payments through old age security and the guaranteed income supplement are increasing by $1.6 billion, and of course, we can continue to expect to see that as our population ages and the number of retirees increases.

    ESDC is planning expenditures of $3 billion in the social development program area. This includes the homelessness partnering strategy, for which Minister Bergen is responsible, the social development partnerships program, and the new horizons for seniors program, for which Minister Wong is responsible.

    It also includes the recently created Federal Income Support for Parents of Murdered or Missing Children. This program is a new measure from our government to help families going through a very difficult period.

    The social development program area also includes the Enabling Accessibility Fund, which is part of our government initiatives to help Canadians with disabilities. I would like to recognize the efforts of the committee chair for Canadians with disabilities. We recently created a workplace stream of this program to increase the ability of Canadians with disabilities to participate in our labour market.

    Finally, the social development program area also includes payments directly to parents through the Universal Child Care Benefit—which our government is extremely proud of and which was one of our most important 2006 election campaign commitments.The increase in this area is because of an increased number of children entitled to this benefit. That is good news. By paying this benefit, the government recognizes that parents know best what child-care is best for their children. The Universal Child Care Benefit provides support to over 2 million children annually and has lifted 24,000 families out of poverty.

    In the Learning Program area, the department plans budgetary expenditures of $2.3 billion. This program area includes the Canada Student Loans and Grants Program and the Canada Education Savings Program. The non-budgetary section of the 2014-2015 main estimates in this program area is the expenditures paid out in student loans, which are loans we expect to be repaid. Increases in this area are the result of more students receiving this support, more families saving for their children's post-secondary education and an increase in repayment assistance.

     In the skills and employment program area, ESDC has planned expenditures of $1.1 billion in the main estimates before you. The main estimates before you show a $500 million decrease in this area from the year before. The reason for this is that the labour market agreements, which now include the Canada job fund and Canada job grant, were still being negotiated at the time the main estimates were tabled. We'll be bringing forward the $500 million in supplementary estimates as we have signed agreements in principle with all 13 jurisdictions for the delivery of the Canada job fund or grant and indeed final agreements with, I believe, five provinces. All this is to say there is not a $500 million cut. It just wasn't ready, frankly, to put in the estimates.

    The skills and employment program area includes a number of our government's priority areas, including the aboriginal skills and employment training strategy, known as ASETS, which I think is a great program; the skills and partnership fund; the first nations job fund, a new initiative to try to get young aboriginal, able-bodied folks to move from welfare to work wherever possible; the Targeted initiative for older workers, which we've just renewed with a number of provinces; and the labour market agreements for persons with disabilities. The old agreements were sunsetted at the end of the last fiscal year, and we have been renewing them with provinces. There is also the opportunities fund for persons with disabilities; the Red Seal program, a very important part of our skills agenda; apprenticeship grants; and others.

    Our ministry is planning expenditures of $168 million in the integrity and processing program area, which is obviously very important. This is responsible for ensuring that taxpayers' dollars are being disbursed correctly and only to those actually entitled to the benefits. This is particularly important in a department like ours, which is entrusted with a significant amount of taxpayers' dollars.

    To provide you with a recent example, earlier this month a Toronto man was charged for allegedly collecting his mother's CPP and OAS benefits for 15 years after she died. Police alleged that this individual collected nearly $200,000 in fraudulent benefits. The reason this branch exists is to ensure that these funds are directed to those who paid into the system and truly qualify. This is also the program area responsible for processing specific benefits, including our very successful apprenticeship grants. ESDC is also planning expenditures of $118 million in the citizenship centre service program area.

    ESDC is also planning expenditures of $118 million in the Citizen-Centered Service program area. This is the program area of the department responsible for ensuring that the department provides timely and quality service to Canadians. This is particularly important for a department like ESDC that deals directly with Canadians to deliver many programs.

    One area here that I would like to highlight, on which we're particularly focused on improving the department's service delivery performance, is in employment insurance, EI, processing. Mr. Cuzner keeps offering constructive criticism in this respect.

    When I was named Minister of Employment and Social Development, one of the early things I did was ask my parliamentary secretary, your colleague Mr. Armstrong, to conduct a review of EI processing.

    He has been out meeting with Service Canada front-line staff and management across Canada to find ways to be more efficient and fix bottlenecks in the system. I look forward to hearing the results of his review and am hopeful that as a result we will be able to improve the department's service to Canadians in this area.

    Finally, we are planning expenditures of $224 million in the internal services area, which is a reduction of about $54 million from the previous year as the department continues to look for ways to save taxpayers' money.

    By reducing administration and back office expenses, we're able to provide more benefits to Canadians and more support for front-line service.

    These are the summary highlights of our planned spending in the 2014-15 main estimates, Chairman, and I'm happy to take questions.

    Minister Bergen, do you have an opening statement?

    I do.

    Thank you, Minister.

    Let's move to Minister Bergen's opening comments.

    Mr. Chair, I'm very happy to be here today. The last time I was here at this committee, I was actually sitting in the chair's position, so it's interesting being across the way. It's a pleasure to be here. Thank you so much for inviting us.

    As you know, I work very closely with Minister Kenney on the social development side of our portfolio, and I'm very proud of what we have accomplished so far. Today I want to focus my remarks on the considerable progress we've made when it comes to combatting homelessness and on the investments we've made.

    First of all, however, I do want to take a couple of minutes to outline our investments when it comes to ensuring affordable housing for Canadians. These investments are made through the Canada Mortgage and Housing Corporation, CMHC. CMHC estimates budgetary expenditures of $2.1 billion in 2014-15 for housing-related initiatives. This funding supports close to 600,000 households living in existing social housing, as well as the investment in affordable housing initiative, also known as IAH, to help Canadians.

    The IAH bilateral agreements with the provinces and territories recognize the diverse housing needs of Canadians while also recognizing jurisdictional issues. Provinces and territories are best positioned to allocate the investments, for example, these initiatives, to meet their local needs and priorities, and we've given them very broad parameters that include new construction, renovation, home ownership assistance, rent supplements, and shelter allowances.

    Economic action plan 2013 announced our commitment to working with the provinces and territories by investing more than $1.5 billion nationally over five years to extend the IAH. From April 2011 to December 2013, the IAH helped more than 177,500 households across Canada.

    As you can see, our investments are making a difference, and they continue to, which is why we renewed our investment. In fact, about a month ago, I was very pleased to be in British Columbia to sign the investment with Minister Coleman for $300 million. When I was in Prince Edward Island, we signed our agreement with P.E.I. for $14 million. We just recently announced in New Brunswick an additional $78 million. I'm leaving for Edmonton later on today, and I'm looking forward to making an announcement tomorrow.

    We're making real progress in terms of the investment in affordable housing agreements with the provinces. We're seeing a very positive response from them. Each province has a very different way of addressing issues of affordable housing.

    I want to turn my efforts now to talking about what we're doing to combat homelessness. Just over two weeks ago, I joined the Mental Health Commission of Canada for the official release of the final results of the At Home/Chez Soi project. This was the largest study of its kind, looking at how using a housing first approach can reduce homelessness. Many of you, I think, are probably familiar with the approach. I think you know that it represents a departure from more traditional approaches.

    Up until this point, the most common way of dealing with homelessness has been through more of a crisis-based model, so it's been very reactive, not just in Canada but in many developed countries. This model involves relying heavily on shelters and other emergency-based interventions. Typically, these individuals must first participate in a series of treatments and demonstrate sobriety before they are offered housing. This approach has been costly and not effective for the long term. It's pretty easy to see how with that kind of instability it's much more difficult to participate in treatment programs and to manage mental and physical health issues. As you can imagine, for individuals who spend a night in a shelter and then leave that shelter but have to stay very close to it so they know they'll have a place to stay later on that night, it becomes virtually impossible to go out and try to get treatment for an addiction or a mental illness, or to try to look for a job or advance their lives in any way, because they are tied to that shelter. It's pretty much common sense, but now the evidence shows that the housing first approach works.

    With regard to cost, homelessness takes a tremendous toll on our economy and social services in terms of emergency housing, hospitalization, shelters, prisons, and a host of other crisis services.

    The housing first strategy, on the other hand, involves ensuring the individual has immediate housing before providing the necessary supports to help them stabilize their lives.

    Back in 2008 we knew this approach showed great promise and we knew it was something worth looking into, so that year, under the leadership of Prime Minister Stephen Harper, we invested $110 million in the Mental Health Commission of Canada's landmark study on this issue.

    We believe the evidence is overwhelming. We have heard some skepticism and opposition from the opposition, but I'm hoping, as they're looking at more and more of the evidence, we will all be able to come on board to support housing first.

    We continue to invest in our HPS, homelessness partnering strategies, and we've renewed that investment. Thanks to the groundbreaking research from At Home/Chez Soi, we've been able to inform our policy direction moving forward. As policy direction, it's based on evidence. It's not a political decision. It's making smart investments so that we can see lasting results for probably the most vulnerable in our society. We're moving out of crisis mode in terms of managing homelessness and working towards eliminating it altogether.

     As of April 1, we have officially begun the shift towards the housing first approach in our renewed homelessness partnering strategy. We have also built in flexibility so that smaller communities who may not have the resources don't have to move to a full housing first model. They can incorporate such things as shelters and transition housing. We're looking at the larger communities that we are funding to have a majority of their programs go towards housing first, but we believe it's important that this flexibility be there and that programs transition into a housing first model.

    We've committed stable funding over five years at the same level to ensure that communities can plan and successfully implement the housing first approach. The other positive part of our HPS is that community entities and communities themselves make decisions as to where the funding goes. It's not the federal government, bureaucrats, or politicians in Ottawa making these decisions; it's at the local community level, which makes it a very strong and effective program.

    We know that housing first rapidly ends homelessness and leads to other positive outcomes for quality of life. It's a sound fiscal investment that can lead to significant cost savings, and when we look at the evidence, it does. We're proud of this investment. The evidence shows that for the housing first group, an average of 73% of participants were in stable housing at the end of the study, compared with 32% for the usual care group over the course of the study.

     Mr. Chair, as I've said many times, we want to do more than just create safety nets. A comparison I use is that we want to create trampolines, places where people can go from a difficult position and get to a better position. Housing first, the evidence shows, supports that. I'm proud of these investments.

    I appreciate your support. I look forward to answering members' questions. Thank you.

    Thank you, Minister.

    We'll move on to the first round of questioning, the five-minute round.

    I would just note to members of the committee that on today's agenda, under the orders of the day, there are two areas under the main estimates that actually will be addressed by Minister Leitch on May 15. Those are the Canada Industrial Relations Board, as listed, and also the Canadian Centre for Occupational Health and Safety. Those two areas will be dealt with by Minister Leitch coming to committee, so it's appropriate to direct your questions in the main estimates on the other two areas as listed.

    Ms. Sims, you have five minutes.

    I really want to thank the minister for giving us two hours of his time today; well, both the ministers are. That's much appreciated.

    Minister, the Alberta Federation of Labour has obtained documents showing that your department issued hundreds of LMOs in Alberta alone for well below the prevailing wage. This is a fact. We know it happened. Why were these employers granted LMOs when they were clearly breaking the rules?

    Employers who are clearly breaking the rules are not granted LMOs.

    I don't know about the particular allegations to which you refer. It's possible, or I'll speculate, that you're referring to LMOs that were issued between April 2012 and April 2013, during which time we had instituted on a trial basis the flexibility to allow employers to pay 5% less than the median prevailing wage rate in low-skilled occupations, and 15% less than the median prevailing wage rate in high-skilled sectors, if and only if, Canadians in the same job at the same employer were getting paid at that level. Because the median is higher than the starting wage, this was an effort to stop the aberration of temporary foreign workers getting paid more than Canadians.

    It may have been as a result of that, but as you know, we suspended that practice in 2013. Only 5% of employers have actually used that flexibility.

    Thank you.

    Are you going to make sure that each and every one of these employers is now paying the prevailing wage?

    Yes.

    Are you going to make sure that TFWs receive back pay if they have not been paid according to the law?

    I hesitate because I'm wondering if it would be the responsibility of the provincial labour ministries if people have been underpaid. There's an overlap of responsibility with respect to workforce standards, of course. For example, provinces have to make sure people are getting paid the minimum wage.

     I realize there is an overlap, but would you then stop giving these employers LMOs?

    Oh, no, absolutely not.

    Let's be clear. If we had evidence that an employer had paid less than the wage they're obliged to pay in the LMO, we would add them to the black list, which would preclude them from participating in the TFW program in the future. We would also look at other penalties, depending on the gravity of the situation, the potential criminal sanctions that exist for both summary and indictable offences in IRPA.

    Thank you.

    There are a couple of questions on the order paper asking, among other things, about the number of staff assigned to ensure employers are complying with the rules of the temporary foreign worker program as well as where these employers are, and how many, but we haven't received an answer. Will you commit to submitting the answers to those questions to this committee?

    Yes, if we are legally able to do so.... Just to be clear, there are some things, as I mentioned in the House the other day, which are subject to the Privacy Act; for example, particular names of applicants are subject to the Privacy Act. But in terms of statistics, yes absolutely....

    I understand that the order paper question to which you refer is actually something like 45 questions which required thousands of documents so it could not be produced overnight. I do commit to getting that to you as quickly as reasonably possible.

    Thank you, Minister, because it's really important for us to have that information so we can take a look at what is really happening and get down to dealing with actual facts rather than a lot of other information.

    I know you're new to this department, but you're certainly not new to this file because in our other roles we sat in similar spots. When was it that you yourself first figured out that the temporary foreign worker program was being abused?

    I have heard of reports, allegations, and rumours of abuse as long as I've known about the program, like we all have. To answer your question, I think my earliest impressions even before I became minister of immigration was that there were some bad apples, some bad employers, but that most employers try to follow the rules.

    Thank you, Minister.

    That's the five minutes. It does go quickly, I know.

    I thought I had seven.

    No, they're five-minute rounds.

    Thank you.

    Mr. Armstrong, for five minutes.

    I thank both ministers for being here today, as well as staff.

    Minister, you referred in your opening remarks to the success we've had recently with the negotiations with the provinces on the Canada job grant. Could you elaborate on that and let the committee know exactly where we stand now, how we got here, and where you see us going in the future?

    Mr. Chairman, I'm pleased to report to the committee that we have signed, as I mentioned, agreements in principle with all thirteen provinces and territories, for them to deliver the Canada job grant through something called the Canada job fund. Through these agreements, we're renaming what was previously known as the labour market agreements as the Canada job fund. This will be a $500-million annual transfer to provinces allocated on a per capita basis. The provinces, in these agreements, are committing to allocate 40%, i.e., $200 million of the $500 million, toward employer-led training initiatives, which is enormous progress.

    Mr. Chairman, I should back up a step and remind members that it was actually our government in 2007 that created, de novo, the labour market agreement and a half a billion dollar annual transfer to provinces specifically to address those Canadians who are, as we say, technically more distant from the labour market, folks who haven't been working for a while. We have the labour market development agreement, $2 billion, that comes out of EI funds for folks who are either on EI or who have worked in the past three years, but we realized there was a group of Canadians who perhaps had never qualified because they actually had never worked. Many of them maybe didn't finish high school, have literacy challenges, maybe are on social assistance, etc.

    We developed, with provinces, some specific programming with this $500 million of new funding in 2007. However, as a general observation, Mr. Chairman, we were concerned, based on input and data, that we were getting inadequate results for the taxpayer's buck when it comes to training Canadians; that there were too many training programs that were training people for jobs that didn't exist, or training them for the sake of training; that some of these tax dollars were supporting the endless churn of resumé factories and well-intentioned organizations that really weren't linking people up with jobs in the real labour market.

    We also observed that according to the OECD, Canadian governments collectively spend more on skills development and job training than governments in any other developed country, but Canadian employers in the private sector spend less, relatively, than virtually any other developed country.

    The job grant came from this observation that we weren't getting maximum bang for the taxpayer's buck in terms of jobs created through the training system, and employers were under-investing in the system. The observation was we could address both of those deficiencies by priming the pump to increase the private sector employer investment in training, and then the employers would have an incentive to actually employ the people trained. That was the concept of the job grant.

    As you know, we proposed it in the 2013 budget. We had some back and forth with the provinces. When I became responsible for the file last summer, I immediately began contacting provinces. I listened to them, listened to the business community and labour unions, and others, and we came back with several different iterations of the proposal, and finally came to an agreement in principle in March.

    I'm very pleased with this. There would not only be $200 million of the $500-million Canada job fund transfer allocated to, generally, employer-led initiatives, which will typically mean consortia of businesses working through service-providing organizations to engage the long-term unemployed with relevant training that leads to actual jobs, but in addition to that, provinces are committing to spend $300 million, once fully implemented, on the Canada job grant. The key flexibility that we offered to get their agreement here was that they could source that $300 million in year four through any source of funds. That could come from any one of the roughly $3 billion we transferred in skills development. We also transferred, by the way, notionally, about $3 billion for post-secondary education, through the Canada social transfer. Oh, and by the way, we transferred tens of billions of dollars in other programs. They could source the $300 million out of any source of funds.

    The commitment there is that they will set up a program that employers can apply for. What employers will do is identify individuals for specific training programs. They will make a commitment to hire those individuals at the back end of the training, and the employers will, on average, have to commit to paying for a third of the cost of the training.

    We have introduced flexibility for the small and medium-sized businesses that have limited capacity, so they can either put in as little as 15% cash into the job grant, or they can account for half of their contribution through wages paid to trainees while they're undergoing training.

    This has been an example of federalism working. I think the provinces have actually gone from being, shall we say, unenthusiastic to quite enthusiastic about the prospect of this new program. We have signed final agreements with five provinces, and I would hope that within a matter of weeks we'll have completed all the others.

    Thank you, Minister.

    We will move to Mr. Cuzner, for five minutes.

    I'm sorry I took up all your time there.

    I want to commend my colleague for that one question. That was quite an answer. I'm hoping you'll be a little bit shorter with me, Minister.

    If I may sort of lay a base here, how many temporary foreign workers were there at the end of 2013? Do we have preliminary numbers?

    I'm sorry, come again?

    At the end of 2013, do we have preliminary numbers on how many temporary foreign workers there were?

    I'm still waiting for CIC to give us their tabulations.

    How soon after you get them could the committee get those numbers?

    I keep asking them as well, so I'll let you know when I hear from CIC.

    You wouldn't know how many LMOs have been signed, would you?

    We understand that the number of LMOs was down by about 20% in 2013. We think that's primarily because of our cost-recovery fee.

    The Prime Minister was saying it was down 30%, and you're saying 20%.

    That's for the low-skilled stream.

    That's for the low-skilled stream, but you do agree that between 2006 and 2012 the number of temporary foreign workers had increased by 200,000.

    No, not at all.

    Well, there are two ways of looking at any of these statistics. One is the number of admissions and one is the total population.

    In terms of the admission of so-called temporary foreign workers, it was 138,000 in 2006, and in 2012 it was 213,000, so that was—

    Our analyst said it was 340,000.

    The 340,000 is the total population of temporary foreign workers who may have been in Canada on any one day in 2012. That's the population.

    Do you think we're at about 340,000 temporary foreign workers now?

    I have to say that because we don't have an exit information system, we don't know how many of those people have actually left. A lot of these youth mobility workers, for example, actually only come in for a few months and then go. We don't actually count that in our system.

    That would be a worthwhile measurement, absolutely.

    Exactly.

    The C.D. Howe study referenced that they believe that between B.C. and Alberta, the temporary foreign worker program is distorting the labour market up to about 4%.

    That, combined with the fact that since 2006 there has been a 68% increase in Canadian jobs that are paying minimum wage, does the impact of this program on the labour market in this country concern you?

    I'm concerned not only about allegations of abuse, but also about the prospect that some aspects of the program may be distorting parts of the Canadian labour market. This is a central consideration for us as we move forward in the next round of changes.

    It's more than only the administration, it is the impact of the program. I think a complete and transparent study of the program would benefit Canadian business and the workers themselves.

    If we could simply square the circle on one, I asked a question earlier this week and your response was, “but let us not forget that it was the Liberal government that created the low-skills stream of this program in 2002. All we have done since then is to tighten the rules.” You were half right on that. We did create the low-skilled stream. When we left office, there were 36,000 temporary foreign workers on positive LMOs in 2005. By 2012, that had grown to 107,000. In 2007, the parliamentary secretary to the then minister of citizenship and immigration said “We're processing a record number of temporary foreign workers.” Then in 2008, your predecessor, Minister Finley, responded in Hansard, “We have made it faster and simpler for employers to hire a foreign worker...”.

    Can you reconcile the two positions of yours and Minister Finley's?

    I would say, Mr. Cuzner, that I think there is a misunderstanding about this program, because in the immigration system we set targets. The government determines how many permanent residents enter. In the temporary foreign worker program, at least with respect to those who come in on LMOs, the government has never set a quota target. Rather, it's a demand-driven program, and we've seen growing demand. That gets screened through the LMO process.

    I would make this point. If you talk to all the business organizations, they'll tell you that we've tightened up the rules so much they find it almost impossible to use. I think that had we not done so, the growth that you talk about would have been exponentially larger.

    Can you see the Canadian public is losing faith in this program? The program is such now that, when you mention temporary foreign workers to people, their hackles are raised. I think a lot of it has to do with the fact that the government has boasted about taking the shackles off and then, with the rules it has imparted, it comes back and it has to change them and fix them later. Now you're saying that we've tightened them up. The position of the government has been contrary. Can't you agree with that?

    Be very quick, please.

    What I can agree with is that there is no one temporary foreign worker program. There are a whole lot of streams. I make this point because I'm sure you would agree, Mr. Cuzner, that with a factory that has shut down in Canada, that needs repairmen from the U.S. to get it back online, it needs that work permit in a matter of hours or days, not months. But a fast food franchise in an area of high youth unemployment probably shouldn't be getting a temporary foreign worker at all. So I hesitate to make overgeneralizations. I think in some areas we do want, for the sake of our economy, efficient processing. In other cases, we want no process.

    Thank you. You were a little over time, but that's fine.

    We'll go on to Mr. Maguire, for five minutes.

    Thank you, ministers, for being here this morning and making your presentations to us in this important area.

    I'd like to ask Minister Bergen a question in regard to the issues of Canadians with disabilities.

    Certainly the government has done more than any other government in trying to support that area, whether it's through the opportunities fund, the registered disabilities fund in which I know the former finance minister, Minister Flaherty did a great deal of work, or the existing labour market agreement areas for persons with disabilities. Our government has championed the rights of those persons.

    Could the minister please tell the committee more about what the government is doing in ridings like mine for persons with disabilities in these areas?

    Sure. You know, I've been fortunate to have been able to travel across the country and see some of the great things that are being done with the opportunities fund, for example. I know Minister Kenney has been working hard on the labour market agreements for persons with disabilities, so he might want to comment on that.

    The premise of the support we provide for persons with disabilities is twofold.

    First and foremost, we want to make sure barriers are removed for people with disabilities to participate in the economy and in our communities. The expert panel on persons with disabilities found that there are about 800,000 Canadians with disabilities who want to be working, and we think that if people want to be working there should not be barriers in place to discourage them.

    There are things like the opportunities fund, the accessibility fund, and the newest ready, willing, and able program that we're funding that are removing barriers by physically and logistically helping persons with disabilities find work and get back into the workplace. It's also about educating employers. When you talk about the labour market and where there are gaps, we know that persons with disabilities can help fill those gaps. It's about educating employers and helping them see the value. They're seeing it more and more. The evidence and again those who are participating in programs show the value of employing people with disabilities.

    The second thing we're doing, which is something that I know we are all really proud of and something our former colleague Minister Flaherty introduced, is the registered disabilities savings plan, which is the only one in the world, that is providing an opportunity and a vehicle for families to save for their children or people in their families who have disabilities. It's an amazing program with a large amount of grant money available. We know there still are some things that need to be tweaked and fixed, and we're working together with the provinces to do that, but it's something that means parents don't have to worry about what will happen when they're gone, who will look after their children, and how they can save money. The registered disabilities savings plan is doing that. We feel it's our responsibility, and we've talked about it in previous budgets, to make it better and to promote it so that more and more families know about it.

    We also just introduced in our last budget additional support for special Olympics. Again, this is an opportunity to remove barriers and help kids who are making such a great contribution and making all of our lives so much richer.

    Again, we're working in a number of areas, primarily to remove those barriers and help people with disabilities get to work, help them access the community, and help families to support their dependants and their family members.

    Did you want to comment on the labour market agreements?

    Yes.

    Labour market agreements for persons with disabilities—these are five-year agreements—expired at the end of March, at the end of this past fiscal year. We entered into discussions with the provinces in 2013 about their renewal. We indicated that we wanted to ensure that the dollars were being spent on their intended purpose, which is employment support for persons with disabilities. Quite frankly, we thought there was too much of a blank-cheque approach happening. Provinces were using these funds on anything remotely related to persons with disabilities, including offsetting their health care costs for care of persons with disabilities.

    You know what? We transfer, I don't know, $30 billion, give or take, to provinces for health care. They should be taking care of health care with those dollars. The LMAPD dollars, we believe, should be dedicated to employment support, so we've tightened up that definition in the agreements. We had a little bit of pushback from provinces, but we didn't budge. I'm pleased to say that we're getting those agreements done, and we've signed several. We're confident that we'll have a full suite of 13 signed.

    Thank you very much.

    That ends the first round. Now we move to the second round of questioning.

    Ms. Sims, for five minutes.

    [Inaudible—Editor]...the first hour.

    Okay.

    Madame Groguhé, go ahead.

    Thank you, Mr. Chair.

    Thank you for your testimony.

    Minister, I have a more specific question to ask you about the Temporary Foreign Worker Program.

    It is clear that we all recognize that this program has derailed and been abused. Time and time again, you have explained that you wish to better control the program through investigations of certain fraudulent employers, because the number of cases has ballooned.

    Could you tell us exactly how you plan to go about it? We have learned that at least 56 inspection officer positions were going to be cut. Does that mean that, in terms of staffing, there will not be enough inspectors to ensure that this program is set to rights?

    Thank you for the question.

    Unfortunately, I do not agree with these numbers. They do not make any sense to me.

    In fact, our government created a new Service Canada section to uphold the law. There are people who focus exclusively on this process. Our numbers do not match up with this allegation.

    In that case, would it be possible do know exactly how many people are working exclusively on these investigations?

    I will be happy to provide the committee with that information.

    Thank you.

    As I was saying earlier, you agree with me that this program is no longer working properly. Could you ask the Auditor General to undertake an independent assessment?

    If he wants to.

    You won't ask him to?

    I don't think it is the government's role to interfere with the Auditor General's work. He is perfectly capable of choosing the files he wants to consider.

    In 2009, the Auditor General at the time undertook a review of the program. I am pleased to inform you that the government accepted all the recommendations in her 2009 report. We have implemented approximately three quarters of those recommendations.

    Apparently that has not been enough since 2009 to deal with the problem and prevent abuse.

    Some very negative effects have been recorded and discussed, including an increase in unemployment levels in Alberta and British Columbia. Furthermore, according to the Parliamentary Budget Officer, 25% of the jobs that were created have been filled by temporary foreign workers.

    How is your department going to correct the situation? What is your plan to deal with these negative repercussions?

    In November 2012, Minister Finley and myself undertook a series of consultations on the reform of the Temporary Foreign Workers Program. This led to the first step of our reform that we announced a year ago, in April 2013. It is a multi-stage process. It led to a decrease in requests for labour market opinions, among other things.

    One year ago we stated our intention to begin the second stage of our reform. I am currently working on the details of that second stage. If you have any suggestions on how we can ensure that there is neither abuse nor distortion of the labour market, I would be open to hearing constructive ideas.

    You actually have 15 seconds. Do you wish to use it?

    Be very quick.

    Several of my colleagues have spoken to me about the Skills Link Program. Many organizations have been participating in the program for a long time and they are dealing with unreasonable delays in the processing time for funding applications.

    What measures do you intend on taking to resolve this problem as quickly as possible? When they contact Service Canada, they can't actually get any information.

    Are you referring to funding applications under the Canada's Skills Link Program?

    It is the Skills Link Program.

    At times, some MPs have asked me to accelerate the process, but I do not know what the processing time for these applications is.

    We are currently expanding our collaboration between Service Canada and Veterans Affairs Canada. There are Veterans Affairs Canada staff in our service centres to take in applications, but not to process them. It is the department that is responsible for processing applications.

    How do you explain these delays?

    Madame Groguhé, that was about a minute and thirty. You're about a minute and fifteen over, but that's okay. We'll make sure other people get some latitude as well.

    I will come back to that question.

    Mr. Mayes, go ahead for five minutes, please.

    Thank you, Minister Kenney and Minister Bergen, for being here today.

    Minister, in my notes, it says that in the report on plans and priorities, you, as the minister, refer to the importance of speeding up the recognition of foreign credentialling. I've been on this committee for a while, and we did a study on foreign credentialling for professional skills for new Canadians. Our government responded by putting, I think, $50 million towards assisting people to get that credentialling.

    How successful has that been? Has there been any need for any further funding for that program?

    To be honest, it's difficult to measure how effective it has been statistically, because all the work we do is trying to change systems. We don't control the professional licensing bodies that make the actual decisions. We play a facilitative role trying to coax and prod provinces and through them the licensing bodies to get with the program and to speed up and simplify the process for foreign credential recognition and assessment.

    In that regard, my view is we've made a lot of progress. This stuff doesn't make headlines, but it's hard, difficult, technical, granular work. In this thing called a pan-Canadian framework for the assessment and recognition of foreign qualifications, there's a big federal investment of $50 million. We're paying to bring together all 10 of the provincial licensing bodies as we work through the 40-plus licensed professions to get them to one table and hammer out simplified, streamlined procedures for credential assessment and recognition. By the way, this has the happy effect of enabling greater interprovincial labour mobility for Canadians.

    We've gone through 14 of the 40-plus regulated professions. We're about to launch work on another several. We're identifying those professions that I'll say are more eager to participate. Some professions still seem to be stuck in an old-school protectionist or gatekeeping attitude. I think we need to start naming and shaming some of them.

    Finally, I think we are having good effect with things like the foreign credential recognition loans pilot project. We've done a thousand of those loans, delivered through non-profit groups that have worked out arrangements with financial institutions to provide loans of up to $10,000 on preferential terms as bridge financing. This is to help foreign professionals stuck in survival jobs to maybe take some time off their survival jobs to get college diplomas, pay for their certification exams, and do what they need to do to get that little increment in skills and education so they can get their credential and get to work in their profession. Again, it's only a thousand, but that's a good pilot, and the results are phenomenally positive.

    Finally, we are doing pre-arrival work overseas, such as through the Canadian immigration integration program delivered by the Association of Canadian Community Colleges, through centres abroad where we invite selected economic immigrants to come in for free to a seminar that includes personalized counselling on how to get ready for the Canadian labour market. We point them to where they can apply for their credentials in advance, and maybe backfilling they need to do in their education before they get to Canada as permanent residents. Again, the results in that population in terms of their employment have seemed to be extremely positive. I think CIC is doing a formal evaluation that will be forthcoming.

    To be honest, we're dealing with relatively small numbers of people in those two programs. If we were to roll these out to affect hundreds of thousands of people, the costs would probably be in the tens of billions of dollars.

    We're trying to play a facilitative and leadership role in this area. I think the situation is.... The most important thing is the reforms we're making to the immigration system by doing a qualitative assessment of people's education and credentials in the application process, so we stop the craziness of ascribing the same value to a degree from the Indian Institute of Technology, which is the MIT of Asia, as we do to the dodgiest college that is a degree mill.

    We used to ascribe the same points, the same credibility, in our immigration selection process to the highest quality and the lowest quality degrees and diplomas. Now we are making a qualitative assessment of those people whose degrees or professional credentials are likely to be recognized as being at or close to the Canadian standard. Those are the folks we're seeking to give admission to, so they don't end up driving cabs and working in corner stores.

    That's five.

    The last round in the first hour will be Ms. Sims, for five minutes.

    Minister, I'm sure you read with great relish the C. D. Howe report that was just released, in which it points out that the unemployment rate in both Alberta and B.C. increased. They make a direct link to the increase in the lower skilled temporary foreign worker program. Why were so many LMOs given out in this category when unemployment was so high, especially for entry-level jobs?

    Well, LMOs are only approved if and when Service Canada officials are satisfied that employers have met all of the requirements for advertising and offering the job to Canadians at the prevailing regional wage rate, etc.

    However, having observed those stats, I was concerned, which is why a year ago we tightened up the LMO screening process. We extended the advertising period to eight weeks. We extended the number of media in which they have to advertise. As you know, we took away the wage flexibility, etc. We have put on the LMO fee, which has a slight dissuasive effect. We've seen a reduction in LMO applications since then, and I think we need to go further.

    Thank you, Minister, but really, I think for the average Canadian it doesn't really pass the common-sense test when they see McDonalds in Victoria, of all places, getting the number of LMOs they did.

    Ms. Sims, you'll be pleased to know, and as I've said publicly, I agree with you.

    Thank you.

    Minister, I think we all agree that what we really need to focus on is upskilling our existing workforce and giving our young people opportunities to enter the workforce and work their way up. Instead, I think the temporary foreign worker program has definitely got in the way of doing that.

    There was a call for proposals issued last year by the office of literacy and essential skills, OLES. The call was a competition that will result in a very small number of organizations being selected to work together to form a pan-Canadian network. Organizations have been waiting for 11 months for a response from OLES. What can you tell me about this?

    What I can tell you is that I'm expecting a briefing note on this shortly. I was talking to staff about this last night. We are looking at how we can get the maximum bang for the taxpayer's buck when it comes to programs.

     My own view is that we should be focusing taxpayers' dollars in literacy programs that actually help people become literate. I know that's a quaint idea, but I think there's a good reason that the federal government, right across all ministries, has moved away from core programming funding and funding for advocacy and related work to actual service delivery. That's my orientation.

    I want to stress again that upping the skills on literacy and the essential skills of the current workforce and helping them work up the chain as they improve their skills and make better pay is really a good way for us to go. I'm looking forward to your response to this.

    I'm also wondering if Mr. Shugart could clarify something for me. This week in the House, the minister has insisted that the stream for lower-skilled occupations would include seasonal agricultural workers. I checked with the Library of Parliament, which we did before and after, and they insist that is not true, that in fact there is a distinct program called the seasonal agricultural worker program that is completely separate in terms of eligibility, processing, and administrative rules. The library also confirmed that a moratorium on the stream for lower-skilled workers would not inherently affect the seasonal agricultural worker program.

    Can you please clarify this for me, Mr. Shugart, or the minister?

    The deputy can certainly supplement this answer, but first of all, I don't think it's a revelation to say that the participants in the seasonal agricultural worker program are low-skilled, so when you talk about a moratorium on low-skilled temporary foreign workers, it would obviously include them, unless you specifically exclude them. In what we call the general low-skilled stream, we also have the general agricultural worker stream, which is the non-seasonal part of agricultural workers, that I think very clearly would be affected by your moratorium.

    What I find interesting, and I say this sincerely, is that the New Democratic Party apparently wants to continue with those ag streams unaffected. Can we put you on the record as supporting that?

    What I'm going to say, Minister—

    Actually, you're over your five minutes, so I'm going to cut off the discussion.

     I can't get an answer to my question.

    I would be ready to answer the question, but I will wait.

    Can you make it a yes or no?

    No. I will wait, because it's never just a yes or a no.

    Voices: Oh, oh!

    Okay.

    Thank you, Minister Kenney and Minister Bergen, for being here and taking time out of your busy schedules.

    We'll recess—

    Mr. Chairman, I have a complaint. It's Mr. Siddall's first committee appearance. He probably was up studying all night and he got no questions. It's not fair.

    Voices: Oh, oh!

    We'll take a brief recess and then come back for the second hour.

    I bring the committee back to order for the second part of our meeting. I welcome everyone back.

    We're now embarking on our committee's next study, the renewal of the labour market development agreements. To help the committee kick off our study, we're very pleased that Minister Kenney has offered to appear as our first witness to launch the study.

    Thank you, Minister, for your interest and your responsiveness to the work of our committee.

    Appearing along with the minister until the end of the meeting, at approximately 10:35, we have once again the deputy minister, Ian Shugart. Also joining us now we have Mr. Frank Vermaeten, assistant deputy minister from the skills and employment branch at ESDC.

    Minister Kenney, would you proceed with the opening remarks, please.

    Thank you very much, Chairman. I'm pleased to be back. It hasn't been very long, has it?

    Voices: Oh, oh!

    Hon. Jason Kenney: I'm really delighted the committee has decided to take up a study of the renewal of the labour market development agreements. This is important stuff.

    As we were finishing the last discussion, Ms. Sims was alluding to the broader skills agenda. We may not agree on all the details, but I think there's a pretty broad consensus from labour unions to businesses, from the NDP to the Conservative Party, and from academics to people on the street, that we have a big skills challenge, that we're not doing an adequate job. When I say we, I mean all levels in the public sector and the private sector are not doing an adequate job of preparing Canadians for the labour market of the future.

    As a government, we are trying to go through all of the programs we have that deal with job training or skills development to try to get a better bang for the taxpayer's buck, better outcomes in terms of real jobs. Some of the principles that we think are useful include a greater participation of employers in the training process, trying to leverage increased employer investment in skills development and job training. When employers have skin in the game, they have an interest in training people for real specific jobs that the training will lead to, rather than just kind of training for its own sake.

    I don't want to belabour the discussion on the Canada job fund, Canada job grant, labour market agreements because I already discussed that in the last session, except to say that the principles we got to there, such as, greater employer involvement, higher employer investment, training leading to real jobs, are the principles that we are trying to reflect across the whole array of federal skills development programs.

    That includes the big daddy of those programs, the labour market development agreements. This is a $2 billion annual transfer that we make to provinces based on a formula that was worked out in these agreements 15 years ago. It's per capita with some flexibility that's sensitive to promises of higher levels of unemployment. Basically the result of that is that the per capita transfer to provinces like, for example, Newfoundland and Labrador, would be higher than it is to Alberta, given the variations in unemployment.

    It's a $2 billion transfer based on these bilateral agreements we have with provinces. Most of the LMD agreements were signed back in the late 1990s. I want to acknowledge the good work of former minister Pierre Pettigrew at that time. I think this was a very good development of the former Liberal government, to give credit where it's due, to realize that it made more sense for provinces to deliver these programs where they are on the ground, sensitive to the local labour market realities, as opposed to know-it-all Ottawa delivering the programs.

    We can all remember back in the 1970s the Manpower Canada offices. This is kind of the successor to that. That was the Ottawa cookie-cutter approach to job training. Thankfully, we've left that behind in the 1970s. We now basically take a portion of the funds that are raised through EI premiums, $2 billion, and then we transfer that to provinces and they agree to certain parameters in the labour market development agreement. But for all of the good progress that has been made, there has never actually been a full evaluation done of the LMDA. We've never sat down with provinces to discuss the outcomes and to discuss how we might get better results.

    I've launched a process of consultations with interested Canadians, with my provincial counterparts. I would hope that this committee could give us some very good constructive ideas about how we could improve on the results from this significant spending being funded by workers and employers through their EI premiums.

    As I say, I've raised this with my provincial counterparts. I've sent them two letters. I've raised it with the Forum of Labour Market Ministers that will be meeting in November. I anticipate I'll be meeting with them in July where we'll be discussing this at greater length. I've sent the provinces a series of questions that we want them to address, to kind of guide the discussion. I hope the outcome of this will be renewed agreements with the provinces and territories.

    The questions I've asked are as follows: How do we connect training directly to employer demand? How can employers be more involved in identifying labour market needs and ensure LMDA funding goes to training that addresses those needs? How can we ensure the training leads to available jobs? How can we increase individual responsibility and investment in training? How can we increase employer responsibility and investment in training? How can we ensure the training meets employer demand, even if the demands are beyond local needs?

    The second area of prospective reform is to support more effective returns to work. Should we formalize our collaboration projects that focus on earlier provincial and territorial targeting and referral of EI clients?

     We're asking this because the data is pretty clear that when you engage people who have been unemployed with so-called active measures, when you get in touch with them right after they've been laid off and help them develop a plan to find new work, you get much better results.

    We all know the situation. When people are unemployed for a long time, often they get a little bit depressed and discouraged. Their skills perhaps begin to get dated. They fall farther away from the labour market. You want to get in there as soon as you can with people.

     We want to encourage provinces to not necessarily just serve whoever walks through the door first, but proactively to reach out to the people who have been recently unemployed. Get them into a program, whether that means upscaling, retraining, or job link services. Get them in as soon as they can.

    When we hear about large-scale layoffs in certain companies, such as the Heinz factory in Leamington, or whatnot, we try to get in there with Service Canada with an early intervention. We just want to encourage provinces to be on the scene right away, helping those newly unemployed people with a work plan.

    Also, are there additional efforts we can make to reach clients more effectively? That's the proactive part of this. As soon as someone signs up for us with EI, how can we share that information right away with the provincial department delivering the program so they don't just wait for the client to walk in, but rather reach out to the client and say, “We have a whole suite of services available for you. Why don't you come in? We've scheduled an interview with you.”

    The third point is to ensure that eligibility is responsive to the evolving labour market. This is a big issue, and I give credit to the NDP for having.... The opposition in general, but particularly the NDP has been pointing out the changing nature of the Canadian labour market—more short-term work, more contract, and informal forms of work.

     We have the problem of last hired, first fired. A lot of the young people who are at the margins of the labour market get into an employer and if there's a downturn or whatnot, they're the first to go. That often means they are not qualifying for EI, based on the criteria that have long existed. We need to recognize the evolving nature of the labour market, I think, in the EI eligibility criteria. We're open to a discussion about that.

     We're asking provinces how they're using EI part two—that's what we're talking about here, the LMDA funds—to help employed workers. Can more be done to reduce the potential costs of employed workers at a higher risk of job loss? Should we expand eligibility for youth and other workers with insufficient hours to qualify? This is exactly the point I was raising. Should we expand eligibility for under-represented groups, such as the longer-term unemployed?

     I talked in the last session about the labour market agreement clientele. These are the folks who, maybe, have never worked, or rarely worked. They're on income assistance. They are not eligible for EI-supported training. We don't want to leave them behind either, so how do we address them in this?

    Next, to prove that the LMDA programming generates EI savings is an issue we've raised. Right now EI claimants are using about two-thirds of their part one benefits before returning to work. What more can be done to get people to return to work more quickly and thereby reduce net EI spending?

    Really, what I'm raising here is the possibility of paying for results; that is to say, if provinces can reach out proactively to the recently unemployed, get them good programming and back into work right away, it will have the effect of reducing the payout of EI benefits to them.

    Perhaps we should acknowledge that saving to the EI fund by giving a pay for performance bonus, as it were, to the province or the program delivering those results. We see pay for performance becoming a very interesting initiative in many countries and it seems to be producing pretty good results. Is there some way we can measure performance and perhaps compensate provinces that get the recently unemployed back to work faster? It's good for them, good for the country.

    Finally, there's enhancing performance measurement. We're asking provinces how the annual planning process can be improved to ensure that the LMDA programming is more responsive to employer and client needs, and what the most meaningful performance indicators are to ensure that we can fully assess the costs and benefits of LMDA programs.

    Basically, taxpayers deserve to know how these dollars are being spent, what results we're getting for them, and frankly, I think the accounting right now is insufficient. We don't want to burden the provinces with endless forms and reports, but we want to get some good metrics to tell us how we're doing on these programs. I know some of my colleagues—I won't name names; I'll let people speak for themselves. One of my colleagues on this side has often told me about a lot of the service delivery organizations funded by the province with these LMDA funds which basically just seem to produce resumés for people. Some people refer to them as resumé factories. As I say, they're well intentioned, but are they really getting results? Those are the kinds of things we need to know.

    Mr. Chairman, I apologize for not having made a formal statement, but I simply wanted to give you a general picture of my ideas.

    I am open to constructive ideas. I very much look forward to hearing the responses from provinces and territories as well as from the private sector, including unions and employers, but I am especially looking forward to hearing from you, members of Parliament.

    Thank you very much.

    Thank you very much, Minister, for those opening comments and for being very candid, frankly, about the process you'd like to see undertaken here.

    We'll open it up to five-minute rounds again. I will just remind you that we will be breaking a little early to give ourselves about 10 minutes at the end of the meeting for some housekeeping things that the committee has to address today.

    The first five-minute round goes to Ms. Sims.

    First of all, let me put it on the record, Minister, that we absolutely did not include the seasonal agricultural worker program in our call for a moratorium. However, we do see all streams being part of the independent audit to make sure that Canadians always get first access to the jobs.

    Getting back to the topic you're talking about right now, Kijiji has been mentioned in the House quite a bit recently. I'm not sure if your department or your office even advertises on Kijiji. Can you tell us whether you believe Kijiji is a reliable source of labour market information on which to design national policies.

    We rely on all of the data that's available. Obviously, primarily there's the general labour market information that Statistics Canada generates but there are also specific studies or data sets that they maintain funded by my department. Of course, there's a huge volume of labour market information. I will say this about it. I'll just repeat what I've been saying as long as I've been in this position. We have an inadequate system of labour market information. What we do know from it is that we do not have a general labour shortage in Canada. We do not have a general labour shortage in this country. If we did have a general labour shortage, it would be reflected in the price of labour. We would have seen faster increases in wages than we have since the downturn.

    However, I think the aggregate national labour market information is not adequately identifying the skills gaps in particular regions and industries. Every business organization of employers in the country identifies skills gaps or skills shortages as their most important challenge.

    Minister, I have a number of questions. Thank you for answering my question.

    The government has repeatedly said that there were national skills shortages to justify the fact that we have to tell Canadians in what they should train to satisfy the needs of big business. The PBO has now told us there are no national skills shortages, and I think you just acknowledged that, but when you talk about temporary foreign workers, you are now saying that the market should do more to solve the skills shortages experience by employers.

    Why trust the market to solve labour shortage experienced by employers when it comes to temporary foreign workers but not when it comes to training Canadians who have the right skill sets? Given that there are no national skills shortages, do you not trust that Canadians can make good decisions about which jobs they want to train for?

    I think I disagree with the premise of every one of those statements. I don't know where to begin.

    First of all, I didn't say there were no national shortages. I said there is not a general labour shortage in Canada. For example, you just said implicitly you think we need an agricultural worker program, from which I infer you think there's a shortage of Canadians willing to work in the agricultural sector doing basic agriculture work.

    I'm talking about skills.

    That is a certain kind of a skill that some people are not willing to undertake, right?

    Minister—

    Perhaps I could try to answer the question.

    I think the question you asked is, why should market forces be involved in helping people get the appropriate skills? It's because it's employers who, by definition, create the jobs and who know what skill level people need for those jobs, and because we see better labour market outcomes in countries with a higher level of employer involvement and investment in training, like in Germany, a country to which I recently led a study mission.

    I think it's obvious from the data that we should all be trying to get employers more engaged in the training system.

    Minister, to get back to that, are you saying under this new system we have here right now that it will cover training for people to enter into entry-level jobs?

    Well, in some cases it does.

    That's really close. You have five seconds so I was going to cut it off at that point.

    Let's not be pejorative about entry-level jobs. Sometimes people need support to actually get those jobs, including being connected to them.

    I'm not being pejorative. I just wanted to be clear that they could have access to the program you have described here.

    Thank you, Ms. Sims.

    Now we move to Ms. McLeod, for five minutes.

    Thanks to the minister for being here to start the study. I think it's a really important study.

    As I look at the labour market development agreements with the provinces, there's always the no ties attached, the provinces versus having what you talked about right now—there is this broad parameter—so I absolutely agree that some metrics and an evaluation process should be part of this.

    Quickly, because I have a whole host of questions, what are the broad parameters right now in terms of the agreements, the LMDAs?

    Why don't I invite ADM Vermaeten to address this question?

    Chair, I think you're talking about what guidance we give provinces and territories in delivering this. There's a framework that's set out in legislation and then set out in regulations and policy that provides broad parameters about what this funding is for.

    We can basically put the funding in two pots. There is an allowance there to provide support measures. When we mean support measures, it's setting up those offices you see across the country that provide the counselling, the labour market information, the support in writing CVs, and that's one part of the framework. That's available to all Canadians, whether they are EI eligible or whether they are not EI eligible. So that's available.

    I guess for the purposes of the committee those would be great documents we could have tabled so they form part of our study in terms of what the broad parameters would be. That would be great.

    For, perhaps, Prince Edward Island we have a little bit higher unemployment rate than other areas. We know, for example, the Irving shipyards have a pretty significant contract coming up.

    I know we don't mandate people to move, but to what degree do we envision these agreements perhaps supporting Irving in terms of where they are going to need to go with a resident on Prince Edward Island who needs a little bit of support to be job ready for when those opportunities arise?

    Yes. I would say that in the broader skills agenda which we're addressing one of the objectives is to remove barriers to labour mobility. We don't want to tell people they should move from A to B in the country, but as a general rule, we don't want to discourage people from moving to where there are good jobs available to them. That's why Minister Moore is working with the provinces to remove the existing exemptions under the labour mobility provisions in chapter 7 of the Agreement on Internal Trade. It's why my department is working on apprenticeship harmonization, for example, with the provinces.

    Of course we have, generally speaking, labour mobility in the Red Seal trades, 55 trades which have reciprocal standards across the country, but we don't for the training years that lead up to a Red Seal certificate. We're trying to get greater mobility for people during the training period. In this area, training requests are generally not approved currently if the job is in another jurisdiction, which limits labour mobility. One of the things we may want to do is put mechanisms in place to ensure training is linked to a job offer and that it's prioritized regardless of where the job is.

    Perhaps if someone is willing to make a move, that might be a recommendation once we have some input from witnesses.

    Do we have any sense to what degree private industry is already coming to the table? I look at the mining industry, companies like Seaspan. Is there any data on that particular issue in terms of to what degree we already have participation of companies in this particular area?

    Frank.

    Well, I think that primary involvement is up front in priority setting. What we find is about a little less than half of the provinces and territories have a system, a mechanism whereby they engage employers up front, figure out where the best place is to spend money. That's a real best practice that as part of this employer involvement we want to have a lot more of it, so that the employer is involved in figuring out what type of training is needed, for how many people, and when. It is about that training for real jobs.

    Thank you for that answer.

     Mr. Cuzner.

     Mr. Chair, I'm going to try to get three questions in if I can. I want to sort of come off from what Mrs. McLeod was asking.

    One of the recurring problems we've heard over the course of our studies here with the committee has been the challenge of recognizing apprenticeship credentials province to province. What carrot and what stick can be included in the LMDAs to help expedite or rationalize this, or whatever? I would suggest that recognition of foreign credentials is important, but when we can't get an apprentice in New Brunswick qualifying to take a training opportunity in Saskatchewan, where are the carrots and sticks within the LMDA discussions?

    That's a good question. I have to say that I recently announced, I think, a $4 million grant with the four Atlantic governments that they're contributing toward apprenticeship harmonization of the Atlantic provinces. Alberta, B.C., and Saskatchewan have the new west partnership. Those seven provinces are working very closely on apprenticeship harmonization to allow for that mobility which you're talking about so there are some good active performers.

    I would say that two central Canadian provinces are not so progressive. All I can tell you is that I'm calling them out publicly on that and saying that they need to be part of the program to harmonize apprenticeship. I don't think we can lean on provinces through the LMDA funds to do that, though.

    You don't think that opportunity is there?

    Well, I think we could talk about national priorities, but I think it is important to distinguish between the harmonization of the system so that people can move while they're on training versus what has been achieved with chapter 7 that was agreed to by all provinces and territories several years ago. Now, once the apprentice has the ticket, there is full mobility once the ticket is achieved. It's in that process that it's very much different across provinces and territories. I think that's what the minister has been pushing to try to move that, and we've been providing the funding for the provinces and territories to move in that direction.

    If I can get my second one in here—

    I'm open to this. I think the federal government has an essential role to ensure the economic union, and if the 28 member states of the European Union can get this right, we should be able to with the 13 jurisdictions in Canada. Mr. Cuzner, if you have ideas about how we can make some of this conditional on progress, on mobility, I'm all ears for that.

    On literacy, you mentioned that no longer are we into core funding the advocacy, that there's a better way to do this. The Canadian Literacy and Learning Network identified that 50% of Canadian workers are functioning at a minimum literacy level, and in order to be more productive for themselves and their employer, this has to be attributed.... We've seen a decrease in the funds going to literacy development, from $35 million in 2006, and in 2011 it was capped at $21 million. It's a fairly significant decrease. Where are we with literacy development? Where do you see us?

    It's important to point out that the funds we've spent in these grants and contributions in the area of literacy aren't actually going directly to teaching people to read and write. They're going to administering organizations, overhead, research, and policy work. All of that's fine, but as a general rule, the Government of Canada, including prior to 2006, has been moving away from core funding for organizations to actual delivery. That's where we're trying to move in terms of literacy.

    I would say this. We give provinces billions a year through the Canada social transfer to support higher education, and it's through that transfer that they will have dollars to actually deliver real programming. Education, including adult education and basic education like literacy, is a provincial responsibility. If you want the federal government to teach illiterate people how to read, well, we're going to have to spend billions of dollars and get into the provincial jurisdiction. I don't think any of us want that.

    Thank you very much.

    We'll go now to Mr. Butt, for five minutes.

    Thank you, Minister and deputy ministers, for being here today.

    As I see this study, the role for this committee is obviously to look at how we can improve these agreements and provide some good advice to the ministry on better ways for skills development training in Canada.

     I know, Minister, you were recently in Germany studying how it does training and skills development, and how the integration works with the private sector, etc. Are there some things you learned during that trip which you can share with the committee that might be helpful for us in our deliberations? Are there things they're doing successfully that we could be incorporating? Are there other jurisdictions you would recommend perhaps our committee look at in this study to see if we can learn some best practices from what other jurisdictions are doing?

    Yes, absolutely. The reason that I led this study mission was precisely because I think we Canadians, as big and as open as we are, sometimes become a bit insular. We sometimes think we've got the model. I think the truth is that when it comes to skills development, we are anything but a model. We have one of the highest levels of university academic enrolment in the world, which is great. A lot of young Canadians graduate with university degrees. Unfortunately, as we know, a growing percentage of them go on to be under-employed or employed in areas in which they did not study.

    As I said, we also have one of the lowest levels of private sector investment in skills development in the developed world. We have 14% youth unemployment, which is unacceptable, and 14% unemployment among recent immigrants. We also have unacceptable levels of unemployment among our aboriginal people. All of this is in an economy where employers are saying that skills shortages are their primary challenge, so something is not working here.

    That's why I invited key stakeholders, including my provincial counterparts, business organizations and labour unions to join me on a study mission in Germany and the United Kingdom. We had a delegation of 30 that included five provinces, most of the major business groups and some of the larger unions.

    Germany is, I think, broadly considered as having the most remarkable model, not simply the country of Germany, but what they call the Germanic system, which is very similar as well as in Austria, Switzerland and Denmark, where there is very strong moral and practical encouragement for young people in the secondary school system to go into paid apprenticeship programs. Their conception of apprenticeships is much broader than ours. We have about 150 apprenticeable occupations. In Germany they have about 350. It includes things like retail and banking, as well as construction trades.

    Over 60% of young Germans, roughly at the age of 16, go into these apprenticeship programs where typically they are at an employer location for about three and a half days a week and at a vocational college for one and a half days a week. The learning they're getting, the theory they're getting in the college, is perfectly integrated with the experience they're getting at the work site, and they're getting a modest stipend. These apprenticeship programs on average last three years, which means that most young Germans are graduating with a certificate at the age of 19 on average. They're already with an employer. Over 90% of them go on to be employed in the field for which they were trained, and they're unencumbered by debt.

    One thing that is key is obviously the high degree of employer involvement in the education system and the sense of responsibility employers have to invest in training. That means maintaining all that equipment, paying for trainers, paying modest salaries to the apprentices. It's a big investment. In fact, in Germany employers collectively invest the equivalent of $47 billion Canadian a year on apprenticeship programs alone.

    The other key factor is what they call the parity of esteem between technical training, such as through apprenticeships, and academic university degrees. Everyone in Germany, including the academics, told us that a trade certificate which an apprentice obtains at the age of 19 has the same social and economic value in the eyes of all Germans as a university degree does. Perhaps that's the biggest cultural change we need to see in Canada. For too long we have diminished the value of technical training, experiential learning, and non-academic education.

    I don't mean for a moment to set one up against the other. To the contrary, I mean to say we should value and encourage all choices, because we have, I would argue, too many young Canadians pursuing academic programs which have very poor labour market prospects and we have emerging skills gaps in more technical vocations with future skills shortages.

     I think at a high level those are the issues we need to address.

    Thank you, Minister.

    On to Madame Groguhé, for five minutes.

    Thank you, Mr. Chair.

    I'd like to go back to the Skills Link Program and try to clear up any confusion. I would like to point out that this program is mainly for young people aged 15 to 30 years old who are dealing with barriers to employment. They are not veterans.

    The problem that has been raised and that I am raising with you, Minister, is that organizations that use this program—which works very well and gives good results—face unreasonable delays in the processing of their funding applications. Furthermore, when they contact Service Canada they are unable to obtain information.

    What steps do you intend on taking to resolve this situation as quickly as possible and follow up with us on this issue?

    Thank you.

    Thank you. I will ask my deputy minister to respond.

    Mr. Chair, perhaps it would be more useful if we were to look into the situation within the department and provide you with details when we come back next week.

    Yes, I could send you the details and you could follow up by providing us with information.

    Yes.

    All I can say is that every week I receive the list of grants that are recommended by the department and then I approve them or not.

    There certainly is a system and we will find out if there are any administrative problems.

    Fine, thank you.

    Minister, you've recently mused that you'd like to see the Alberta pilot on occupation-specific work permits expanded to the national level. How many people have been accepted into the pilot project so far? If you don't have that, could you maybe send it to us?

    My recollection is, and I stand to be corrected, around 2,500 work permits were issued so far under that pilot.

    Okay. Can you also give us an idea of the number of workers with Red Seal certificates, or equivalent, accepted into the pilot and the number of workers without these certificates accepted into the pilot?

    Minister, because I'm short on time I'm going to get my next question in. Under the pilot, employers do not have to attempt—attempt—to recruit Canadians or landed immigrants. How can you be sure they're not displacing Canadians or landed immigrant workers?

    I certainly don't have an answer to your first statistical question. I will look into that. I suspect we don't have that data.

    On the second point—

    Minister, I have to interrupt you. We have a point of order.

    Mr. Armstrong, go ahead.

    Mr. Chair, on a point of order, we're engaged in a discussion here on the LMDAs and our potential study. I don't think this relates to our discussion at all.

    The minister can answer, but I think this is off the subjects we are looking at studying here in this particular committee.

    Okay. I've allowed quite a bit of latitude all day on subject matter. I would ask members to keep it on the LMDA study.

    Minister, I'm going to leave that to your discretion. If you wish to respond, you're welcome to. If not, that's fine too.

    I would respond by saying that we have had for some time, Ms. Sims, temporary.... We have immigration agreements with all of the provinces. Some of them include annexes that relate to the temporary foreign worker program and in some of those annexes, including the one with Alberta, they have long had the capacity to indicate that there are certain occupational categories for which they would like labour market opinion exemptions because they are facing a critical shortage.

    The Government of Alberta asked us to exempt, I think, seven occupational categories in the skilled trades, primarily related to the big oil sands developments, and we responded as is our obligation under the annex.

    Thank you, Minister.

    Once again, I think my critical question is what kind of oversight is in place to make sure that Canadian workers and those who live in Canada, permanent residents, will get first crack at those jobs?

    A point of order.

    Before you answer, Minister, we have another point of order.

    It's the same point of order, Mr. Chair. You’ve just instructed the committee to focus on the study, yet we're still having questions on—

    I did, and indeed, you are correct.

    Minister, please don't feel obligated to answer that. Actually, I'd like to ask Ms. Sims to keep it on topic, which is the LMDA subject matter. This is going off topic. It's going back to where you were previously.

    I appreciate your intervention, Mr. Chair, but I do want to say that I see a direct link here because when we're looking at training people for future jobs and the grant system that is going to be put in place, it actually links to the current Red Seal question. I see a direct link. I do not see this as a separate stream. That's why I'm always careful of what I ask the minister.

    I know that the minister is more than willing to answer the question because he can actually see the linkage.

    Well, I'll take the question as having been more of a rhetorical question. Let me just say let's be a wee bit careful about this language of displacing Canadians. I saw on Twitter last night that a Liberal MP said something about how we were letting foreigners take Canadian jobs. That language can lead to a coarsening of the public discourse on immigration and a lot of things. Let's be a wee bit careful about this.

     For example, we have a new skilled trades permanent residency immigration program. I don't want us, as parliamentarians, telling Canadians that when those people come as permanent residents—for example, many of them starting on their work permit as temporary foreign workers—that they're somehow foreigners taking jobs from Canadians. You didn't say that Ms. Sims, but some of the debate is starting to go in that direction.

    Chair, I have a point of order. I'm sorry, but I want to make it very clear that at no time is it an anti-immigration policy statement.

    Thank you for acknowledging it.

    I'm sorry, Chair, but I have to clarify the statement—

    Please, that's not a point of order.

    I felt it was. It was setting the record straight.

    No, it's not. It's not referencing back to something that is a point of order. Please.

    Mr. Mayes, we are running quickly out of time. You have three minutes, sir.

    Minister, as we do this study, there are two challenges I think I see.

    One, as the parliamentary secretary said, the agreements in place now obviously had broad parameters. If we study this topic and then come down with specific guidelines for the provinces, with the dynamics of provincial jurisdiction and service delivery, is that going to compromise what we would recommend?

    The other thing is, I see the challenge about the mindset of Canadians and educational institutions as far as the value of skills training. We identified that when we did our study and that there needs to be maybe some better communication, either by the province or the Government of Canada and help to educate the educators.

     I was just wondering what you see in those two topics.

     Mr. Chairman, on the first point, I've encouraged wide-open discussion on the LMDA renewal and the broader skills agenda from this committee and from other interested parties. I don't think that compromises the federal negotiating position.

     Once we get your input and that of stakeholders, we will then formalize the Government of Canada's negotiating mandate for LMDA renewal. We'll get your input first depending on your work plan because, to be transparent about this, we hope to have new agreements by the end of this calendar year and I would hope to formalize the federal offer to provinces for LMDA renewal this fall. We would hope to get your input in time for that.

    On the second point, yes we need, as it were, to better educate the educators on the realities of the labour market. That, however, is not a federal responsibility. I've asked to meet the Council of Ministers of Education of the provinces and territories to raise precisely this question.

     I am concerned, and all Canadians should be concerned, that we saw the closure of virtually our entire system of vocational high schools and of vocational training in our comprehensive high schools over the recent decades. There needs to be a re-engineering of the secondary and post-secondary education systems to create more choice and options for experiential learning in vocations and trades.

    Again, it is not a direct constitutional responsibility of the federal government, but you know, we pay for a lot of this. We transfer billions to the provinces, partly for higher education. I think we, as the custodian of those taxpayer dollars, have every right to ask the province how those dollars are being spent and what outcomes they are getting in terms of employment. I've put that on the agenda with the provinces.

    That will end this session because we do have a few things to do.

    Minister, I'd like to thank you, first of all, for the generosity of your time today. I know what your schedule is like, and I know this was an exception you made, and our committee truly appreciates it.

    We also appreciate your personal comments about what directions you are taking with the ministry in terms of the renewal of these LMDAs, and it is an excellent beginning to our study in that we don't normally have ministerial input.

     We thank you, sir, for being here today.

    Thank you, Chair.

    We will have a very brief recess and then resume in about two minutes.

    I call the meeting back to order. I would ask those who are not involved to please quickly move along so we can get our committee business done on time.

    As some committee members may be aware, the Standing Committee on Finance has invited our committee to study the subject matter of certain clauses of Bill C-31.

    It's my understanding that Mr. Armstrong has a motion for this. Typically with committee business, we go in camera. I'm not certain that we need to on this, but perhaps I'll leave it to the discretion of the committee. If someone wants to put us in camera, we can do that.

    I will.

    Okay, so we will move in camera. We'll break briefly, until we know we're technically in camera.

    [Proceedings continue in camera]