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FINA Committee Report

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Mr. James Rajotte, MP
Chair of the Standing Committee on Finance
House of Commons
Ottawa, ON
K1A 0A6

Dear Mr. Rajotte,

I am pleased to respond on behalf of the Government of Canada (the Government) to the Sixth Report of the House of Commons Standing Committee on Finance (the Committee) titled, Youth Employment in Canada: Challenges and Potential Solutions.  I would like to thank the Committee members for undertaking a review of this important issue and for listening to the testimonies of Canadians who offered their perspective on youth employment in Canada.  I would also like to thank the witnesses for their valuable observations and important contributions to this report.

As mentioned by the Committee, youth aged 15 to 24 are consistently at greater risk of unemployment, regardless of economic conditions, than core-aged workers (i.e., 25 to 54 years old).  Furthermore, since the recession, it has been somewhat more difficult for youth to find and retain full-time work.  However, average youth unemployment has been a full point lower from 2006 to 2014 as compared with 1993 to 2005.  Young men and youth with lower levels of education in particular have struggled to a greater degree than their peers.  Fortunately, Canadian youth are unemployed for shorter periods of time than their core-aged counterparts and participate in larger numbers in the labour market than in most developed countries.  Canada continues to have one of the lowest youth unemployment rates in the G7, but the Government recognizes that the rate is still too high.  The Government makes significant investments to deliver results for Canadian youth through support for education and support for training programs that help youth get jobs.  Overall, education and training programs have helped over 6 million youth obtain skills, training and jobs since 2006.

The Committee’s study is timely because a tightening labour market will make it increasingly important that youth leaving school have the skills the labour market needs and that they be able to find in demand jobs.  The Committee makes recommendations in a variety of areas, which speak broadly about ensuring that youth make informed career choices and have the skills that employers are seeking to make successful transitions into the labour market, while providing additional support to help under-represented groups reach their full labour market potential.  The Government supports this approach and, through its skills development agenda and programming that targets youth, has taken actions that are well-aligned with the Committee’s recommendations.                                                                                                                    

The Government makes significant investments every year in programs to facilitate the success of young Canadians who face barriers to employment.  The Career Focus, Summer Work Experience, and Skills Link components of the Youth Employment Strategy (YES) will receive $360 million in 2014/15 to help youth facing barriers to employment, including youth with disabilities, as well as post-secondary graduates to transition into the labour force.

In addition to having one of the highest youth employment rates among its peer countries, Canada also has one of the highest rates of post-secondary education (PSE) attainment among member countries of the Organisation for Economic Co-operation and Development (OECD). 

The proportion of young Canadians aged 25 to 29 with a post-secondary education (PSE) degree or diploma, including a trade certificate, increased from 43% in 1981 to 68% in 2011.  Furthermore, the “drop out” rate in secondary education has decreased consistently since the early 1990s.  Current projections anticipate that approximately two-thirds of job openings from 2013 to 2022 will be in high skilled occupations that require university or college education, an apprenticeship, or managerial skills.  Thus, it is important that young Canadians continue to receive the education and training that will prepare them to step into these openings.

Since 2006, the Government has made substantial investments to empower youth to make informed choices about their education, training, and employment, and to assist them throughout their preparation for an entry into the labour market.  The 2013 and 2014 Economic Action Plans committed a combined total of $30.8 million to initiatives designed to inform youth about job opportunities in high-demand fields.

The Government also uses targeted initiatives to ease the financial burden on students and apprentices.  The 2011 Economic Action Plan enhanced the Canada Student Loan Program (CSLP) by eliminating the accumulation of loan interest during in-study periods for part-time students and doubling the exemption made for income earned while studying to $100 a week.  In addition to the 500,000 apprenticeship grants the Government has issued since 2007, it also announced a new Canada Apprentice Loan (CAL) this year.  At least 26,000 apprentices in Red Seal Trades per year are expected to apply for over $100 million in loans.

Once they are trained, young Canadians should be able to use their skills anywhere in Canada.  The Government committed $4 million in the 2013 Economic Action Plan to continue its work with the provinces and territories to harmonize requirements for apprentices and so to increase labour mobility.  At the Forum of Labour Market Ministers (FLMM) in July 2014, the Government and the provincial Ministers of Labour committed to continuing work to break down barriers to labour mobility.

Although Canada’s youth are faring well compared to their international peers in terms of education and employment, youth are not a uniform group, and challenges remain for certain groups of young people.  Among young Canadians, Aboriginal people, recent immigrants, visible minorities, and persons with disabilities experience above average rates of unemployment compared to others in their age group.  Unemployment rates also tend to be higher for Aboriginal youth living on-reserve, compared to those living off-reserve.  Labour market outcomes also vary by gender, with young Aboriginal women generally worse off than young Aboriginal men.

The Government has implemented several programs and policies to help youth find good jobs while helping to address employers’ needs.

Facilitating the transition into the workforce

Canada has one of the highest rates of PSE attainment and youth employment among member countries of the OECD.  While a good education and training are vital for finding a well-paying job, a degree or certificate may no longer be enough to guarantee a successful transition into the workforce.  As businesses seek to enhance their productivity, it is increasingly important that workers have a solid foundation of work experience to ensure that their skills and abilities are current and reflect employers’ workforce needs.  To this end, the Government continues to take steps to make sure that federal funding and training programs are directed toward meeting labour market needs, and to help youth develop skills and gain real-life work experience through apprenticeships, cooperative education programs, internships, work placements, summer jobs, and entrepreneurship programs.

The Government supports youth through its flagship program, YES.  The Government is investing over $360 million in 2014/15 to help youth between 15 and 30 years old develop the skills and obtain the job experience needed to make a successful transition into the workforce through the YES Career Focus, Summer Work Experience, and Skills Link programs.  For example, the Career Focus program provides financial support to employers and organizations that hire post-secondary graduates to help them develop skills and gain work experience.  Similarly, the Summer Work Experience program provides wage subsidies to small private sector employers and not-for-profit organizations to help them create summer job opportunities for full-time students.  Since 2012, the Government has introduced changes to these YES programs to make them more responsive to labour market needs by increasing support for training and job opportunities in high demand fields such as science, technology, engineering and mathematics (STEM) and the skilled trades.  In the 2012 Economic Action Plan, the Government increased funding for YES by $50 million over two years to support the creation of 3,000 internships in high demand fields.  The 2013 Economic Action Plan provided an additional $70 million over three years to YES to support 5,000 new internships so recent graduates could gain work experience.  More recently, in the 2014 Economic Action Plan, the Government proposes to strengthen youth programming by dedicating $40 million toward supporting up to 3,000 full-time internships for post-secondary graduates in high-demand fields for 2014/15 and 2015/16.  In addition, to facilitate the linkages between small and medium-sized employers and youth, the 2014 Economic Action Plan proposes a reallocation of $15 million annually within YES to support up to 1,000 full-time internships for recent post-secondary graduates in small and medium-sized enterprises.

The Government has introduced the new Canada Job Fund Agreements, which includes the Canada Job Grant (CJG), and represents an investment of $3 billion over six years.  The CJG is directly linking skills training with employers and is helping ensure that Canadians, including youth, develop the skills required for available jobs.  The CJG is providing up to $10,000 per person in government contributions toward the direct costs of training and requires employers to contribute, on average, an additional one third of the total costs of training.  Under these agreements, the Government will continue to provide funding for programs and services that are designed and delivered by the provinces and territories based on local labour market needs.

Since 2006, the Government has worked with its partners to increase apprenticeship opportunities for young Canadians in order to help address localized, sector-specific skilled labour shortages.  For example, in Budget 2006 the Government announced the creation of the Apprenticeship Incentive Grant (AIG) and Apprenticeship Job Creation Tax Credit (AJCTC) to promote apprenticeships in the skilled trades as a post-secondary education option for youth and to increase employment in the skilled trades.  The AIG encourages young people to pursue careers in nationally recognized Red Seal skilled trades by providing a cash grant of $1,000 for the first two years of a Red Seal trade apprenticeship program.  The AJCTC encourages employers to hire new Red Seal apprentices, providing a tax credit of 10% of the wages payable to eligible apprentices in the first two years of their apprenticeship program, up to a maximum of $2,000 per apprentice, per year.  To further promote apprenticeship training and completion while addressing skilled labour shortages, the Government announced the creation of the Apprenticeship Completion Grants (ACG) in the 2009 Economic Action Plan.  The ACG provides a taxable cash grant of $2,000 to apprentices who complete their Red Seal trade certification.  Since 2007, over 500,000 apprenticeship grants have been awarded through the AIG and ACG initiatives.

Beyond providing incentives to employers to help apprentices fulfill the on-the-job training component of their studies, the Government has also committed to connecting apprentices with available jobs through initiatives related to federal procurement contracts, housing investment, and federally funded infrastructure projects.  In March 2014, the Government launched the largest long-term infrastructure plan in Canadian history, the New Building Canada Plan (NBCP), which provides predictable infrastructure funding for provincial, territorial, and municipal infrastructure for a 10 year period.  Through the implementation of the NBCP, the Government will encourage the provinces, territories, and municipalities to support training and job opportunities for apprentices on infrastructure projects receiving federal funding.

In addition to supporting employment among apprentices, the Government shows leadership in the use and promotion of internships and cooperative education programs to create job opportunities for Canadian students and recent post-secondary graduates.  Approximately 30% of all those hired by the federal public service in the last four years have been students.  As an employer, the Government attends career fairs across Canada to promote youth employment opportunities and work experience in the federal public service through programs such as the Federal Student Work Experience Program, the Cooperative Education and Internship Program (Co-op/Internship), the Research Affiliate Program, the Recruitment of Policy Leaders program, and the Post-Secondary Recruitment program.  The federal public service provides post-secondary students with a four month, full-time, paid practicum through its Co-op/Internship program.

As the Committee mentioned in its report, becoming an entrepreneur is also a viable career option that creates jobs, fosters innovation, and supports economic growth.  Since 2006, the Government has worked to create an environment in which entrepreneurs and new businesses can grow and succeed in a global economy.  In the 2013 Economic Action Plan, the Government announced funding of $18 million over two years to the Canadian Youth Business Foundation.  Now called Futurpreneur Canada, it is a not-for-profit organization that helps young entrepreneurs between the ages of 18 and 34 become the business leaders of tomorrow by providing mentorship, expert advice, learning resources, and start-up financing.  Under Furturpreneur Canada’s loan program, young entrepreneurs can also obtain up to $15,000 in start-up capital and work with an experienced business mentor.  To highlight Canada’s entrepreneurial culture, the 2013 Economic Action Plan also announced the creation of new Entrepreneurship Awards that aim to promote and inspire future generations of entrepreneurs by recognizing exemplary Canadian entrepreneurs, business mentors, and innovative start-up firms.

The Government is committed to ensuring that Canadians, including youth, are first in line for available jobs, and that employers make greater efforts to recruit and train Canadians and permanent residents.  Accordingly, on June 20, 2014, the Government announced reforms to the Temporary Foreign Worker Program (TFWP) to ensure that it is used as intended: as a last and limited resort to fill acute labour shortages on a temporary basis when qualified Canadians are not available.  As part of these reforms, the Department of Employment and Social Development will no longer process Labour Market Impact Assessment (LMIA) applications for certain low skill occupations in the Food Services and Accommodation, and Retail Trade sectors in economic regions with an unemployment rate of 6% or higher.  Entry-level jobs in these sectors have traditionally been used by youth as an introduction to the labour market.  This measure will thus help ensure that employers draw on the pool of young workers to fill available positions.  In addition, employers seeking TFWs in high wage occupations are now required to submit a Transition Plan as part of their LMIA application to explain how they will transition their workplaces to a Canadian workforce.  As part of their Transition Plan, employers must engage an organization serving groups that are under-represented in the labour market, such as youth, to identify potential workers.

Some youth use unpaid internships to gain work-related experience in their field of interest.  As responsibility for labour market and labour affairs is shared between the federal, provincial, and territorial governments, each jurisdiction has its own labour legislation, regulations and/or guidelines.  The Canada Labour Code (the Code) governs industrial relations, occupational health and safety, and employment standards in federally regulated workplaces.  However, there are no specific provisions in the Code for unpaid interns.  Under Part II (Occupational Health and Safety) of the Code, employers must ensure that individuals, including interns, are informed of, and protected from, health and safety hazards to which they are likely to be exposed in the workplace.  There are ongoing discussions on the issue of unpaid internships between the federal, provincial, and territorial departments and ministries responsible for labour.

Providing targeted support for under-represented youth

Canada’s long-term prosperity relies on the labour market participation of all Canadians.  However, as mentioned in the Committee’s report, youth with disabilities and Aboriginal youth may face particular challenges when trying to enter the labour market.  Accordingly, the Government supports the workforce participation of youth with barriers to employment through several programs.  To support the hiring of young persons with disabilities, both the Career Focus and the Summer Work Experience components of YES allow employers and organizations to receive financial assistance to cover the costs associated with disability supports.  Furthermore, every year the YES Skills Link program helps over 30,000 Canadian youth facing barriers to employment, including youth with disabilities, Aboriginal youth, recent immigrants, youth residing in rural or remote areas, single parents, and youth who have dropped out of high school.  Skills Link provides funding to employers and organizations to help youth with barriers to employment develop basic to advanced skills and obtain valuable work experience.  It also provides funding to support mentoring and entrepreneurial activities, client assessment, and job search and retention assistance.  YES funding supports Aboriginal Affairs and Northern Development Canada’s First Nations and Inuit Youth Employment Strategy, which provides $24 million a year for initiatives that help youth obtain information on career options, skills development opportunities, and work experience, including summer work experience for full-time students.

Through the Opportunities Fund for Persons with Disabilities (Opportunities Fund), the Government provides approximately $30 million per year to help over 4,000 persons with disabilities, including youth, to prepare for, obtain and keep employment, or to become self-employed.  In the 2013 Economic Action Plan, the Government announced an increase in ongoing funding to the Opportunities Fund of $10 million per year starting in 2015/16, for a total of $40 million, and committed to make the program more responsive to employers’ needs.  The 2008 evaluation of the Opportunities Fund found that obtaining work experience while in school was an important step that helped young persons with disabilities find a good job after leaving school.  Accordingly, the reformed Opportunities Fund will now give priority consideration to helping young persons with disabilities gain hands-on work experience.  Additionally, the 2013 Economic Action Plan announced that the Government will provide $222 million a year in funding over the next four years, matched by the provinces and territories, to a new generation of Labour Market Agreements for Persons with Disabilities (LMAPDs).  The new LMAPDs will focus on providing tangible employment opportunities and work experience through activities like youth internships.

The Government recognizes that Canada’s young Aboriginal population has tremendous potential for long-term success and prosperity, but Aboriginal youth remain under-represented in both PSE and the labour market.  Equipping First Nations to fully participate in the economy is a priority for the Government and for First Nations.  Accordingly, since 2006, the Government has made innovative investments in on-reserve education and in skills training programming for Aboriginal Canadians, including youth.

In 2012/13, the Government invested $1.55 billion in elementary and secondary education for 116,400 First Nation students living on reserve and attending school either on- or off-reserve in over 600 First Nation communities and almost 450 schools.  First Nations also receive funding for school-based services through elementary and secondary instructional services and student support services for eligible students who attend band-operated schools on-reserve, or provincial and private schools off-reserve through tuition agreements.  The Government invests over $300 million a year to support PSE among First Nations and Inuit students through the University and College Entrance Preparation and the Post-Secondary Student Support programs.  These programs provide financial assistance for tuition as well as travel and living expenses to Status Indians and Inuit students enrolled in university or college entrance programs that help them achieve the academic level required to enter PSE programs and those enrolled in eligible community college, certificate, and undergraduate and professional degree programs.  In addition, the 2013 Economic Action Plan committed $10 million over two years to Indspire’s Building Brighter Futures Program, which provides scholarships to First Nations youth so they can access PSE.  Indspire provides over 2,200 scholarships a year to Aboriginal students, and has raised significant support from corporate donors to support students’ success.  Through the Post-Secondary Partnerships Program the Government also helps PSE institutions design and deliver programs that respond to the educational needs of First Nations and Inuit students by, for example, converting courses to support on-line and distance learning.

In the 2013 Economic Action Plan, the Government also committed $241 million over five years to improve the on-reserve Income Assistance Program (IAP) to help ensure that First Nations youth can access the skills and training they need to secure employment.  Accordingly, the Government is providing $109 million of this funding to the new First Nations Jobs Fund to support skills assessments, job coaching, and personalized training.  Furthermore, the Government is providing $132 million through the Enhanced Service Delivery program to help First Nations, tribal councils, or other on-reserve income assistance service providers with the case management of on-reserve youth in order to focus efforts on assessing young people’s job readiness and identifying the skills they require to find and keep a job.

The Government works closely with Aboriginal communities to ensure that labour market programming is available to Aboriginal people regardless of their affiliation, status, and location and to ensure that programming is adaptable to their needs.  As complementary programs, both the Aboriginal Skills and Employment Training Strategy (ASETS) and the Skills and Partnership Fund (SPF) help Aboriginal people overcome barriers to employment and find jobs.  Since it was launched in April 2010, ASETS has been providing skills development and training supports to Aboriginal people with the aim of enabling them to take advantage of job opportunities in sectors and occupations that are in demand.  The Government has invested $1.68 billion over five years in ASETS.  Its programs are designed and delivered by a network of 85 service delivery organizations with over 600 points of service across Canada; these organizations partner with employers and industry representatives to connect Aboriginal people, including youth, to available jobs.  The SPF was launched in July 2010 and represents a federal investment of $210 million over five years.  The SPF is a project-based, opportunity-driven program that supports training-to-employment for jobs that are in demand by employers and has the flexibility to respond to skilled labour shortages.  The Government continues to engage with Aboriginal leaders, organizations, and stakeholders from across the country to better understand the successes, challenges, and potential gaps in Aboriginal labour market programming.  This ongoing dialogue is valuable to the development of new ideas on programming.

The Government has taken measures to promote an efficient labour market.

Collaborating with provincial and territorial governments

An efficient labour market with a mobile labour force creates conditions for all Canadians, including youth, to fully participate in our economy.  While Canadians are already mobile workers by most international standards, facilitating greater labour mobility will allow youth to respond to opportunities in high-demand occupations across Canada.  The Government is committed to continued efforts in cooperation with provinces and territories to remove barriers to interprovincial mobility in regulated occupations and skilled trades by helping them to adopt occupational standards based on common interprovincial standards.

The Interprovincial Standards Red Seal Program plays a critical role in harmonizing apprenticeship training programs in skilled trades.  The Program ensures the automatic recognition of certified skilled-trades workers across Canada and represents a standard of excellence for Canadian industry.  The federal, provincial, and territorial governments have a longstanding and successful partnership through the Red Seal Program, which is recognized in the Agreement on Internal Trade (AIT) as a well-established means of developing common interprovincial standards for skilled trades.  Standardized requirements encourage labour mobility and help to ensure that more apprentices complete their training.  In the 2013 Economic Action Plan, the Government reallocated $4 million over three years to continue to work with the provinces and territories to harmonize requirements for apprentices, and to examine the use of practical, hands-on tests as a method of assessment in targeted skilled trades.  A project is currently underway through the Canadian Council of Directors of Apprenticeship (CCDA) to review training and certification requirements in ten Red Seal trades.  In consultation with industry, the CCDA identified priority areas to enhance the mobility of apprentices.  In addition, the FLMM agreed during their July 11, 2014 meeting to support the Pan-Canadian pilot project on harmonization underway in the Red Seal trades.  The Ministers also requested that the CCDA expand harmonization to other trades.  The Government is also working with the provinces and territories through the CCDA on such initiatives as the integration of essential skills in Red Seal apprenticeships in order to improve apprenticeship programming, examination, and completion outcomes.

Significant progress on labour mobility has been made since the revision of the labour mobility chapter of the AIT five years ago.  At the July FLMM meeting, Ministers committed to continuing the removal of barriers to labour mobility.  The AIT guarantees that workers certified for a regulated occupation in one province or territory will, upon application, be certified for that occupation anywhere it is regulated in Canada.  Ministers also agreed on the need to provide Canadians with more information, including online, to help workers have their qualifications recognized anywhere in Canada.

Studying international best practices on multi-sector training partnerships to improve the responsiveness of the training system to employers’ needs

The Government believes that helping Canadians get the skills and training they need to be successful in the labour force is a responsibility shared by employers, workers, unions, educational and training institutions, and the provinces and territories.  In March 2014, a Canadian delegation embarked on a six-day tour to study the skills and training systems of Germany and the United Kingdom in order to deepen our understanding of the role of partnerships.  During the tour, the delegation met with government officials and business leaders to explore each country’s approach to skills training, and how these approaches could apply in Canada.  The delegation also toured training centres, met with students in both Germany and the United Kingdom, and took part in roundtable discussions with stakeholders from a wide range of sectors, including manufacturing, education, and labour.  Representatives of the Government have also visited Denmark and Switzerland, and plan to visit Australia, to learn more about apprenticeship systems and the role of partnerships in each country.

In addition, in June 2014, Employment and Social Development Canada hosted a National Skills Summit that brought together about 200 leaders from business, education and training, labour, and the public sector.  The Summit reinforced the importance of partnerships and the Government is committed to an ongoing dialogue with key actors to address our labour market challenges.

The Government has taken several measures to empower youth to make informed training and employment choices, and to support their financial readiness for post-secondary studies or apprenticeships.

Providing learning and labour market information to better inform student choices on educational and career paths

To make informed choices about training and employment, Canadians, and in particular youth, need to have access to up-to-date learning and labour market information.  Good choices early on can help to ensure that young Canadians get the skills and experience necessary to find work quickly, to avoid unnecessary debt, and to have a better start to their careers.  Recognizing that provinces and territories hold primary responsibility for PSE, the Government is committed to empowering youth to make informed choices and to promoting the benefits of pursuing education in fields of study that help meet labour market demands.

The Government provides youth with information about education and career options, including information on trades and apprenticeship programs, on its youth website (http://www.youth.gc.ca) and through its social media platforms.  It also funds Statistics Canada’s learning surveys, such as the Post-secondary Student Information System and the National Graduates Survey, which provide information on enrollment, graduation, and graduate outcomes.

In addition, the Government plays a key role in developing a highly qualified and mobile skilled tradesperson workforce and recognizes the importance of promoting the skilled trades as a first-choice career, and apprenticeship as a desirable PSE option.  While recognizing provincial and territorial governments’ authority in this area, the Government has long been committed to increasing the appeal of apprenticeship in the skilled trades and connecting youth to employment opportunities in this area.  For example, the Government supports the Interprovincial Standards Red Seal Program’s efforts to inform stakeholders, tradespeople, secondary school students, and the general public across Canada about apprenticeships and skilled trades through its website (http://www.red-seal.ca) and through its travelling kiosk.  Furthermore, the federal government provides funding to Skills Canada, a not-for-profit organization that promotes careers in the trades and technology to young Canadians.  Information on apprenticeship is also made available through the Registered Apprenticeship Information System, which provides comparable information on the number of apprentices taking in-class and on-the-job training in trades, and the number of provincial and interprovincial certificates granted to apprentices.

The 2013 Economic Action Plan reallocated $19 million over two years to inform young people about fields of study that are relevant to existing and forecasted demand for labour by occupation.  The Government committed to providing more information on the job prospects and benefits of working in various occupations, and to developing new outreach efforts to promote careers in high-demand fields such as STEM fields and the skilled trades.  This commitment includes support for a web-based product and outreach to inform student choices.  Accordingly, the Government is developing a new Career Choice Tool that is being added to a modernized and easy-to-use Job Bank website.  This tool will help to provide youth with information about expected outcomes by fields of study, and will also improve the ability of programs and institutions to respond to labour market needs.  Furthermore, the 2014 Economic Action Plan announced an investment of $11.8 million over two years and $3.3 million per year, ongoing, to launch an enhanced Job Matching Service to ensure that Canadians are given the first chance at available jobs in their local area that match their skills.  The Job Matching Service will build on the launch of a modernized Job Bank, providing employers and job seekers, including youth, with timely access to job postings and labour market information.

In order for Canadians, including youth, to have access to information on available jobs and occupations in demand, the Government also funds Statistics Canada’s monthly Labour Force Survey, which provides estimates of employment and unemployment that are among the most timely and important measures of performance of the Canadian labour market and economy.  In addition, the Government announced that, starting in 2015, it will invest $14 million annually for two new Statistics Canada surveys – the quarterly Job Vacancy Survey and the annual National Wage Survey.  These new surveys will provide more information on regional job vacancies by occupation and skill level, as well as national and regional data on prevailing wages by occupation.  This data will help youth identify in-demand occupations in their region as well as current and emerging labour market pressures.  Furthermore, the Sectoral Initiatives Program (SIP) funds partnership projects that support the development of industry-based labour market information, national occupational standards, and certification and accreditation programs.  The SIP helps to produce information that enables job seekers and students to make informed decisions associated with career planning, learning and training.  It also facilitates labour mobility by producing information to support decisions on where to move for work.

Supporting youth and their families with financial planning for post-secondary studies

The Government has made efforts to help youth and their families plan for the financial expenses associated with PSE and training.  It is important to the long-term financial security and retirement readiness of Canadians, including youth, that they have appropriate tools and knowledge to make responsible financial decisions.  To this end, the Government continues to promote savings and financial planning initiatives for young Canadians and their families.  By developing a National Strategy on Financial Literacy and specific electronic tools to facilitate financial education, and by offering savings vehicles such as Registered Education Savings Plans (RESPs), the Canada Education Savings Plan (CESP), Tax-Free Savings Accounts (TFSAs), and Pooled Registered Pension Plans, the Government is providing support for young Canadians as they plan for the future.

With respect to saving for PSE, the Government supports financial literacy through CanLearn.ca, a website that offers information and tools designed to help Canadians save, plan, and pay for PSE and apprenticeships.  Through CanLearn.ca, parents and youth can obtain information on how to use RESPs and access the CESP to help save for part-time or full-time education after high school.  The CESP promotes and improves awareness of the importance of saving for a child’s future PSE expenses, while also helping parents and youth navigate and access the savings programs and benefits available to them.  For example, the CESP offers savings incentives in the form of Canada Education Savings Grants (CESG) and Canada Learning Bonds (CLB) to encourage Canadian families to plan and save for a child’s PSE using tax-assisted RESPs.  By helping families build savings, RESPs and the CESP aim to help make PSE more affordable.  The CESG can provide up to $7,200 toward a child’s RESP, and families who receive a National Child Benefit Supplement may be eligible for the CLB, which may provide up to $2,000 toward an RESP.

Providing student financial assistance to increase affordability and access to post-secondary studies and apprenticeships

As the Committee rightly states, PSE and apprenticeships play a key role in helping youth get the skills they need to succeed in the labour market.  The Government provides a number of measures to ensure that youth with demonstrated financial needs are able to access the financial assistance they require in order to pursue post-secondary studies.

For example, the Canada Student Loan Program (CSLP) promotes accessibility to post-secondary education by reducing financial barriers through the provision of Canada Student Loans (CSLs) and Canada Student Grants (CSGs).  In 2012/13, the CSLs provided $2.6 billion in loans to 477,000 students and the CSGs provided $695 million in grants to 357,000 students from low- and middle-income families, students with dependents, and students with permanent disabilities.  Since 2006, the Government has made several improvements to the CSLP to facilitate youth transitions into the labour market.  The 2011 Economic Action Plan enhanced financial assistance for full-time students by doubling the exemption made for income they earned while studying, from $50 a week to $100 a week.  The 2011 Economic Action Plan also eliminated the accumulation of interest on CSLs during in-study periods for part-time students, providing the same in-study interest-free subsidy as was available to full-time students and making part-time education more affordable.  The 2014 Economic Action Plan also announced the elimination of the value of student-owned vehicles from the needs assessment for CSLs and CSGs.

The 2014 Economic Action Plan announced several measures to provide support to apprentices.  It created the CAL, an expansion of the CSLP that will help apprentices registered in Red Seal trades pay for their training.  A total of over $100 million in loans will be provided to approximately 26,000 apprentices per year through the CAL.  It also introduced the Flexibility and Innovation in Apprenticeship Technical Training pilot project, which will enable apprentices to work while completing their technical training.  Finally, the Government committed to increasing awareness of the financial support already available to apprentices during their technical training through the Employment Insurance program.

After PSE, some Canadians may have difficulty repaying their CSLP loans due to particular circumstances.  To assist borrowers experiencing difficulty in repayment, the Government implemented the Repayment Assistance Plan (RAP) in 2009.  The program includes a separate stream for borrowers with a permanent disability.  Under the RAP, monthly payments are limited to less than 20 per cent of a borrower’s income, and no borrower has a repayment period longer than 15 years (10 years for borrowers with a permanent disability).  These enhancements, as well as those made by provincial/territorial governments and educational institutions, have resulted in a gradual decrease in the default rate on CSL, which now stands at approximately 13%.

Given that the Government provides a major portion of student financial assistance, it monitors levels of individual student debt closely.  The Government continues to assess appropriate measures aimed at assisting students and parents to save for education, providing financial assistance to help youth pay for their education, and supporting young Canadians in repaying their student debt.

In closing, I believe that this response demonstrates to the Committee that the Government will continue to support youth to acquire the skills and competencies they need to make successful transitions into the labour market.  We are proud of our record which has helped over 6 million youth obtain skills, training and jobs, but there is still more to do.  We are also proud that youth unemployment has been a full point lower from 2006 to 2014 than it was from 1993 to 2005.  Canada continues to have one of the lowest youth unemployment rates in the G7, but the Government recognizes that the rate is still too high.  The Government will continue to make significant investments to deliver results for Canadian youth through support for education and support for training programs that help youth get jobs.  Their contribution towards securing our economic future is invaluable.  Once again, I would like to commend you and the members of the Committee for your hard work, and extend my appreciation to the witnesses who appeared before the Committee.

Yours sincerely,

 

Hon. Jason Kenney, PC, MP
Minister of Employment and Social Development andMinister of Multiculturalism