Thank you very much, Mr. Chair.
Thank you for the opportunity to be here today. You should have a slide deck in front of you. I'd like to walk you through it over the next few minutes.
As I know some members are aware, CFIB is a not-for-profit, non-partisan organization representing more than 110,000 small businesses across Canada. Our members collectively employ more than 1.25 million Canadians. Small businesses across Canada account for $75 billion, or nearly half of GDP. They represent all sectors of the economy and can be found in every region of the country.
As you may be aware, CFIB takes direction solely from our members through a variety of surveys. That makes us a bit different from other organizations. We know that business owners are often too busy to attend round tables or AGMs, so we go directly to them for feedback through our survey process and through our field force of approximately 220 district managers, who knock on the door of approximately 4,000 small businesses a week. This provides us with an opportunity to understand the realities of running a small business at a grassroots level.
As I mentioned, we are a survey and research-based organization. The data I'm presenting to you today is not necessarily focused on the greater Toronto area, but we know that the experiences of business owners across the country, which I will share with you today, can be readily attributed to the experiences of those business owners.
The first piece of research I'd like to share with you is on slide 3. This data is from our Help Wanted report from the third quarter of 2018, which evaluates small business vacancies across the country. This shows that vacancy rates for small businesses are at all-time high, with approximately 430,000 jobs currently unfilled across the country. The vacancies are highest in the construction industry and for services, including personal services—mechanics, plumbers, electricians, hairdressers, etc. This will likely be increasingly a concern as the baby boomer generation retires over the next five to 10 years. Note that in the construction industry alone, 250,000 workers are set to retire in the next 10 years.
I will let members know that while this data is from quarter three, on Monday we will have new data from the fourth quarter of 2018 coming out. I just couldn't share it with you before then, unfortunately.
As you might expect, given those job vacancy numbers, many business owners have had difficulty hiring the employees they need. As you can see from slide 4, 78% of respondents said they've had trouble finding employees, while an additional 36% have had trouble retaining staff. Past research has shown that employers have the most trouble filling positions that require on-the-job training.
In addition to finding the employees, small business owners face many challenges when actually proceeding through the hiring process. As you can see from slide 5, nearly three-quarters, or approximately 70%, have difficulty hiring due to a lack of candidates in their geographic area, while over half have indicated that candidates are underqualified for their businesses' needs. Nearly half have also indicated that candidates for the jobs they are trying to fill have unrealistic expectations with respect to wages, benefits, vacation time, etc.
To address some of these challenges and improve their odds of hiring the right candidate, many business owners are doing what they can to attract and retain employees. As you'll see on slide 6, 60% of small employers have increased salaries and/or benefits to attract candidates, nearly 80% have improved salaries and benefits for the employees they already have, and 64% have increased training opportunities for these employees.
Part of the reason small employers in particular invest so much in their employees, especially ones who've already been hired, is the cost of training new employees. Once they have found an employee who's the right fit for their business, many small employers will turn to training them to improve their productivity within the business. As you can see from slide 7, new hires with no experience, often young people getting their first job, cost the most to train, approximately $4,200. A new hire with some experience still requires a significant investment on behalf of the business owner, around $2,800. As the cost of hiring increases, many employers may hire fewer young workers or may choose to hire more experienced employees rather than youth with little to no job experience.
While I know that this is not the focus of this particular study, it is our view that, as a result, youth could lose out on valuable opportunities to gain work experience, or might be forced to delay getting their first job, meaning that employment rates of youth between the ages of 15 to 18 will remain low. We do think this is a significant solution to the potential problems you've been discussing today, so I will detail that a bit further.
As I mentioned, one solution to the shortage of skilled workers is to invest in youth. We recently completed a report on youth employment. We discovered through surveying over 6,000 members that more emphasis is needed on matching the skills needed by most employers with those that young people have when they enter the job market.
On slide 8, you can see that the most important skills and attributes employers are looking for are general motivation and attitude, communication skills, professionalism, basic literacy, problem-solving and flexibility. Specific industry knowledge, previous work experience and educational attainment are less important to an employer. As you saw in the previous slide, many small employers can and do hire young people, despite the cost to their business.
One way to better prepare young people for the job market is to improve the connection between educational institutions, students and small employers. Community colleges are consistently rated highest by SMEs, as you can see on slide 9, as colleges are connected with the business community and involve the small business community in the creation of their syllabus. In community colleges, instructors often tend to have related on-the-job experience that they can then share with students.
University and high school students are at the bottom of the list in terms of job readiness, which is problematic. High schools should be teaching job readiness skills, as youth often get their first jobs in high school.
Government can also play a role. As you'll see on slide 10, small businesses identified the best ways government can help their businesses hire the workers they need: decrease red tape associated with the hiring process; decrease the costs associated with hiring new employees, either by reducing payroll taxes or by implementing tax breaks for hiring or training; and, provide tax assistance to help them invest in their businesses, such as the accelerated investment initiative.
To conclude, our recommendations are as follows.
We recommend that government consider reducing red tape associated with hiring and training. This can be, for example, records of employment, the LMIA application process for bringing in temporary foreign workers and reporting requirements to access government programs.
We're also suggesting that you consider implementing measures to reduce the cost of hiring and training in the form of perhaps an EI training credit for small business or an EI holiday for youth hiring.
We're suggesting as well that you emphasize and promote the skilled trades as a viable career option among youth and those looking to retrain, and better communicate with small business owners on the government programs that may be able to help offset the costs of hiring and training.
I will conclude on this note. I'm happy to answer questions you may have.
I can also answer your questions in French.
Thank you to the committee for inviting me to speak today.
Today I would like to explain what the Ontario Construction Secretariat has seen regarding the skills shortages in the greater Toronto-Hamilton area, and some of the challenges associated with them.
For the sake of speed, I'm only going to use two acronyms. Ontario Construction Secretariat is going to be OCS, and the greater Toronto-Hamilton area is going to be the GTHA. They're both mouthfuls.
I will conclude with recommendations on how to increase the construction skills development in this region.
The OCS was formed in 1993 to represent the collective interests of the unionized construction industry in Ontario's industrial, commercial and institutional construction sector. The OCS is a non-partisan, joint labour-management organization that works with 25 unionized construction trades and their contracting partners. We represent over 100,000 union members and 5,000 union contractors who actively train the skilled construction workforce.
The OCS believes that the skills gap in the construction skilled trades in the GTHA is nuanced and multi-faceted. In a 2018 survey of contractors, we found that among the variety of challenges that contractors are experiencing, recruiting skilled workers was their biggest concern. We will be presenting the results of the 2019 survey of contractors in early March, and will share that report in our written submission.
BuildForce Canada also reinforces this point, citing that as major project requirements approach an anticipated plateau in 2020, keeping pace with rising employment demands across most of the province's regions will remain a challenge for the industry. Although other areas will face skills shortages, the GTHA will be the epicentre of labour market issues, given the size of the construction market and the number of significant major projects currently on the books.
I would like to address the challenges associated with the lack of skilled workers in the industry. Skilled workers are the backbone of this country. Building the Canada of tomorrow requires a focused effort to attract, train and retain a skilled construction workforce. Without sufficient workers, projects are delayed and costs increase.
A number of systemic challenges are associated with future-proofing the construction industry's skilled workers, including an overall lack of awareness of the skilled construction trades, navigating through the complex apprenticeship system and pathway, economic barriers for training, a lack of labour mobility and apprenticeship completion rates. Each of these challenges has complex roots and is not easily solved.
It is important to understand that each trade is distinct in its overall requirements and the number of skilled workers in the labour market. Although the skills gap is an issue facing the vast majority of the construction trades, a one-size-fits-all approach will be less than effective.
For the purposes of my presentation, I'd like to primarily focus on the lack of awareness of careers in the skilled trades, the complexity of the apprenticeship system and the barriers associated with labour mobility.
I'd like to speak about some recommendations of how to increase skills development in this region.
The stigma associated with the skilled trades is central to the ongoing challenge of attracting workers to the construction industry. To better understand the extent of this issue, in 2017 the Government of Ontario undertook a province-wide engagement with more than 1,000 stakeholders in the apprenticeship community. During this consultation the most common recommendation was that there was a definite need to improve the perceived value of careers in the skilled trades and that earlier outreach to elementary and secondary schools is needed. Much has been done, but there still is a need for more.
The OCS started the Future Building expo in 2001, specifically to address this need. This is an annual three-day interactive event co-funded with the Ontario government. Future Building has brought a hands-on trade experience to over 200,000 youth to introduce them to and stimulate their interest in the construction industry's skilled trades. This generally gets moved around the province. It's not in the same place every year.
What we have seen, and my staff has witnessed first-hand, is that young career seekers and the general public do not understand the diversity of jobs and the opportunity in the skilled trades.
I digress for a second. How many people know what a glazier or a millwright or a boilermaker does? How do you research a career option when you don't know that the option even exists?
Returning to Future Building, this event also shows us that hands-on experience in the trades works. Our annual Future Building survey of students and teachers showed that 57% of the students who came to Future Building 2018 are now more likely to consider pursuing a career in the construction trade.
Our goal is also to showcase the trades to influencers. Of the teachers who attended Future Building 2018, 81% were more likely to encourage students to pursue a career in the construction trade after attending it.
Unfortunately, 2019 is the last year of our three-year funding agreement with the Province of Ontario, and we are in the process of looking for new federal and provincial partnerships. We would be happy to showcase our event in the GTHA as we have in the past. I would also like to extend an invitation to everyone here to come out to Future Building in Ottawa. It's going to be held at the EY Centre on May 14 to 16. I'll send that information later.
One of the best ways that more skilled workers can enter the GTHA labour market is to increase apprenticeship levels across the area. In recent years there has been much done to encourage individuals to enter into the apprenticeship system. The continued promotion of supports available for apprentices, such as the apprenticeship completion grants and the Canadian apprenticeship loan system, are vital for those deciding to enter into the skilled trades.
Increased supports can also come from existing EI payments available to those attending the in-class portion of their apprenticeship. When an apprentice is in an official program, part of it is on the job, and then they generally have three eight-week blocks in class. When they go in class, they're eligible for EI. The problem is that, in many cases, the EI payments are delayed and frequently don't arrive until after the eight weeks. During those whole two months, they're not getting anything when they're used to getting paid every Friday. There have been problems with EI payment delivery for years.
This obviously is a challenge to those who live in the GTHA because of the high cost of living. An increase in these payments when apprentices are entering block training would dramatically alleviate the financial hardships that many apprentices experience when they attend their training centres. We recommend the government review the use of these programs and continue to promote them in the GTHA.
Many unions also stress that workers themselves require more support. This is especially important, as some skilled trade workers travel up to 200 kilometres a day, round trip, just to get to the sites in downtown Toronto and downtown Hamilton. While some trades have travel provisions negotiated that provide financial compensation for travel, a better understanding of costs and restrictions on the labour force will provide effective solutions. Many of these costs are unique to the construction skilled trades as workers do not have conventional working situations.
Construction is project-based employment. This means a worker can be dispatched to many different locations throughout the year. It is not the same office address every day; it can be all over the place. Ideas such as allowing workers to claim mileage and parking costs as tax deductions would significantly reduce costs associated with transportation and thus increase the labour pool and labour mobility. Consultants, salespeople, accountants and lawyers are allowed to deduct their travel expenses and parking. This would be welcomed in the construction industry as well. It would also be an advantage for non-union tradespeople, who do not always have the same level of support that those in a unionized environment have.
Research is the foundation of the OCS. As I conclude my remarks, I want to provide you with a summary of some of our current studies. The OCS is in the process of working on a demographic and diversity study. Our apprenticeship longitudinal study is in its fifth year. We are doing an updated study of union investment and training and an update on the underground economy. We are more than happy to provide these reports to the committee and assist with any research requests relating to labour markets in Ontario.
Thank you again for allowing me to make this presentation on this important issue.
Thank you, committee, for inviting me here to speak. It's a real pleasure.
I represent the Toronto Community Benefits Network. We are a 99-member organization and growing, a coalition of community organizations, grassroots groups and social enterprises, unions, construction trades training centres and workforce development agencies. Nine of the largest union training centres are members of the TCBN.
We negotiate community benefits agreements into major infrastructure projects, and together as a coalition and with our partners and key stakeholders we are making collective impact.
In the fall of 2017, TCBN undertook a labour market analysis, funded by the Ontario government, to identify strategies to address the workforce development needs of employers and employees in sectors supporting access of under-represented groups to trades and jobs and to procurement opportunities in the construction industry.
Our analysis included both secondary and primary research. First, an environmental scan and document review were undertaken to ground the research and to learn about the trends and opportunities, challenges and best practices and contextual information to interpret the needs of the industry in this area.
The construction industry, as you know, is booming, fuelled in large part by hundreds of billions of dollars of investment of taxpayer dollars into infrastructure projects over the next 10 to 12 years. The industry is one of the largest employers in Canada. Within the unionized construction sector, it provides well-paying jobs with benefits and pensions.
The sector has been described by researchers as one of the most complex and problematic arenas within which to manage people. The structure of construction workplaces, outsourcing, subcontracting, and start-up of flexible firms, leads to the employment relationship's being characterized by separation, conflict, informality and reluctance to embrace change. Structural and cultural impediments to equality, diversity and inclusion and work-life balance exist in the sector, leading to discriminatory cultures, outmoded procurement processes and informal networks.
Once the environmental scan was conducted, TCBN conducted further research.
All lines of evidence throughout TCBN's consultation process confirmed that indeed there is a skills gap in the construction industry. This skills gap was identified at all levels of the industry, from entry-level positions as apprentices to project management experience.
We have seven recommendations from that research, which I have also attached to the paper I presented to you.
There is an untapped labour pool of people from diverse communities that have been historically overlooked in the construction industry who could meet this need. Toronto is 51% visible minorities; Ontario is 32%; Canada is 22%, up from 11% in 1996—doubled in the last 20 years.
In our society, women make up at least 50% of the possible labour market. This reality, though, is not reflected in the industry. The Government of Ontario, in its report on the need to modernize the apprenticeship system, identified that of those registered with the Ontario College of Trades, only 4.4% are women, 1.9% aboriginals and 1.2% racialized apprentices.
Our research built upon TCBN's work during the past two years in supporting the implementation of the community benefits framework for the Eglinton Crosstown construction project.
Community Benefits is proving to be a process to intentionally address the issues of under-representation in the trades. Community Benefits requires the contractor of a project, especially when they're funded by taxpayer dollars, to source from the local labour pool.
The Eglinton Crosstown LRT project runs through many of Toronto's low-income and priority neighbourhoods, and the project has an aspirational goal to hire apprentices and journeypersons from historically disadvantaged groups to perform 10% of all trade or craft working hours on the project. This was negotiated with our Community Benefits coalition.
The partners at the table with the Metrolinx Community Benefits working group have designed and are implementing outreach, support and monitoring mechanisms to track the progress of community members along the pathway and to identify and address challenges that arise. In working through the challenges of building up such a system, TCBN and its partners now recognize that all sectors involved need greater awareness of their strategic roles as well as knowledge, skills and resources to fulfill what is essentially a workforce development strategy for the construction sector.
The Eglinton Crosstown project is starting to show good outcomes, with more than 100 apprentices hired to date and 150 professional, administrative and technical workers hired. It hasn't reached the 10% goal that we had anticipated, but we have more time and we're developing processes. This is what the community benefits process allows us to do.
We celebrate the achievement of each individual. We are proud to tell the story of Ahmed, a young Somali resident of the Mount Dennis community who took an interest in learning a trade after hearing about Community Benefits. He connected with Chris, from Carpenters' Local 27, who saw mentorship as a key to the success of an apprentice such as Ahmed.
Now in his third term, Ahmed is the first of 100 apprentices who have been hired on the Eglinton Crosstown project through the Community Benefits program. Soon, Ahmed will be a mentor in TCBN's NextGen Builders program. He's going to be a journeyperson. This program was developed in partnership with the LiUNA African American Canadian Caucus. We are achieving collective impact by working with the industry.
Interestingly, as a newcomer to Canada, Ahmed did not qualify for Ontario Works and could not access many of the supports available through federal, provincial or municipal bodies to access employment services or pre-apprenticeship training. His experience entering the trades was unnecessarily chaotic and harsh.
This example demonstrates the need for government to reduce the artificial eligibility requirements and burdens that are inherent in the current system for newcomers to seek employment.
Just as important, Canada has already invested in welcoming generations of immigrants to our country. Many of these first- and second-generation immigrants, many of them citizens now, continue to be under-represented and marginalized in the labour market. We need to address that situation.
In conclusion, TCBN supports this study on labour shortages to identify the gaps that contractors are facing sourcing skilled trades from the local labour pool. We would add that this study must include an equity, diversity and gender lens.
Further, we recommend that a diversity panel be established, led by senior provincial leaders and subject matter experts in construction, workforce development, diversity and inclusion, and by stakeholders with lived experience. It is so important to meet with those folks who are dealing with the issues on the ground.
The panel's long-term goal would be to ensure that all construction workplaces engaged in publicly funded projects have the knowledge, skill systems and resources in place and are operationalizing diversity and inclusion practices that match or exceed local and global best practices in construction or other workplaces.
The study would build on Canada's leadership with the invest in Canada infrastructure program, of which I'm sure you're all aware, which is a good start for the federal government to develop standards that the industry can buy into and begin to innovate in so as to accelerate systemic change.
The program sets out the criteria for reporting of the community employment benefits achieved by implicated infrastructure projects receiving funding under the program stream.
The next opportunity that is coming up is for the government to pass Bill at the Senate. If passed, this would require contractors to report on community benefits to the local community. As such, contractors of federal infrastructure projects would be required to engage early with the local labour pool and prioritize the hiring of under-represented groups. Industry leaders in diversity and inclusion are also cautioning that true inclusion requires steps and processes that take time and persistence.
With the bill passed, the next step would be to invest more strategically in training and educating newcomers and under-represented populations about the opportunities and the process to access these opportunities. Investment is required for more pre-apprenticeship programs.
This is an opportunity for under-represented groups to get their foot in, because they have no prior experience and access in the industry. They don't have a mom, a dad, a brother or an uncle in the industry. That's right now how the industry recruits for members.
Let's demystify something. There is demand from under-represented groups to access jobs and opportunities in the industry. TCBN alone has over 600 people in our database who have expressed an interest in the jobs and opportunities created through Community Benefits. Our partners from the vast network of employment services agencies in Toronto will also confirm that they have waiting lists.
Most historically under-represented groups in the trades are experiencing high levels of unemployment in their local communities, sometimes double or triple the national average. We look at that at TCBN and we see this as a massive opportunity: untapped labour that you can call on. We need the opportunities to be opened up for them.
Canada had no problem more than 80 years ago in figuring out how to rapidly attract women into non-traditional jobs when the Second World War presented a labour shortage in male-dominated occupations. The period required to develop and implement the strategy was approximately five years, and that was during wartime. Within the construction industry, we have 10 to 12 years.
We know the investment is there. Here is our opportunity to take that leadership by providing the appropriate incentives and supports to attract our women, racialized and immigrant workforce into the trades.
In events such Future Building—and I'm tooting my own horn, obviously—what happens is that we have approximately 20 of the unions come in, they have a hands-on booth, and the kids come in and get to try what that trade involves.
Virtual reality has become a big training tool. They can weld using a virtual welder. They can paint—spray paint, not brush and roll. They can go on a Genie. They have the virtual reality and are up on a Genie and are working. These training tools help real apprentices learn via virtual reality. It's safer and better. It's just like pilots. They train in virtual reality and are then much more apt to do well in the real world. We expose them to the tools this trade uses.
We have younger apprentices there who are obviously closer to their age. They ask, “What did you do? What were your challenges? Why do you like doing this?” There's a lot of interaction. Those are the kinds of things that really resonate and change people's attitudes. We take surveys of people coming in and we take them when they exit, and there's a dramatic change. They'll say, “Oh, I didn't know that.”
Kids nowadays love all the cool electronics and cool high-tech stuff. Well, let me tell you, if you see what the ROM did with the glass and the high-tech equipment.... The total stations are about $15,000. Guys have to train and use that equipment to build stuff now. It's not the old hammer and drill; it has become high tech, and you're not getting muddy all of the time.
That was my quote: You don't have to have a hammer and drill for the next 30 years.
Once you become a journeyperson, you can become a contractor. You can take some courses in project management and estimating and start your own company, or you can work for another company and be an estimator, or....
You don't have to be on the job site for the next 40 years. You can be, if you want, but there are many different job branches that come out of the skilled trades, and once you have your journeyperson, your C of Q, you can go on to bigger and better things.