Mr. Chair and members of the committee, I am pleased to speak on the 2012-2013 main estimates for HRSDC and to present key elements of our government's economic action plan 2012.
[English]
As I said when I met you in November, Canada's performance in terms of jobs and growth is very encouraging, but we cannot be complacent. In the short term we need to deal with the lingering effects of the recession and get our economy back on a solid path of economic recovery and growth.
But we also have to take the long view and consider the interests of Canadians, not just for the next few years but for the next few decades.
I believe the two biggest challenges that we are facing are demographic change and the skills gap. The demographic challenge can be articulated very simply. Our population is aging, with the proportion of retired Canadians increasing relative to the proportion of those who are working and active in the labour market, and this trend will accelerate. Today, there are four people of working age for each person over age 65. By 2030, instead of a ratio of four to one, that ratio will only be two to one.
[Translation]
This trend has implications that we need to address. The most obvious one is that an aging population puts pressure on the retirement income system. Canadians are living significantly longer than they did when Old Age Security was first introduced in the 1950s—and they are collecting retirement benefits for a much longer time.
[English]
OAS, quite simply, is unsustainable on its current course. Specifically, in 2012, the costs were $36 billion, and according to Canada's Chief Actuary, by 2030, they will be $108 billion and will account for roughly 25% of all federal program spending. Therefore, our government is taking action to protect OAS for future generations by gradually increasing the age of eligibility for old age security from 65 to 67, starting in the year 2023.
We will also offer older people assistance and financial incentives to stay in the workforce. For example, starting in July of next year, we will offer Canadians the option to defer collection of their OAS and subsequently receive an actuarially adjusted higher pension. In addition, we will proactively enrol more seniors in OAS and GIS, removing the need for them to apply themselves, and save costs at the same time.
We believe that all of these measures will improve flexibility and choice in the OAS program and keep it sustainable for future generations.
Our second biggest challenge is the growing skills shortage in this country. We're already starting to experience acute labour and skills shortages in various regions and sectors throughout the country, and those will only continue to grow. More and more, our productivity depends on our ability to work smarter rather than harder. Our greatest assets are our human resources in the form of skilled, educated, and adaptable people.
As Minister of Human Resources, I'm very concerned about the fact that in some areas we have high unemployment, and yet in those same regions we often experience labour shortages. Last year more than 250,000 jobs in Canada remained unfilled.
[Translation]
Part of the problem is that there is a mismatch between the skills that employers need and the skills that are available in the workforce. That is why, over the past three years, in collaboration with the provinces and territories, our government has made huge investments in skills training and employability programs.
In the economic plan 2012, we are intensifying those efforts. Besides our general labour market programs, we also have targeted initiatives for youth, all the workers, aboriginal people and people with disabilities.
[English]
I recently spoke to the G-20 labour and employment ministers conference about youth employment.
Countries around the world are exploring every possible way to meet the challenge of employment for young people, and I was happy to be able to share our experience and best practices and to learn from others.
In Canada, youth employment is challenging, there is no question. The unemployment rate there stands at just under 14%. As I stated to my global colleagues, there unfortunately is no silver bullet to resolving this issue. But the situation in Canada, fortunately, is better than for most other countries.
Many young Canadians, who could be launching their careers and contributing to the economy, are held back because they aren't prepared for the demands of the workplace. Sometimes it's because they lack basic skills. Sometimes it's because they don't have the specialized knowledge that leads to good jobs.
[Translation]
We know that, in today's labour market, two out of three jobs require some form of post-secondary education. And we are taking a multifaceted approach to support skills development and education programs.
The Government of Canada is committed to making post-secondary education accessible and affordable for all Canadians.
[English]
We invest over $10 billion annually in support of post-secondary education, we have boosted education transfers to the provinces by 70%, and we are giving more direct support to students through various forms of financial aid. In the 2010-11 school year, the Canada student loans program provided loans and grants to approximately 445,000 students.
We are also helping students to manage their debt through the repayment assistance plan, otherwise known as RAP, under which borrowers pay back only what they can reasonably afford. In the 2010-11 school year, the RAP assisted approximately 165,000 borrowers who were having difficulty with repayment.
Just recently, we also announced that we are increasing the income eligibility thresholds for part-time student loans and grants.
Of course, a degree is not the only ticket to a good job. To help meet the rising demand for skilled workers, our government also provides cash grants to encourage young people to pursue apprenticeships in the skilled trades.
Sometimes, the greatest obstacle to a young person getting a job is simply a lack of experience. That's why, in EAP 2012, we're also reinvesting in our youth employment strategy, which helps young Canadians prepare for the labour market and get that all-important first job.
[Translation]
Our goal is to get as many Canadians working as possible. And if they lose their jobs, we want to get them back to work as quickly as possible.
[English]
We want to ensure that Canadians are always better off working than not.
EAP 2012 has introduced new measures to make the employment insurance program more efficient and more effective for Canadians. We are working to remove disincentives to work, improve the information and support provided to Canadians, and ultimately better connect them with jobs in their local area that match their qualifications.
The changes being introduced to EI are not about forcing people to move. They're not about attacking certain regions of the country.
The changes are about improving a federal system so that Canadians better understand the expectations we have of them while they are on EI. They are about making sure that Canadian workers are made better aware of the opportunities available in their own geographic area.
Ladies and gentlemen, they are about helping to ensure that employers have better access to available Canadian workers before hiring temporary foreign workers.
To conclude, Mr. Chair, our government has been clear that our priorities are: job creation, economic growth, and Canada's long-term prosperity. My department continues to be a key driver for these objectives, both today and tomorrow.
[Translation]
I would now be happy to answer any questions you may have. Thank you.
As I mentioned in my speech, one of the critical challenges facing us as a country is going to be the skills gap. That's why, as a government, we've made unprecedented investments in things like universities and colleges and their infrastructure, so that they have the capacity, first of all, to provide young people with the skills they are going to need for the future jobs.
We also need to help these students, in many cases, connect with the jobs. That's why we have the youth employment strategy. I, too, was pleased with the extra investment this year.
There are three main streams of the youth employment strategy. One is the Canada summer jobs program that helps well over 30,000 students each summer get real experience that will often help them prepare for their future careers. It also helps them finance their way through further schooling.
There are two other aspects to it. One is the career focus program, which helps post-secondary students or university students who are graduating who are trying to find a job. They may have a lot of different challenges finding a job. The program is there to help them identify what to do, where to go, and how to get those jobs.
Then there's the skills link program, which has been very successful in helping young people from, let's say, challenged backgrounds. They may be from broken homes, have addiction issues, or even have some learning disabilities. It helps these young people to, first all, identify what they'd like to do and what they'd be good at, and then it teaches them how to pursue the jobs and how to do the interview. It gives them a work placement, since the lack of experience is often the single biggest barrier to getting their first real job. I've personally seen some tremendous achievements by thousands of young people in this program. It has been really great in helping young people get attached to the labour market in jobs that suit them. We're pleased with that and pleased to move forward with the additional investment in these programs.
:
Thanks. I particularly like the question because this announcement was made recently.
To put it in context, I met with a number of people who are on employment insurance and had been offered part-time work, and I met with the employers who had often offered it to them. These EI claimants said they couldn't afford to go to work for the employers. Yes, they would like to do it, but it cost them to work because the system is set up in such a way that someone who is on EI could earn, by taking part-time work, the greater of $75 or 40% of their claim. After that, they had to turn back from their EI, dollar for dollar, every dollar they earned working on a job. It just didn't pay. It didn't make sense to work beyond that $75 or 40% cap.
So people who wanted to work were basically told their work was worth nothing, and employers couldn't get the help they needed. So a few weeks ago we introduced this change, which takes effect in August, that says if they can find part-time work, we're going to let them benefit from that. They're still on EI but they'll now be allowed to keep 50 cents of every dollar they earned, and that's for part-time work. That's a good thing.
First, the worker and his or her family are better off, but second, we know that quite often somebody gets a part-time job and that leads to full-time work, and then that person is off EI, they are collecting full wages, and that's even better. So you go from EI to working part-time when you can keep your EI plus, to working full-time in many cases.
With the skills and labour shortages we're experiencing across the country, and that we're expecting to see grow significantly, this is a good way to make sure that work always pays, that people are always better off putting forth the effort they really want to.
For many years, a program called the best 14 weeks pilot project has been run in 25 of the 58 EI regions across the country. As you say, it was a number of years ago, and what it said basically was that in areas of high unemployment where it's difficult to find a job, instead of taking their average wage, we were just going to take it from the best 14 weeks they worked. One of the problems was that if you worked extra, it started to bring you down a bit.
But the other thing that we found was that in those regions where the pilot project was running, when they started the pilot project they might have been at 13% or 14% unemployment, and they're now sitting at 5%. Yet other parts of the country where there was a 5% unemployment rate, people needed maybe 22 to 26 weeks. That's how they were evaluated, so they would be taking more work but at a lower rate. They ended up getting fewer benefits in dollars than the people in the pilot regions, and that wasn't fair.
So we said we were going to make it equal across the country and adjust it according to the unemployment rate in their region. Now if you have two parts of the country where the unemployment rate is the same, somebody has the same job experience, they're going to get the same benefits. But we're also going to make sure that it does vary according to our belief that when an unemployment rate in an area is low, it's easier for people to find work, so it makes it harder to qualify for EI. They have less need for it because there's more opportunity for them to be working.
So it's going to vary directly with that, which I think is fair. In areas where it's tough to find another job and the unemployment rate is high, then the number of weeks required to determine the benefit rate will be lower in recognition of those differences that exist between different regions.
:
Thank you, Mr. Chairman.
Thank you, Minister, for taking your time today to be with us and to the other individuals who are in support of your being here.
I have a question about prevailing wages. But before I get into that question, I'd really like to give you a good example because I know you know my riding really well, being in the neighbouring riding, and some of the challenges my community has faced over the long term.
I had an experience recently with a contractor, who's a friend, who came to my office and told me about the fact that they had taken on a lot of restoration work. They needed 21 new workers, unskilled, who they were going to train in pointing masonry joints on older buildings, and they were trying to connect to the resources of those individuals who would be willing to take those positions. Their frustration was with just that. It was with the fact that all the methods they had undertaken to that point before coming to see me had been frustrating and had been unsuccessful in filling those jobs.
So there are two points I want to reinforce with the direction you're taking and compliment your ministry on taking these directions. One is removing disincentives from the system, so that people actually say, “That's a good paying job,” which it is, and “I can learn at least a skill out of doing it.” But the matching part of it is so important and I compliment you on addressing that.
The question I'd really like to pose, though, is about prevailing wages, because as both you and I know, there are a lot of temporary foreign workers who come into your riding and my riding, especially through the spring, summer, and fall seasons. I have noticed lately that there's a lot of misinformation circulating on the issue of temporary foreign workers, and in particular, how prevailing wages are calculated and how this new wage schedule will be applied.
Can you please clarify our government's new method for determining prevailing wages for temporary foreign workers and how these measures will help Canadian businesses ensure that labour and skills shortages do not stop Canada's economic recovery?
:
I'll be sharing my time with Mr. Lapointe.
I have one quick question about CMHC, especially in light of CMHC's really vital role in affordable housing and with respect to first nations housing.
Minister, you're probably aware that in the 2010-11 Public Accounts, CMHC reported $247.7 million in lapsed funding for, and I quote, “Low-cost loans for new construction projects to eligible First Nations”. Because that seemed like such a huge amount, we followed up. We contacted the department, and we were informed that, quote, “...the amount of lapse should have been reported as $16.3 million”—not $247.7 million, but just $16.3 million.
So an amount of $231.4 million was put in this line when it should have been put under “Advances under the National Housing Act”. That's a quarter-billion dollar error.
Then we followed up with another question, and CMHC responded that they'd made another error two pages later, this time putting another $208 million in the wrong line.
Now, given the role that CMHC plays in programs that are really vital to Canadians, I wonder if you just want to make a comment about how we can have any kind of confidence in how CMHC is managing a portfolio that's literally worth hundreds of billions of dollars.
:
We'll come back to that when we finish with the estimates. We'll deal with that and make that correction.
Now with respect to the estimates, we have to vote on votes 1, 5, 10, 15, 20, and 25.
Shall vote 1, less the amount voted in interim supply, carry?
HUMAN RESOURCES AND SKILLS DEVELOPMENT
Human Resources and Skills Development
ç
Vote 1—Operating expenditures..........$617,650,000
(Vote 1 agreed to)
The Chair: Shall votes 5, 10, 15, 20 and 25 carry?
Human Resources and Skills Development
ç
Vote 5—Grants and contributions..........$1,761,017,000
Canada Industrial Relations Board
ç
Vote 10—Program expenditures..........$11,424,000
Canada Mortgage and Housing Corporation
ç
Vote 15—To reimburse Canada Mortgage and Housing Corporation for the amounts of loans forgiven, grants, contributions and expenditures..........$2,139,812,000
Canadian Artists and Producers Professional Relations Tribunal
ç
Vote 20—Program expenditures..........$1,879,000
Canadian Centre for Occupational Health and Safety
ç
Vote 25—Program expenditures..........$3,853,000
(Votes 5, 10, 15, 20, and 25 agreed to)
The Chair: Shall I report the main estimates 2012-13 to the House?
Some hon. members: Agreed.
An hon. member: No.
The Chair: It shall be done in any event.
Some hon. members: Oh, oh!
The Chair: By the way, just so you know, these would be deemed to be approved if we didn't approve them here today. Remarkably, as we carried on with questions—and certainly we dealt with what was in the budget implementation bill as well as the EI changes, which are not covered in these main estimates. They will be covered in the supplementaries, but it was far too interesting to have anyone interrupt.
Now, with respect to the point or order—