:
Thank you very much, Mr. Chairman. Good morning to you and to all members of the committee.
My name is Andrew Treusch, and I'm representing the Department of Human Resources and Social Development. I'm accompanied by colleagues: Ms. Donna Kirby, Mr. Peter Larose, Mr. John Atherton, Ms. Barbara Glover, and Monsieur Sylvain Segard. It's a very great pleasure to be here.
I will situate us. This is the second of our presentations to you as a committee. In the first, on June 1, our delegation was led by Ms. Karen Jackson and a number of officials. She gave you an overview on human capital development, as well as information on skilled worker shortages, labour mobility, and recognition of foreign credentials.
Today we will continue our presentations. You should have with you four sets of information related to seasonal workers, older workers, adjustment, and workplace literacy.
[Translation]
Once again, we have provided documentation on these issues in both official languages, with a focus on facts and research which may be of interest.
[English]
In addition, I would like to assure you that we are in the process of providing written responses to the questions asked of us at the previous session. Three information requests were made of us: first, about differences in access to post-secondary education for persons residing in rural and urban areas; second, about the cost to doctors of credential assessment; and third, about the relationship between EI and mobility.
On this last, I have familiarized myself with three or four studies and would be happy to answer a question in that regard today, pending the formal written response to the committee. This information will be provided to the clerk within the next few days, along with any other responses to the questions you may put to us today.
Previously we spoke to you about the drivers for change and their impact on the labour market. I want to expand on those, with a brief depiction of how we see the Canadian economy and the labour market adjusting to external pressures, as well as to changes here at home. This process is quite relevant to the challenges, as we see them, that relate to the employment issues you've raised with us: seasonal and older workers, as well as the issues of literacy in the workplace.
Now, it is worth restating that Canada's economy and labour market are performing very well. Not only are our macroeconomic indicators strong, but Canada's participation rate of 67.2%, in April of this year, is exceptional by historic and international standards, as is our unemployment rate of 6.4%.
[Translation]
However good our performance is, there are always difficulties and changes we must face if we intend to maintain or even improve this performance. The main factors at play are an aging population, the commodities boom, the rising dollar, globalization and an increasingly competitive environment as well as an ongoing transition towards a knowledge-based economy.
[English]
Responding to these drivers will be important to achieve both social and economic objectives and will require that we focus increased attention on increasing labour market participation through better recognition of immigrant credentials and by removing barriers to work; improving skills and promoting lifelong learning, including increased opportunity for adult re-skilling; increasing labour market efficiency and flexibility by reducing barriers to mobility and improving the flow of labour market information; reducing economic security, so individuals are better able to manage these transitions; and finally, supporting adjustment processes for individual sectors and communities to adapt to these changing economic realities.
In terms of the decks, I do not propose to present them to the committee today, due to their length, but I will highlight a few features of each.
With respect to labour market adjustment, first,
[Translation]
The Canadian economy is constantly changing. These changes are inevitable and crucial to both growth and prosperity. In order to adapt, we simply intend to shift the focus of our resources from less productive activities to more productive sectors.
Over the years, our economy has undergone a huge structural change, having shifted its focus, to a certain extent, from the manufactured goods industry to the service industry. These changes have led to the sudden arrival, and departure, of a large number of employees, and have created both opportunities and obstacles as the markets attempt to balance supply and demand.
[English]
Canada does well on adjustment. International organizations such as the Organisation for Economic Co-operation and Development attest to it, as does the International Monetary Fund, which rates our capacity for adjustment as high.
That means, for the most part, individuals make successful transitions as firms expand or decline and this economy changes. Well-functioning markets and a national pool of skilled, mobile workers contribute to reducing the imbalances in supply and demand experienced in some sectors and regions.
Nevertheless, more must be done. Skill shortages in growing regions and sectors reflect strong national and regional economies, combined with slower labour force growth and rising skill requirements. These upside adjustment challenges have the potential, if not addressed, to limit Canada's growth, if firms cannot find the workers and the other resources to expand and meet labour market demand.
So this structural evolution has a differential impact on the adaptation of individuals, communities, firms and sectors. Older workers, for example, while doing well overall, do take longer in general to find employment than younger Canadians, to return to work once they experience unemployment.
The issue of seasonal workers also illustrates some of the dynamics of adjustment and both the challenges and opportunities. With respect to seasonal workers, the seasonality of the Canadian economy has gradually diminished over the years, reflecting a decline in seasonal primary industries; technological advances; and the falling share of youth in the labour force, who traditionally rely on seasonal employment as a primary source of income.
Some regions are more seasonal than others, particularly Atlantic Canada, but seasonal employment is present in all regions across Canada. In fact, over half of seasonal workers are located in Ontario and Quebec. They represent a higher proportion of the workforce in Atlantic Canada due to the concentration of seasonal industries there.
For some individuals, seasonal work is welcome. It supports their preference for other activities, such as providing temporary opportunities for individuals to gain valuable work experience--such as students--or in certain regions, allowing residents to remain in their communities. However, for others, recurring seasonal employment may create challenges. For example, workers in undiversified remote communities are less likely to find alternate employment opportunities in the off-season, due to the nature of their employment.
With respect to older workers, Canada's population structure is changing; population aging is accelerating. The share of the population age 65 and over is forecast to expand rapidly in the coming decades, and this expected increase will be most pronounced in the Atlantic provinces and Quebec. Aging brings forth a number of challenges in a Canadian context. Its most significant effect for us is on future labour supply growth. Slower labour force growth can lead to a slowdown in economic growth rates and in the growth of our living standards. As a result, among other populations, it's notable that older workers--and here I'm speaking of workers between the ages of 55 and 64--will be an increasingly important source of experienced labour.
[Translation]
As the population in the Atlantic and Quebec regions is aging more rapidly and is saddled with, on average, a lower labour force participation rate, aging will be even more detrimental to labour supply.
[English]
As the population ages, older workers are becoming an increasingly important part of the workforce but continue to face barriers to remain in, and return to, employment--issues such as the currency of their skills, literacy, and other essential skills.
I will mention that I have brought with me today the 2005 report on Canada's aging and employment policies, a report of the OECD, which I would be very pleased to leave with the clerk of the committee. It provides both a review of Canada's performance in an international context and some recommendations that may be of interest to committee members.
In closing, I would now like to conclude with a brief reference to workplace literacy. It is clear that the Canadian workforce needs to be highly skilled and adaptable to compete in this global economy, and a foundation for skills development surely is literacy and numeracy and a propensity to lifelong learning.
[Translation]
In a knowledge economy, the labour market not only requires superior skills, but also constant upgrading and regearing of acquired skills. Better literacy promotes learning, makes transitions smoother and helps workers adapt more easily to changing professional demands.
[English]
There is a convergence of change both in our economy and society, this shift towards a knowledge-based economy combined with a low incidence in Canada of workplace training, which is resulting in some significant changes. And you will find much more data on the incidence of our literacy issue by sector, by region, by age, and by other factors in the deck that we've made available you.
I thank you for your indulgence, Mr. Chair, in hearing me thus far.
[Translation]
We would be glad to answer your questions.
:
Thank you very much, Mr. Chairman.
Thank you for your presentation, Mr. Treusch. I'd like to broach a number of the issues you raised.
First, on page 2 of your brief concerning seasonal workers—or perhaps we should refer rather to seasonal work—you said that in many Nordic countries, seasonal work is a key component of the labour market.
That is interesting. Maybe that means we can finally recognize the work these people do across various industries throughout Canada whether it be in the building, farming, fisheries or tourism industry. As far as the fishery and agricultural sector is concerned, obviously we're not going to grow potatoes right in the downtown core of Toronto. Clearly, we need rural regions, where seasonal work is common place, so that we can provide these goods.
I'd like to focus on two points related to seasonal work and labour in general. First, as you know, I tabled a private member's bill so that people entitled to employment insurance benefits will no longer have to wait two weeks. We all know that the waiting period sometimes exceed two weeks. It can stretch out to four, five, six, seven and even eight weeks before a person in need gets his first cheque. This is unacceptable, in my opinion.
Some of us may be able to afford to wait two months before getting a pay cheque while still paying for groceries, the telephone and electricity bills, and their mortgage. But I'm not convinced that someone who losses his job has enough money in the bank to go two months without an income.
This is no longer the 1930s where you could go to the general store and buy material and food on credit. From what I understand the rationale behind the two-week waiting period, in the past, very little, if at all anything, was computerized. All the calculations had to be done more or less manually. In our days, all you have to do is push a button to know somebody's entire history.
I'd like you to comment on the scrapping of the waiting period. This would be an acknowledgement of peoples' needs. If someone is going to get employment insurance benefits for 26 weeks, he or she should at least be able to get a first cheque a few days after visiting an employment centre. The person may not receive the entire amount immediately, but at least it would help to pay the bills. You can't escape it, somebody has to buy food. And I don't think anybody here is about to offer to pay a needy person's bills. We need to find a way of helping such people, and one way of doing this would be for the government to be more flexible.
Could you comment on this.
I think the member raises two issues. One is the incidence and nature of seasonal work in the Canadian economy in reference to Nordic countries. Certainly while Canada has still a fair bit of seasonal work, it clearly does relate to our northern geography, our climate. It also relates to the continued importance of natural resources extraction in the economy, and it does relate to rural and remote populations. So I essentially agree with that.
You'll note in the deck, however--and it's actually quite important to remind ourselves of this--on page 5, that over half of seasonal workers are in fact in the service industry, and some of these as well, if you think of things like tourism, also have a summer coincidence. There is perhaps a broader set of seasonal work than is often thought to be the case, and it's important to remember as well that a large number of these people are students, although different data sets have given different estimates there.
On the second point regarding the two-week waiting period, it would seem to be a policy issue that the member is raising. He's made reference to a private member's bill, and so I assume our members of Parliament will debate that and will put their arguments accordingly.
In the term “employment insurance program”, the second word I would focus on is “insurance”. We tried to preserve some of its insurance features. It's not inconsistent with an insurance program to have a short waiting period. It does then presumably protect the program against very short-term churn, where you might have people trying to apply and going through the administration, for periods that were shorter than that. One should remember as well that in those circumstances, depending upon the nature of the employment, sometimes severance is available for the individuals themselves, although this is probably less likely with respect to seasonal work.
So this is something that obviously we will be looking at insofar as it arises in your private member's bill.
:
Thank you. It is a very challenging question from the member, Mr. Chair.
First, if I may just quibble a bit, I don't think I said that the Canadian economy is at full capacity or is going gangbusters. The message I meant to relay is that, compared to many other industrialized countries, the Canadian economy and the labour market in particular are performing very well. Looking backwards over a long series of years, the Canadian economy and the labour market have never performed better.
This is not to say that we do not have problems, serious challenges for individuals, for communities, for regions. And indeed, we would not be coming with information on some of these challenges of adjustment, seasonal work, and older workers if we didn't think there were serious policy challenges withstanding.
I do agree as well with the minister, of course, that if there were simply no problems, then perhaps the department could shut its doors and there would be little need for much of our programming. Our programming obviously exists, along with provincial programming, to support individuals through these transitions, whether it's access to post-secondary education, whether it's training opportunities, or whether it's income support for people who lose their employment through no fault of their own.
Poverty is a very large subject. There is a tendency in many countries where disparities in market income have been widening. Canada is not alone. This really attaches great importance to the social safety net, not only to programs like employment assistance, but also to provincial social assistance regimes. So when you make reference to food banks and the like, you really have to look, I think, at the workings of employment insurance, social assistance, as well as the influence of the tax system there.
Obviously we have concerns about people who lose their jobs. That's the very raison d'être for employment insurance and for employment measures themselves, the part II programs, where funds are revealed to be available and either we co-manage them with provinces or, in many instances, provinces deliver those services as well.
I would just point out in closing that the tax system is not unimportant here. While I'm not an authority, in terms of some of these individuals and the hardships you refer to there are a couple of features of the last budget. Both the employment tax credit, which supports employment, and the working income tax benefit set out...there's a proposal that can be an additional inducement to support people in making the transition into the labour market.
:
Thank you, Mr. Chairman.
First, I would like to make the following statement. There is a reality that some people do not understand, which is that companies in rural regions, whether they be in the Atlantic region, in Quebec or in Northern Ontario, also need employees.
The reality for us in Atlantic Canada is that people come in from other countries to fill the gaps. Now there is no way we can solve this problem as a whole by transferring employees from region to region.
Now I would like to raise the issue of literacy. I am sure that you are aware of the situation. In New Brunswick, the illiteracy rate has reached 67%. This does not mean that these people cannot read or write at all. Basically, this refers to how well they function at work. I know that this matter has been discussed before.
Given this situation, with such a high percentage, we wonder whether different measures should be taken from those that currently exist within the regular programs. And I mean dynamic programs aimed at lowering that percentage, as it is really very high. This is not just 5, 7 or 8%. The situation is very different. We have already had problems with education in the past. Therefore, in the future, we may also see a decrease in illiteracy. However, in order to bring this about, people should be given the equipment they need in order to function well at work.
No doubt, you will say that this is a political issue, and I understand, but I would like to know whether you think that it would be important to have a dynamic, precisely targeted program that would do whatever is possible to bring that percentage down.
:
I'm not an expert, but I do know a little about this.
You're absolutely right. First of all, in regard to your point about high skills versus low skills, we actually have a national occupational system that puts the skills in four categories: A, B, C, D. You're absolutely right, A can be very high skilled, but D still has some level of skill, and you go down. And you're right, in the temporary foreign worker program for C and D you can only stay a maximum of 12 months.
We've done some pilot studies, particularly on truckers, about this, and we're trying to figure out whether it's right. I'm not saying everything at C is lower than everything at B. It's not a perfect system, and the skill requirements of jobs are constantly changing so we're constantly revisiting the classification to make sure it is right.
But I think the basic thrust would be, again, as Andrew was alluding to earlier, before we bring in a temporary foreign worker we ask ourselves if the employer advertised for the job. Clearly, the higher up you go, the harder it is going to be to find somebody who can do a job.
At the lower levels what we're doing is protecting the system a little bit, particularly if the economy changes. So we bring in Andrew from overseas, we give him some training, but in the meantime the economy may have changed and there may be people who can do that work. Part of what we're doing is saying, after 12 months, Andrew, you have to go back and the employer has to relook and see whether other people can do the job. We find that at the lower levels that's often the case, and there are people who can do the job.
Is the system perfect? Absolutely not, and particularly in Alberta right now with the unemployment rate so low, it makes it difficult. But again, it's something the system is trying to adapt to in terms of how fast the labour market is changing.