Interventions in Committee
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Angelo DiCaro
View Angelo DiCaro Profile
Angelo DiCaro
2014-04-02 17:09
Good afternoon, Chair, and members of the committee. My name is Angelo DiCaro. I'm a national representative working in the research department of Unifor, Canada’s largest union in the private sector. Unifor represents 305,000 workers across Canada in nearly every sector of the economy.
We appreciate the opportunity to address this committee today on an issue which we fear if not taken seriously or dealt with meaningfully, will have lasting consequences for Canadians.
On the surface the issue is about youth unemployment. There are more than 382,000 young Canadians between 15 and 24 who fall into this category. Ostensibly, the solution to the problem is to get these 382,000 people into jobs. However, and as previous presenters have expressed to this committee, the more accurate and poignant analysis lies deeper beneath the standard reported unemployment numbers.
Youth unemployment in provinces like Ontario has actually fallen since the recession, yet youth employment-to-population rates sit at historic lows, a reflection of young people simply giving up and exiting the labour market altogether. The underemployment rate, which is captured monthly by Statistics Canada and includes not just the unemployed but discouraged workers and those who would rather work full time but can only find part-time jobs, is another metric that digs deeper into the youth labour market challenges, but it is very rarely reported. Currently one in five young Canadians are considered underemployed by this measure.
Equally as important to this committee’s analysis must be the foundational restructuring of Canada’s job market over the past generation and its impact on young Canadians. Of the 17 major economic sectors in Canada’s economy as measured by StatsCan, seven have turned out net job gains for young workers since 1976. Of those seven, which include sectors like construction, technical services, business services, and recreation, the two that have yielded the biggest job gains are retail and wholesale trade and hospitality. In fact, today half of all young workers in Canada are employed in either of these two sectors. One generation ago that number was far more modest, about one in four.
The average hourly wage for young workers in the retail and hospitality sectors is less than $12. That's the lowest in our entire economy.
As a result of this restructuring, more young workers today find themselves in low-wage jobs than they did a generation ago. This is a serious problem as the expenses many young people are expected to bear, including housing rent and tuition, continue to rise. Average student debt in Canada, for example, is $37,000.
Young workers are also far more likely to work in part-time and precarious jobs today than ever. A generation ago, 21% of young workers held a part-time job. Today, that number has jumped to 48%, and most of that jump is accounting for young workers between 20 and 34 years old. Yes, some of this has to do with young Canadians staying in school longer, but much of it has to do with the quality of jobs on offer.
There’s a prevailing myth that young workers favour part-time work. In fact, since 1997 there’s been a 33% jump among young workers who voluntarily work part-time. However, the number of young workers who are involuntarily working part-time, and who cite business conditions as the reason why they can’t find full-time work, has risen over that same time period by 231%. That is seven times faster than growth in voluntary part-time work.
Is it any wonder more than 150,000 young workers today hold more than one job. Is it any wonder that nearly 43% of all young people in Canada still live with their parents, and that's compared to 27% in 1981.
This unchecked restructuring of our economy has created a more vulnerable generation of workers with poorer labour market outcomes than generations past. To be clear, I am not saying more factory jobs will cure what ails our country’s youth unemployment crisis. I am also not saying young workers should steer clear of working in the retail and hospitality sectors.
What I am saying is that the eventual recommendations this committee makes to improve labour market outcomes for young workers have to consider these deeper structural challenges. Part of the policy prescription must tackle the worsening quality of existing jobs in tandem with any proposals designed to bring more jobs to market.
We understand the committee's objective is to explore solutions to improve youth employment outcomes in Canada. We invite the committee to consider the following policy prescriptions in light of the evidence we've provided above. There are three that I have.
One, establish a national multi-stakeholder retail and hospitality sector work standards and training council.
Less than 15% of workers in precarious forms of employment receive employer-paid training compared to almost 60% of workers in more secure forms of employment. There is currently no active multi-partner—
My five minutes are up?
View Francis Scarpaleggia Profile
Lib. (QC)
Thank you very much. I am brand new to this committee; I am substituting for someone.
I've been thinking.... We all think about this issue a lot. We hear that we need to have more on-site training and that governments need to invest more in this. There are different models, of course. The government has come out with the current model, and there's going to be financing and so forth, but I'm trying to understand the dynamics of this whole issue.
You have the schools, the community colleges, which teach specific skills; it could be in knowledge-based areas such as engineering or law, and community colleges will teach all kinds of other skills on real-life equipment and so on.
Then when you think of the workplace, you think about the employer who hires someone who has gone through, say, Algonquin College and knows how to do CAD/CAM, for example. They put them to work and then have to teach them a bit about the product they're making and so on. That is more like an apprenticeship.
When we talk about the money that businesses need for training, what are we talking about? As I say, the school system is giving people skills, and yes, people have to choose the right avenue, because you have to be useful in life—unless you're a politician, I suppose. So what's the role—this is a bit of a naive question, and it's meant to provoke an answer—that the employer plays in this, other than showing the new employee, who already has some basic skills, the nuances of that particular firm's product or that particular firm's system, and so on?
When business says it needs more money for training, what is it talking about?
Sarah Anson-Cartwright
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Sarah Anson-Cartwright
2014-04-02 17:28
I'll start, being here representing business, as my colleague Monique is as well.
I don't know that we're asking for more money for training, but certainly there is an expressed interest that business step up its investment in employee training. That's something that has been noted in a lot of research, that Canadian businesses don't seem to be making the direct investments to the degree that our American counterparts are.
But we have to take into context the on-the-job training that is happening. As CFIB has noted, in small business firms that amounts to a very great deal; their estimate is $18 billion a year in small businesses' training their employees on the job in an informal way. That is not counted as formal, direct investment.
The up-skilling that is needed—
Monique Moreau
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Monique Moreau
2014-04-02 17:29
Sure. I'll speak to that.
Some of the research that we have demonstrated shows that the most effective way to help a business is to give them a relief on payroll tax. What we would suggest and what we have promoted in the past is such things as the EI hiring credit, whereby the smallest of businesses, those with less than about $400,000 in payroll, when they get an up to $10,000 increase in payroll, get an up to $1,000 tax credit from Revenue Canada. They don't administer it. Revenue Canada decides. They don't have to apply for anything. It's automatically calculated at the end of the year, recognizing that if you have had an increase in your payroll tax over the last year, the reason is most likely that you have trained someone and have brought on a new staff member.
I challenge a little bit the notion that employers aren't doing enough. As Ms. Anson-Cartwright mentioned, our research shows that $18 billion a year is being invested by small business. Yes, some of that will be specific to the business, but in other cases it's just giving especially youth their first chance. You're teaching basic customer service. You're teaching basic responsibility, management skills. That is transferable, and that's what happens.
We have a shortage of qualified labour because bigger businesses come and take those now newly trained employees from the small business and move them up.
Angelo DiCaro
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Angelo DiCaro
2014-04-02 17:36
Yes, I appreciate it.
As I mentioned, the first one was about looking at retail and hospitality and looking at a multi-stakeholder dialogue in those sectors. It would be a dialogue about how things such as on-the-job skills training could be improved, especially as it relates to young workers. Also it would be about even basic transferable skills training, which in some cases unions will take on and bear the burden of that, and assist with. There could be some dialogue with that. That doesn't exist right now in Canada.
One other suggestion we had was to attach youth employment targets to major public infrastructure projects. We've seen some success with this and some developments in the province of Ontario.
Also, really try to tighten up existing wage subsidy programs. Right now it seems as though a lot of them that are national in scope are very much focused on short-term jobs. If we can attach some of those to longer, more permanent jobs, I think that would get us a long way toward solving some of the poor labour market outcome problems we have.
Monique Moreau
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Monique Moreau
2014-04-02 18:02
Thank you.
I want to highlight from our presentation that small businesses do train youth. They are very involved in youth hiring and they do an incredible amount of on-the-job formal training that needs to be recognized by government.
They can be assisted in that by considering things like the EI training credit or the EI hiring credit focusing on youth, keeping payroll taxes stable, and looking at solving this issue of apprenticeship and all the different associated issues that go with having 10 different provincial bodies across the country dealing with that.
David McGovern
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David McGovern
2014-03-06 15:32
Thank you very much.
I'd like to thank the committee for inviting Employment and Social Development Canada to appear before you today on the topic of youth employment.
I'd also like to introduce my colleagues around the table, but we have too many of them, so I won't. They're here to help me if you have questions regarding programs that support youth participation in the labour market.
As the committee is aware, the government announced in Budget 2014 its intention to better align employment programs with the realities of the labour market, and in that context, the committee's study is timely and welcome.
Over the coming decade, approximately 6.2 million people will enter the labour market, three-quarters of whom will come from the school system. Young labour market entrants will therefore contribute the most to labour force growth, well above the contribution of new immigrants.
We also know that over the next 10 years the shift in employment towards occupations requiring higher levels of skills and education will continue, as approximately two-thirds of new jobs will require some form of post-secondary education. A large proportion of these will be in health, engineering, and technology occupations, as well as in certain skilled trades.
The recent recession highlighted the importance of skills and education for youth, as those with higher education levels fared better, while those with lower levels of education were most severely affected.
Canadian youth are investing in their education, and educational attainment is among the highest in the world and growing. At the same time, there is some evidence that qualifications are not optimally aligned with demand. In particular, employers express concerns that too few students are choosing in-demand fields such as science, technology, engineering, and math, and many do not consider skilled trades as a first career choice.
Given growing skills requirements of jobs and pressures of an aging labour force, it is essential that youth have the right skills to make successful transitions in the labour market and to improve their ability to adjust when economic circumstances change.
Addressing skills challenges facing youth has been a long-standing objective of the Government of Canada's policies and programs. Recent efforts, however, have focused on ensuring interventions are better aligned with the needs of employers and the labour market.
More specifically, that has meant enhancing opportunities for Canadian youth to access post-secondary education and supporting careers in the skilled trades; assisting youth transition to the world of work by providing tangible work opportunities in areas of high demand; and ensuring youth have the information they need to make informed career and training choices aligned with the needs of the labour market.
Allow me to highlight some of the Employment and Social Development Canada key initiatives dedicated to supporting these objectives.
The government supports access to education through a number of programs and initiatives. These include, for example, the Canada student loans program. This provides student financial assistance to post-secondary students with demonstrated financial need, through the provision of loans and grants. The education savings program encourages families to save for their children's post-secondary education, using registered education savings plans, RESPs, which allow savings to grow tax free. The Canada education savings grant and the Canada learning bond provide additional incentives, particularly for low- and middle-income families, to save in RESPs.
The government also provides support to Pathways to Education Canada, an organization with an established record of reducing high school dropout rates and increasing post-secondary enrolment among disadvantaged youth. Budget 2013 confirmed that the government will extend support for this initiative.
Apprenticeship training is also an important part of the post-secondary education system.
To further encourage Canadians to consider a career in the skilled trades, Budget 2014 proposed the creation of the Canada apprentice loan by expanding the Canada student loans program. The objective is to provide apprentices registered in red seal trades with access to an estimated $100 million in interest-free loans each year.
This action builds on the existing government incentives for apprentices and employers to encourage apprenticeship training and stimulate employment in the skilled trades.
The apprenticeship grants are designed to encourage more Canadians to pursue and complete apprenticeship programs in the red seal trades.
To support youth transitions in the labour market, the youth employment strategy is the government's flagship program to help youth aged 15 to 30 gain skills and real work experience to transition in the labour market. This program, which invests approximately $330 million annually, is led by Employment and Social Development Canada and delivered by 11 federal departments and agencies.
It has three main streams. Skills Link provides funding for employers and organizations to help youth facing barriers to employment acquire skills and work experience. Summer Work Experience provides wage subsidies to employers to create summer employment for secondary and post-secondary students. This program includes Canada Summer Jobs, which provides funding for not-for-profit organizations as well as public sector and private sector employers to create summer job opportunities for students. All told, approximately 35,000 summer jobs were created in 2013. Finally, Career Focus provides youth with work experience in their field of study to enable more informed career decisions and to develop their skills.
Moving forward, the government is committed to enhancing its supports for the labour market transition of youth. In particular, through budget 2013, the government provided an additional $70 million over three years for the Career Focus stream of the youth employment strategy to support internships for recent graduates, so they get an opportunity to apply their newly acquired skills.
Through budget 2014, the government announced that it would take further steps to align youth employment programs with the evolving realities of the job market, more specifically to promote internships in high-demand fields such as skilled trades, and in science, technology, engineering, and math, so that youth can find work experience and the skills necessary to find and retain jobs.
The Government of Canada also provides support for unemployed and underemployed youth through income support from the employment insurance program and through significant transfers to the provinces and territories. More specifically, the government transfers $1.95 billion annually through the labour market development agreements to support the unemployed who are eligible for employment insurance. Similarly, the government provides $500 million annually through the labour market agreements for training and unemployment supports for those not eligible for EI. Youth represent about 20% and 35% of the clients receiving support under each of these transfers respectively.
Finally, the labour market agreements for persons with disabilities allow provinces to provide targeted programming to improve the employability of persons with disabilities, including youth.
The new Canada job grant to be introduced by July 1, 2014, aims to directly connect skills training with employers, helping to ensure that Canadians, including youth, are developing the skills for available jobs.
Finally, the government plays an important role in providing learning and labour market information to ensure youth have timely and reliable information to make the right choices about learning and work.
For example, through the Working in Canada website and the government provides information on available jobs, labour market outcomes, and educational and training requirements.
In Budget 2013, the government reaffirmed its commitment to improving these tools and announced a reallocation of $19 million over 2 years to provide young Canadians with more information on job prospects and to undertake outreach efforts to promote careers in high-demand fields.
Through its funding of the Red Seal program, the government supports promotional activities to inform industry and tradespeople, as well as high school students and the public at large, about apprenticeships and the benefits of working in the skilled trades. The government also provides significant support to Skills Canada to actively promote careers in the skilled trades to Canadian youth by working with local organizations, educators, and governments.
In conclusion, I would again like to thank the committee for undertaking this timely study. We look forward to seeing its recommendations.
My colleagues and I welcome the opportunity to respond to any questions you may have.
Amy Huziak
View Amy Huziak Profile
Amy Huziak
2014-03-06 16:01
Thank you.
Good afternoon, everyone.
As introduced, I'm Amy Huziak, and I'm the national representative of young workers for the Canadian Labour Congress. With me is my colleague, Angella MacEwen, who is a senior economist with the CLC. On behalf of the 3.3 million members of the Canadian Labour Congress, we thank you for the opportunity to present our views.
The CLC brings together workers from virtually all sectors of the Canadian economy, in all occupations, and in all parts of Canada. As a young worker myself, I'm one of more than 876,000 young union members in Canada today. I regularly hear from my peers, both unionized and non-unionized, about the many barriers we're facing in the current labour market. Recessions are always harder on young workers, but we are nearly five years past the end of the last recession and there's still no recovery in sight for young workers.
Comparing the unemployment rate of 15-to-24-year-old young workers to that of 25-to-54-year-old workers gives us some indication of how young workers are faring. In 2012, the unemployment rate for young workers was 2.4 times that of core age workers, its highest value since comparable data became available in 1976.
The unemployment rate for aboriginal young workers was 21.1% in 2010, which is the most recent data we could find. That is 6.5 percentage points higher than the non-aboriginal population. Racialized workers and newcomers also face greater barriers to labour force participation, but it's difficult to know exactly what is going on with this group, as data is scarce and unreliable.
Between October 2008 and January 2014, there was an increase of 100,000 unemployed young workers aged 15 to 29, so that there are now 540,000 unemployed young Canadians. Even more startling, though, is that over 350,000 young workers left the labour force over that period, for reasons such as returning to school or skills training, discouragement, or taking unpaid work to fill that gap. It has been estimated that there are between 150,000 and 300,000 unpaid interns each year in Canada, which is a labour market challenge that no previous generation of workers has had to face.
But unemployment isn't the only issue that needs to be addressed. One third of young workers are employed part time, and many are in low-wage, temporary, and otherwise insecure employment, with a large contingent located in the retail and service sector, which is notoriously insecure. Too many young workers are underemployed: either unable to secure enough hours of work or lost on the margins of the workforce. We calculate the underemployment rate for young workers aged 15 to 24 to be 27.7% for 2013. This is a significant number, meaning that more than a quarter of young workers are being affected by the situation right now, and it's a significantly higher number than just the straight unemployment rate shows.
This is a big problem for the upcoming generation of workers, as persistent or extended unemployment and underemployment leads to what we call “scarring”, which basically means that it's very difficult to recover the level of wages and labour market outcomes that we would have had otherwise. The IMF says that high levels of youth underemployment contribute to growing income inequality in developed nations such as Canada. They estimate that the wage penalty for unemployed young workers can be as high as 20% compared to peers who are lucky enough to find employment and can be felt for up to 20 years. Scarring effects also extend beyond wages into social exclusion and health outcomes.
In Canada, Professor Philip Oreopoulos from the University of Toronto has estimated that entry level wages are 10% to 15% lower for those who graduate during a recession. The longer the economic recovery, the longer it takes for these wages to catch up. TD Economics estimates this to cost at least 1.3% of the GDP for Canada.
The paid internships announced in the last federal budget will only reach a maximum of 2,500 individuals per year, less than 0.5% of unemployed young workers. This only addresses a fraction of the need and, more importantly, does not address the need for long-term permanent work for young people.
To top off the dismal labour market, our social safety net is failing young workers too. In 2013 only 18% of unemployed young men and 8% of unemployed young women were able to qualify for EI. High entrance requirements for new labour market entrants shut young workers out of employment insurance. Given that a large number of training supports are available only to EI-eligible workers, shutting young workers out of EI also cuts access to valuable training supports.
Recent cuts to LMA funding, which provides training assistance to workers not eligible for EI, further exacerbate this problem.
As we see it, the problem of youth unemployment needs to be addressed from three angles. First, we need an employment strategy that is linked with a training strategy to put young workers on a career path to good jobs, meaning that the work is decently paid, is permanent, and has such benefits as access to a pension.
Second, we need good labour market information to flow between the government, employers, and educational institutions to ensure that young people can make informed decisions about the fields in which they are educated and that institutions can properly advise students.
Finally, we need to strengthen social protections to ensure that young workers have equal access to EI and health care, as well as to a strong Canada pension plan and old age security system when they retire.
There are many phrases that we've been hearing about young workers lately: that young workers are being left behind, that this is the last generation. But the truth is that young workers have a lot to contribute in this economy, and we have to make sure they have the opportunities.
Thank you.
View Andrew Saxton Profile
Thank you very much.
My next questions are for Employment and Social Development Canada.
Most recently, our government reached an agreement with the provinces and territories for the Canada job grant. What impacts will the new Canada job grant have on youths seeking employment?
John Atherton
View John Atherton Profile
John Atherton
2014-03-06 16:22
I think the job grant is going to be fundamentally important for young people. I think it helps address some of the issues that were raised by the previous member about the match between skills and talent in the economy and employers' needs. The grant itself will provide a transformative opportunity for employers to reach into the employment system with some of their own funds to choose a person and choose the training that they need.
For young people, my sense is that this will be a tremendous opportunity for them because they'll have a direct link to an employer and an opportunity that, without the Canada job grant, they may not have had and quite likely would not have had. I think it's part of what our minister hopes is a transformative change in the labour market and something that connects not just young people but all Canadians to real jobs and provides them with the training that they need.
View Gerald Keddy Profile
Thank you.
Ms. Josephs, you made a comment about entrepreneurship and the fact that entrepreneurship should be in the K-to-12 curriculum. That's the smartest thing I've heard here today. Good for you for saying it.
It's not that everybody else's comments weren't important; let's clarify that comment.
I have a huge level of frustration when I hear the talk of youth unemployment and underemployment because I grew up in rural Nova Scotia where everybody was simply expected to work, and everyone could work and did work. Even when unemployment was 15% and 18% everywhere else in the world, somehow everybody found a job because they had to in order to survive.
In Nova Scotia, we have a new program between the community college system and the universities where they've taken your point on entrepreneurship and they have allowed people who want to enter the skilled trades to take their two years of a skilled trade to start an apprenticeship, or to work in the skilled trades, and that two years counts as two years toward an undergraduate degree if they decide to go back to university. I suspect other provinces have similar programs. That's been in place for a while now, and that has been a fantastic program for students. They come out, they have built up skills in the community college system that allow them to work for a good living wage and to continue in that trade if they care to. However, if they want to go back to university for an undergraduate degree, their first two years are already covered.
Have you been an advocate of that? Do you follow that? How extensive is that across the country?
Marsha Josephs
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Marsha Josephs
2014-03-06 16:34
Yes, we are aware of that. In fact, CYBF has introduced an entrepreneurship in the skilled trades initiative that we launched in Manitoba and Saskatchewan. What we're doing there is helping those journeypersons who are in the skilled trades to learn entrepreneurial skills. They learn the fundamentals of opening their own business, as well as entrepreneurial skills to help them be better employees.
View Dave Van Kesteren Profile
I think Mr. Rankin was talking about the poor success rate we've had in training the right students.
You know that the government has introduced a new program, the Canada job grant, which will allow employers, for the first time, to become part of that decision-making, as well as the province and the feds. What about a program like that? Is it something that is going to help this situation?
Who wants to jump in?
Angella MacEwen
View Angella MacEwen Profile
Angella MacEwen
2014-03-06 16:52
I just want to say that employers always have the option to train their own employees as they would see fit. This is not the first time employers have that opportunity. This would be the first time that they maybe—
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