Interventions in Committee
 
 
 
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Angella MacEwen
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Angella MacEwen
2015-05-26 8:58
Thank you.
On behalf of the 3.3 million members of the Canadian Labour Congress, we want to thank you for the opportunity to present our views today. The CLC brings together workers from virtually all sectors of the Canadian economy, in all occupations, and in all parts of Canada.
Part 1 of Bill C-59, which we're speaking to today, would implement a wide variety of income tax and related measures. Today our comments will be limited to three provisions: reducing the required minimum amount for withdrawal annually from the RRIF; increasing the annual contribution limit for the tax-free savings accounts; and renewing the accelerated capital cost allowance for investment in machinery and equipment.
First of all, in terms of retirement security, the changes to the RRIF withdrawals and the increases to the tax-free savings accounts are measures that are both related to retirement security, but it will be no surprise to members of this committee that the Canadian Labour Congress feels that expanding the Canada pension plan is a much better solution to the looming retirement security crisis in Canada. Changes to RRIF withdrawals benefit older workers who already have RRSP savings, but they do little for workers without the means to save through RRSPs. This is significant because only a third of Canadians today contribute to RRSPs, and the unused RRSP contribution room reached $790 billion in 2013. Eleven million workers in Canada have no pension plan other than the CPP. At the same time, the annual contribution limit for the tax-free savings account would increase to $10,000, as has already been discussed, and this measure would have an estimated cost to federal revenues of $1.1 billion by 2019.
Even at the maximum annual contribution of $5,500, the TFSA is projected to cost the federal government up to $15 billion annually, and cost the provinces another $8 billion when the program is fully mature. Doubling would further increase this cost almost exclusively to the benefit of higher income earners. In contrast, expanding the CPP would benefit all workers, follow workers who change employers or who have multiple employers, and be simple for employers to administer.
In terms of supporting manufacturing, we recognize that as a result of globalization, unfavourable trade deals, a high dollar, and the most recent recession, manufacturing in Ontario and across Canada has experienced devastating losses over the past decade. In recognition of this reality, we have long supported renewing the accelerated capital cost allowance for investment in machinery and equipment. This measure was first introduced in 2007, renewed in 2011 and 2013, and would now be renewed until 2026. While we support this measure, we want to note that corporate tax cuts have failed to spur business investment. In the same vein, we feel that continuing this accelerated capital cost allowance would be insufficient to support a struggling manufacturing sector in Canada.
Coming out of the recession, business investments in manufacturing have been very slow to rebound, despite the continuation of the accelerated capital cost allowance. In October 2014, the monetary policy report released by the Bank of Canada suggested that this is in part because of a semi-permanent loss of capacity in several manufacturing export sectors. Low interest rates and low taxes have not been sufficient drivers of growth. Weak and uncertain demand have played a significant role in subdued investment. All signs point to the need for the federal government investment in infrastructure to spur growth and therefore boost business confidence and private investment.
A singular focus on tax cuts has significant drawbacks. We note that while the budget 2015 documentation mentions the importance of investment in skilled labour in the same sentence as it mentions investment in machinery, government action on this front has been noticeably absent.
Let me remind the committee of some of the recommendations the Canadian Labour Congress has made in the past that would make a difference to investment in skilled workers.
One, establish a national skills council that brings key stakeholders together to identify skills gaps and develop strategies, policies, and programs to address them.
Two, establish a mandatory national workplace training fund. Employers with a payroll of more than $1 million who fail to invest 1% of their payroll in training should pay the shortfall into a public fund that is used to finance work-related training initiatives.
Three, increase funding for the labour market agreements, the LMAs, with the provinces and territories to help vulnerable unemployed workers, including immigrants, aboriginal peoples, persons with disabilities, women, older workers, younger workers, and less skilled individuals.
Four, mandate employers to hire and train apprentices. The federal budget should ensure that those projects receiving federal dollars through the new building Canada fund and the investment in affordable housing program mandate employers to hire and train apprentices.
This budget further erodes the fiscal capacity of the Canadian state and rejects the opportunity to take advantage of exceptionally low borrowing costs and invest in the current and future needs of working people in Canada.
Thank you.
Angella MacEwen
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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—
Angella MacEwen
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Angella MacEwen
2014-03-06 16:53
The way the Canada job grant is structured—
Angella MacEwen
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Angella MacEwen
2013-11-21 12:42
On behalf of the 3.3 million members of the Canadian Labour Congress, we want to 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.
Leading economists, including bank economists, say that Canada's economic growth prospects remain weak due to insufficient business investment, high household debt, and weak global growth. Leading economists also fail to see any sign of labour shortages emerging. Some even suggest we should welcome the eventual tightening of the labour markets that will come when boomers retire.
Business investments are not where they should be. The across-the-board corporate tax cuts did not deliver the promised investments in real assets, such as new factories, or in workers' training. Thus these cuts failed to boost economic growth and productivity and did not help to create more and better jobs.
The overall labour force participation rate and the employment rate have not recovered to their pre-recession levels. Employment growth has been shallower than labour force growth, and the labour force participation rate is at its lowest level in 10 years. The participation and employment rates for 20- to 35-year-olds is markedly lower than pre-recession, indicating there's a difficulty for young workers to break into the labour market. On the other hand, employment rates have increased throughout the recession and recovery for people over 55.
Programs targeted at helping young workers get experience in the job market and information that helps them choose training for in-demand careers are both critical components of addressing this pressing issue. Second chance retraining opportunities for older workers affected by structural shifts in the economy are also important.
We're concerned about the rise in precarious labour, part of a much longer-term trend. For example, two million workers are employed in temporary jobs in Canada right now, which is about 13.5% of all employees, up from about 12% just before the recession.
Underemployment is also an issue that we're looking at closely. For the year between November 2012 and October 2013, an average of 1.35 million workers were unemployed. Some 900,000 workers worked part-time but wanted full-time work. That represents 27% of all part-time workers. Some 472,000 people were not in the labour force, but indicated to Statistics Canada that they did want work. These are marginally attached workers and they're an indication of how many people may be looking to enter the labour market should labour market prospects improve. Statistics Canada tells us that there are 6.4 unemployed persons per job vacancy in Canada, but that number doubles when we consider these marginally attached and underemployed workers.
The proportion of unemployed workers who remain unemployed for long stretches is also higher than pre-recession, with 20% of unemployed workers having been unemployed for more than 27 weeks, and 7% unemployed for more than a year. This is compared to pre-recession levels of 13% and 4%. All of this is to say that the labour market is weaker than the headline unemployment rate of 6.9% would indicate.
A recent TD Economics report by Derek Burleton and his colleagues found there are no wage pressures in high-demand occupations. In Saskatchewan, wages for in-demand occupations are actually growing at a slower rate than the provincial average. This evidence supports the position that before the government intervenes in labour markets, either to provide easy access to migrant works or to subsidize employer training costs, you ensure employers have “more skin in the game”, as employment Minister Jason Kenney aptly expressed. To properly assess the presence of actual labour shortages, we need better labour market information.
The CLC urges the government to take seriously the need for timely, reliable, and detailed labour market information as part of a broader investment in improving Canada's labour market productivity.
Is the time up?
Angella MacEwen
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Angella MacEwen
2013-11-21 12:47
Okay.
The CLC also calls for the development of a national tripartite skills development strategy to prepare for the consequences of the aging workforce and to meet the specific needs of groups such as aboriginals, recent immigrants, and youth.
Training and lifelong learning are critical, and literacy and numeracy skills in Canada lag behind many other countries. LMA, labour market agreement, funding has been key to supporting this goal. We know that 86% of LMA clients are employed after participating in an LMA program and earn an average of $332 more a week. LMAs also have proven track records of reaching vulnerable and marginalized populations. For example, the CBC reports that in Saskatchewan, 60% of LMA beneficiaries were aboriginal persons and many of them lived in areas where new economic projects were planned.
Thank you.
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