Finance Committee on Nov. 21st, 2013

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Right.

Jayson?

[Jayson Columbus]

Yes, I definitely agree with that.

Also, I want to mention that among things that are going well specifically for our business, we've been able to take advantage of some of the federal incentives for our employees for training, such as the career start youth program. Those have been invaluable for us in employing youth who are learning and are investing themselves in their degrees and professional designations and things of that nature. We believe that this is a solid path the government is setting.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Thank you.

Norma.

[Norma Kozhaya]

Sometimes it's the way things have been done. For instance, we were critical of what was proposed for the telecom industry. Of course we are for competition and consumer protection and all that; however, we have to make sure that we don't disadvantage our companies.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Martin?

[Martin Lavoie]

In our sector I have to say there's not a single week I don't get a call about the cuts to the SR and ED tax credit. A lot of companies think there is nothing else for them to replace what they've lost, especially in sectors that have not benefited from direct support, such as aerospace and automotive, and a lot of other sectors, outside of Ontario and Quebec as well.

The second one is that a lot of companies bidding on infrastructure procurement projects feel more and more that when they want to bid in the U.S. and other countries, they're banned from public infrastructure projects. When they're here in Canada competing on large bridge projects or other infrastructure projects, they have to compete with all these other foreign players from countries that systematically discriminate against Canadian manufacturers.

[The Chair, Conservative, James Rajotte]

Okay, you have about 30 seconds.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

This is my pet peeve.

Especially, Julie, with you representing the chamber, you talked about legacy costs and what we pass to our children. What are you doing to stop some of these ridiculous pensions that are starting to bleed the municipalities dry?

[The Chair, Conservative, James Rajotte]

Ms. Labrecque, please answer very briefly.

[Julie Labrecque]

We are continually consulting various stakeholders at municipal, provincial and federal levels, as well as our members, in order to analyze the situation and find solutions to those deficiencies.

[The Chair, Conservative, James Rajotte]

Thank you.

I'm sorry, I know members have more questions, but we are going to have to cut it there.

Merci beaucoup à tous.

Thank you so much for your presentations and for participating in the pre-budget consultations.

Colleagues, I will suspend for a couple of minutes and we'll bring the next panel forward.

If you could just review the budget request you have before you, hopefully we can deal with that today.

Thank you.

[The Chair, Conservative, James Rajotte]

I'd like to call this meeting back to order. I would ask our witnesses and colleagues to find seats as soon as possible, please. Thank you. I'm sorry, but we're very tight on time today.

Colleagues, briefly, have you had a chance to review this budget? Are there any questions? This is for Bill C-4. The amount requested is $26,400. Are there any concerns about it?

Ms. Nash.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Mr. Chair, I have a quick question. This sounds fine. If we were to have a situation in which we needed an additional video conference or there was something else, I assume we could make amendments if they were found to be necessary.

[The Chair, Conservative, James Rajotte]

We could ask for additional funding. So far, with respect to video conferences, we have budgeted for six and we have four confirmed.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Okay, so we should be fine.

Thanks.

[The Chair, Conservative, James Rajotte]

There is some latitude there.

Mr. Jean, do you have any questions on this?

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

I have a very brief comment. I want to compliment you on the austerity you've shown on this compared to budgets a year or two ago. I notice there's a tremendous difference in savings for taxpayers. You've encouraged video conferencing, and I'd like to compliment you on that. I know that's your role, along with the clerk's.

[The Chair, Conservative, James Rajotte]

Thank you. I'll share that credit with our committee staff. They've done an excellent job.

Are all in favour of this budget proposed by Mr. Jean?

(Motion agreed to [See Minutes of Proceedings])

I want to welcome our guests to our second panel. Thank you so much for being with us today.

We have six presenters on this panel. We have from the Canadian Energy Pipeline Association, the president and CEO, Brenda Kenny. From the Canadian Labour Congress, we have the senior economist, Angella MacEwen. From the Canadian Restaurant and Foodservices Association, we have the president and CEO, Mr. Garth Whyte. We have from l'Institut de recherche et d'informations socioéconomiques, professeur Éric Pineault. From Unifor, we have economist Jim Stanford back with the committee. From the United Steelworkers, we have their economist, Mr. Erin Weir.

Welcome. Thank you so much for being with us. You have five minutes maximum for an opening statement, and then we'll have questions from members. We will begin with Ms. Kenny, please.

[Dr. Brenda Kenny, President and Chief Executive Officer, Canadian Energy Pipeline Association]

Good morning members of the committee, Mr. Chairman.

My name is Brenda Kenny. I am president and CEO of Canadian Energy Pipeline Association. We look forward to the opportunity to provide our views on the 2014 budget.

As you probably know, we represent all the large transmission pipeline companies in Canada. Together they ship about 97% of all of Canada's daily onshore crude oil and natural gas production, and meet the needs of consumers in that fashion every day.

Our membership currently operates more than 115,000 km of pipelines in North America. We are big job creators on the cusp of investing more than $25 billion on nationally significant projects and we recommend that the federal government support pipeline technology research and collaboration across Canada. This would support continuous improvement on pipeline safety and security while also improving social licence to operate, reaching needed new markets, but also very importantly positioning Canada as a world leader in engineering research, development, and deployment.

Federal support for collaboration would be defined as a modest contribution comprised of two things: first, sufficient capacity within a key department such as Natural Resources Canada, through which the federal government could participate in collaborative efforts; second, funding of up to $5 million for three to five years to establish investments in technology and collaboration, perhaps through a CANMET energy program.

The economic benefits of increased pipeline infrastructure are clear. Salaries and benefits support thousands of families, local businesses, and many regional economies from coast to coast to coast. Last Friday we released an economic evaluation that showed direct employment across the country of over 9,000 people. Our members for, operating systems alone, pay over $1 billion a year in taxes. We also benefit thousands of local suppliers, welding, steel manufacturing, construction, information technology, even hotels, restaurants, and banking. They are all impacted by the pipeline industry, and we have a golden opportunity to broaden that long-term trade.

Infrastructure delays are estimated to cost this country $30 million to $70 million a year. The Canadian Chamber of Commerce calculates that $18 billion a year is lost and the overall market differential would cost Canada $135 trillion in the coming years. Of course, safety is job one, and we in our industry have committed to strive to zero incidents through design, constructing, operating, etc.

One of the most significant ways in which we improve safety is through deployment of advanced technologies. Collaboration is key. To really break the back and get a step change, we need to find better ways to collaborate. We have established the CEPA Foundation, which is the means through which suppliers and contractors across industry come together.

We've also been working with others on something called the Canadian Pipeline Technology Collaborative,which is a pan-Canadian approach to leverage and optimize R and D. This is similar to what Australia has done. It focuses on a number of core areas that are outlined in our letter to the committee. Actions on these objectives are critical through a tri-sector approach that includes governments, the research community, and industry, resulting in safety and new jobs through new high-tech firms.

Fundamentally, there is a number of key examples also outlined in the document provided to the committee. This complements our sophisticated risk management approach through the CEPA integrity first risk management program. The federal government's involvement is critical. We need to have capacity from the federal government to be engaged in collaboration and support for matched commitments to come. This supportive collaboration is an important part of Canada's golden opportunity in opening and securing new markets while meeting Canadians' public interest priorities respecting safety and environmental protection.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much, Ms. Kenny.

We'll now hear from Ms. MacEwen, please.

[Angella MacEwen, Senior Economist, Social and Economic Policy, Canadian Labour Congress]

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?

[The Chair, Conservative, James Rajotte]

You've got about 30 seconds.

[Angella MacEwen]

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.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation. We'll now go to Mr. Whyte, please.

[Garth Whyte, President and Chief Executive Officer, Canadian Restaurant and Foodservices Association]

Thank you, Mr. Chair, and thank you to the committee for inviting us to speak to you today.

We note that this committee is looking at six issues: economic growth, vulnerable Canadians, R and D, rural issues, urban issues, and red tape. We could be in every one of those committees.

Today we're going to talk about maximizing employment opportunities for Canadians. I have a powerpoint presentation, which is not on a powerpoint, but I have a deck here that I'll be referring to.

If there's an overall key message I would like to leave with the committee today it's that the restaurant industry will continue to play a significant role in job creation across Canada, especially with youth, first-time jobs, as well as skilled jobs.

If I may turn to the next page, I don't know if some of you saw this several years back, but it was a United Way campaign. It was a good campaign in what they were trying to do, but you can see here they had a new Canadian working in a dungeon. It was obviously not a very good job, and he needed to get out of that job into a nurse's position.

I started in my position months before this ad went out. I showed this to my board. My board has 30 members—which is a lot, and we can talk about that later—with everyone from CEOs of multinational corporations to chefs for fine dining to independent restaurateurs, and to a person they were angry and hurt. Many of them, including CEOs of multi-billion dollar corporations, started as dishwashers. Many of them have their kids starting as dishwashers. It became apparent that if we don't tell our story, other people will tell it for us and this is the story they're going to tell.

I'd like to move to the second page, which is the United Way campaign three years later. It shows a builder of careers, of jobs, of communities, builders in urban and rural settings in every community. As an organization and as a sector, whether we're talking about agrifood, health, tourism, or economic development, we're positioning ourselves, and you should see us as part of the solution, not part of the problem.

As we talk about employment we move to the next slide, what is called an infograph. We have 18 million Canadians visit us every day. We give back almost $300 million to the community. We support 1.1 million jobs and we support $250,000 indirect jobs in agrifood primarily. It says $65 billion, but we're a $69 billion industry.

We are the number one creator of first-time jobs. We hire underprivileged people, people from the aboriginal community, seniors. We hire from all categories. We'll take them all. We are the number two creator of jobs for youth. These jobs are across Canada.

The next page refers to a labour force survey and Statistics Canada information. We looked at sectors and put it together. You may remember 2009 and 2010. We are a reflection of consumers; if they are uncertain we feel it. Even during those times we continued to create jobs. We were the third largest job creator. The others were a mix of private and public sector jobs. We were just behind construction. Even during our tough times we were creating jobs.

We ask our members to look at the economy. We meet with the bank governor, Finance, and premiers because our members are the canaries in the mine shaft. With 18 million visits a day, they know what's going on in the economy, and 80% are saying that in the next six months they're going to maintain or increase their employment.

We asked them what their most important issues were. Seventy per cent of their costs are food and labour. Those are the issues, but I want to point out that a third said that a shortage of skilled labour is a concern for them—it depends which region—and another 28% said it was a shortage of unskilled labour.

We are anticipating a labour shortage and we are feeling it in some regions. We can do statistics and data and we strongly recommend we need better labour market information, but you can see we're facing a skill shortage and many of our members are feeling it now.

Mr. Chair, in conclusion, we're a significant employer in every community, and we have a key role with youth employment and first-time jobs.

We have a shortage of skilled labour issue. It's becoming a growing issue. We strongly support and need a federal-provincial private sector strategy to deal with future labour shortages, and government policy should enhance and not stifle restaurant growth.

Thank you, Mr. Chair.