Evidence of meeting #4 for Human Resources, Skills and Social Development and the Status of Persons with Disabilities in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was question.

On the agenda

MPs speaking

Also speaking

Karen Jackson  Assistant Deputy Minister, Workplace Skills Branch, Department of Human Resources and Social Development
Cliff Halliwell  Director General, Policy Research and Coordination, Department of Human Resources and Social Development
Barbara Glover  Acting Director General, Labour Market Policy, Department of Human Resources and Social Development
Corinne Prince-St-Amand  Acting Director General, Foreign Workers and Immigrants, Department of Human Resources and Social Development

9:05 a.m.

Conservative

The Chair Conservative Dean Allison

I welcome everyone this morning to the Standing Committee on Human Resources, Social Development and the Status of Persons with Disabilities, which is meeting this morning in room 308, West Block, pursuant to Standing Order 108, to commence its studies on employability in Canada.

Just before we get going with some questions, I would like to welcome you all here today for your presentation on employability. I have been led to believe, Karen, that you're not going to go through all the decks, but you'll provide a brief presentation and then just open it up for questions.

Karen, thank you once again for coming. The floor is all yours.

9:05 a.m.

Karen Jackson Assistant Deputy Minister, Workplace Skills Branch, Department of Human Resources and Social Development

Thank you very much for the invitation to be here today.

Yes, we understand that the committee wishes to conduct some discussion and some study around employability issues, so we have come prepared today to deal with three of the six that you've chosen: skilled worker shortages, labour mobility, and recognition of foreign credentials. There will be a group from the department who will come back next week, June 8, ready to discuss with you the others: seasonal workers, older workers, and workplace literacy.

If I could, I would begin by introducing my colleagues. With me is Cliff Halliwell, who is our director general of policy research and coordination; Barbara Glover, who is the acting director general of labour market policy; and Corinne Prince-St-Amand, who is the director general for foreign worker programming and immigrants and has responsibilities as well for the Agreement on Internal Trade and mobility.

We have provided you with materials on today's issues in both official languages which we believe will be helpful in highlighting relevant facts and research on the issues that you are examining.

I will begin my comments with a brief description of the Canadian labour market, followed by a short synopsis of today's three issues. I will then be pleased to respond to any questions that you may have.

On the labour market context, the Canadian labour market is performing well. Participation in employment rates rank in the top of the OECD, and the unemployment rate, at 6.4%, is at its lowest in three decades. Job growth continues to be strong, with 220,000 jobs created in 2005, of which 205,000 are full-time positions. This is actually the twelfth consecutive year of gains in full-time employment. As well, average hourly earnings have risen by 3.5% in 2005.

While Canada has trailed the U.S. in labour productivity growth in recent years, last year, again in 2005, labour productivity in the Canadian business sector rose for the first time in three years. It was up by 2.2%, which actually represents the strongest annual productivity performance since the beginning of the decade, the year 2000.

Moving forward, a number of current and emerging drivers could actually both exacerbate challenges and present us with opportunities. This morning I would like to name a couple of the key ones: globalization, the commodities boom, the knowledge-based economy, and the aging of our population.

The U.S. is still our predominant trading partner, but emerging economies, notably China and India, are providing new markets for our goods and services and are also a source of growing competition in a number of sectors, notably manufacturing.

The commodities boom has been an increasingly important source of both regional and sectoral growth and change in the country. In particular, labour shortages are substantially more pronounced and persistent in western Canada as a result of the strong growth of the energy sector in that region. At the same time, however, higher energy prices, combined with the stronger dollar and increased international competition, are indeed creating challenges for the manufacturing sector in central Canada, and there continues to be persistently high unemployment in areas of eastern Canada.

The fourth key driver here, as we look at our labour market, is the move and the increasing shift to a knowledge-based economy. As the magnitude and pace of technological change intensifies, labour demand is increasingly skill biased. Emerging across a number of sectors, you'll see rising skill requirements in health, oil and gas, construction, mining, and definitely other skilled trades.

Finally, on the reality of an aging population, while it brings forth a number of challenges in the Canadian context, its most pronounced effect is likely to be that of its impact on our future labour supply. Slower labour force growth will make it difficult to sustain past growth rates and improvements in our standards of living.

In summary, we can really see the need for a highly skilled labour force, one that's adaptable, flexible, and resilient in the face of all these pressures of change.

If I could, I'll now move specifically to skilled workers and shortages in that area.

Labour market indicators such as the employment rate, the unemployment rate, the labour force participation rate and real wages, provide no strong evidence of a generalized labour shortage in Canada at the present time.

However, a balance between overall labour demand and labour supply usually hides many instances of imbalances in specific regions, sectors and occupations of the labour market, with excess supply in some sectors coexisting with excess demand in others.

At the present time there are indications of shortages in several skilled occupations, in particular the health sector. We see these as a result of rising demands associated with population aging, combined with retirements among health professionals. We also see shortages in the oil and gas sector, largely as a result of the large investments in that sector, particularly in western Canada, and in management, largely as a result of the levels of retirement we are experiencing.

Most of the skilled occupations that are currently facing demand pressures are expected to remain in that situation over the next several years. Again, contributing to this will be the retirement of the baby boomers, opening up jobs across the spectrum of the occupations.

Market signals, such as higher wages, can certainly help to reduce those shortages over time by encouraging students to enrol in programs that lead them to be able to work in those occupations, and by encouraging employers to move from less buoyant or less healthy sectors to the hotter sectors, or the hotter regions and occupations.

But it goes without saying, certainly, that supporting high levels of PSE and training throughout the lifetime of Canadians really is important so that they have the necessary foundational skills to often be able to make adjustments to changes in the labour market.

I would just note here that in the recent budget for 2006, the federal government did propose a number of initiatives in support of a more skilled and educated workforce. Among those initiatives are plans to discuss with provinces a new approach to long-term and predictable support for post-secondary education and training, some immediate investments in post-secondary education infrastructure, and measures to support apprenticeship, among others.

With that, I would now turn to labour mobility as the next topic.

Labour mobility is the ability of workers to move between jobs, occupations, sectors and regions.

The type of mobility that we tend to focus on most, is the ability of workers to move to a different region or province to find a job—geographic labour mobility. The free flow of workers between provinces is an important component of Canada's economic union.

Labour mobility is the ability of workers to move between jobs, occupations, sectors, and regions of the country. Just to probe a bit deeper, I want to underscore three reasons it is important.

First, mobility is essential to growth and prosperity, as it shifts labour to more productive uses—to firms and workers that the Canadian economy can benefit from.

Second, labour mobility enables adjustment, including from the forces of globalization and technological innovation, which are changing the types of businesses and employees that are successful in Canada. To be able to adapt to these changes, workers need to be able to move from declining sectors and declining careers into other growth areas.

Third, no doubt citizens have the right to move within Canada. Enabling workers to move strengthens Canada's economic union and the economy as a whole.

There is no specific target for how mobile a workforce should be. In the absence of artificial barriers, market forces should determine how much movement you want to see. If a booming sector requires more workers, it can get them by paying higher wages or by offering relocation incentives, etc. However, if workers with good skills and experience are prevented from taking those jobs because they can't get licensed in different provinces or areas of the country, the labour market is indeed not functioning properly.

Some of the largest barriers to mobility involve workers being re-accredited, or their credentials being re-recognized, as they change provinces. Provinces, territories, and the federal government have agreed to work on the elimination of these barriers in the regulated professions. You will find those commitments where they were first agreed, in the Agreement on Internal Trade signed in 1994. However, progress has been slower than ideal.

A survey done by the federal-provincial-territorial Forum of Labour Market Ministers in 2005 found that 35% of workers had difficulties getting relicensed as they moved between provinces. An even higher proportion than that—50%—had trouble getting relicensed if indeed they were foreign trained, having acquired their credentials outside of Canada.

Concluding my comments on labour mobility, I will move on briefly to the recognition of foreign credentials. Immigration is expected to account for all net labour force growth within the next 10 years, so immigration does provide part of the solution to meeting our labour force needs of the future and our productivity challenges.

But research tells us that approximately 60% of employed immigrants in Canada don't work at the same level of job as they were doing before coming here, regardless of their education level. The biggest reasons for this are that we're not recognizing their credentials, they have insufficient language capacities, and they lack Canadian work experience required by employers.

Human Resources and Social Development has had in place for a number of years now a foreign credential recognition program, by which we're working with provinces, territories, other partners, and stakeholders such as regulatory bodies, sector councils, provincial assessment agencies, and post-secondary institutions to implement fair and more transparent credential recognition processes to address this problem facing skilled immigrants.

Since its inception in 2003, the program has funded a variety of projects, including diagnostics, research, partnership building, engagement of employers, and development of tools and processes to help speed up the processes of assessing and recognizing credentials, and making those processes more efficient, such as by using online regulatory exams, as well as piloting certain overseas integration services.

Initially, after consulting with the provinces, the program people focused their efforts on three regulated occupations, doctors, nurses, and engineers--in the case of the first two because of shortages across the country, and in the case of engineers because the majority of economic immigrants who apply to come to Canada actually identify engineering as their profession. Subsequently, based on further discussions over the last 18 months to two years with provinces and territories, we've now moved on to begin work with five other health occupations in demand--pharmacists, occupational therapists, physiotherapists, medical lab technologists, and medical radiation technologists.

Here too, as a next step, the recent federal budget set aside $18 million to be spent over the coming two years to consult with provinces, territories, and stakeholders on a mandate, a structure, and a governance for a national agency, and then to see us take the first steps toward the creation of such an agency to assist in this area of assessment and recognition of credentials.

Mr. Chair, that's it for me. We'd be pleased to answer any questions on those comments or on the materials we've brought, or on anything else the members would wish to put to us.

9:20 a.m.

Conservative

The Chair Conservative Dean Allison

Thank you, Ms. Jackson.

Just for clarification for members around the table, you are supposed to have four decks in front of you. If you don't have four decks, then just let us know and we'll make sure you get them.

Mr. Regan has about 12 decks there, I see. All the spare copies are with Mr. Regan.

We'll start with our first round of questioning, seven minutes each.

Mr. Regan, you're going to start off for us.

9:20 a.m.

Liberal

Geoff Regan Liberal Halifax West, NS

Thank you, Mr. Chairman.

I feel a bit like the library here--a reservoir for all these copies of these decks.

Thank you very much for coming to see us this morning and for illuminating some of these interesting areas.

You mentioned that you expect shortages to remain in the coming years in most of the skill areas you referred to. I'd like to get a better idea of the numbers we're looking at and of the economic impact this suggests, from your examination. It's certainly of great concern to me and I think to many Canadians. How acute will it be, and in which trades will it be most acute?

I'll start with that, I guess. That's probably enough for the first question.

9:20 a.m.

Assistant Deputy Minister, Workplace Skills Branch, Department of Human Resources and Social Development

Karen Jackson

I'm going to ask Cliff Halliwell to begin the answer to those questions.

9:20 a.m.

Cliff Halliwell Director General, Policy Research and Coordination, Department of Human Resources and Social Development

Just give me one moment to find the right document, with my mountain of paper here....

9:20 a.m.

Liberal

Geoff Regan Liberal Halifax West, NS

You have a mountain of paper too, I see.

9:20 a.m.

Director General, Policy Research and Coordination, Department of Human Resources and Social Development

Cliff Halliwell

Yes. Actually, why don't you ask another question while I find what I'm looking for? I'll be ready in one second.

9:20 a.m.

Liberal

Geoff Regan Liberal Halifax West, NS

All right.

In terms of the country's future productivity, obviously training and education are vitally important, but what does your analysis show in terms of how important it is and what reliance our economy in the future is going to have on education and training? What options have been examined by the department to increase the number of Canadians who are trained and educated and ready for the new skilled workforce? In particular, what options have you examined in terms of encouraging employers to do more training?

I'd add one more point to that, and it relates to what I said a moment ago. If we can get employers in Canada to do more training, that would be one good thing, but also we have the problem of a lot of people in Canada who are unemployed, who don't quality for EI, and who need to have training. What are we doing about that, and what is the department doing about it?

9:20 a.m.

Assistant Deputy Minister, Workplace Skills Branch, Department of Human Resources and Social Development

Karen Jackson

We have loads of questions here. Cliff can start with the first set, and then I certainly would like to address some of what we know about employers and their training record--what we think needs to be done and what we're doing on that one--and then some of the issues perhaps around productivity and the contribution of PSE and education. Barbara may want to jump in on that as well.

We'll go back to Cliff to begin with.

9:20 a.m.

Director General, Policy Research and Coordination, Department of Human Resources and Social Development

Cliff Halliwell

Thank you.

We have a set of forecasts that we do every year. They're available on the department's Internet site for people who need to learn more about where areas of shortages and areas of potential surpluses are in Canadian labour markets. It comes in this form here, and it's done through a forecasting exercise that this department has been doing for over a quarter of a century.

We are working on the current forecast for 2006, but I have preliminary results and they give an indication of the number of different areas in which you find occupational pressures. You might be interested or amused that on the top of my list are legislators and senior management as areas of shortage. I suspect it's more in the category of senior management that there are shortages.

But there is a whole range of occupations now--human resources managers, human resources and business service professionals, geologists, geochemists, geophysicists, civil engineers. It is a very long list that goes through the full list of health occupations, lawyers, Quebec notaries, university professors, psychologists, professional occupations in public relations and communications. There are quite a number in the trades--residential home builders and renovators, facility operation and maintenance managers. I could go on.

Clearly one of the reasons there is such a spectrum of occupations in which there are pressure points now is that these pressures are not just coming from strong growth in the economy in some areas. In fact, by our forecast, two out of three of the job openings that will take place in the next 10 years will arise not because a new job was created but because somebody retired from an existing job. That means that because of population aging, you start to see the pressures across a wider spectrum of the occupations that people do than you would if you just thought of oil and gas as being a hot sector or of health as being a hot sector.

As to the implications of these pressures, clearly one of the implications is going to be upward pressure on earnings to encourage people to stay in the workforce, to entice people to move into the areas where the demand is the greatest. If you're a worker, I don't think you would think this is a terrible problem. You would probably think it is a good problem. I think clearly firms are going to have to learn to adapt to these pressures. They are going to have to start to invest in new technology, start to invest in new efficiencies to make more effective use of Canadian workers. That might be an important contributing factor in reducing the difference between Canadian and U.S. levels of productivity or output per worker.

9:25 a.m.

Conservative

The Chair Conservative Dean Allison

We have about 30 seconds left for follow-up on this, and then we're moving to the Bloc with Mr. Lessard.

9:25 a.m.

Barbara Glover Acting Director General, Labour Market Policy, Department of Human Resources and Social Development

I just wanted to say on productivity.... Does that mean you just want to move on?

9:25 a.m.

Liberal

Geoff Regan Liberal Halifax West, NS

Time is almost up, so we'll have to come back to some of this, but go ahead.

9:25 a.m.

Acting Director General, Labour Market Policy, Department of Human Resources and Social Development

Barbara Glover

Just quickly on productivity, recently results have been better than expected, which is a good thing. But there is a gap between the U.S. and Canadian productivity growth rates. We believe that having a highly skilled labour force is an important contributor to good productivity growth, and we believe that to be the case not only looking backward, but also forward looking to the future.

So there are a number of initiatives that have been put in place to increase access to training at the PSE level.

Karen wanted to talk about some of the employer issues.

9:25 a.m.

Conservative

The Chair Conservative Dean Allison

We'll have to come back to that. Maybe someone else will pick that up.

We'll now go to the Bloc. Mr. Lessard, seven minutes please.

9:25 a.m.

Bloc

Yves Lessard Bloc Chambly—Borduas, QC

You mentioned something I find relevant, that there is no evidence of a generalized labour shortage, but that there may be a shortage of skilled labour in some regions of Canada.

We are often told that in some regions, namely in Quebec, very specialized workers are on standby while they could be working in other provinces. There are some issues with respect to inherent travel costs as well as a province and employer's ability to properly take in these workers.

You've addressed the issue, but there was no mention of possible solutions in this respect, specifically relating to travel costs, living expenses and mentoring costs which would help workers adapt to the standards in a new province or territory.

9:30 a.m.

Assistant Deputy Minister, Workplace Skills Branch, Department of Human Resources and Social Development

Karen Jackson

It is an issue we know something about. Barbara, do you want to expand a bit on what our research to date tells us about the costs of relocation?

9:30 a.m.

Acting Director General, Labour Market Policy, Department of Human Resources and Social Development

Barbara Glover

Yes.

Of course, you're right, the decision to move depends on a number of factors. One of the factors is the trade-off. If I'm working here in Ottawa and there is another job in Toronto, then I need to decide whether the trade-off in terms of my salary and associated costs and leaving my community makes sense.

The first thing I want to say is that our research shows that there are a lot of factors. One of them is a sort of calculation of the costs and benefits, but I think it's important to note that there are a bunch of other factors that are not easily costed. For example, we know that two-parent families tend to be less mobile than single people. Our sense is that other factors come in, like attachment to community and attachment to local schools. So I just want to step back and say that the decision to move or not is based on a range of factors.

The second thing is cost. I'm not from the Department of Finance, but I know that there is a tax measure that assists individuals with expenses related to moving.

The third point is that our department has had a number of programs in place previously to help with the cost of moving for some individuals. Our program evaluations showed that those were very expensive programs and very ineffective programs in the sense that we tended, I think, in at least half the cases, to help people who would have moved anyway. It's an example of spending money where people would have otherwise made the move anyway.

I've answered some of the questions you raised. I don't know if I've answered all of them.

9:30 a.m.

Director General, Policy Research and Coordination, Department of Human Resources and Social Development

Cliff Halliwell

I'd like to add that perhaps the barrier is somewhat more related to a difference in housing costs from one place to the next. In some regions, the difference in costs may amount to far more than the cost of moving.

9:30 a.m.

Bloc

Yves Lessard Bloc Chambly—Borduas, QC

You've answered my question, but only for people who make a permanent move. Employers may need temporary workers, be it for seasonal work or on a worksite for say six months, or a year or two. In those cases, living expenses and training on local regulations are factors we must consider. Do you have an answer to that?

9:30 a.m.

Acting Director General, Labour Market Policy, Department of Human Resources and Social Development

Barbara Glover

I'm not sure of the question. In a simple sense, yes, that would come into people's calculations. So if someone was moving for just two months, and they were moving across Canada, and the difference in wages was minimal, then that would affect their decision to move. So in a factual way, if it's a temporary job, then the cost of moving would have a bigger impact. I'm just agreeing with your point. I'm not sure of what to say further.

Your second question is what, if anything, is the role of government in subsidizing the cost of the move. Besides the tax system, I don't know that there are any other programs in place that do that.

9:30 a.m.

Assistant Deputy Minister, Workplace Skills Branch, Department of Human Resources and Social Development

Karen Jackson

If I could, I'll simply add to the answer.

You may want to ask that same question of officials from the Department of Finance. As I understand it, the tax benefits in support of relocation do not cover the temporary moves that Barbara has described to you. Yes, it is certainly, from time to time, brought to our attention that there is no government benefit at this moment in any program that supports temporary relocation.

9:35 a.m.

Conservative

The Chair Conservative Dean Allison

A quick question.

9:35 a.m.

Bloc

Yves Lessard Bloc Chambly—Borduas, QC

Essentially, if I have understood correctly, your department does not have a specific program for this. I'd like to ask you a question which may require a more elaborate answer. You may complete your answer during the second round.

With respect to the aging labour force, Ms. Glover was referring earlier on to the problem which will arise when most baby boomers retire and the labour shortages that will cause in the workplace.

Has your department thought of an approach which would help transform work arrangements so that older workers who want to continue working may do so through another arrangement, say two or three days per week? They could be instructors or they could mentor younger people entering into the workforce. Have you started to consider that?