Thank you.
Mr. Chair and members of the committee, I am pleased to speak on the 2012-2013 main estimates for HRSDC and to present key elements of our government's economic action plan 2012.
As I said when I met you in November, Canada's performance in terms of jobs and growth is very encouraging, but we cannot be complacent. In the short term we need to deal with the lingering effects of the recession and get our economy back on a solid path of economic recovery and growth.
But we also have to take the long view and consider the interests of Canadians, not just for the next few years but for the next few decades.
I believe the two biggest challenges that we are facing are demographic change and the skills gap. The demographic challenge can be articulated very simply. Our population is aging, with the proportion of retired Canadians increasing relative to the proportion of those who are working and active in the labour market, and this trend will accelerate. Today, there are four people of working age for each person over age 65. By 2030, instead of a ratio of four to one, that ratio will only be two to one.
This trend has implications that we need to address. The most obvious one is that an aging population puts pressure on the retirement income system. Canadians are living significantly longer than they did when Old Age Security was first introduced in the 1950s—and they are collecting retirement benefits for a much longer time.
OAS, quite simply, is unsustainable on its current course. Specifically, in 2012, the costs were $36 billion, and according to Canada's Chief Actuary, by 2030, they will be $108 billion and will account for roughly 25% of all federal program spending. Therefore, our government is taking action to protect OAS for future generations by gradually increasing the age of eligibility for old age security from 65 to 67, starting in the year 2023.
We will also offer older people assistance and financial incentives to stay in the workforce. For example, starting in July of next year, we will offer Canadians the option to defer collection of their OAS and subsequently receive an actuarially adjusted higher pension. In addition, we will proactively enrol more seniors in OAS and GIS, removing the need for them to apply themselves, and save costs at the same time.
We believe that all of these measures will improve flexibility and choice in the OAS program and keep it sustainable for future generations.
Our second biggest challenge is the growing skills shortage in this country. We're already starting to experience acute labour and skills shortages in various regions and sectors throughout the country, and those will only continue to grow. More and more, our productivity depends on our ability to work smarter rather than harder. Our greatest assets are our human resources in the form of skilled, educated, and adaptable people.
As Minister of Human Resources, I'm very concerned about the fact that in some areas we have high unemployment, and yet in those same regions we often experience labour shortages. Last year more than 250,000 jobs in Canada remained unfilled.
Part of the problem is that there is a mismatch between the skills that employers need and the skills that are available in the workforce. That is why, over the past three years, in collaboration with the provinces and territories, our government has made huge investments in skills training and employability programs.
In the economic plan 2012, we are intensifying those efforts. Besides our general labour market programs, we also have targeted initiatives for youth, all the workers, aboriginal people and people with disabilities.
I recently spoke to the G-20 labour and employment ministers conference about youth employment.
Countries around the world are exploring every possible way to meet the challenge of employment for young people, and I was happy to be able to share our experience and best practices and to learn from others.
In Canada, youth employment is challenging, there is no question. The unemployment rate there stands at just under 14%. As I stated to my global colleagues, there unfortunately is no silver bullet to resolving this issue. But the situation in Canada, fortunately, is better than for most other countries.
Many young Canadians, who could be launching their careers and contributing to the economy, are held back because they aren't prepared for the demands of the workplace. Sometimes it's because they lack basic skills. Sometimes it's because they don't have the specialized knowledge that leads to good jobs.
We know that, in today's labour market, two out of three jobs require some form of post-secondary education. And we are taking a multifaceted approach to support skills development and education programs.
The Government of Canada is committed to making post-secondary education accessible and affordable for all Canadians.
We invest over $10 billion annually in support of post-secondary education, we have boosted education transfers to the provinces by 70%, and we are giving more direct support to students through various forms of financial aid. In the 2010-11 school year, the Canada student loans program provided loans and grants to approximately 445,000 students.
We are also helping students to manage their debt through the repayment assistance plan, otherwise known as RAP, under which borrowers pay back only what they can reasonably afford. In the 2010-11 school year, the RAP assisted approximately 165,000 borrowers who were having difficulty with repayment.
Just recently, we also announced that we are increasing the income eligibility thresholds for part-time student loans and grants.
Of course, a degree is not the only ticket to a good job. To help meet the rising demand for skilled workers, our government also provides cash grants to encourage young people to pursue apprenticeships in the skilled trades.
Sometimes, the greatest obstacle to a young person getting a job is simply a lack of experience. That's why, in EAP 2012, we're also reinvesting in our youth employment strategy, which helps young Canadians prepare for the labour market and get that all-important first job.
Our goal is to get as many Canadians working as possible. And if they lose their jobs, we want to get them back to work as quickly as possible.
We want to ensure that Canadians are always better off working than not.
EAP 2012 has introduced new measures to make the employment insurance program more efficient and more effective for Canadians. We are working to remove disincentives to work, improve the information and support provided to Canadians, and ultimately better connect them with jobs in their local area that match their qualifications.
The changes being introduced to EI are not about forcing people to move. They're not about attacking certain regions of the country.
The changes are about improving a federal system so that Canadians better understand the expectations we have of them while they are on EI. They are about making sure that Canadian workers are made better aware of the opportunities available in their own geographic area.
Ladies and gentlemen, they are about helping to ensure that employers have better access to available Canadian workers before hiring temporary foreign workers.
To conclude, Mr. Chair, our government has been clear that our priorities are: job creation, economic growth, and Canada's long-term prosperity. My department continues to be a key driver for these objectives, both today and tomorrow.
I would now be happy to answer any questions you may have. Thank you.
