Human Resources Committee on Oct. 2nd, 2012

[The Chair, Conservative, Ed Komarnicki]

Good morning. We will start the proceedings.

We're doing a study on current and anticipated skills shortages in high-demand areas and the difficulty faced by employers seeking to hire people for low-skilled jobs.

We're happy to have with us this morning Ken Georgetti, the president of the Canadian Labour Congress. From the International Union of Operating Engineers, Steven Schumann will be presenting. Also, we have with us Harold McBride, the executive director of the Operating Engineers Training Institute of Ontario.

After you present, gentlemen, we'll have questions alternating between the parties here.

With that, I would invite Mr. Georgetti to make his presentation.

[Kenneth V. Georgetti, President, Canadian Labour Congress]

Thank you very much.

Good morning, ladies and gentlemen. Thank you very much for the invitation to comment on the issue of skills gaps.

My name is Ken Georgetti. I'm the president of the Canadian Labour Congress. I am also a steamfitter—or a pipefitter—by training.

Before addressing the issue of the skills gap, though, I think we need to define what we mean. The most recent information we have from the labour force survey and the job vacancy survey tells us that there are currently over five unemployed workers for every available job in the country. Given this information, it's clear that our major problem in the job market is still unemployment.

While some employers in some sectors in some geographic regions may have difficulty filling some specific vacancies in particular occupations, Human Resources and Skills Development Canada has stated in its labour market projections up to 2015 that we will be facing no sustained generalized labour shortages. With five unemployed workers for every job available, our main problem remains unemployment—pure and simple.

This is not to say, though, that any gap between available jobs and workers who are qualified to do them is acceptable. It's not.

But let me assure you that if unemployed workers had the means to identify where the jobs were and then had access to training required to do those jobs, they'd jump at the chance. Quite simply, if we find there is a shortage of workers with the skills required to fill a specific job, the answer is to train those workers. What we may have is what we think of as an opportunity gap rather than a skills gap.

If workers can't access affordable and timely training for available jobs, it's an opportunity lost for the worker, for the employer, and indeed for the health of the economy. In a report prepared for the G-20 just a couple of years ago, in 2010, it was estimated that a 1% increase in training days leads to a 3% increase in productivity. Further, the share of the productivity growth attributable to training is around 16%.

Unfortunately, the participation of workers in work-related training in Canada has fallen below the rates for workers in many industrialized countries, according to the OECD. In fact, we have one of the poorest performances in the G-20. At the same time that Canadian corporations are not meeting the level of workforce training being done by their competitors and our trading partners, the Governor of the Bank of Canada confirms what we've been saying for a long time: that corporations are hoarding cash and sitting on half a trillion dollars of what he called “dead money”. Clearly, it's just a matter of priorities for how that money gets deployed and spent.

Given the current levels of unemployment, the unsustainably high unemployment rates for our young people, and the continuing low participation rates of women, aboriginal people, people with disabilities, and others in the labour market, we would recommend that efforts to overcome specific and potential skills gaps begin with training our people for the available jobs today.

In part, this will need, first of all, an early identification of emerging skill shortages through sophisticated and timely labour market information. Employers will need information on their current and future skills needs. Workers will need easily accessible information on job trends in the market. A rapid response to emerging skills shortages in specific jurisdictions would include identifying training needs and then mobilizing the resources to meet those needs.

Also, we need to identify where training happens and create the environment for this training to be improved and enhanced. In general, we can identify the public school system, community colleges, other post-secondary institutions, and the workplace itself as the primary locations for that training to take place.

Specifically, in order to ensure that we have an efficient and effective labour market in which employers can find workers and train their current workers, and in which workers can access the training required to meet their occupational needs and aspirations, our recommendations would include maintaining and increasing funding for the bilateral training provisions contained in the current labour market agreements and the labour market development agreements between the federal government and the provinces and territories, and then ensuring that key labour market stakeholders, employers, and workers are involved in the development of labour market policies and programs through development of labour market partner forums. Models for these forums can be found today in Newfoundland and Labrador in the strategic partnership initiative, and in Quebec in the Commission des partenaires du marché du travail.

Still, we would argue that incentives for employers to provide workplace training, including a tax credit for employers who train, would be very helpful. We recommend increased support for training in the employment insurance system, including work sharing while working, extending benefits for workers who are in training, and continued and restored support for organizations that provide support and encouragement for the development and the expansion of workplace training, such as the Canadian Apprenticeship Forum.

It is very discouraging for us to learn that only 14% of young people say they were encouraged by guidance counsellors to enter the skilled trades, while at the same time our government is cutting funding to the primary national organization that supports and encourages the skilled trades through a healthy apprenticeship system.

Finally, I can't emphasize enough, for a national strategy in this day and age, literacy and basic skills and the embedding of literacy training in all workplace-based learning. It's nothing short of a disgrace to think of the lost potential that we continue to suffer when we derail the aspirations and disregard the potential of workers due simply to the lack of access to programs that address literacy and essential skills, which, I would argue, is still the number one productivity-enhancing measure anyone can take in any advanced workplace in Canada.

To reiterate, though, the answer to our skills gap lies in our current labour force, and we will need to develop that human resource to its full potential before we look at other measures.

Thank you very much.

[The Chair, Conservative, Ed Komarnicki]

Thank you, Mr. Georgetti.

You certainly identify and point out a number of areas of concern, and give suggestions and recommendations for meeting those. We appreciate that.

We'll now move to Mr. Schumann. Go ahead.

[Steven Schumann, Canadian Government Affairs Director, International Union of Operating Engineers]

Thank you.

My name is Steven Schumann. I'm the Canadian government affairs director for the International Union of Operating Engineers. With me is Harold McBride. He's executive director—

[The Chair, Conservative, Ed Komarnicki]

Mr. Schumann, I'd just advise you to slow up a bit, because the interpreters have to keep up with your speed there. If you could take that into account, we'd appreciate it.

[Steven Schumann]

Yes.

Harold McBride is the executive director for our Operating Engineers Training Institute of Ontario, and he's also the manager of the Canadian Operating Engineers Joint Apprenticeship and Training Council, our national training organization.

We are a progressive and diversified trade union with over 45,000 members in Canada, primarily in the construction sector.

Our members operate the tower and mobile cranes, the bulldozers, the graders, the backhoes, and the piping equipment that help form and shape the infrastructure and skylines of Canada.

We provide the construction industry with highly skilled and highly technical tradespersons. To become a journeyperson in our sector you must train for thousands of hours, in both theory and practical training in the classroom as well as through on-the-job training. Because of the nature of our work, our training, and our skills, we are some of the best paid and highly sought after positions in the construction sector.

The development of these skills begins at one of our eight training facilities across Canada, where we provide rigorous, state-of-the-art training. Our facilities are registered within their particular province as well as with Human Resources Development Canada.

As stated by other witnesses, it's estimated that the construction sector will require 200,000 new skilled workers by 2018. However, the urgency for skilled trade workers in the construction sector is now.

I have a couple of examples.

By January 2013, our local in Alberta will need 1,000 operating engineers in support of the pipeline industry. In Ontario, we had a recent study commissioned that stated we need to train between 200 and 300 apprentices each year to replace retirees. We've tried to implement those numbers, but we are still facing a significant tower crane shortage. If you go downtown in Toronto and see all those cranes, and there are hundreds of them there, many of them sit empty for days on end because we don't have operators to fill them. The shortages are here and now.

We have a few suggestions that may help with the challenges we face in dealing with the shortages.

First, our training centres aren't able to meet the demand for heavy equipment/crane operators in Canada. If our training centres were able to access some additional support, through government support, either federally or provincially, it would allow us to expand our facilities and allow more Canadians to be trained. In the past there were funds like the knowledge infrastructure program, which our school in Ontario was actually able to access funds from, but it was the only school. Also in the past there was something called the Training Centre Infrastructure Fund, which allowed training centres to actually purchase equipment through a matching dollar fund with the federal government, and that was quite beneficial as well.

As well, as was touched on, there needs to be a better job done by all stakeholders to promote trades, particularly in the high schools. There is a lack of information or misinformation out there. When we go to many of these training fairs in trade careers, people look at us and say that our jobs are menial, low paying, and for the uneducated. That's far from the truth.

We also need to look at working with employers and government to maintain and encourage apprentices. There need to be better incentives to contractors who employ and maintain apprentices. Apprentices are usually the first to be let go from a job site, and once they're let go, many do not return, because of the long hours they must commit to the program. If they're unemployed, they have to find employment elsewhere and they do not come back. That's a big one.

There need to be changes to how Service Canada centres operate. For example, government retraining programs, such as Second Career Ontario, have policies in place that encourage clients to take their training locally at private schools, even though the training often will not lead to employment because of the limited amount of seat time that's provided. Guidelines discourage individuals from seeking the best training that will ensure employment in the trade of their choice. These private schools advertise training on four to five pieces of equipment and they charge up to $10,000. Only these schools benefit from this type of training because the trainees use up their EI and are not qualified or skilled enough to actually work in the construction sector.

Another problem we see with the EI system is that it needs to be opened up to allow laid-off workers to get retraining. The longer it takes an individual to access training, the more difficult it is financially. Because of the eligibility and suitability assessment template used in Ontario, as an example, an individual may not qualify for retraining until she or he has been unemployed for up to 26 weeks. If an individual is interested in training in a demand occupation, there needs to be a process that will enable them to access training sooner. More weight must be placed on the occupational demand rather that the length of unemployment.

Temporary foreign workers are not a solution. It's a stopgap measure. There are many challenges with the program on the construction side, including around the credentials of those coming to Canada.

We do support a long-term immigration policy, but we also must realize that Canada is competing worldwide with the same workers. I'll give Australia as an example. In western Australia they're facing similar booms and skill shortages. They have one program that brings people in for four years and they can work for multiple employers. That has apparently been quite a success, from what we've been told by others.

Finally, and most important, we need to look at developing made-in-Canada solutions by tapping into the female workforce and the youth of first nations, Métis, and Inuit communities across Canada. The future labour supply is here, already in Canada. We need to better encourage their participation. Most of our training centres have been very aggressive in trying to recruit women into the industry. Despite our efforts, female participation remains very low, and much more needs to be done.

Also, our training centres are reaching out to first nations communities, but it's a piecemeal approach. We need more of a national approach. We've actually approached the Assembly of First Nations to partner at a national level, but this is in the early stages. At some point we'd love to come back to update you on the progress of that.

We wish we as a union could do more, but despite being the trainers of choice, we face the challenge of exclusion from any government programs because we do not employ the tradesperson. We have the facilities and the knowledge to help develop and maintain the workforce in Canada, so we need some cooperation and support to allow us to reach our potential as trainers, and we are more than willing to work with government to find ways to do that.

Thank you.

[The Chair, Conservative, Ed Komarnicki]

Thank you very much, and thank you again for identifying your concerns and making suggestions as well for the committee to consider.

We'll now move to rounds of questioning, and we'll start with Mr. Boulerice.

Go ahead.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Thank you very much, Mr. Chair.

I want to thank the witnesses for their presentations. We always listen to them with pleasure.

You have pointed out from the beginning that the challenges in terms of training were huge. However, there is a job shortage in Canada and Quebec. Even if everyone was trained for the jobs available, 80% of people currently unemployed would still be unemployed. I think it's important to mention that.

Could you tell me who is responsible for occupational training in Canada? Is it the responsibility of workers, their democratic organizations, unions, the state or employers? Within what framework should we work to meet that challenge?

I have an example that has nothing to do with your members. However, I think that it's important because it is telling. In Canada, Airbus and Boeing pilots must obtain a new licence and receive new training every time they have to fly a different airplane. Over the years, we have seen that Canadian companies increasingly prefer to bring in foreign pilots—often from Europe—instead of investing in their pilots' training. That may be the case in other sectors with temporary migrant workers.

How can we build a system where investment in training is encouraged so as to provide Canadians with jobs instead of bringing in foreign workers?

[The Chair, Conservative, Ed Komarnicki]

Who would like to answer that?

Mr. Georgetti, go ahead.

[Kenneth V. Georgetti]

Thank you.

I guess the easy answer to whose responsibility it is would be that it is everyone's, I would think. Part of the problem is that we now have a huge issue of a workforce that needs to be much more adaptable and mobile, but unfortunately, a long time ago, before any of you probably were sitting in Parliament, the federal government gave that responsibility of training to the provinces, which made it much more difficult for the issue of national standards. What we need more of is a workforce that is much more mobile and adaptable, and we need credentials in a lot more skill sets than just the trades.

This is not a very well known fact, but the biggest trainers of journeypersons in Canada are the construction unions themselves, who do it on their own, train their own members to do the work they need to do. Some of the worst trainers of apprentices are governments in all forms—municipal, federal, and provincial—whose employees and workforce have very few apprentices in the system.

I sit on a round table for workforce skills with the Canadian Manufacturers and Exporters, and we're working very hard to try to identify ways in which we can adapt the system to train for the needs of the day and be able to do it. Our community college system, which trains apprentices, is at maximum capacity right now. If people need apprentices to go forward, we're going to have to start to adapt to train those apprentices in a much more exclusive fashion.

Yes, I agree with you, there are some employers, including airlines, who will use the fact that they don't train and don't upskill their workforce to find another workforce that would find their way into Canada and work for less money.

[The Chair, Conservative, Ed Komarnicki]

Does anybody wish to comment?

[Harold McBride, Executive Director, Operating Engineers Training Institute of Ontario, International Union of Operating Engineers]

Yes. I guess I agree with you, in certain terms, with regard to training and who should be responsible. I also like to take the side of the employers from time to time. With the implementation of Bill C-45, it basically comes down to competency. Workers have to be competent, and if they're not, in the event of an unfortunate accident, the employer can receive a lot of lawsuits and fines from the Ministry of Labour and such.

I don't like to think of it as the total responsibility of employers because the employers are in the business, let's face it, of making money and being profitable. Their forte is not necessarily training. I like to think of it as putting it back on the individual colleges; especially for the trades, put it back to the colleges. Have government support these colleges. Have government support training delivery agents and private career colleges so that the subject matter experts can deal with training. I think that's the direction we need to take. The funds go back to the training agents.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Yes, but I think that as a collectivity we should have a long-term vision, not a short-term one.

[The Chair, Conservative, Ed Komarnicki]

Thank you.

Mr. Boulerice, your time is up. Perhaps you can come back to make some further comments.

Mr. Butt, go ahead.

[Brad Butt, Conservative, Mississauga—Streetsville, ON]

Thank you very much, Mr. Chairman.

Good morning, gentlemen. Thank you very much for being here.

I just want to clear up a bit of confusion from the testimony of the two organizations. I think, Mr. Georgetti, your testimony was that there is not in fact a skilled labour shortage in Canada. Yet I heard Mr. Schumann very clearly say that with respect to operating engineers there is a huge skills gap, and there will continue to be a greater gap as baby boomers retire from the industry. Who's right and who's wrong?

[Kenneth V. Georgetti]

Well, I must be wrong. I want to be specific. There are some specific skill shortages in some specific regions, but we have a huge amount of idle capacity in our workforce that could be and should be trained to do that work much more quickly than it is.

[Steven Schumann]

Our sector is a construction trade sector, and that's what our needs are. We can't speak on behalf of the whole employment industry in Canada. We're a very specific sector in which we see the shortages.

I think Mr. Georgetti is right. If you look at the overall picture, if we could train those out there to fill the gaps, we wouldn't have this problem.

[Brad Butt, Conservative, Mississauga—Streetsville, ON]

Let's talk about training. I think that's an excellent place to start. I know that there are some unions that are providing direct training and apprenticeship programs, and that's excellent.

What should be the role of organized labour in Canada? Should you be full, equal partners in training and retraining individuals? Should it be, as I believe it is now, a bit of a hybrid? Employers play a role, the federal or provincial governments play a bit of a role, and organized labour plays a role. Or should we instead be looking at some way of ensuring that organized labour is playing a larger role in helping in the training and retraining of individuals so that they will be ready to operate those cranes in downtown Toronto, or in the city of Mississauga? We're still having a bit of a building boom there and need those skilled workers as well.

What role do you see that we're not seeing right now that will improve the system?

[Steven Schumann]

I'll touch on it quickly, and then we'll go to Harold.

Our training is probably the most advanced training out there. We provide training actually for other countries, and we're looking at other opportunities. Compared to some of the private schools out there, as I said, with their four or five pieces of equipment, we offer training, and our guys and ladies get employed. I think Kellie can be more specific about that.

I think we should be playing a larger role. I can only speak on the construction side, but we are the key trainers. Harold can expand on that.

[Harold McBride]

Yes, I think in the perfect model, it's within the apprenticeships. I agree that it needs to be employers, training agencies, and government to support the apprenticeships through funds for apprenticeships specifically. That's the perfect world. Unfortunately, right now we're seeing a skills shortage, and we have people in low-demand occupations who simply want to get the training. The training is expensive. In particular, you're dealing with tower crane operators, hydraulic crane operators, earth-moving equipment. It's extremely expensive.

The support needs to come, first and foremost, from government funding, through EI, to take unemployed workers from the sector that might be experiencing these low demands, give them the funds needed, without a 26-week waiting period, and move them right into the high-demand trades, get them trained, and put them to work. Right now, we can't supply the demand.

To answer your question, yes, it's government funding, apprenticeship systems, employers to support the apprentices.

[Brad Butt, Conservative, Mississauga—Streetsville, ON]

Do I still have some time?

[The Chair, Conservative, Ed Komarnicki]

You have about 40 seconds.

[Brad Butt, Conservative, Mississauga—Streetsville, ON]

There was an issue about what role the federal and provincial governments should play. I don't believe there ever was, in the Constitution, necessarily a role for the national government to play.

We've decided, as a government, to provide apprenticeship training money. We've decided, as a government, to provide tax credits to employers that provide training. But most of it is done at the provincial level, there's no doubt about it. I'm not sure the provinces are making an argument that they want the federal government to take that over. I think they want to be able to run their own programs. I don't think we'd want to get into a constitutional challenge.

Can you give me an example of any province that you feel is operating its training and apprenticeship programs in a best-practices kind of way that we could look at? Are you familiar with any provinces that are doing a little bit better than others?

[The Chair, Conservative, Ed Komarnicki]

It would have to be a relatively short answer because Mr. Butt has exhausted his time.

[Kenneth V. Georgetti]

I mentioned in my brief that Newfoundland has a program, and Quebec has a training tax, in fact, that tries to stimulate investment in training. Again, the OECD argues that we should be spending about 3% of our national payroll on training; we're spending less than 1%.

I'm not sure it's anybody's fault, sir. I think it's everyone's responsibility. Clearly, I'm not here to say it's someone's fault. I just think we have to get better at the concept and better at the delivery. The federal government has done some good things in the last little while in terms of trying to use incentives for training, and we appreciate that. But where it's not being done is in the workplace, and largely by employers that utilize a lot of skilled, trained people. They're probably the ones that do the least amount of training.