Human Resources Committee on May 30th, 2013

[The Chair, Conservative, Ed Komarnicki]

Good morning, everyone.

We are starting somewhat late, of course. We had two panels scheduled, one for 11 o'clock and one for 12 o'clock, but given what has happened this morning, we'll combine both panels into the last hour.

We'll have Mr. Chris Roberts present first and then we'll have the group from Calgary.

Can you hear us in Calgary, Dianne Cooper-Ponte, volunteer services manager? Are we connected?

[Dianne Cooper-Ponte, Volunteer Services Manager, Calgary Seniors' Resource Society]

Yes, we are.

[The Chair, Conservative, Ed Komarnicki]

Can you hear us, Mildred Williams?

[Mildred Williams, Escorted Transportation Manager, Calgary Seniors' Resource Society]

Yes.

[The Chair, Conservative, Ed Komarnicki]

All right. That's good.

You have translation services.

I think what we'll do is start with Mr. Roberts. He'll make his presentation and then we will have Dianne and Mildred present from the Calgary Seniors' Resource Society. Then we'll open it up to questions from each side.

With that, we'll start with Mr. Roberts.

Go ahead.

[Chris Roberts, Senior Researcher, Social and Economic Policy Department, Canadian Labour Congress]

Thank you.

On behalf of the Canadian Labour Congress, I want to thank the committee for undertaking the study and for allowing the congress to present its views.

The congress is the national voice of 3.3 million workers in Canada. It's comprised of dozens of national and international unions, as well as provincial and territorial federations of labour.

The CLC has prepared a written submission to the committee on this study, and it's in translation. I will provide copies to the committee shortly.

I'm going to focus my preliminary remarks on issues pertaining to displaced older workers before addressing pensions and retirement and workplace training and education. In the interests of time, I'm going to jump to my overarching theme for my remarks and share the following.

In our view, facilitating choice over whether to prolong labour force participation is an important public policy goal. The emphasis on providing flexibility and greater opportunities for participation is key. Commonly, the tacit message in much policy discourse is that policy should encourage greater work and longer labour market attachment by older Canadians because of the larger economic advantages of easing fiscal pressures in the slowdown of growth in the labour supply.

Whether or not this is a desirable outcome, however, depends on workers' individual needs and preferences for work or retirement. We are therefore in agreement with the approach taken by the Expert Panel on Older Workers, which set out to improve opportunities and reduce barriers for workers who might choose to continue in paid work. Older workers may face a host of obstacles to employment, from age discrimination and poor health to obsolete skills. To improve the circumstances of older workers, public policy should aim at enlarging the range of choices available to workers with respect to continued labour force participation and retirement as well as encouraging flexibility with respect to work arrangements in the transition to retirement.

As the Canadian workforce ages, older workers are also making up a greater proportion of workers displaced by larger economic restructuring and displacement through layoff. Workers with longer tenure were affected by layoffs, for instance, to a greater extent in the most recent recession than in previous recessions.

Displaced older workers face significant labour adjustment challenges arising from multiple barriers to re-employment. Older workers' longer average job tenure may combine with skills specific to particular sectors, especially those in decline, that may pose difficulties in transferring to jobs in other sectors, so significant impediments to re-employment can arise.

Older workers tend to have lower levels of educational attainment than younger workers, and participation in formal training falls with age. In short, older workers face multiple challenges, including lower levels of literacy and investments in human capital, which have tended to lose value over the working career.

Despite being as prepared as younger workers to look outside the local community for re-employment, and being more willing, or resigned, to accept re-employment at lower earnings, older workers commonly experience periods of extended unemployment. Long-term unemployment in Canada, while lower than in the United States and below the OECD average, has worsened significantly since 2008 for workers of all ages, and it remains a particularly significant problem for older workers.

Whereas displaced younger workers routinely experience reduced earnings initially and subsequent increases in earnings, long-tenured older workers tend to suffer a significant and enduring loss of earnings. While this tends to result from significantly lower earnings from replacement employment rather than unemployment, some comments are warranted with respect to the employment insurance system and older workers.

The EI system was not designed for structural shifts and industry decline but rather for cyclical unemployment, and it does not well serve the interests of long-tenured workers in traditional industries facing periods of extended unemployment. Older workers typically do not access EI at the same level as younger workers. Despite being long-tenured, experienced workers with strong attachment to the job market receive the same benefits as younger workers.

We encourage the committee to consult the CLC's more extensive proposals on EI, which I will provide to the committee. These changes are designed to improve equity and adjustment for all workers, including older workers. These include moving to a uniform 360-hour EI entrance requirement for all regions; longer benefits of at least 50 weeks in all regions, so that fewer unemployed workers exhaust their claims, particularly during economic downturns; higher weekly benefits based on the best 12 weeks of earnings before a layoff; and a replacement rate of 60% of insured earnings.

Under current rules, workers are required to expend their severance pay prior to receiving regular benefits from EI. Besides being a compensation for job loss, having severance moneys available to draw on later is also a way of improving the prospects for successful adjustment. The CLC recommends that EI rules be amended so that severance pay does not displace EI benefits.

With respect to pensions in retirement income, displaced older workers are commonly dependent on pension income via public or workplace pensions. In this regard, two positive steps recommended by the Expert Panel on Older Workers are the elimination in January 2012 of the CPP work cessation test and the changes to permit older workers who are receiving CPP benefits to continue to accumulate CPP credits on future earnings.

In other respects, the Government of Canada's approach thus far has been to restrict early retirement opportunities to encourage later exit from the labour force. I'm referring here to the decision to phase in an increase in the eligibility age of old age security, the guaranteed income supplement, and the allowance.

As well, steps have yet to be taken to reduce or eliminate the clawback on GIS benefits triggered by annual employment income above $3,500, despite recommendations from various committees, including the expert panel. The reason I raise this is that the weakening of public pension availability is of particular concern in a context of low and declining pension coverage, the retreat of early retirement provisions of workplace pension plans, and the decline of defined-benefit plans generally. All of these shifts, as well as the conversion to defined contribution plans, will entail greater investment longevity risks falling on the shoulders of individual displaced workers, reducing the range of options and flexibility when they are considering whether to remain in employment or to retire.

The prospect of an insecure retirement should not be the impetus for older workers to remain in the workforce longer than they should or wish to.

On education and training, there is substantial room for employers to increase support for literacy efforts in the workplace, training and innovative forms of learning, lifelong learning among employees, and flexible work arrangements to support retention of experienced workers.

Employers are commonly reluctant to invest in training due to the problem of poaching, and many view older workers as carrying a high risk of low return on training investment, given that these workers are in the final stages of their careers. Indeed, employer-provided training is channeled disproportionately to younger workers with higher levels of education and skills. However, because of increases in health-adjusted life expectancy and the ability and interest among many older Canadians in working longer, opportunities for investments in training older workers, with greater anticipated return, are widespread. Older unemployed workers are as keen as younger workers to acquire new skills, suggesting a considerable unmet demand for formal and non-formal training. Measures to improve literacy are also important, given the benefits of raising the overall levels of literacy and numeracy to aggregate productivity growth.

Basic job search and employment counselling aimed at displaced older workers, such as that provided by the targeted initiative for older workers, can be effective. In our view, the targeted initiative should be expanded to unemployed workers 45 to 54 years old and to workers age 65 years and older. As well, measures to provide early intervention following job loss—which is something the targeted initiative does not provide—are crucial since re-employment prospects diminish with long-term unemployment.

Finally, providing greater access to active labour market measures under EI, part II, would be an important contribution to expanding options for displaced older workers.

Over and above these measures, paid training leave that is funded through the EI system would improve access to training for all workers, including older workers.

With that, I'll conclude.

I welcome your questions.

[The Chair, Conservative, Ed Komarnicki]

Thank you very much for that presentation.

We have with us a number of somewhat older workers who will talk about their experiences.

With the Calgary Seniors' Resource Society, we have Dianne Cooper-Ponte, volunteer services manager; Mildred Williams, escorted transportation manager; and Susan Verlinden, reception.

I understand that each of you will present briefly, and then we'll open up to questions to all members of the committee here.

Whoever wishes to start first, go ahead.

[Dianne Cooper-Ponte]

Good afternoon, everyone.

My name is Dianne Cooper-Ponte. I was employed in the corporate sector for 35 years and took early retirement approximately 6 years ago. I have now re-entered the workforce with the Calgary Seniors' Resource Society, formerly as a volunteer and then as a paid employee. The decision to re-enter the workforce was from wanting to continue to contribute as a younger senior. I feel that being employed, whether it's through volunteering or as a paid employee, I continue to use the skills I've acquired over my 35 years of working in the financial industry. I'm also keeping myself active, and I'm enjoying life so much better by being able to go out everyday knowing that I'm making a difference.

The Calgary Seniors' Resource Society gives me flexible hours, which is something I wanted as an older retiree. I am able to work my schedule around looking after aging parents.

These are some of the things that I looked for and have found at the Calgary Seniors, and they are reasons why I'm still in the workforce.

Thank you.

[The Chair, Conservative, Ed Komarnicki]

Go ahead, whoever is going to present next.

[Susan Verlinden, Receptionist, Calgary Seniors' Resource Society]

Good morning.

My name is Susan Verlinden. I've been with the Calgary Seniors' Resource Society for six and a half years.

I was previously unemployed for two years, partly due to my husband passing away, and then I was sick. I did attend a course that was put on by the government called Prospect Human, which helped people over 55 find employment. I did actually find it very helpful, and I found this job through them, as companies posted positions with them.

I'm still in the workforce. Being single, I have to work a little bit longer for financial reasons. I'm quite happy with my job. Our company is very good to us, very fair, especially with hours. If we need some time for something or other, they are very flexible.

I think that's everything.

Thank you very much.

[The Chair, Conservative, Ed Komarnicki]

Thank you for that.

We will conclude with Ms. Williams.

[Mildred Williams]

My name is Mildred Williams. I worked for an oil company for 22 years and when they downsized I was laid off. I was looking for something different to do, something more meaningful and less stressful.

I run a transportation program where volunteers drive seniors to medical appointments. I'm in my twentieth year with the Calgary Seniors' Resource Society. I work with two wonderful groups of people: the volunteers, who are there because they choose to be, and the seniors because they are looking for assistance to go to appointments.

I've stayed with my job because I enjoy what I do, and I feel I'm making an important contribution to society. It's a good feeling to know that I'm helping others.

I'm 67 and I've chosen to work longer for two reasons: because I enjoy my job and because financially I really have to. I couldn't survive on government pensions. Our agency has just recently started a pension plan, which certainly isn't that helpful for anybody my age. It's mostly because I enjoy my job that I'm happy to stay on. I guess I'm fortunate that I didn't have to look for a job in the last 5 or 10 years, that I've been able to continue in the job that I enjoy.

[The Chair, Conservative, Ed Komarnicki]

Thank you for that presentation.

We will now go to a round of questioning. We'll start with Monsieur Boulerice.

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

Thank you very much, Mr. Chair.

Thank you to the witnesses for the information they gave and their perspective.

Mr. Roberts, you mentioned some very interesting points of view, including on severance pay, which is considered income by employment insurance. I think we should, indeed, see if we can't make changes to that.

We know that the manufacturing sector in Canada has been bled dry and completely emptied in the past few years. A few years ago, in my riding, I visited a textile plant that was about to close, where people had worked for 20, 25 or 30 years. For their entire lives, these people had made pants and jackets, and they were going to lose their jobs. In some cases, theses people were 55 or 60 years of age and had no means for their retirement. They had to return to the job market to try to find a new job when they had done the same job all their lives. A new textile plant is probably not going to open up in Montreal.

What should the federal government do to help those workers who have to find a new job after having done a manual job their entire lives, using machines, but who have no other training or skills?

[Chris Roberts]

I think a number of things can be done to address the circumstances of workers in those industries.

For starters, there is the issue of the consideration of severance under EI. To facilitate better re-employment, that is, a better labour market adjustment process, as opposed to simply the quickest outcome, which may not be optimal in terms of re-employment prospects for workers who match their capabilities and their potential contribution, there can be measures taken to ensure that severance payments are not expended or exhausted prior to EI benefits being available.

With respect to the government's targeted initiative toward older workers that is intended to address circumstances like this, as we say, expanding those targeted labour market adjustment initiatives that provide job search assistance services to displaced workers we believe would have a significant impact as well, if it's expanded beyond the current window of workers to those 45 to 54 years old, as well as older workers.

But I also think there need to be mechanisms to provide early intervention, because the prospects for re-employment and avoiding long-term unemployment are much greater with early intervention. The targeted initiative doesn't currently do that. I think there's much more that could be done in addressing these circumstances.

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

Thank you.

I think you have put your finger on the need for preventative training or training that would continue throughout the workers' careers so they would have more options should they lose their jobs.

Witnesses from Alberta that we heard from had the opportunity to have jobs they like and enjoy, it seems, and I am very happy for them. However, Mr. Roberts, they also said this:

“I have to work.”

And Ms. Williams said:

“I really have to.”

She spoke about the fact that she had to keep working.

Knowing that about 70% of Canadians do not have a supplementary pension and that public pensions are currently inadequate, what measures do you think should be taken to improve public pensions or improve access to supplementary pensions through companies?

We have the impression that a lot of people continue working because they have no choice. I am pleased if they like their jobs but, for me, people should have the opportunity when they turn 65 to say thank you, but that's enough, that they've worked enough and that the time has come for them to enjoy life with their children, their grandchildren and their families. However, we don't currently have measures in place to allow that. We've also just increased the age to receive old age security to 67.

What measures do you think should be taken so that people can have the choice to work or not?

[The Chair, Conservative, Ed Komarnicki]

Thank you.

With that response, we'll conclude, so go ahead, Mr. Roberts.

[Chris Roberts]

I do think that support for the defined benefit plans, which do afford workers the security to be able to retire, is welcome. We obviously advocate an expansion of the Canada Pension Plan to provide more decent and secure retirement incomes for workers who need to or want to exit the labour force. As I said, the provisions to permit older workers to continue to work while receiving CPP benefits, and even continuing to contribute to a post-retirement benefit, are welcome.

I think the current pressures on early retirement provisions in workplace pension plans really are destructive in that respect, in really removing the ability of workers, where they want to exit, to do so.

[The Chair, Conservative, Ed Komarnicki]

Thank you for that response.

We'll now move to Mr. Shory.

[Devinder Shory, Conservative, Calgary Northeast, AB]

Thank you, Mr. Chair.

Thank you to the witnesses for taking the time to give us their insights today.

The Calgary Seniors' Resource Society is in my riding of Calgary Northeast. It is of course the hardest-working riding in Canada—

[Voices]

Oh, oh!

[Devinder Shory, Conservative, Calgary Northeast, AB]

—which also has a very large population of new Canadians. I also know that in many cultures the elderly people are expected to stay at home, either to help their children or to do some other chores at their households.

This kind of situation presents two key challenges. Either the seniors in such a situation have to adjust their work time outside and their family duties, or they feel that they're there solely to attend to the house duties. My question is, how can organizations in diverse areas such as I've mentioned, Calgary Northeast, work to engage elderly persons who may be in a situation like the one I just explained?

[The Chair, Conservative, Ed Komarnicki]

Any one of the three of you is free to give a response.

[Susan Verlinden]

I just considered this yesterday. It's true that with a lot of immigrant populations the parents are somewhat expected to remain in the home and look after children and grandchildren. Sometimes it ends up that they have to go out and find work because they do not have enough money to live on. We see it quite frequently.

I think that education, such as learning English, is very important. If the immigrants who do not speak English could be urged to learn the language when they come here, I think it would be so much easier for them when they find themselves in a position such that they need to find work.

[Devinder Shory, Conservative, Calgary Northeast, AB]

Does the CSRS employ a large number of seniors, either as direct employees or as volunteers?