Human Resources Committee on June 5th, 2014

[The Chair, Conservative, Phil McColeman]

Of course. The more the better. By no means take it that this is in any way trying to skew this in any particular organization's favour. Simply use your networks as a member of Parliament and a member of this committee and let's network it out there as much as we can.

Madam Sims.

[Jinny Sims, NDP, Newton—North Delta, BC]

That's great, knowing that we haven't reached out. As we said, we don't have difficulty but I would like to see a list of everybody we're going to reach out to because I think, especially as we're doing an extension, it has to be really open and transparent and fair for everybody.

[The Chair, Conservative, Phil McColeman]

Of course, it does.

Mr. Cuzner.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

I appreciate Jinny's clarification. I thought the NDP was calling for closure.

[Jinny Sims, NDP, Newton—North Delta, BC]

Excuse me.

[Some hon. members]

Oh, oh!

[The Chair, Conservative, Phil McColeman]

First we'll go to Mr. Brahmi and then the clerk wants to clarify a couple of points.

[Tarik Brahmi, NDP, Saint-Jean, QC]

I have an important question to ask regarding whether it is appropriate to grant an extension.

What is the amount of this award? I have absolutely no idea of the amount we are talking about. If it is $1,000, it is not the same as if it were $20,000 or $50,000. In my opinion, if the award is $1,000, it would be a bit ridiculous to grant an extension. However, if we are talking about an amount of $50,000 or $100,000, it would be ridiculous to have only one candidate for an award of that size.

[The Clerk]

The award is $5,500, which is between the two amounts you mentioned. It is very rare that there is only one candidate. We would like there to be more. As for the list we will be drawing up, it will be based on the witnesses from all the parties who appeared before the committee in the past concerning persons with disabilities. If the members of the committee are in agreement, that is the database we will use.

[The Chair, Conservative, Phil McColeman]

Mr. Mayes.

[Colin Mayes, Conservative, Okanagan—Shuswap, BC]

Would it be appropriate, Mr. Chair, to put this on the agenda in the fall, simply to look at that criteria to get a breakdown so we can all read it, then maybe determine as a committee whether we should be changing that type of criteria to make it a little bit simpler?

Second, I think personally it's better in the hands of the clerk, if you want an unbiased approach to those who are eligible or that she is reaching out to. As soon as you get us involved, you have politics, and quite frankly, I think that's the wrong route.

Thank you.

[The Chair, Conservative, Phil McColeman]

Point taken.

I'm at the behest of the committee. If the committee decides it wants to review this in the fall, I think that's entirely doable.

Ms. Sims.

[Jinny Sims, NDP, Newton—North Delta, BC]

Mr. Chair, as a point of clarification, at no time was I suggesting that once I got the list I had the time or the inclination to sit and phone. I only wanted to see the list of organizations that we were going to be reaching out to, because we are using an extraordinary process and I wanted to make sure that groups do get included.

[The Chair, Conservative, Phil McColeman]

I think Mr. Mayes makes a good point, that it will be in the hands of the clerk. I'll make sure of that. I think that's very valid.

Can we then call the question on whether to extend the date to the end of June? Is that fair?

[Some hon. members]

Agreed.

[The Chair, Conservative, Phil McColeman]

Seeing consensus then, we don't need to call the vote.

That ends our small session on committee business. Thank you for indulging us to get this done today, because it's important that we get it done and get this out to the potential applicants.

This is our 28th meeting and we're continuing our study of the LMDAs. For our first hour today, we are pleased to be joined by the Parliamentary Budget Officer, Mr. Jean-Denis Fréchette. Welcome, sir.

Along with Mr. Fréchette, we have Mr. Mostafa Askari, the assistant parliamentary budget officer for economic and fiscal analysis.

I'll turn it over to you for your presentation, up to 10 minutes.

[Jean-Denis Fréchette, Parliamentary Budget Officer, Library of Parliament]

Thank you, Mr. Chair.

The first part of my presentation will be in English and the second half will be in French.

Good morning, Chair, vice-chairs, and members of the committee.

I would like to thank you for inviting me today to speak today on the Canadian labour market in the context of the committee’s study of labour market development agreements. My remarks will largely relate to the recent work of my office on the Canadian labour market, as well as our ongoing work on the Canadian labour market stemming from parliamentarians’ requests.

The Canadian labour market continues to recover from the depths of the 2008-09 recession. However, many labour market indicators continue to remain below their trend levels. At the same time, unemployment remains above trend levels, particularly among youth. Unemployment for those 15 to 19 remains well above trend, while underemployment for those aged 20 to 24 is more prevalent. Together, these factors contribute to a level of real output of the Canadian economy that remains below its potential.

As would be expected in an economy that is below its potential, wage growth in Canada has remained muted relative to growth observed before the 2008-09 recession. More specifically, real average wage growth has been lower through the recovery in all sectors of the economy relative to a comparable pre-recession period. Together, this evidence points to an excess supply of labour in Canada. However, an argument has been extended that there is instead a labour shortage in Canada.

The PBO has found no evidence in support of a national labour shortage in Canada.

Some provinces may be experiencing a tighter labour market than was the case prior to the 2008-09 recession. Labour shortages may exist in specific sub-provincial regions, sectors, or occupations. However, the PBO found no evidence of a national skills mismatch that is any more acute than prior to the 2008-09 recession. This same conclusion holds true at the provincial level. As in the case of labour shortages, this aggregate data does not preclude skills mismatches in specific sub-provincial regions, sectors, or occupations.

In reaching our conclusions regarding labour shortages and skills mismatches, the PBO used data from the Bank of Canada, Conference Board of Canada, Canadian Federation of Independent Business, and Statistics Canada. Job vacancy data was used from the latter three of these sources.

The differences in these data and the conclusions they led to point to some glaring gaps in labour demand data in Canada.

First, no job vacancy data extends back further than the first quarter of 2004, and therefore, do not go over a full business cycle. As a result, it is difficult to support the assertion made in Finance Canada’s February 2014 jobs report that “Canadian firms are experiencing more difficulty in hiring than the unemployment situation would normally warrant.”

Second, job vacancy data are gathered, compiled, and presented very differently. For instance, Conference Board of Canada numbers are derived from raw data on job postings from a large number of websites, less duplicates and redundant postings where these are identified. However, the number of vacancies can differ significantly depending on the treatment of anonymous postings, as evidenced by the marked difference in the job vacancy rate presented in the February 2014 jobs report, and that derived from the number of vacancies presented in the EI monitoring and assessment report 2012-13.

Further, CFIB and Statistics Canada surveys identify the sector in which the firms with vacancies fall as opposed to the occupation for which the vacancy exists. For example, a construction company looking for an administrative assistant would be classified as having a vacancy in the construction sector, as opposed to a vacancy among administrative assistants.

I will continue in French.

Third, with the exception of Statistics Canada data, none of these sources collect job vacancies in a manner that corresponds with internationally accepted definitions of employment and unemployment. As a consequence of all these gaps, the current picture of labour demand in Canada is very vague. This was also the conclusion reached in the 2009 Final Report of the Advisory Panel on Labour Market Information, entitled Working Together to Build a Better Labour Market Information System for Canada. To quote from the report:

A good [Labour Market Information] LMI system will help to improve the matching of people and jobs both in times of labour shortages and high unemployment. And a good LMI system is always necessary to make sure that the right policy decisions are made to improve the economy's performance and lower unemployment [...] it was not surprising that many stakeholders voiced the need for a job vacancy survey to assess labour demand across regions and through time. This is important to policy makers to determine the tightness of the labour market enhanced for the development of the appropriate policies and programs for macroeconomic management and an efficient labour market.

In 2011, Statistics Canada undertook a survey entitled Workplace Survey: Jobs Vacancies and Skills Shortages — 2011. However, following the collection of this data in 2011, Statistics Canada did not have the available resources to validate, analyze and disseminate the results. Consequently, this data has not yet been released publicly, although Employment and Social Development Canada has stated publicly that it will be paying for the completion of the work on this survey. Nonetheless, even if it were to be released today, given this data was collected for 2011, it would no longer provide an overview of the current state of labour demand in Canada, but rather the state that existed in 2011.

In summary, parliamentarians have very little information on the current state of labour demand in Canada on which to base those decisions. As a result, it is difficult to analyze the effectiveness of programs aimed that alleviating labour market pressure associated with labour shortages and skills mismatches, such as Labour Market Development Agreements or the Temporary Foreign Worker Program (TFWP). Consequently, to satisfy the request of a parliamentarian for PBO to analyze the impact of the TFWP on the Canadian labour market, we submitted an information request to obtain data on temporary foreign workers by location and occupation in order to assess whether the impact of the TFWP on the supply of labour has been statistically significant. We continue to wait for a response.

My colleague Mostafa Askari, who is the Assistant Parliamentary Budget Officer, and I would be happy to respond to your questions.

Thank you, Mr. Chair.

[The Chair, Conservative, Phil McColeman]

Thank you very much.

Now we'll move to our first round of questioning, which will be seven-minute rounds.

Madam Sims.

[Jinny Sims, NDP, Newton—North Delta, BC]

Thank you very much.

Mr. Fréchette, thank you so much for appearing here. I must say that having a short half hour with you is very disappointing, so I'm hoping that if the committee so requests at a later date, that you would be prepared to come back, because we have a huge number of questions.

The first one I want to go to is the one that you commented on in your presentation, and that is the survey that was conducted in 2011 and how we're still waiting for that data to be analyzed. We need data, as many people have said over and over again, to understand the temporary foreign worker program and its usage, but also to plan for the future. This survey has been sitting on the shelf for a long time, and now we know that the minister has said they will make money available. But as we also know, money being made available and things happening are not always the same thing.

What evidence has come your way to suggest that ESDC will see that the remainder of the surveys are completed and analyzed, and to what kinds of timelines has ESDC committed on this?

[Jean-Denis Fréchette]

Thank you for the question, Mr. Chair.

PBO will be happy to appear again in front of this committee, if it's the wish of this committee.

I will ask Mostafa Askari who negotiated or discussed with the ESDC and Statistics Canada for the result and the timeline. As I mentioned, we are in contact with them, as we are with many departments, to get the data not only regarding job vacancies but also the temporary foreign workers. I will ask Mostafa to give you the latest he has from the two departments.

[Mostafa Askari, Assistant Parliamentary Budget Officer, Economic and Fiscal Analysis, Library of Parliament]

Thank you very much.

I have a couple of things. The survey was conducted in 2011. So, even if it is released it will only show the situation in 2011. It's not a continuing survey. The design of the survey, actually, is very good in terms of the kind of data that we need to assess the labour market demand in Canada. It's based on a survey of 25,000 businesses in Canada, very detailed questions for a very detailed level of occupations. However, when the survey was conducted and finished, the funding was cut at that time, and nothing was done with the data that existed, the raw data.

There are a number of steps before Statistics Canada can actually release that survey and make it available to the users. I talked to the director of labour statistics at Statistics Canada and I was told that they have a commitment from ESDC to continue the funding so they can validate, analyze, and make the survey ready for the users. But they are in discussion with ESDC to make that commitment firm and to get the actual funding. But that's just the first step. As she told me, there are a number of different things they need to do, even if the funding is there. First of all, are the people who they need there to actually do the analysis, to make the data ready? Then there are a number of other steps, so she could not give me any timeframe for that.

[Jinny Sims, NDP, Newton—North Delta, BC]

So, not only do we have data that is old, but now the analysis is taking so long that it makes it even older.

I'm going to go back to Mr. Fréchette again. In your expert opinion, is there truly a skills mismatch in Canada? Because I keep hearing this description that one of Canada's most pressing economic problems is this so-called skills mismatch. Have you found any kind of substantive evidence to support that?

[Jean-Denis Fréchette]

As mentioned in my presentation, and that's what the PBO report found, there's no real skills mismatch. There's always the possibility of having mismatch in some pockets, in some areas, but there's no national skills mismatch across Canada.

[Jinny Sims, NDP, Newton—North Delta, BC]

Are you able to speak to a correlation between the increase in LMOs issued in recent years and the number of jobs supposedly created in Canada during the same period?

[Mostafa Askari]

I can't really, because I don't really know exactly what's behind that. One of the things that we have said publicly is that to have an effective program—whether it's the temporary foreign workers or job grants, or any other kind of program that affects the labour market—you need a lot of good data on the labour demand in Canada. Unfortunately, we do not have good data on labour demand. We have very good data on labour supply in Canada, which actually the EI program uses for different regions. But without having access to that kind of data, it's very hard to say how that program is working and whether it is actually replacing or complementing the labour market in Canada.