Industry Committee on June 13th, 2006

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Are the current very rapid changes already being felt?

[Renée St-Jacques]

The major rise in the exchange rate and energy prices is already over. So those adjustments are made. With regard to what happened in 2003-2004, there had been relatively minor changes in recent months, but compared to what happened before that, these changes are more minor. I don't want to speculate about amounts or when this will happen, but there are still a few adjustments to come.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Can you evaluate the extent of the impact of each 10¢ increase in the value of a dollar, from 90¢ to $1, for example? If the dollar was at par with the U.S. dollar in three years, what would be the consequences for employment? Have you in any way determined the cost for manufacturing employment of every 10¢ increase in the value of the dollar?

[Renée St-Jacques]

We're not specialists. The specialists in the field work at the Bank of Canada for our private sector consultants. We use their forecasts. If there is a one per cent increase in the dollar, the models seem to say that a 0.04 per cent decline in employment will be observed two years later.

That's correct, Robert, roughly speaking?

[Robert Lamy, coordinator, Department of Industry]

As Ms. St-Jacques said earlier, it's not our role to build models to determine the effect of an increase in the value of the dollar on the economy.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

I'm not talking about—

[The Chair, Conservative, James Rajotte]

Mr. Crête, it's over eight minutes now.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

I took 35 seconds to read the documents and 8 minutes to ask questions.

[The Chair, Conservative, James Rajotte]

Those are the rules you established for the chair, so I'm following your rules.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

I agree on the eight minutes.

[The Chair, Conservative, James Rajotte]

We'll go to Mr. Carrie now.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you very much, Mr. Chair, and thank you to all the witnesses for coming here today. As Mr. Crête was saying, there are so many questions we want to ask and we hope you'll be available to come back.

One of the things I wanted to start with is the human resource challenge and, like my colleague across the way said, a plan. Obviously over the last 13 years there really wasn't a plan, and that leads us to where we are today.

One of the questions I'd like to ask you is this. Do you have any ideas about what government can do to better promote worker mobility? You brought up the concept of production mobility, which I think is a very valid idea. I was wondering, as a new government, whether you have some ideas we could promote to help improve the situation for Canadian manufacturers.

[Cliff Halliwell]

I'll catch the first part of that one, and that pertains to the observation about perhaps not having a plan 13 years ago.

I suspect that anyone who looked 13 years ago at the people who were forecasting where the economy would be today.... They would have never forecast that the economy would be in the kind of healthy shape it is today, that the employment ratio would be at a record level, that the unemployment rate would be at a 32-year low. I suspect that very few would have considered that a plan would have been necessary to improve on the kinds of outcomes we have now.

I'm also a bit concerned, having been in the forecasting business for most of my career, about the perils of relying heavily on plans that are hostage to a set of assumptions that are in a forecast that you might make at any one point in time. For instance, if you go back even six or seven years ago, we talked a lot about the shift of the economy to the knowledge-based economy and what that would mean and what that would require in terms of the response of governments. And the reality is that in the last several years the more traditional parts of the economy--the resource sector, the energy sector--are generating tremendous job growth as well, so we've actually had a shift back towards a more balanced mix of employment growth, including considerable employment growth for people in the trades.

One of the things we have to bear in mind is the imperfection of forecasting and the necessity of building a broad foundation for the future. So I consider, just as an example of this, the fact that despite the loss of manufacturing jobs in the last several years, the unemployment rate in the manufacturing sector has not gone up, and that is, the unemployment rate of people who were unemployed and said they were in the manufacturing sector. So clearly a lot of those people are finding work elsewhere. And I think their educational level plays an important role in it.

In 1976 nearly half of manufacturing employees had less than high school education. Now nearly half of them have completed post-secondary education. So that shift in the educational calibre of the Canadian workforce is essential to a more adaptive workforce. And I think that's probably the most important contribution policy can make to creating the flexibility within the workforce, because the flexibility comes from people's skill sets, perhaps more so than from plans.

[Colin Carrie, Conservative, Oshawa, ON]

I would like to address the mobility part of it, though, and this is what we've heard a few times. I come from Oshawa, where there is a lot of manufacturing and a lot of skilled trades. There's a fear that skilled workers could lose their jobs in this area of the country. Do you think there is anything that government could do? In Alberta right now they're wanting these skilled trades.

You mentioned again, as I said, the production mobility and the mobility of people to move across the country. Do you have any concrete ideas about what types of things government could do to help that along?

[Éric Parisien, Director, Sector Council Program Division, Department of Human Resources and Social Development]

I'll take that question, if you want.

First of all, in the skilled trades program there is a program that's been in effect for a great number of years, the red seal program, which allows certified tradespeople to move from province to province and have their credentials recognized. That is now very active in 45 trades, not only in construction but also in industrial trades.

Worker mobility is critical, but credentialing is the responsibility of provinces. For the federal government, this department has been very active in supporting provincial regulators in harmonizing their standards and their regulations. For example, for each of the 45 red seal trades, provinces have agreed on a core set of standards for that job, an occupational analysis that will be the same from province to province. In fact, the examination for that trade is actually carried out by this department, designed by this department. So there is quite a bit of activity.

Worker mobility in unregulated trades is critical, and that's where sector councils come in. They develop occupational standards in unregulated areas that allow mobility for workers, because once you've acquired the basic skills and the technical skills of your industry, you're mobile within that industry. Those skills are also transferable to other areas, so there is work being done by sector councils to improve the mobility of workers, not only from province to province but also within the industry. So if one part of the industry dips a little bit and there's employment elsewhere, the skills are transferable.

[Colin Carrie, Conservative, Oshawa, ON]

I have a quick tourism question. I'm curious to know what your initiatives are this year to educate more Americans about Canadians. I know there's been a perceived negativity of Americans towards Canadians over the last few years. Do you have any specific initiatives that you're putting down to the States to promote the vision of Canada or how Canada is perceived?

[Michele McKenzie]

Yes. About half of our marketing dollars are dedicated to the U.S. market. Our partners also invest a lot with us and, in fact, independently in that market.

This year we completed the largest piece of consumer research that was ever conducted by any destination in the U.S. We found there was in fact an issue on how Americans thought Canadians might feel about them. But more than that, the barriers of travel are cost barriers and competitive barriers. They see a lot more information about other destinations. Our efforts have been to fight those particular competitive battles per se.

In terms of how we spend money, we've shifted away from the traditional advertising style of activity and more into media and public relations, where we can get a lot more of the message out about what Canada is like to visit and what Canadians are like. It's working quite well.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Carrie.

We'll go to Mr. Masse.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

Thank you to the witnesses for appearing here today.

I'll continue with tourism, especially the western hemisphere travel initiative. How much of your budget was cut from marketing in the last year?

[Michele McKenzie]

In the current budget, it's a $3 million cut.

[Brian Masse, NDP, Windsor West, ON]

When I asked a question in the House of Commons—and I'm only going by memory now—I'm fairly certain the Minister of Industry acknowledged that there was actually an increase to the tourism budget this year. Is that not correct?

[Michele McKenzie]

I'm telling you the facts of what the budget figures are for this year; it's a cut of $3 million, from $78.8 million to $75.8 million. I believe the minister was referring to the Olympic investment that may be forthcoming.

[Brian Masse, NDP, Windsor West, ON]

That's totally different from the western hemisphere travel initiative. If we wait until 2010 to do something, we'll lose a lot of jobs.

What specific recommendations does your department have in regard to dealing with the WHTI? There are recommendations from the tourism association, and I've made recommendations. Has previous Minister Emerson or the current minister recommended anything in the past? This is now an overlap. What specific things are actually in the works, or is there anything to deal with this?

[Michele McKenzie]

From a purely tourism perspective, we find that this issue is getting a lot more attention now than it did last year, when our first research was completed. The focus we've made from a tourism marketing point of view is on trying to get the confusion out of the market as quickly as possible.

It means the effort that's currently under way in the U.S. to extend the deadline may in fact prolong the pain for Canada in some manner. It will give them more time for implementation.

The confusion is a big barrier right now in terms of travel intention.

[Brian Masse, NDP, Windsor West, ON]

Have either the two ministers or your department made specific recommendations on what to do?

I would disagree on the fact that many Canadians and other persons in the business community understood this before your study was launched, which we discussed when you were at committee last time in terms of doing it. What is specifically being done in terms of a strategy?