Industry Committee on June 13th, 2006

[Brian Masse, NDP, Windsor West, ON]

I'd like you to answer the question. With all due respect, you spent your time giving qualifiers to the information you presented to this hearing today, so why even present it?

[Howard Brown]

I think there is information in the data. All I'm suggesting is, you have to treat it, as you do with any economic time series, with a little bit of caution.

The second point is that these data of course include taxes. So you may see differences between countries as a result of tax differences, rather than as a result of a price that's being received by the supplier of the product.

I think the answer to your specific questions—why were natural gas prices historically lower in Canada, and why have they kind of converged?—is that there were supply constraints in our capacity to ship natural gas into the markets in the United States.

The other point here is—and this goes back to the statistical question, and I think this is very important—that they're measured in different places. One would be Henry Hub in the southern United States. The other would be the Alberta Hub in Edmonton. It would be quite natural for there to be a difference between those, reflecting transportation costs.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Brown.

Thank you, Mr. Masse.

We'll go to Monsieur Lapierre.

[Jean Lapierre, Liberal, Outremont, QC]

Thank you, Mr. Chairman.

I'd like to speak more particularly to the people from the Department of Human Resources and Social Development. I know that, for a number of years, you've been a pocket of resistance to the program for older worker adjustment. All the ministers who have arrived in the department have wanted to do something, but, after hearing you, they change their minds because there were apparently passive measures.

Mr. Crête cited some statistics earlier. He said that 71,000 jobs had been lost last year. According to the Canadian Exporters Association and according to the documents I have here, approximately 100,000 additional jobs were lost in the textile, clothing, leather and furniture industries. I don't get the impression these are people who have post-secondary diplomas. I don't know a lot of 59-year-old seamstresses who work on a two-needle overlock machine who have a post-secondary diploma.

What are we doing for those people, who are ultimately the victims of the dollar and the price of oil?

We're currently refusing to take measures like those we've had in the past, that is to say the Program for Older Worker Adjustment (POWA), which worked well. These people are victims. They lose their jobs, they receive employment insurance for a few weeks and then they're forced to sell everything they own. They're 58 or 59 years old, and the only way for them to receive welfare benefits is to sell what they own, thus losing their dignity.

How can we accept this situation? These are statistics, but ultimately there's a human drama and a host of solitudes behind every figure. What can we do for the least adaptable people who come from the soft and difficult sectors? I've never seen a seamstress working at IBM. What are we doing for these people?

[Éric Parisien]

Mr. Lapierre, I can try to give you a partial answer. The department has conducted a number of pilot projects, and many studies have been done. You're right to say that there are unemployed workers in the softest sectors of the economy.

However, it should also be noted that the sectoral councils program has definitely put sectoral councils in place in the textile and clothing industries. Those councils have stopped the bleeding so that employees can have access to technical training, basic training, so that they at least have transferrable essential skills in their industry.

There have been losses in the clothing industry. They're declining now, but the remaining sectors and businesses will be looking for much more advanced and profitable markets, as a result of which employees have a better chance of staying in that field.

As for the textile industry, Canada went looking for more active and upper end sectors. Jobs in the textile industry are very well paid. The employment floor and ceiling have remained stable in Canada: approximately 50,000 jobs.

[Jean Lapierre, Liberal, Outremont, QC]

I'm not satisfied at all. These are the same answers we've always heard. In the meantime, 71,000 jobs have been lost. Investors and the manufacturers themselves have told us that, according to their forecasts, there will be another 100,000.

You can't make me believe that the women who work on Chabanel Street have gone into the high tech sector. I don't believe that. Take a little walk in that area. Sincerely, I don't believe that the people who work in the textile and furniture industries have been able to get jobs elsewhere.

You can talk about your labour mobility programs. However, mobility has its limits for a Francophone. So why, for a number of years now, have you been resisting the idea of creating an assistance program for those who have no other resources? Why are you claiming that everyone can be trained and can adjust, when that's simply false? These are people who have worked all their lives and who are losing their dignity. You can't recognize that they're paying with their dignity. That's what I can't accept.

[Martin Green]

I can only point out that under the employment insurance program some 230,000 older workers received a total of about $1.4 billion in income benefits. More than 80,000 unemployed older workers benefit from employment programs funded through the Employment Insurance Act each year. There was an older worker pilot project. The recent budget announced a feasibility study to look at measures for displaced workers. I presume that's not fast enough action, but I think in one regard you want to look at where this is happening and what real measures we can put in place.

I think you're probably right, not everybody is adaptable. Not everybody can make that transition, and there isn't a magic wand that suggests somebody who's been in the textile industry for 20 or 30 years can jump into a high-tech job, but we do have measures in place to try to help make that transition, and we're looking at what other things can be done.

[The Chair, Conservative, James Rajotte]

I am going to take the next Conservative spot, unless my Conservative colleagues object. So I have five minutes.

I want to follow up on the employment issue. One of the things you did mention in your presentation, Mr. Green, was partnerships between educational institutions and the government. You talked about the need for greater investment in skills development. The polytechnic schools across Canada are very much involved in training of all sorts for people in both manufacturing and the energy sector. The one I know best from my city is NAIT. It trains between 13% and 18% of the apprentices across Canada and is doing some outstanding work with aboriginal communities by having mobile classrooms on reserves and other areas in northern Alberta and northern Saskatchewan.

One of the things they have found difficult is trying to get the federal government to partner with them. They have the provincial government there, and I assume it's the same across the country. Is the federal government in favour of apprenticeship training? There are a lot of initiatives on incentives in the recent budget, but is your department intending to become a partner with these types of institutions to form the partnerships you yourself identified in terms of increased funding for these types of institutions?

[Martin Green]

Outside of the measures announced in the 2006 budget, the apprenticeship job creation tax credit, the apprenticeship incentive grant, and the tools tax deduction, a fundamental debate is going on as to what extent the federal government will be involved with colleges. The budget also announced a kind of PSE and skills training consultation with the provinces, which will probably lead to some interesting things.

That being said, we do have small programs aimed at encouraging the kinds of partnerships we're talking about, such as the workplace skills initiative, which is aimed at getting farms working with community colleges or technical colleges, with the help of the federal and provincial governments. We're on the cusp of making some recommendations with regard to some of those projects, and at this point that's about all I can say on it.

Cliff wants to add something.

[Cliff Halliwell]

One thing that has struck me is the tendency in Canada to think that a post-secondary education means a university education rather than a community college education. I think we have, to a degree, created a culture in this country that tends to downplay the trades as a place where there are tremendous prospects for work. I think we've created that tendency by tending to compare the average earnings of university graduates with the average earnings of community college graduates, and on average, they are higher for university graduates. We lose the enormous range of outcomes that you see when you look at specific degree programs or training programs. In our concern about the knowledge-based economy of the mid-nineties, I think we've also, in a sense, forgotten how many opportunities there are to make things with your hands, or do things with your hands.

So I think a cultural change is necessary. Although I can't cite the statistics by memory, for the obvious reasons of middle age, the number of young Canadians who think they need to go to university is vastly out of proportion with our projections of the number of jobs that, strictly speaking, will require a university education. I think we do need a cultural change, or we will potentially find ourselves with these ongoing shortages in these areas.

I might even add something with respect to the question pertaining to the Quebec workers.

Even in economics, there will always be jobs for people who haven't gone any further than high school. Sometimes I'm surprised to see that the number of jobs that simply require a high school education is increasing. However, that number may decline, since now a lot more have post-secondary diplomas.

So I believe the pressure will be on this labour market sector in the future. Unfortunately, it's too late for the older people who work in the textile industry. However, that kind of job should not be forgotten.

[The Chair, Conservative, James Rajotte]

We'll now go to Ms. Stronach.

Welcome to the committee, Ms. Stronach. You have five minutes for questions.

[Belinda Stronach, Liberal, Newmarket—Aurora, ON]

Thank you.

Let me begin with the topic of education, which is something I'm a big proponent of. I can't understand why in this country we don't put the dialogue on education on par with health care. I think it's so important to our future well-being and quality of life. We must create a culture of lifelong learning in this country.

You've indicated that we're actually sliding backwards from a knowledge-based economy in some ways, which includes the manufacturing sector, to become more dependent again on our natural resources. I consider it a great shame and an injustice to many Canadians that we're letting these jobs disappear. We fail to have an industrial strategy that focuses on education to protect and grow the manufacturing sector and that looks at the value-added jobs.

When you look at China, it's graduating in the neighbourhood of 40% of their citizens in the engineering sciences and technologies. India is at about 20%. In Canada, we're at less than 8%. I point that out because that affects how we're going to be able to compete in this global economy.

With respect to education and skilled trades, are we doing enough?

In terms of access to post-secondary education I agree with your comments, Mr. Halliwell, on the need for a culture change, that we also include apprenticeships and skilled trades in that. That's necessary now. It's what a high school diploma used to be to secure a good job.

The previous government had put a lot of work into negotiating a labour market partnership agreement where consensus was achieved among all of the provinces on six priorities for investment, from aboriginal people to literacy to older workers to skilled trades to labour mobility, with a greater emphasis on apprenticeship programs. I say it is a great shame that this is potentially dropped and a great deal of effort over a number of years has been wasted.

So what is the next step? What are the plans to address these challenges? The provinces and the federal government, I thought, worked very well together to address these challenges. So what are the plans?

Also, what new models are we looking at to bring together not only government and university, but enterprise--I think this is where the U.S. and other nations are far ahead of us--that lead to a greater commercialization, new technologies, products, and processes? That's how we're going to compete. It's not going to be on a low dollar. It's not going to be on the backs of workers, with low wages.

I have one comment with respect to NAIT. I've also been to that institution, and they're doing outstanding work. We did put forward last time $1 billion of investment to be transferred to the provinces--which I think it's good that this government is also supporting--not only to upgrade universities, but we expanded it to colleges, because colleges are in such desperate need and have been left behind in terms of investment.

So in terms of new models for education and labour market partnership agreements, what's the plan?

[Martin Green]

It's a very big question.

In terms of the labour market partnership agreements, the recent budget did not have anything on them. The recent budget spoke about the federal-provincial consultations on post-secondary education and training. I can't say much more, other than that those will obviously be part of that exercise.

But you're absolutely right, there was agreement on six key areas that the governments have to work on together. Some of that work continues on a number of issues, and I think the results of these federal-provincial discussions will indicate where they go.

With respect to some of the other issues, do you want to comment, Cliff, at this juncture?

[Cliff Halliwell]

I'm inclined to agree that there has to be a lot of consultation, but it has to take place at a highly, if you will, atomistic level. That is to say there is no one grand plan, as has been detailed here. As well, there is no one manufacturing sector. The manufacturing sector is highly divergent. The economy is highly divergent. Young Canadians are quite different in their own interests and aptitudes.

My sense of it all is that when you actually look at our labour market, notwithstanding the current stresses we are under, we've been here before and we've had a lot of these pressures. I'm sure the minutes of committee meetings would reflect that these concerns are perennial.

Yet in many respects the Canadian economy and labour market are highly resilient, and a lot of these things work out. They don't always work out for the individual workers themselves who are affected by this kind of change. But we should never actually forget just how much flux and change is actually going on at any one point in time and how well we're adapting to it.

If I told you that in 1999 one in five manufacturing workers either quit or lost their job, you would be shocked. But in fact, over one in five new hires took place in that year. It's just an indication of the amount of churn that does take place in the sector.

The key challenge we actually face is making sure that people have enough skills, first of all, especially those foundational skills. In fact, my single largest concern would be not so much our level of educational attainment, but some of the literacy challenges we face in the economy. If you don't have the literacy skills, the first thing you're missing is a tool for learning, because literacy and reading skills are the most important tool for even learning new skills.

[The Chair, Conservative, James Rajotte]

Briefly, we have Mr. Brown and Ms. Filbee.

[Howard Brown]

Thank you very much, Mr. Chairman.

I just want to offer a brief comment in response to something that I thought I heard Ms. Stronach say, something to the effect that it was unfortunate we were losing high-tech jobs and falling back on natural resources. I just wanted to offer the observation that an awful lot of employment in the natural resource industries is very high-tech; it isn't lumberjacks out with an axe. Whether it's electrical engineers at Hydro-Québec or underground robot miners at uranium mines in Saskatchewan or 3-D seismic visualization labs at the oil patch in Calgary, in a lot of respects it's at the cutting edge.

They don't do a very good job at generating research and development. They do a really good job at incorporating research development that other people have done.

I just couldn't let that one go, because at Natural Resources Canada we think the resource industry is a part of the solution.

[Sara Filbee]

Thanks very much.

I just wanted to pick up on your comment about new models of looking at it. I can't talk on the education system, but in order for us to identify where we need to be looking in terms of the types of new skills, we obviously have to get a grounding somewhere. There's an area that we work in, technology road maps, that is very much cross-governmental, cross-agency, and very much industry centred. In fact, it's very much industry driven. We're often the catalyst for doing them, but industry is very much there. I think we've done over 20. Over 800 corporate folks have been involved, over 500 companies, and all levels of government and other stakeholders.

Very quickly, what they do is the market-driven process whereby the group will look ahead in terms of the future market demands for their sectors, types of products and so on, and then back up to identify what technologies will be needed, and then the sorts of management and workforce skills that are going to be required with respect to those technologies.

It is a very powerful tool. We get some good feedback on it. We need to do more work in terms of implementation. But I certainly think it's something you folks might want to have a look at.

[The Chair, Conservative, James Rajotte]

Okay. We've been asked to have that submitted, so if we could have it submitted to the committee, we would appreciate it.

We have two more members. If I can just impose a little more on your time, we'll try to be very brief. We have Monsieur Arthur and then Monsieur Crête to finish up the meeting.

Monsieur Arthur.

[André Arthur, Independent, Portneuf—Jacques-Cartier, QC]

Thank you, sir.

I was a bit stunned to hear the labour specialists console each other by saying that the job losses in the manufacturing sector would soon be recovered since people are managing to find other jobs, probably outside the manufacturing sector. It's a bit like being happy about your ship running aground because you get to have a nice rescue boat.

Currently in the industry, there are holes that can't be filled. If you talk with the people in the printing business, for example, they'll tell you that there are press operator jobs at $125,000 a year that they can't fill because the technical schools aren't meeting their needs. They can't convince young people to go into their industry. As a result, the expansion of those businesses, which are often small and medium enterprises, is slowed by their inability to find the personnel they need.

In the trucking industry, we're told that Canada is short 40,000 truckers to meet demand in the coming years. However, wages aren't rising, even though we're short 40,000 workers. The economic supply of people who might join the industry isn't there.

Does that have any relation to the fact that a monopoly is currently being established in Eastern Canada with a revenue fund that is strangely similar to that of organized crime in New York? I hope not, but it troubles me. When you're short 40,000 employees in an industry that doesn't raise wages in order to get them, it may be because there's a baseball bat behind that.

My question is this: Do we have an adjustment problem between the school systems of our provinces in general, and Quebec in particular, and the manufacturing industry? We mostly offer jobs to young men, while our school systems are increasingly oriented toward meeting the needs of female students, young women.

[Cliff Halliwell]

I just mentioned the change of culture necessary for the trades to be considered as good jobs for young Canadians. I added that that adjustment should probably be made first by students. But especially, the education system also has to be receptive to workers' needs and be more flexible. I see that employers mainly consider community colleges as the most receptive to their needs.

I believe that the manufacturing industry's document "Manufacturing 20/20" contains tables that provide a lot of information on what's lacking in education according to industry employers. These are shortcomings that must be corrected.

I see there's mainly a lack of correspondence between occupations. That's always the case in a modern economy, because you can't predict all impacts in every sector and on all occupations. However, I believe there are too many workers in some sectors and not enough in others. Having more information on job opportunities can help us, but students have to respond to that information.

[André Arthur, Independent, Portneuf—Jacques-Cartier, QC]

But the lag between those who are in industry and those being produced as talent from the schools is longer than the time it will take to complete their education. So there is no solution.

[Cliff Halliwell]

There is no perfect solution, because quite often an education program will take several degrees. A few years ago, we found ourselves caught with a lot of people who were taking courses in the high-technology sectors and were expecting to work in some of the well-known firms in Ottawa. When they completed their education, they discovered the jobs weren't there.

Forecasting is never going to solve the problem. Choosing an educational pathway is a bit of a gamble for students. But I think it's important that they have forward-looking information about where the employment opportunities are arising. That's one reason that this department, for a quarter of a century, has been in the business of trying to provide that kind of information to young Canadians.

[The Chair, Conservative, James Rajotte]

Mr. Parisien, you wanted to add something?

[Éric Parisien]

In my opinion, we shouldn't underestimate the importance of being able to mobilize the private sector in order to engage young Canadians and part of the immigrant population. Nor should we underestimate their ability to have an influence on the education system.

Partnerships are possible. The sectoral councils are partnerships. In Quebec, there's a counterpart to those councils: the sectoral labour adjustment committees. More and more work is being done jointly with these two types of organizations in order precisely to match the industry's needs with what's being done in education, especially in technical education and occupational training. So there are potential solutions in this area.

[The Chair, Conservative, James Rajotte]

Thank you.

Mr. Crête.