Industry Committee on Nov. 22nd, 2007

[Tom Wright]

I do not have any study in hand.

[Robert Vincent, Bloc, Shefford, QC]

Have you done one?

[Tom Wright]

I have not seen the details. We can check on whether or not we have more information on the subject, but I do not have any study with me this morning.

[The Chair, Conservative, James Rajotte]

Do you have another question?

[Robert Vincent, Bloc, Shefford, QC]

Yes, I have not finished.

On page 2, we can see that the service sector has been thriving. Why do you think it has expanded as much as it did? The service sector has seen real growth as a share of real GDP. However, the growth rate of the manufacturing sector has slowed down, which has resulted in increased job losses, contrary to the service sector, which has seen approximately a 50% growth rate.

[The Chair, Conservative, James Rajotte]

What is your question?

[Robert Vincent, Bloc, Shefford, QC]

Where did all those jobs go? We cannot put all of them in the service sector.

[Tom Wright]

Page 7 indicates the growth rates and the areas within the service sector in which jobs were created. In terms of the health of the economy, obviously there is a...

[Robert Vincent, Bloc, Shefford, QC]

I know that you are referring me to page 7, but take page 2 and look at the decline.

[The Chair, Conservative, James Rajotte]

Monsieur Vincent, we're well over time here.

Mr. Wright, do you want to make a final comment?

[Tom Wright]

I simply want to indicate that slide seven shows where the growth has been. That's where jobs have occurred; that's the change. You can explore things in more detail.

[The Chair, Conservative, James Rajotte]

Thank you.

We'll go to Mr. Stanton, please.

[Bruce Stanton, Conservative, Simcoe North, ON]

Thank you, Mr. Chair, and thank you to our witnesses this morning for taking the time to shed some light on this rather diverse sector of our economy.

First of all, for the purposes of our discussion, when we start looking at various components of the service sector, pitting one against the other, trying to determine where one group of jobs fits, and so on, that can end up being a very difficult thing to track.

I can see there's a perception that somehow when job losses happen in one sector and move to another, they will only go to the low-paying portion of the service sector. In fact, quite the reverse is true. We have some stats here from October showing 66,000 new jobs in health care, social services, other services, and public administration.

That supports what you've said, Mr. Wright, on slide seven, that while retail trade has the greatest amount of increase, look at the top several others before you hit accommodation and food. So we have to deflate this myth that somehow manufacturing jobs are only going to the low end of the sector. I think it would also be true that if one looked at the diversity of sectors, even in manufacturing alone, there would be components in the lower end of the wage scale. So every sector has their highs and lows. I think we have to keep this at the higher level and look at what we're doing here.

I have a couple of specific questions for you, Mr. Wright. I wasn't sure where a couple of sectors would show up, and one was the building trades sector. Would that be in wholesale or part of the service sector?

[Dr. Janet King, Director General, Service Industries and Consumer Products Branch, Department of Industry]

Construction is a separate component, so it's not included in these data.

[Bruce Stanton, Conservative, Simcoe North, ON]

Okay. So that was a good question; what about utilities like power companies?

[Dr. Janet King]

It's the same situation. They're unique and separate.

[Bruce Stanton, Conservative, Simcoe North, ON]

They're not in the service sector.

[Dr. Janet King]

That's correct.

[Bruce Stanton, Conservative, Simcoe North, ON]

Okay, excellent. That was just a question that I had come up.

I'll direct this question to Mr. Wright. We skirted around some of the discussion here this morning on the degree to which this sector does, in fact, create primary employment. You can see that certain portions of it are in support of the manufacturing sector, or what one might consider primary jobs as opposed to secondary jobs, secondary being those that are really only feeding off the wealth creation that's happening on the primary employment side. So I'm captivated by this notion of the degree to which the service sector--the component of the service sector that is primary jobs--is creating wealth.

Second, as we look ahead, and I think there's been some talk of that already, where do the opportunities lie in creating more? I was interested, actually, in the degree to which the financial sector, for example, had quite a large amount of export capacity or investment in other parts.

I'm rambling on here. Let me get back to my question.

Could you give us some thoughts on the degree to which it's a primary sector of our economy and not just secondary?

[Tom Wright]

It's an interesting question to try to take apart, and it would be interesting to listen to some academics grapple with that concept. At the outset, I would observe that quite a number of these sub-sectors are finding a capacity to export, so in that respect, it would account for it being a primary employer. So the architect who specializes in green who sells into Shanghai, that's primary, I think, in your analogy. But if you were just designing a building for Manulife, maybe that's secondary. I think there is, in fact, a growing capability, and there is growing evidence that in Canada it is primary.

The fundamentals of the question are interesting, because I would argue that, more and more, the determinants of success for your manufacturing, your goods and services, come out of the service sector, whether it's informatics or whether it's design and engineering.

So they're secondary in the purest sense, but boy oh boy they're integrated with regard to the success factors for your goods-producing sector. While I think it's interesting in an academic sense, I'm not sure where we end up at the end of it. Still, I'm fascinated by the notion.

[The Chair, Conservative, James Rajotte]

Thank you.

Thank you, Mr. Stanton.

Time runs when you're on an interesting topic.

We'll go to Ms. Nash for five minutes, please.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Thank you, Mr. Chair.

I'd like to pursue that line of discussion that Mr. Stanton was just raising with respect to the professional, scientific, and technical sector.

Would you agree, Mr. Wright, that the manufacturing sector is one that involves a lot of innovation and investment in new technology?

[Tom Wright]

Generally, that's what we had hoped it would include, absolutely.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Would you agree that when we lose manufacturing capacity, and companies go out of business and we no longer produce goods in a certain area, the jobs that involved technical capability, innovation, and design, that relied on that part of manufacturing, cannot function any more? Because if the manufacturing capacity is not there, then the design jobs that went with those manufacturing jobs are no longer there either.

You're frowning, so let me ask you--

[Tom Wright]

If the job goes away, the job's gone. There is design and there is innovation. If you talk to some companies, they have design and innovation right on the factory floor.