Evidence of meeting #4 for Industry, Science and Technology in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was sector.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

  • Tom Wright  Assistant Deputy Minister, Industry Sector, Department of Industry
  • Colleen Barnes  Acting Director, Financial Institutions, Financial Sector Policy Branch, Department of Finance
  • Janet King  Director General, Service Industries and Consumer Products Branch, Department of Industry

9:45 a.m.

Conservative

Colin Carrie Oshawa, ON

We hear comments quite often that the service sector actually relies on the manufacturing sector. In other words, if you don't have people manufacturing products, there's not the money to buy and use these services.

Could you comment on that statement?

9:45 a.m.

Assistant Deputy Minister, Industry Sector, Department of Industry

Tom Wright

I think there are two dimensions to your observation. One is the sheer magnitude of the service sector within the economy. At the end of the day, the goods-producing side of the economy wants a market to sell into. If we have 70% of the employed people in Canada doing well in the services sector, there's a piece of the market. Health there is good, and there is a symbiotic relationship on that front.

But also, when you take a look at the nature of the manufacturing industry and start to peel the layers of that onion, you're going to find that the manufacturing industry can't go very far very fast without the use of the service sector, be it in the ICT or the informatics end of the things, in logistics, in trucking, in engineering, in design. Their productivity, their efficiency, their fundamental elements of competitiveness can in some cases be found within the service sector. I think that relates to some of the questioning I had earlier.

There's very much a symbiotic relationship, and I don't think you can consider these in isolation. I'm not an economist, but in my experience, you have to take a look at how these elements of the market work together.

9:45 a.m.

Conservative

Colin Carrie Oshawa, ON

I've heard comments as well that Canada has great opportunities in emerging markets. One sector that is not doing as well as it could in emerging markets is the service sector. With the potential for export and opportunities worldwide, are there things the government could do even better to help promote global champions in the service sector?

9:45 a.m.

Assistant Deputy Minister, Industry Sector, Department of Industry

Tom Wright

There are certainly opportunities. We are already exporting, but I think the observation is accurate. Our export of services has been fairly stable. It hasn't experienced the same levels of growth that some might expect. I think the deliberations of the committee might be able to shed some light on what might facilitate this.

In my experience, there are some areas where we have done quite well. Some of the financial institutions have made inroads into some of the new and emerging markets, be they in China or elsewhere. We have in Canada niche elements of expertise. If you were to talk, for instance, to the architectural community, green architecture at a point in time was making some tremendous inroads into China. The Chinese government was seized suddenly of green, and we had some expertise here in Canada. So there were opportunities.

In the marketing and trade promotions we do, as the government embraces a global commerce strategy, unambiguously there are ways in which we can continue to promote the services. We have expertise in a variety of these areas, and they can and should be promoted.

9:45 a.m.

Conservative

The Chair James Rajotte

Ms. Barnes, do you want to comment briefly? Then we'll go to Ms. Nash.

9:45 a.m.

Acting Director, Financial Institutions, Financial Sector Policy Branch, Department of Finance

Colleen Barnes

Yes. It's on the financial services element.

We have companies like Scotiabank who are really active in some of the small emerging markets. There are the free trade negotiations we're trying to do, for example, right now with Peru, and we just finished a financial services chapter with Chile. These are things that Scotiabank really likes to have in place, because it gives them some legal certainty when they go into these emerging markets that there's at least some agreed international framework that, should things go wrong, they can rely on.

On the financial services side, you'll see in one of the charts that exports from the finance and insurance sector are very small. The reason for this is that many if not most countries require a physical presence when you want to go into a country, in China and all of these areas. What we're showing is that we don't have a lot of exports, but we have a lot of foreign direct investment in these emerging markets. So when you're looking at the financial services sector, bear that in mind.

9:50 a.m.

Conservative

The Chair James Rajotte

Thank you.

Thank you very much, Ms. Barnes.

We'll go now to Ms. Nash for six minutes.

November 22nd, 2007 / 9:50 a.m.

NDP

Peggy Nash Parkdale—High Park, ON

Thank you, Mr. Chair, and thank you to the witnesses for your presentations.

I'm interested in employment in the service sector. I noticed on slide six of your presentation, Mr. Wright, that the composition in terms of employment starts off with retail, health care, education, and accommodation as the largest sectors of employment.

I'd like to ask you about the private service sector. If we look at, say, the first five sources of employment, three of them are in the public sector, not exclusively but primarily in the public sector. That would be health care, social assistance, education, and public administration.

If we set those aside for a moment and look at the private sector, which would be the retail trade and accommodation, this accounts for--it simply is a guesstimate, looking at the graph you have here--roughly 25% of the employment. Could you tell us what would be the average wages in the retail sector and the accommodation and food sector in Canada?

9:50 a.m.

Assistant Deputy Minister, Industry Sector, Department of Industry

Tom Wright

We tried to capture some of the averages of the salaries in those sub-sectors on, I believe, slide eight. You'll find accommodation and food there, and you will find the retail trade. Accommodation and food is at the lower end, and retail trade is the third one from the bottom.

9:50 a.m.

NDP

Peggy Nash Parkdale—High Park, ON

Looking at your chart on page eight, accommodation and food is maybe around $11 or $12 an hour--this would be an average wage--and retail trade looks to be just over $15 an hour. Again, this would be an average wage, so some would be higher and some would be lower.

I'm thinking about people who are losing their jobs in the manufacturing sector. I had the opportunity to be part of the finance committee yesterday. What we heard there was quite chilling--namely, that the more than 300,000 manufacturing jobs that have been lost so far reflect fiscal conditions of two and three years ago. The incredible rise in the value of the dollar and other factors will have an impact on the manufacturing sector that we will only see over the next couple of years. So while we've had significant job losses, we're about to face much more.

I ask you, given that the average wage in the manufacturing sector is, as you have said, higher than the service sector; given that not only the largest source of employment but the fastest growing sources of employment is in retail; and given that by your own chart here, retail and food and accommodation are among the lowest-paying jobs in the service sector, do you not think it's reasonable to assume that many workers who lose good-paying, secure jobs in the manufacturing sector could be faced with jobs that bear a relatively low wage in the service sector? More importantly, rather than being full-time jobs with benefits, and in many cases pensions, these jobs are precarious jobs, where one can never count on the hours of work. These jobs offer no security or benefits to support the workers or their families.

9:55 a.m.

Assistant Deputy Minister, Industry Sector, Department of Industry

Tom Wright

I understand the issue, and I wouldn't dispute that this in fact has happened. Equally, I would not dispute that we may well see some more of that.

I don't have data to quantify that observation. I get nervous about the clarity of my crystal ball, looking forward, but--

9:55 a.m.

NDP

Peggy Nash Parkdale—High Park, ON

I'm not asking you to project job losses. At the finance committee yesterday, that's what witnesses said.

9:55 a.m.

Assistant Deputy Minister, Industry Sector, Department of Industry

Tom Wright

Indeed, and I wouldn't refute that there is a degree of that. I just can't quantify that. But I do take your point, unambiguously.

9:55 a.m.

NDP

Peggy Nash Parkdale—High Park, ON

Do I have one more minute?

9:55 a.m.

Conservative

The Chair James Rajotte

You have about a minute left.