Thank you, Mr. Chairman.
I'd like to begin by thanking you for the opportunity today to raise the concerns of our $51 billion industry in Canada.
There are two substantive issues I'd like to raise here in the brief time I have available. The first is the GST and the second is labour shortage.
The one-point cut to the GST earlier this year was applauded by our industry from coast to coast. After more than 15 years, the GST remains a sore point for our industry. It is discriminatory and unfair, adding tax to our ready-to-eat meals while leaving ready-to-heat meals tax-free. I would encourage this committee to recommend that government move as quickly as possible to reduce this tax to 5%.
The other pressing issue is labour shortage. For members in western Canada, this is already a crisis. For the balance of the country, it is a growing problem. There's no getting around or wishing away the two realities that confront our industry: first, the country's birth rate has fallen precipitously in the last three decades, seriously constraining growth in the labour market; second, we're on the verge of the biggest exodus from the labour market in the country's history--the baby boomers are starting to retire.
When you look at these two factors, you can only conclude that these challenges ahead are daunting. The Conference Board of Canada projects there will be a shortfall of more than 950,000 workers in Canada by 2020 unless we do something to increase the available labour pool.
All industries will suffer from the labour shortage, but the outlook for the food service industry is particularly daunting. Our industry is skewed toward youth, and in fact the available workforce will be older. Food service today relies on young people for its workers. In fact, 44% of food service workers--more than 440,000 employees--are between the ages of 15 and 24, but projections suggest that by the year 2025 the population of that group, the 15-to-24-year-olds, will actually decline by 330,000.
In order to meet this challenge, we in the industry need to strengthen our recruitment and our retention activities. We will have to access older workers and look for new pools of talent to entice the industry, but we can't overcome the demographic reality confronting the Canadian labour market.
We need dramatic changes in public policy, including modernization of the immigration point system so that it recognizes the diverse needs of Canada's labour market; greater flexibility and easier access for temporary foreign workers; the working holiday program and the provincial nominee program; elimination of the clawbacks in our federal retirement benefits programs, which punish retirees for supplementing their incomes; and incentives for labour mobility within Canada, encouraging the unemployed to move from areas of high unemployment to areas of high demand.
We also recommend that government take a serious look at lowering the tax burden on low-income Canadians, thus encouraging them to enter the workforce. There are a number of ways government can lower the tax burden on Canadian workers, including lowering the bottom tax rate or raising the basic personal exemption, and adding a yearly basic exemption of $3,000 into the Employment Insurance program, as we already have in the Canada pension plan.
A yearly basic exemption in the EI program has been recommended twice in the past by this committee and twice by the human resources committee. The YBE would put more money into the pockets of working Canadians and provide targeted payroll tax relief to labour-intensive industries.
In summary, Mr. Chairman, the labour shortage is already a crisis in western Canada, and it will be the biggest single issue we face in the years to come. I believe that you and your committee should recommend to the Minister of Finance that he move as quickly as possible to address the labour shortage, so that we will be able to compete tomorrow.
Thank you.