Thank you, Mr. Chair.
I hope that our input will help you in your efforts to ensure continued economic recovery and, most importantly, to create sustainable employment.
The Association of Canadian Community Colleges is the voice of Canada's publicly funded colleges and technical institutes. Our 150 members serve Canadian learners of all ages in every corner of Canada through 1,000 campuses.
Any strategy focused on job creation must take account of two immutable realities. First, in our knowledge-based economy, the workplace is increasingly laden with technology. Entry level positions in virtually every sector require sophisticated knowledge of complex systems. Seventy per cent of new jobs now require a post-secondary credential. Within a decade, we expect that will be 80%. Our post-secondary achievement rate in Canada is now an inadequate 60%.
The second immutable reality is that Canada has a challenging demographic deficit. With a rapidly aging population, we are not at a replacement level. In addition, an exodus from the labour market of mammoth proportions is under way as millions of baby boomers retire. The first baby boomer turned 65 this year. Even with immigration, Canada's labour market participation rate will drop from somewhere above 60% to the low 40% range within a generation. The implications are enormous.
Canada's current shortage in advanced skills has been masked by the 2008 recession and slow economic growth since then, but nevertheless, industry leaders are expressing profound concern about the availability of qualified human resources. Unless something changes, within 10 years employers will not find qualified candidates for 1.5 million positions in Canada.
The remedy is not difficult. We must increase the proportion of Canadians with the advanced skills associated with post-secondary education. To do this, we must reach out to traditionally marginalized populations, including the disabled, poor immigrants, disengaged young men, aboriginal Canadians, and multi-generational, welfare-dependent families, to lift them into the economic mainstream through education. A highly skilled workforce that exploits the talents of every Canadian is our only path to a sustainable economy.
Canadian colleges and institutes excel at providing accessible, cost-effective post-secondary education and lifelong learning. They possess a unique ability to nurture the marginalized through to graduation and employment. Despite the sluggish economy, upwards of 90% of college students find employment within six months of graduation.
As we approach the renegotiation of the Canada social transfer, the $3.8 billion now committed annually for post-secondary education is at play. With pressure on health budgets, some provinces may back away from higher education. We therefore recommend separating the PSE component into a dedicated post-secondary transfer at least at the current level, with some performance standards. We are not calling for new spending. We are focused on the continuation of current investments.
Most new jobs in Canada are created by small and medium-sized enterprises, or SMEs, and because of their limited capabilities, these companies increasingly turn to colleges for innovations through applied research. Colleges and institutes help SMEs innovate and grow by focusing on improvements in technologies, processes, products, and services.
This year, 4,444 private companies, primarily SMEs, partnered with colleges on applied research projects. The Government of Canada and the governments of some provinces support these initiatives; however, on the federal side, these investments represent only 1.25% of the $2.9 billion invested annually by federal funding institutions.
To unleash the full job creation potential of the SME sector and to boost its productivity, we recommend that investment in college-SME applied research partnerships be increased over time to 5% of federal investment in R and D. We think it's a reasonable ask. We are not recommending an increase in federal spending. We are talking about a retargeting of existing spending.
In order to remain competitive, Canada must invest in post-secondary education and develop a plan to increase the number of persons with advanced skills.
We urge the federal government to launch a national dialogue with provincial and territorial governments, educational institutes, the private sector, and civil society to identify measures to mitigate the demographic and skills challenges we face.