Evidence of meeting #64 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was csis.
A video is available from Parliament.
Conservative
Chief Economist, Canadian Labour Congress
—but are not back to where they used to be.
NDP
Peggy Nash NDP Parkdale—High Park, ON
Thank you.
Thank you to all the guests for making yourselves available today as witnesses.
Mr. Jackson, I would like to ask you about the proposed changes to OAS and the increase in the age from 65 to 67 to qualify for it. My question concerns youth employment. You just pointed out that youth employment is significantly higher than the average rate in Canada. You used the figure of 20%.
What impact could this increase in the qualification age for old age security have on young people trying to get into the job market?
Chief Economist, Canadian Labour Congress
I hate to put it in a framework where people are fighting for jobs, that it's an intergenerational struggle, but to some degree that's true when you are in a high-unemployment context.
When you look at Ontario, for example, we obviously experienced very large layoffs during the recession in 2008-09. What appears to have happened is that a lot of industrial and manufacturing workers who lost their jobs did move elsewhere in search of jobs—moving west—but others moved into the kinds of entry-level jobs that young people would otherwise be taking up. I don't have all of the facts and figures at hand, but I'm led to understand, for example, that in the tourism industry in Niagara Falls, a lot of those hotel jobs have been taken by industrial workers who lost their jobs in Welland. So workers with skills and experience do have an advantage in the job market compared to young people without skills and experience. I think the fact that youth unemployment is so high reflects the fact that older workers who lost their jobs did take, to some degree, the jobs that would otherwise be taken as entry-level jobs.
NDP
Peggy Nash NDP Parkdale—High Park, ON
We're finding now that hundreds of thousands of young people are neither in the workforce nor in school. I think that presents a real challenge for the future, that they're not getting a foothold in the job market.
Most Canadians don't have a private pension plan and they're not able to put money away in RRSPs. Delaying getting OAS for a couple of years not only impacts them to the tune of thousands of dollars, but it will also have an impact on their local economy, because people don't have that money in their pocket to be able to go out and buy things for their home or to travel or spend money to keep the economy going.
Do you have any thoughts about that, about taking this money out of the hands of seniors who could be spending it in the local economy?
Chief Economist, Canadian Labour Congress
My guess would be that for people who are 45 to 50 now and who see and register that this is happening, I don't think it's going to make a hell of a lot of difference in how much they save. They're not saving very much anyway, that we know of. I think that's why they've advocated expansion of the CPP. It takes that element of personal choice out of it, to a degree, and it also, of course, requires the employer to contribute to pensions. I think people will just generally say, well, I guess 65 isn't retirement age for me and I'm probably going to have to work till 70. This is, I think, about changing people's expectations.
I think the problem will come when they turn 65. What then happens to those who aren't able to continue to work, who can't get a decent income from work?
NDP
Peggy Nash NDP Parkdale—High Park, ON
That's what I'm thinking. I live an area with a lot of small businesses. If people don't have the money to be able to sustain themselves and shop in those local businesses....
But let me just ask as a last question whether you think it's a surprise to governments, and to this government, that baby boomers are going to be retiring. Why do you think the government has suddenly discovered there's a problem here with OAS, when the OECD and others have said there is no problem? Why now?
Chief Economist, Canadian Labour Congress
I'm still in the world of the optimist when it comes to the expansion of the Canada pension plan. I think we still have a majority of the provinces prepared to support expansion of the Canada pension plan, because they do see that looming problem. There are moments when the Minister of Finance seemed to have heard their message and to be thinking about it. It's still in play, so I think that CPP debate will continue.
Frankly, I see the OAS decision as curiously at odds with that because we know people aren't saving enough. We know private pension coverage is shrinking, and to just take away that basic building block of OAS for a couple of years, I think, further undermines the situation.
Conservative
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
Thank you all for coming this afternoon.
Mr. Jackson, you're right. There is an alarming rate of young people who are having difficulty finding jobs. It's not just in Canada, though, is it? I think I read that in Spain it's 25%.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
Fifty per cent. What do you think? What do you think is the biggest problem? I'm asking you because I really don't know.
Chief Economist, Canadian Labour Congress
It sounds a bit simplistic, but I think the reality is that in any economy that has high unemployment, most of the brunt of that is going to fall on people who don't have the skills and experience. Given the choice, most employers will hire the person with the skills and experience.
I think an example of where you can learn from other countries is Germany, where the overall unemployment is quite low but youth unemployment is also very low . I think part of the reason, if you take Germany, the Netherlands, and some other countries, is that they really have a very structured way of taking young people out of the educational system into employment through apprenticeship programs. It looks like that's the case. My impression is that German and Dutch employers see the socially responsible thing to do as continuing to maintain the people they're bringing into those programs. So the direct fallout for young people has been much less there than here.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
Have you in the labour congress thought about giving some ideas on that? I think you're right. I've heard that about Germany as well. I think they fast-track kids maybe by the 9th grade or something. The kids know where they're going to go. If they have more ability to work in the trades, they are moved there.
Have you thought about that in terms of making a recommendation to the government? You mentioned something about skills training too—and I agree with you. I think we have to start to recognize that. I see a day and an age—and I believe we're there—where we can't have east and west in labour. We have to work together.
Has labour thought about a concrete plan they could come up with and present to the government in regard to where we might avoid the pitfall that's happening in places like Spain?
Chief Economist, Canadian Labour Congress
Here are two quick thoughts. First of all, I think one disappointment in the budget when it comes to EI is that we haven't expanded investment in the training of unemployed workers through EI. The government did put in additional resources for that during the recession, but that's run its course.
Now's the time. The argument against spending that money in training is that the payoff hasn't been that big. But if we really believe there are go to be major and growing skill shortages in Canada, then putting that money into training now should have a much significantly bigger payoff than in the past.
I think what we need to look at is a targeted intervention. If so, I think it would be around giving young people work experience. So what I'd be looking at now would be summer job terms and placements—some sort of incentives to employers to create that experience for young people.
Part of the problem—though I shouldn't talk about it.... What we see in Quebec with the student protests is in part about the tuition fee, but it's also this view that a lot of young people are spending more and more time in the educational system, because I guess there aren't job opportunities there for them and they're not getting much work experience along the way. I think we really need to marry our educational system more closely with where the jobs are going to emerge and give people some experience in those areas.
Chief Economist, Canadian Labour Congress
I might mention that the CLC is partnered with the Canadian Manufacturers and Exporters and HRSDC in what's called the Roundtable on Workplace Skills, which brings labour, employers, and government officials together to think about some of these issues. It's a pretty low-key operation, but I think there are productive discussions going on between employers, unions, and the government around some of these workforce issues.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
Mr. Clemens, did you have a few comments in that regard as well about future training?
Director of Research, Macdonald-Laurier Institute
One problem that we observe in many industrialized countries is, for one reason or another, the ethos that we've created that if you don't go to university, you're a failure. Even if you look at the past 20 years in terms of government expenditures, these tend to be allocated toward the university. I can tell you that there's a whole set of trades that are not going to be replaced by a robot.
So part of it is just about taking leadership and changing that ethos to the effect that it is an honourable task and job to be a plumber or a carpenter—or a whole set of tasks that are largely at the community college level, if not exclusively at the community college level.
Again, I would leave this to the provinces, to be respectful, to sort out, but some general leadership is needed about the fact that not everybody has to be an economist or a doctor or a lawyer, or whatever, that it is equally acceptable to go to college or to apprenticeship programs.
The key, though—and where I think Andrew and I agree completely—is that we've got to ensure that kids finish grade 12 and don't see that as the finish line, but say, okay, I need another two years in apprenticeship. Again, I think much of that should get sorted out at the provincial level.
Conservative
The Chair Conservative James Rajotte
Thank you.
Thank you, Mr. Van Kesteren.
Monsieur Caron, please.
NDP
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
Thank you very much.
My colleagues have spent a lot of time talking about Old Age Security. I am going to take a bit more time to talk about employment insurance. In my constituency, in the east of Quebec, it is a specific concern.
My first question goes to you, Mr. Céré, because you know the reality too. The reforms were announced on Thursday morning. On Thursday afternoon and Friday morning, I spoke with a lot of people in my constituency at some public forums I held on various issues related to Bill C-38.
What surprised me was that more employers than workers came to see me about the problems that Ms. Finley's proposed reforms were going to create. Among them were employers from ZECs—controlled harvesting zones. They were in tourism and cabinet-making. They all told us that they were having a lot of difficulty because they train their workers in the specialist ZEC areas, such as tourism and cabinet-making. Since the employment is seasonal, they have to lay off their employees for two, three or four months. The workers try to find other jobs but getting employment for two, three or four months is not the easiest thing in the world. The employers can hire them back and so can get back the expertise that they provided. The employers are thinking that, because of the reform and the measures that are proposed, they may well lose the employees whom they have trained.
I would like to know what you think about that. You mentioned a lot of employees and workers who are affected. But I feel sure that employers in a region like mine and like those in Atlantic Canada, may well be adversely affected too.
