Evidence of meeting #66 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was immigration.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Patrick Grady  Economist, Global Economics Ltd., As an Individual
Richard Kurland  Policy Analyst and Attorney, As an Individual
Ian Lee  Professor, Sprott School of Business, University Carleton, As an Individual
Lorne Waldman  As an Individual
Roxanne Dubois  National Chairperson, Canadian Federation of Students
Mark Fried  Policy Coordinator, Oxfam Canada
Jim Stanford  Economist, Canadian Auto Workers Union
Diane Brisebois  President and Chief Executive Officer, Retail Council of Canada
Marjorie Griffin Cohen  Professor, Simon Fraser University, As an Individual
Laurel Rothman  National Coordinator, Campaign 2000

10:55 a.m.

Conservative

Shelly Glover Conservative Saint Boniface, MB

If you can find them.

10:55 a.m.

Economist, Global Economics Ltd., As an Individual

Patrick Grady

I think the problem with a lot of these.... I haven't studied the Manitoba program, and I plan to do that at some point.

10:55 a.m.

Conservative

Shelly Glover Conservative Saint Boniface, MB

Fair enough. We'll stop there.

Maybe Mr. Kurland can answer then, because he's likely studied it.

10:55 a.m.

Conservative

The Chair Conservative James Rajotte

Very briefly.

10:55 a.m.

Policy Analyst and Attorney, As an Individual

Richard Kurland

The Manitoba program, beginning in 1976 with the sewing machine operators, was a model of success. You target an occupation. You match it up with local demand. You bring in the people who will respect the terms and condition.

In the northern Alberta experience, the Tim Hortons, there were 100 foreign workers brought in from the Phillipines, and every one of them respected the terms and conditions.

That's the model we used back then. That's the model we use now.

10:55 a.m.

Conservative

The Chair Conservative James Rajotte

Thank you.

I just want to ask one final question, as the chair. I'm speaking as a member of Parliament who has been elected since 2000. If I look at the case files in my constituency office, over 80% every year have dealt with immigration.

I'm going to pose a question, and I'll allow Mr. Waldman and Mr. Kurland to answer. I think Mr. Kurland said it well. We can blame governments, but it's a series of policies that led to a system that simply did not work.

We've assisted hundreds of people and dealt with thousands of cases. I think we've done some good things at the margin, as a constituency office, and I'm sure other members of Parliament have done so as well. But the system was completely broken—for families, for entrepreneurs, for business people, for people coming in on visas. I mean, the system was broken and something fundamental had to be done.

Mr. Waldman, you're saying that what we're doing is not appropriate, but what would you do to deal with a system and a backlog that we've encountered as a government?

10:55 a.m.

As an Individual

Lorne Waldman

I'll make two points. First of all, I don't disagree that things need to be done and I don't disagree with the idea of reform.

I have two concerns. First of all, I think what we're doing is wrong.

10:55 a.m.

Conservative

The Chair Conservative James Rajotte

What would you do, though? That's my question to you.

10:55 a.m.

As an Individual

Lorne Waldman

Well, I think Mr. Kurland gave you the kernel of an idea. I think there are things that can be done. When the last backlog was mitigated, in the end there was a settlement that allowed the government to slowly process that backlog over a long period of time so that it didn't gum up the new system. I think Mr. Kurland's idea is one that has some merit.

To just completely eliminate the backlog is morally wrong. Let me just give you three things. One, you have to speak clearly and with transparency so that everyone knows the rules. If the rules are that we're going to retroactively change things, make that clear in the future so that people don't plan their lives around expectations that are then dashed.

For sure, reform the system. Some of these reforms may work; they may not. Mr. Kurland seems to think they will. I have more doubts, but let's give them a try.

You haven't really dealt with the problem, which is why most of the people come into your office, and it's the problem of family reunification. None of these reforms do anything to make family reunification easier.

11 a.m.

Conservative

The Chair Conservative James Rajotte

It's family reunification and temporary foreign workers.

11 a.m.

As an Individual

Lorne Waldman

Anyway, I'm just telling you—

11 a.m.

Conservative

The Chair Conservative James Rajotte

I'll give Mr. Kurland equal time to answer that.

11 a.m.

Policy Analyst and Attorney, As an Individual

Richard Kurland

My goodness, don't discount Mr. Waldman's sage advice merely because he wants to sue you.

11 a.m.

Voices

Oh, oh!

11 a.m.

Policy Analyst and Attorney, As an Individual

Richard Kurland

I was co-counsel, class counsel, in the first litigation against the then Government of Canada. I am not taking this matter to court at the present time. That's because I feel the government is doing the right thing. This is the right solution for a problem that has been plaguing this country for over 25 years. It is the first time it's being fixed.

You can come together and arrive at a compromise, hopefully without litigation; if not, I see it with litigation. Either way, this is the right plan for the right time.

If the consequences for 284,000 disappointed individuals are sad, they took the business risk of applying. They can seek temporary status as student foreign workers, knock on the provincial door, requalify for skilled workers, find family reunification through marriage or being sponsored by a relative.

The door is not shut; it's just that those are no longer the skills we need.

11 a.m.

Conservative

The Chair Conservative James Rajotte

I appreciate that very much.

Unfortunately, Mr. Grady, we're right at 11 o'clock. We have to go to our next panel.

I appreciate all of you being here today for a very lively discussion, for speaking truth to power—all of you. We sincerely appreciate that.

Colleagues, we will suspend for a couple of minutes to bring our next panel forward.

11:05 a.m.

Conservative

The Chair Conservative James Rajotte

I call this 66th meeting of the Standing Committee on Finance back to order. We are continuing our discussion of Bill C-38.

We want to thank our guests for coming in today and for joining us by video conference. We have four witnesses in this panel.

First of all, from the Canadian Auto Workers Union, we have economist Jim Stanford; from the Retail Council of Canada, we have Madame Diane Brisebois, the president and CEO; and Karen Proud, as well, from that same organization; by video conference, we have Professor Marjorie Griffin Cohen—she joins us from Simon Fraser University—and via video conference from Toronto, we have from Campaign 2000, national coordinator, Laurel Rothman.

Thank you all for being with us. Each of you has up to five minutes for an opening statement, and then we'll have questions from members.

We'll start with Mr. Stanford and proceed in the order I outlined.

Mr. Stanford, please.

11:05 a.m.

Jim Stanford Economist, Canadian Auto Workers Union

Thank you, Mr. Rajotte and members of the committee, for the opportunity to appear with you. I will focus my introductory remarks on the condition of Canada's overall labour market. In particular, I will argue that the labour market is characterized, and will continue to be characterized, by a condition of chronic excess supply. This contrasts with the oft-made claim that Canada is experiencing or is about to experience a major shortage of labour.

This issue is an important context for several of the measures that you are contemplating in Bill C-38, including the proposal to defer eligibility for old age security payments by two years and the plan to reduce and restructure employment insurance benefits, as well as measures to restructure immigration and migrant labour policies.

All of those are bundled, of course, into one piece of legislation. At the risk of repeating what just happened, I should add my organization's view to the record that we think it's inappropriate to consider measures that are very important, very long lasting, such as changes to OAS and EI programs, within the framework of an omnibus bill.

The issue of whether the labour market experiences excess supply or short supply is also very relevant to a wide range of economic policies. It's very common to use the official unemployment rate as an all-purpose indicator of the general supply/demand balance in the labour market. That official rate currently stands at 7.3%, which might not seem too bad, depending on your context. However, that rate is not an accurate indicator of true labour market balance, especially during a recession or in the period after a recession.

To qualify as officially unemployed for purposes of this measure, an individual must not only be working, but also actively seeking work. If you stop actively seeking work—according to the definition of that term by Statistics Canada—you disappear from the labour force, and hence from the unemployment statistics. This is an arbitrary hurdle that skews the resulting measure of supply/demand balance, especially when job searches may be inhibited by the view that there aren't positions to apply for. Perhaps I could mention that Albert Einstein defined insanity as doing the same thing over and over again, expecting a different result. In that case, if you've applied for 50 jobs and didn't even get a callback, applying for the 51st might be considered irrational.

It must be noted in this context that most unemployed Canadians do not receive EI benefits, so the idea that people are just going through the motions of looking for work in order to remain qualified for EI cannot explain this result.

I think that at this point in the business cycle, a better measure of labour market balance is the flip side of the unemployment rate, what we call the employment rate. It steps back from the issue of whether someone is actively seeking work and just asks if they are employed in any type of job.

A handout has gone around, and the graph at the top of that handout illustrates the trend in the employment rate in recent years. As you see, the employment rate fell dramatically during the recession by 2.5% of the working-age population. Since then, it has rebounded by only 0.6%. In other words, only one-fifth of the damage that was done to the labour market by the recession has been repaired. Indeed, in the labour market, it still feels like a recession, even though economists say technically we're in a recovery.

The last two months of labour market data were good. You'll see the last two points on that graph show a nice rebound, and that's very positive. Even with that, we're only back to where we were 16 months ago. In that regard, our employment recovery has stalled. I think it's worth noting that between one in four and one in three of the net new jobs created in Canada between the end of 2007 and the end of 2011 went to temporary foreign migrants. That program is playing a larger and larger role in meeting the new jobs being created.

How do we reconcile that graph with the claim that we have won back all the jobs that were lost in the recession?

This measure, as we should, takes into account ongoing population growth. Saying that we're back to the absolute number of jobs we had in the fall of 2008 is a bit irrelevant when we have to create hundreds of thousands of net new jobs each year to keep up with population growth in the four years since then.

We think a better measure of the actual mass of unemployment would take the non-participation of discouraged Canadians into account, and the table at the bottom of my handout does that. We add to the official unemployment tally, which is around 1.4 million as of April, about 300,000, representing the withdrawal from the labour market by many Canadians, as well as Canadians who are working involuntarily in part-time positions or who have a job but no hours or are waiting for the next shift.

By that measure, I estimate that true unemployment in Canada is about 2.3 million Canadians, or about 12% of the adjusted labour force.

11:10 a.m.

Conservative

The Chair Conservative James Rajotte

One minute.

11:10 a.m.

Economist, Canadian Auto Workers Union

Jim Stanford

It is an enormous shortage of jobs, not a lack of workers and not a lack of work ethic, that explains the decline in the employment rate pictured in the graph and the challenges in our households and communities.

Let me conclude by summarizing the relevance of this analysis for Bill C-38.

With chronic underutilization of our existing supply, policies that are aimed at compelling more labour force participation, such as the OAS deferral and the new rules cutting and restructuring EI benefits, are questionable. Those policies should be designed not to compel more labour supply but rather to support Canadian families in an era where there's a chronic shortage of jobs that dominates the outlook for our labour market moving forward.

Thank you for your attention. I look forward to our discussion.

11:10 a.m.

Conservative

The Chair Conservative James Rajotte

Thank you very much, Mr. Stanford.

We will move on to Ms. Brisebois, who will make her presentation.

11:10 a.m.

Diane Brisebois President and Chief Executive Officer, Retail Council of Canada

Good morning. Mr. Chair, members of the Standing Committee on Finance, we would like to thank you for inviting us to talk about the retail sector's concerns and recommendations regarding Bill C-38.

You have in front of you today a copy of the brief that was recently presented to the Standing Senate Committee on National Finance relating to the study on the potential reasons for price discrepancies in respect of certain goods between Canada and the United States, given the value of the Canadian dollar and the effect of cross border shopping on the Canadian economy.

Because we only have five minutes to present our comments and recommendations, I will get to the point immediately. I hope you will have time to carefully review our submission, which includes more details.

Of course, we will be very pleased to answer all of your questions after our presentation.

Our comments are timely considering that Bill C-38 will significantly change the personal exemption limits for Canadians bringing goods back into Canada, making it even harder for Canadian retailers to compete with their U.S. counterparts. We will focus on three significant areas that we believe need to be addressed by this committee. They include import duties on finished goods, supply management affecting prices of food products such as dairy and poultry, and regulatory harmonization. You'll also note that the submission before you speaks to vendor pricing, which is a matter we discussed at length with the Senate committee.

Let me quickly address import duties. One of the main areas where the federal government has a role to play in levelling the playing field for Canadian retailers and importers is in eliminating the outdated tariffs on finished goods entering into Canada. While Finance officials often note that these tariffs are only applied to 10% of all products entering Canada, they unfortunately are overly represented in the retail sector. For some retailers they represent close to 100% of the items they import into the country.

As an example, on page 9 of our submission, which we circulated

—it is on page 8 in the French—

we have listed the tariffs applied to sports equipment. For the most part, there are no duties applied in the United States for retailers importing those goods, yet the same products entering into Canada carry tariffs as high as 18%.

On page 10 of both the French and English versions of our brief, we provide another sample list of some of the tariffs we believe should be eliminated.

We thus urge the government to support the elimination of tariffs, as the minister had noted in the budget that he would be looking at this issue seriously.

The second matter relates to supply management, which we all agree is not always a very popular issue to discuss. One area that has not been discussed in full is the effect of the difference in pricing of dairy and poultry products between Canada and the United States. I draw your attention to page 12 of the report and the table that shows the difference in prices between both jurisdictions for supply managed food products. I think you will find it as shocking as we have.

While retailers fully respect and support Canada's agricultural community, we do know from our members that these products are the most popular products purchased by consumers during the great majority of the same-day cross-border shopping trips. In fact, dairy products, poultry, gas, alcohol, and cigarettes are the five top items that are brought in on same-day trips. There is a trend.

At the very least, should the current system continue to be sustained, the government must acknowledge its role in supporting marketing boards and higher prices in Canada for those popular grocery products. If the government wanted to provide retailers in Canada with a level playing field, it should have exempted or restricted these supply managed products from the personal exemption limits that have been increased by this bill, as it has done with tobacco and alcohol, and actively enforce those rules at the border.

The final point is regulatory harmonization. I would like to speak briefly about the need for better harmonization of regulations and policy.

Lack of harmonization and different standards and requirements contribute to increased prices of products in Canada and decreased productivity.

We applaud the government's creation of the Canada-U.S. Regulatory Cooperation Council. However, even after this was announced in February 2011, as our submission outlines, a new car seat testing regulation came into force, which was not at all harmonized with that of the United States.

Because of time, I will immediately conclude my remarks and thank the committee for its consideration of issues of concern to our sector.

Thank you, Mr. Chairman.

11:15 a.m.

Conservative

The Chair Conservative James Rajotte

Thank you very much, Ms. Brisebois.

We'll now hear from Professor Griffin Cohen, please, for a five-minute opening statement.

11:15 a.m.

Marjorie Griffin Cohen Professor, Simon Fraser University, As an Individual

I would like to thank the committee for inviting me today. There are two issues I would like to discuss. One relates to part 4, division 42, in the bill, regarding amendments affecting the federal contractors program, and the other is EI changes and what those will mean for women in B.C.

Division 42 of part 4 amends the Employment Equity Act to remove the requirements for employment equity that are specific to the federal contractors program. I imagine the committee has seen this, but just to remind you, what this sentence does is to say that the minister is responsible only for the administration of the federal contractors' employment. What it cuts out from the Employment Equity Act is the following:

and shall, in discharging that responsibility, ensure that the requirements of that Program with respect to the implementation of employment equity by contractors to whom the Program applies are equivalent to the requirements with respect to the implementation of employment equity by the employer under this Act.

This effectively does away with the requirements for contractors to meet employment equity standards when they work for the federal government.

The minister now has the latitude to establish any standard he or she would like, or none at all. This is really a huge blow to women in Canada and to other groups who are protected by human rights, including aboriginal people, visible minorities, and people with disabilities.

I had a complaint, along with six other women, about the unfairness of the Canadian research chairs in Canadian universities. It went to a human rights settlement, but it could do that only because of the contractors program. So it is incredibly important that this kind of program exist. Even what are usually good employers, like universities, will behave badly if they are not forced to meet employment equity standards.

The other issue I want to raise is employment insurance. This has received media attention primarily because of what it will mean for seasonal workers who are in largely male-dominated jobs. I want to point out what these changes will mean for women.

The structure of employment in Canada has changed considerably over the last 20 years, and full-time, full-year work is less common, particularly for women. Women predominate among the part-time, part-year workers, and these are the workers who are going to suffer from this.

According to the OECD, Canada has an absolutely dismal record of protecting workers, coming 29th out of 30 members, and now it will only get worse.

The issue is how women get to qualify for EI. Right now it's very difficult. In B.C. only 35% of the women who are unemployed qualify for employment insurance, and this is compared to a 38% average for women in Canada and a 42% average for men in B.C. Women in B.C. really do suffer because of the structure of their labour force participation.

I can give you an example from my own department in the university. It is part of a structure of employers to rely on part-time workers and temporary workers. These are people with PhDs. Sixty percent of the teaching in my department is done by people who are not full time and permanent.

These are the people we're going to be forcing to take lower incomes and to look for other kinds of jobs that will be unfair for them. There are all kinds of workers who do temporary and part-time work—hospital cleaners, home support workers, group home workers, legal secretaries, child and youth workers, and of course many who work in the tourism industries. Much of this work is skilled work, but the jobs are not necessarily high paying. Going from making $14 or $15 an hour to making $10.25, the minimum wage, makes a very huge difference for women.

We see that this legislation will contribute to a low-wage policy, and already the vast majority of low-wage workers are women, so these policies will affect them. I would like the committee to understand that.

Thank you.

11:20 a.m.

Conservative

The Chair Conservative James Rajotte

Thank you for your presentation.

We'll hear now from Miss Rothman, please.