Finance Committee on March 6th, 2014

[The Vice-Chair, NDP, Peggy Nash]

Good afternoon. I call this meeting to order. This is the 23rd meeting of the Standing Committee on Finance. Our orders of the day are pursuant to Standing Order 108(2) and the motion adopted on October 29 for a study of youth unemployment. This meeting begins a series of meetings on this topic.

I'd like to welcome all of our guests this afternoon. We thank you for joining us here and for your testimony this afternoon.

We're going to first hear from the Department of Employment and Social Development, and then from Statistics Canada. Each department will have between 10 and 15 minutes in total for presentations. I'd encourage you to stay within that timeframe.

Then we'll hear from the Canadian Labour Congress and the Canadian Youth Business Foundation. You will each have five minutes to make your presentation.

As usual, there then will be a question and answer session with members.

David McGovern, from the Department of Employment and Social Development, I invite you to begin, please.

[David McGovern, Senior Assistant Deputy Minister, Strategic Policy and Research Branch, Department of Employment and Social Development]

Thank you very much.

I'd like to thank the committee for inviting Employment and Social Development Canada to appear before you today on the topic of youth employment.

I'd also like to introduce my colleagues around the table, but we have too many of them, so I won't. They're here to help me if you have questions regarding programs that support youth participation in the labour market.

As the committee is aware, the government announced in Budget 2014 its intention to better align employment programs with the realities of the labour market, and in that context, the committee's study is timely and welcome.

Over the coming decade, approximately 6.2 million people will enter the labour market, three-quarters of whom will come from the school system. Young labour market entrants will therefore contribute the most to labour force growth, well above the contribution of new immigrants.

We also know that over the next 10 years the shift in employment towards occupations requiring higher levels of skills and education will continue, as approximately two-thirds of new jobs will require some form of post-secondary education. A large proportion of these will be in health, engineering, and technology occupations, as well as in certain skilled trades.

The recent recession highlighted the importance of skills and education for youth, as those with higher education levels fared better, while those with lower levels of education were most severely affected.

Canadian youth are investing in their education, and educational attainment is among the highest in the world and growing. At the same time, there is some evidence that qualifications are not optimally aligned with demand. In particular, employers express concerns that too few students are choosing in-demand fields such as science, technology, engineering, and math, and many do not consider skilled trades as a first career choice.

Given growing skills requirements of jobs and pressures of an aging labour force, it is essential that youth have the right skills to make successful transitions in the labour market and to improve their ability to adjust when economic circumstances change.

Addressing skills challenges facing youth has been a long-standing objective of the Government of Canada's policies and programs. Recent efforts, however, have focused on ensuring interventions are better aligned with the needs of employers and the labour market.

More specifically, that has meant enhancing opportunities for Canadian youth to access post-secondary education and supporting careers in the skilled trades; assisting youth transition to the world of work by providing tangible work opportunities in areas of high demand; and ensuring youth have the information they need to make informed career and training choices aligned with the needs of the labour market.

Allow me to highlight some of the Employment and Social Development Canada key initiatives dedicated to supporting these objectives.

The government supports access to education through a number of programs and initiatives. These include, for example, the Canada student loans program. This provides student financial assistance to post-secondary students with demonstrated financial need, through the provision of loans and grants. The education savings program encourages families to save for their children's post-secondary education, using registered education savings plans, RESPs, which allow savings to grow tax free. The Canada education savings grant and the Canada learning bond provide additional incentives, particularly for low- and middle-income families, to save in RESPs.

The government also provides support to Pathways to Education Canada, an organization with an established record of reducing high school dropout rates and increasing post-secondary enrolment among disadvantaged youth. Budget 2013 confirmed that the government will extend support for this initiative.

Apprenticeship training is also an important part of the post-secondary education system.

To further encourage Canadians to consider a career in the skilled trades, Budget 2014 proposed the creation of the Canada apprentice loan by expanding the Canada student loans program. The objective is to provide apprentices registered in red seal trades with access to an estimated $100 million in interest-free loans each year.

This action builds on the existing government incentives for apprentices and employers to encourage apprenticeship training and stimulate employment in the skilled trades.

The apprenticeship grants are designed to encourage more Canadians to pursue and complete apprenticeship programs in the red seal trades.

To support youth transitions in the labour market, the youth employment strategy is the government's flagship program to help youth aged 15 to 30 gain skills and real work experience to transition in the labour market. This program, which invests approximately $330 million annually, is led by Employment and Social Development Canada and delivered by 11 federal departments and agencies.

It has three main streams. Skills Link provides funding for employers and organizations to help youth facing barriers to employment acquire skills and work experience. Summer Work Experience provides wage subsidies to employers to create summer employment for secondary and post-secondary students. This program includes Canada Summer Jobs, which provides funding for not-for-profit organizations as well as public sector and private sector employers to create summer job opportunities for students. All told, approximately 35,000 summer jobs were created in 2013. Finally, Career Focus provides youth with work experience in their field of study to enable more informed career decisions and to develop their skills.

Moving forward, the government is committed to enhancing its supports for the labour market transition of youth. In particular, through budget 2013, the government provided an additional $70 million over three years for the Career Focus stream of the youth employment strategy to support internships for recent graduates, so they get an opportunity to apply their newly acquired skills.

Through budget 2014, the government announced that it would take further steps to align youth employment programs with the evolving realities of the job market, more specifically to promote internships in high-demand fields such as skilled trades, and in science, technology, engineering, and math, so that youth can find work experience and the skills necessary to find and retain jobs.

The Government of Canada also provides support for unemployed and underemployed youth through income support from the employment insurance program and through significant transfers to the provinces and territories. More specifically, the government transfers $1.95 billion annually through the labour market development agreements to support the unemployed who are eligible for employment insurance. Similarly, the government provides $500 million annually through the labour market agreements for training and unemployment supports for those not eligible for EI. Youth represent about 20% and 35% of the clients receiving support under each of these transfers respectively.

Finally, the labour market agreements for persons with disabilities allow provinces to provide targeted programming to improve the employability of persons with disabilities, including youth.

The new Canada job grant to be introduced by July 1, 2014, aims to directly connect skills training with employers, helping to ensure that Canadians, including youth, are developing the skills for available jobs.

Finally, the government plays an important role in providing learning and labour market information to ensure youth have timely and reliable information to make the right choices about learning and work.

For example, through the Working in Canada website and CanLearn.ca the government provides information on available jobs, labour market outcomes, and educational and training requirements.

In Budget 2013, the government reaffirmed its commitment to improving these tools and announced a reallocation of $19 million over 2 years to provide young Canadians with more information on job prospects and to undertake outreach efforts to promote careers in high-demand fields.

Through its funding of the Red Seal program, the government supports promotional activities to inform industry and tradespeople, as well as high school students and the public at large, about apprenticeships and the benefits of working in the skilled trades. The government also provides significant support to Skills Canada to actively promote careers in the skilled trades to Canadian youth by working with local organizations, educators, and governments.

In conclusion, I would again like to thank the committee for undertaking this timely study. We look forward to seeing its recommendations.

My colleagues and I welcome the opportunity to respond to any questions you may have.

[The Vice-Chair, NDP, Peggy Nash]

Thank you very much, Mr. McGovern, for your presentation.

There is about a minute left. Shall we wait before questions for the other panellists from your organization?

[David McGovern]

We're happy to proceed however you wish.

[The Vice-Chair, NDP, Peggy Nash]

All right. We'll go to Statistics Canada, then.

We welcome Alison Hale and René Morissette.

You have 10 to 15 minutes for your presentation.

[Alison Hale, Director, Labour Statistics, Statistics Canada]

Good afternoon. We would like to thank the committee for the opportunity to speak with you today on subjects relevant to your study on youth employment.

In today's presentation, we will be presenting a few highlights focusing on the labour market experiences of Canadian youth. For the purpose of this discussion, youth have been defined quite broadly, from ages 15 to 34, to allow information to be presented on education and transitions into the labour market.

Most of the data being presented today is from the monthly labour force survey or LFS, though in a few instances we'll introduce data from other sources to provide a historical context. As I am sure you're all aware, the labour force survey is a household survey carried out monthly by Statistics Canada and provides high quality estimates of employment and unemployment that are among the most timely and important measures of performance of the Canadian economy. One thing that the committee may not be aware of is that the labour force survey is one of the largest labour force surveys in the world surveying over 100,000 people each month, 15 years of age and over. This makes it similar in size to the equivalent survey that's run in the United States.

To start off, we would like to provide a bit of information on the unemployment situation of Canadian youth in the international context. In 2012, Canada's unemployment rates for youth aged 15 to 24 and 25 to 34 were lower than the OECD averages and the rates observed in many European countries and the United States. Canada's unemployment rate for those aged 15 to 24 was 14.3% in 2012, below the OECD average of 16.3%. For those aged 25 to 34, Canada's unemployment rate was 6.9%, compared to 9.1% for the OECD average.

One thing one has to do when comparing data is to control for conceptual differences between the sources. I have in my speaking notes some information comparing the U.S. and Canadian labour force surveys that are not shown on this graph, but have been adjusted for the difference in concepts between the two surveys. For example, when you adjust for concepts the U.S. unemployment rate for youth under 25 has remained above the Canadian rate since early 2008. In 2013, the U.S. rate was 15.5%, compared to 13.7% in Canada, again still for youth under 25, a 1.8 percentage point difference. Similarly for those aged 25 to 34 the U.S. rate was 7.4% compared to 6% in Canada.

While the previous slide provides how Canada's youth unemployment compares to that of other OECD countries, I'm sure the committee is interested in seeing how Canada's youth unemployment compares to that of other age groups in Canada over the last three decades.

Three points are worth noting. First, regardless of economic conditions, youth aged 15 to 24—and to a lesser extent those aged 25 to 34—are more at risk of being unemployed than individuals aged 35 to 54. For instance, the unemployment rate of youth aged 15 to 24 was 15.2% in 2009, compared with 7.9% and 6.7% for individuals aged 25 to 34 and those aged 35 to 54, respectively.

Second, the recent peak of 15.2% observed in 2009 for youth aged 15 to 24 was slightly lower than the peaks observed during the two previous recessions of the early 1980s and early 1990s.

Third, while the unemployment rate of individuals aged 35 to 54 is now, and by now I mean in 2013, close to what it was in 2007, prior to the onset of the last recession, the unemployment rate of youth aged 15 to 24 is still 2.5 percentage points higher than its 2007 value of 11.6%.

Likewise, the unemployment rate of youth 25 to 34 is still 1.1 percentage point higher than its 2007 value of 5.7%.

If you look at this in an accounting sense, the relatively high unemployment rates observed in a given year among youth—as compared to those for workers aged 35 to 54—could be due to two factors.

First, it could be that youth more often move into unemployment—i.e., more often become unemployed—than do their older counterparts, for example, because they are more are at risk of being laid off than are older workers.

Second, it could be that youth have longer durations of unemployment than older individuals do once they start being unemployed.

The next slide provides information related to the latter factor. This shows that differences in duration of unemployment cannot explain the higher unemployment rate of youth since youth unemployment spells tend to be shorter—not longer—than those for working-aged people between 35 and 54 years of age. For example, according to the data in the chart for 2007, unemployed youth aged 15 to 24 had, on average, eight weeks of unemployment compared to 14 and 20 weeks of unemployment for those individuals aged 25 to 34 and 35 to 54. A similar pattern existed in 2013.

Since higher durations of unemployment cannot explain why youth experience higher unemployment rates than do older individuals in a given year, the implication is that youth higher unemployment is—again looking at it from an accounting point of view—essentially due to the fact they become unemployed more often than do older individuals.

Recent research conducted at Statistics Canada shows that one reason youth become unemployed more often than older individuals do is that youth are more at risk of being laid off than are older workers. The higher layoff rate for youth is, in turn, related primarily to their relatively low levels of seniority as many firms lay off workers on a last-in, first-out basis. We'll be more than happy to provide this report to the committee after today.

Being from Statistics Canada, we do love our numbers, but I'll probably shorten some of the discussion on each slide just so you can get through everything. This graph looks at unemployment by highest level of educational attainment. On the left is the information for men aged 25 to 34, and on the right, for women.

We can see that virtually every year young men and women with relatively high levels of education experience lower unemployment rates than do their less educated counterparts. For instance, men aged 25 to 34—which is the green line on the left chart—with a bachelor's degree had an unemployment rate of 5.5% in 2013, compared with 8.2% for their counterparts with a high school diploma. For women, we see something quite similar. It was 4.9% and 8.5%.

Following the onset of the last recession, less-educated young men experienced a sharp increase in unemployment. From 2007 to 2009, the unemployment rate of young male high school graduates increased by roughly five percentage points, much more than the 1.3 percentage point increase experienced by male bachelor's degree holders.

By 2013, differences in unemployment between young bachelor's degree holders and young individuals with trades certificates were much less pronounced than they were 20 years earlier after the 1990 to 1992 recession.

Now I'll pass the baton over to my colleague René Morissette, who will provide you with information on the employment situation of Canada's youth.

[The Vice-Chair, NDP, Peggy Nash]

You have about five-and-a-half minutes left for your presentation.

[René Morissette, Assistant Director, Research, Social Analysis Division, Statistics Canada]

Apart from unemployment, the extent to which youth are employed full time is another indicator of their success or lack thereof on the labour market. This slide answers the following question: of all young individuals who are not full-time students, what percentage had a full-time job from 1976 to 2013? The slide shows that over the last three decades the percentage of youth employed full time fell for young men, both those under 25 and those aged 25 to 34, as well as for women aged 15 to 24. From 1976 to 2013 young men and women under 25 who were not full-time students saw their full-time employment rate drop by 16 and 9 percentage points respectively.

The story is different for women aged 25 to 34. Thanks to a secular growth in their labour market participation, they experienced a substantial increase in full-time employment since the mid-1970s, as we can see on the blue line looking at the right chart.

The national level trends in full-time employment shown in the previous slide mask important regional differences. Since the early 2000s the oil-producing provinces of Alberta, Saskatchewan, as well as Newfoundland and Labrador experienced stronger growth in young men's full-time employment rates than other provinces. For instance from 2000 to 2013, men aged 25 to 34 in oil-producing provinces saw their full-time employment rate rise by two percentage points from roughly 87 to 89 percentage points, which is the red line on the right chart. In contrast their counterparts in other provinces experienced a four percentage point decline in their full-time employment rate during that period. So really when we talk about the youth employment situation in Canada, we have to make a regional distinction.

Moving on to the next slide we also see for young women 15 to 24 that those living in oil-producing provinces, the red line, experience a greater growth in full-time employment rates than their counterparts living in the remaining provinces of Canada. For women 25 to 34, the right chart, we see an increase in full-time employment rates both in oil-producing provinces and in other provinces.

So far, we've given you an overview of the unemployment rate and the full-time employment rate for youth. We will spend the remainder of the presentation on two other key factors affecting youth employment: wages and the tendency to hold temporary jobs.

Since the early 1980s, the wages of young men in full-time jobs have not followed a linear trajectory. As these two tables show, the hourly wages of men under 25 years of age and those between 24 and 34 years of age decreased between 1981 and 2000, after accounting for inflation. And that decline was observed in both oil-producing provinces and the other provinces.

The reverse trend has emerged during the 2000s. In both groups of provinces, the hourly wages of young men rose between 2000 and 2013, with the increase being especially notable in the oil-producing provinces. In the final analysis, men between the ages of 25 and 34 working in oil-producing provinces in 2013 were found to have hourly wages about 10% higher than they had in 1981. But men under the age of 25 working in non-oil-producing provinces received, in 2013, hourly wages that were about 12% lower than what they received in 1981.

Since we are short on time, I will skip right to the summary.

In summary, while youth unemployment has remained high since the recent downturn, it is not exceptionally high by historical or international standards. Compared with the mid-1970s, the percentage of youth employed full time is now generally lower for youth aged 15 to 24, with one exception noted at the bottom of the slide, and lower for men aged 25 to 34 in non-oil-producing provinces. It is similar for men aged 25 to 34 in oil-producing provinces, and it is higher for women.

Following declines during the 1980s and the 1990s, youth wages grew during the 2000s after accounting for inflation. While wage growth during the 2000s was relatively strong among less educated workers, especially those in oil-producing provinces, higher education generally remains associated with higher wages.

In a nutshell, I will conclude by saying that, when looking at the youth employment situation in Canada, one has to make a key distinction, first by region and second by gender.

Thank you.

[The Vice-Chair, NDP, Peggy Nash]

Thank you very much, Mr. Morissette and Ms. Hale.

We'll go now to the Canadian Labour Congress and Amy Huziak for five minutes, please.

[Amy Huziak, National Representative, Young Workers, Canadian Labour Congress]

Thank you.

Good afternoon, everyone.

As introduced, I'm Amy Huziak, and I'm the national representative of young workers for the Canadian Labour Congress. With me is my colleague, Angella MacEwen, who is a senior economist with the CLC. On behalf of the 3.3 million members of the Canadian Labour Congress, we thank you for the opportunity to present our views.

The CLC brings together workers from virtually all sectors of the Canadian economy, in all occupations, and in all parts of Canada. As a young worker myself, I'm one of more than 876,000 young union members in Canada today. I regularly hear from my peers, both unionized and non-unionized, about the many barriers we're facing in the current labour market. Recessions are always harder on young workers, but we are nearly five years past the end of the last recession and there's still no recovery in sight for young workers.

Comparing the unemployment rate of 15-to-24-year-old young workers to that of 25-to-54-year-old workers gives us some indication of how young workers are faring. In 2012, the unemployment rate for young workers was 2.4 times that of core age workers, its highest value since comparable data became available in 1976.

The unemployment rate for aboriginal young workers was 21.1% in 2010, which is the most recent data we could find. That is 6.5 percentage points higher than the non-aboriginal population. Racialized workers and newcomers also face greater barriers to labour force participation, but it's difficult to know exactly what is going on with this group, as data is scarce and unreliable.

Between October 2008 and January 2014, there was an increase of 100,000 unemployed young workers aged 15 to 29, so that there are now 540,000 unemployed young Canadians. Even more startling, though, is that over 350,000 young workers left the labour force over that period, for reasons such as returning to school or skills training, discouragement, or taking unpaid work to fill that gap. It has been estimated that there are between 150,000 and 300,000 unpaid interns each year in Canada, which is a labour market challenge that no previous generation of workers has had to face.

But unemployment isn't the only issue that needs to be addressed. One third of young workers are employed part time, and many are in low-wage, temporary, and otherwise insecure employment, with a large contingent located in the retail and service sector, which is notoriously insecure. Too many young workers are underemployed: either unable to secure enough hours of work or lost on the margins of the workforce. We calculate the underemployment rate for young workers aged 15 to 24 to be 27.7% for 2013. This is a significant number, meaning that more than a quarter of young workers are being affected by the situation right now, and it's a significantly higher number than just the straight unemployment rate shows.

This is a big problem for the upcoming generation of workers, as persistent or extended unemployment and underemployment leads to what we call “scarring”, which basically means that it's very difficult to recover the level of wages and labour market outcomes that we would have had otherwise. The IMF says that high levels of youth underemployment contribute to growing income inequality in developed nations such as Canada. They estimate that the wage penalty for unemployed young workers can be as high as 20% compared to peers who are lucky enough to find employment and can be felt for up to 20 years. Scarring effects also extend beyond wages into social exclusion and health outcomes.

In Canada, Professor Philip Oreopoulos from the University of Toronto has estimated that entry level wages are 10% to 15% lower for those who graduate during a recession. The longer the economic recovery, the longer it takes for these wages to catch up. TD Economics estimates this to cost at least 1.3% of the GDP for Canada.

The paid internships announced in the last federal budget will only reach a maximum of 2,500 individuals per year, less than 0.5% of unemployed young workers. This only addresses a fraction of the need and, more importantly, does not address the need for long-term permanent work for young people.

To top off the dismal labour market, our social safety net is failing young workers too. In 2013 only 18% of unemployed young men and 8% of unemployed young women were able to qualify for EI. High entrance requirements for new labour market entrants shut young workers out of employment insurance. Given that a large number of training supports are available only to EI-eligible workers, shutting young workers out of EI also cuts access to valuable training supports.

Recent cuts to LMA funding, which provides training assistance to workers not eligible for EI, further exacerbate this problem.

As we see it, the problem of youth unemployment needs to be addressed from three angles. First, we need an employment strategy that is linked with a training strategy to put young workers on a career path to good jobs, meaning that the work is decently paid, is permanent, and has such benefits as access to a pension.

Second, we need good labour market information to flow between the government, employers, and educational institutions to ensure that young people can make informed decisions about the fields in which they are educated and that institutions can properly advise students.

Finally, we need to strengthen social protections to ensure that young workers have equal access to EI and health care, as well as to a strong Canada pension plan and old age security system when they retire.

There are many phrases that we've been hearing about young workers lately: that young workers are being left behind, that this is the last generation. But the truth is that young workers have a lot to contribute in this economy, and we have to make sure they have the opportunities.

Thank you.

[The Vice-Chair, NDP, Peggy Nash]

Thank you, Ms. Huziak.

Now we'll go to the Canadian Youth Business Foundation.

Ms. Josephs, you have five minutes, please.

[Marsha Josephs, Director, Government Relations, Canadian Youth Business Foundation]

Thank you.

Good afternoon, everyone. Thank you for the opportunity to appear before the finance committee today to discuss youth employment in Canada. CYBF is a national, non-profit organization established in 1996 to help young Canadian entrepreneurs launch successful businesses.

We have a proven track record of advancing economic growth by supporting and encouraging Canada's emerging entrepreneurs as they create, build, and sustain their own businesses and as they develop entrepreneurial skills that will help them in whatever career path they may choose. We provide pre-launch coaching, business resources, start-up financing, and mentoring to young entrepreneurs between the ages of 18 and 39 to help them launch and sustain successful businesses. CYBF has seven regional offices located in Quebec, Ontario, Manitoba, Saskatchewan, Alberta, British Columbia, and the Atlantic, and we work with young entrepreneurs and more than 200 community partners in more than 1,400 communities across Canada.

Since CYBF's inception, we've invested in 6,300 Canadian entrepreneurs and engaged more than 3,000 volunteer mentors to assist them. The businesses the young entrepreneurs have launched have created 25,991 jobs and over $184 million in tax revenue. The federal government has been a key partner in investing in these entrepreneurs, and we are pleased that the 2013 budget committed $18 million over two years to help CYBF continue to help more young entrepreneurs achieve their dream of launching their own business, through access to funds, mentoring, and business resources.

We are also actively working with our corporate partners to do their part in helping to assist in the growth and support of young entrepreneurs across Canada. While we're seeing growth in the number of entrepreneurs we serve, we are currently helping about 2% to 3% of the potential youth entrepreneur market. CYBF recently extended our offering to non-profits and students in their last year of study.

Youth unemployment is a big challenge. It sits at about 15% to 16%, which is twice the national average. A recent TD Economics report told us to expect $10.7 billion in earnings loss due to youth unemployment. Canada is also facing a huge challenge in the expected retirement of 66% of our small business owners by 2016, according to the Canadian Federation of Independent Business.

Youth entrepreneurship is helping young people find meaningful work and is also helping young people to realize their dreams. Doing so helps them create jobs for themselves and others, and they create the healthy government revenues we need to deal with other social needs.

CYBF has held 10 round tables across Canada since January 22 of this year. Action Entrepreneurship: Growing Young Enterprise is an entrepreneurship-led initiative that connects young entrepreneurs with government, not-for-profits, academia, business leaders, policy-makers, and other stakeholders. About half of those in attendance are young entrepreneurs who gather to discuss promising opportunities and collective actions to better support youth entrepreneurship in Canada.

Some of the challenges we've heard about include not being aware early enough that entrepreneurship is a viable career option, weak financial literacy skills, and difficulty in accessing start-up financing.

Some of the opportunities we heard about include the following. Educators should utilize experiential approaches such as entrepreneurial-based co-ops; financial literacy skills should be taught earlier as part of life skills in kindergarten to grade 12; and the federal government should create and promote a national one-stop shop or other centralized, user-friendly resource for the entrepreneurial community.

This is just a snapshot of what we've been hearing. We are also planning to host a round table in Yellowknife in April. Findings from each round table will be used to draft an action plan that prioritizes issues and incorporates tangible steps for each stakeholder group to collectively strengthen youth entrepreneurship. The action plan will be presented and agreed upon at a national summit in Toronto on May 13 and 14 of this year.

CYBF is a founding member of the global G-20 Young Entrepreneurs' Alliance and the Canadian Host of Global Entrepreneurship Week. The goal of the G-20 YEA summit this year is to create a global strategy to reduce youth unemployment below 10% by 2020, and instill youth entrepreneurship as a global solution to youth unemployment.

Small businesses represent 98% of Canada's economy, and young entrepreneurs are job creators and key contributors to strengthening our economy. There is reason to be hopeful, as reports show that millennials are now twice as likely to start their own business.

We are pleased that the government has recognized the positive impact CYBF makes in helping young entrepreneurs, and we are committed to building on this momentum.

Thank you.

[The Vice-Chair, NDP, Peggy Nash]

Thank you, Ms. Josephs.

Thank you to all the witnesses.

We go now to our questions and answers.

Mr. Rankin, you have the first five minutes.

[Murray Rankin, NDP, Victoria, BC]

Thank you, Madam Chair.

Welcome to all the witnesses.

This is the first session that we have with the finance committee to address the issue of youth unemployment in Canada. You've put us on a very good track going forward. Thank you.

I've only got five minutes and so I apologize in advance if I cut you off. I've only got a limited amount of time to ask questions on this important topic.

My first questions are to Mr. McGovern of the Department of Employment and Social Development.

According to the OECD report entitled OECD Skills Outlook 2013, in 2012 more than 25% of Canadian workers were in a position that required skills below their level of qualification. That places Canada among the top countries when it comes to this overqualification issue. That is, workers are working in areas where they are grossly overqualified. In particular it says that young workers are far more likely to be overqualified for the positions they occupy. The report stated that Canada is one of the OECD countries in which we see “...the largest 'waste' of human capital resulting from over-qualification....”

In light of the programs that you've discussed, can we say they are working if we are still performing this poorly by OECD standards?

[David McGovern]

It's important to recognize that there's a certain degree of underemployment that takes place, especially after a recession. We'll always have underemployment apparent in the labour market. It often takes time, for youth in particular, to find a job that matches their education level. For personal reasons, youth may choose to work in occupations that are not commensurate with their education level. Youth may be able to immediately earn more in a job that requires less education.

It's also important to note that occupational projections show that the majority of job growth occurs in high-skill occupations that typically require some form of post-secondary education, meaning that youth should still be encouraged to attend college and university.

I also want to quote some other OECD figures, though. By most labour market indicators, Canadian youth perform very well compared to other OECD countries. When you look at unemployment rates, and our colleagues from StatsCan noted some of that information, in 2012 14.3% of Canadian youth aged 15-24 were unemployed, compared to the OECD average of 16.3%. In 2012, 6.9% of Canadian youth aged 25-34 were unemployed, compared to the OECD average of 9.1%.

[Murray Rankin, NDP, Victoria, BC]

No, I accept that. But I can't square the circle in my own mind that if the quote is accurate and we're the largest waste of human capital resulting from overqualification among OECD countries, I don't understand how you can square that circle in light of what you've just repeated.

[David McGovern]

I think it's also important to note that the OECD in the past year has released a series of significant documents, a survey called PIAAC, the Outlook document, and others, so to take just a single piece of information out of these major reports...I don't have all of the context for that point.

[Murray Rankin, NDP, Victoria, BC]

Well, it certainly doesn't suggest to me that Canada's performing very well, but I haven't got time to continue.

Can I go to Statistics Canada? Do I have time?

[The Vice-Chair, NDP, Peggy Nash]

You have one minute.

[Murray Rankin, NDP, Victoria, BC]

All right.

Does Statistics Canada regularly publish data on the match between workers' skills levels and the required skills level of their jobs? I'm going to the issue that was referred to about overqualification of workers and individuals who are working in jobs for which they're grossly over-skilled or over-educated. I wonder if you could elaborate.

[Alison Hale]

Actually, because of the time limit—and we do love to talk about our numbers too much—I didn't get a chance to mention that in April we are producing a study on overqualification among recent university graduates in Canada, and we'll be sure to pass that to the committee once it's published. It's something we do periodically as part of our analysis.

[Murray Rankin, NDP, Victoria, BC]

Am I out of time?

[The Vice-Chair, NDP, Peggy Nash]

You have about 25 seconds.

[Murray Rankin, NDP, Victoria, BC]

I want to go to a couple of Stats Canada pages that really disturbed me, and I may be misunderstanding, so I'd like your clarification. On pages 9 and 10 of your report, you show a gross disparity between the wage rates of women and men, and I can't quite understand how it could be so dramatic.

Is that accurate, the five-dollar difference in wage, on average? Or am I misreading it?

[The Vice-Chair, NDP, Peggy Nash]

Go ahead, very briefly, please.