Finance Committee on March 25th, 2014

[Dr. Tammy Schirle]

I would start the information campaign probably in junior high in terms of what types of jobs are out there and what kinds of skills are in demand and how that might change over the next decade, because that's how far ahead they have to think. Then in high school one of the key things is ensuring that students see the opportunities that are there. I think the pathways project that's undergoing evaluation right now is a good example of that, to make sure that students are signing up and enrolling in appropriate education programs. These are things to think about.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

The only thing I take exception to in your comments about the foreign workers program is that the foreign workers program is not cheap labour. These workers are paid a very basic minimum wage, plus the employer has to bring them here. They have to house them. There's a fairly significant cost to foreign workers. This is not cheap labour.

Each of those employers would pay a student in Canada to do that job if that student would do it, and for fairly good wages.

[Dr. Tammy Schirle]

My point is that if the student isn't willing to do it, the wage is not high enough.

[Voices]

Oh, oh!

[The Chair, Conservative, James Rajotte]

You have 20 seconds if you want, Mr. Keddy.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Well, Mr. Antunes might have a quick comment.

[The Chair, Conservative, James Rajotte]

Mr. Antunes.

[Pedro Antunes]

Just very quickly then on this temporary foreign worker program, I think it's been very effective at filling gaps. Especially for big projects when we've needed workers, it's been very effective for those organizations. The problem is that the number of temporary foreign workers has risen and risen and risen. It's very hard to know where the numbers are exactly, but let's say there are 300,000 perhaps in the workforce today. It would add 1.5% to the unemployment rate.

[The Chair, Conservative, James Rajotte]

Okay, thank you for your comments.

Thank you, Mr. Keddy.

We'll go to Mr. Rankin, please.

[Murray Rankin, NDP, Victoria, BC]

Thank you, Chair.

Thank you to all the witnesses.

My first question is to Ms. Yalnizyan of the Canadian Centre for Policy Alternatives. I want to read you something that the Toronto Dominion Bank's economics department has said:

Being unemployed at a young age can have a long-lasting impact on an individual’s career prospects. Economic research indicates that a period of unemployment at the time of entry into the labor market is associated with persistently lower wages many years thereafter. This...fact [is] known in the literature as “scarring”....

With that in mind, you would probably agree that periods of youth unemployment have these long-lasting and negative effects on future wages. In fact, the TD Bank suggested that the amount of wage losses would be about $12.4 billion as a result. Can you give us an explanation of what the long-term and negative effects of youth unemployment on wages would be and other consequences aside from just wage implications?

[Armine Yalnizyan]

I think the TD report would probably do more justice than anything I could say in a couple of minutes.

I wonder if you would permit me to address the issue of the competition with newcomers, both immigrant and temporary workers, and older workers all competing for the same entry-level jobs, both low- and high-skilled. In those conditions, what employer is going to pick the newbie, right?

But what happens is that a lot of these young people go back to school. They've finished their B.A.s. In terms of apprenticeship, I have immediate experience with the apprenticeship story. There are lots of kids, and enrolments in apprenticeships are up as well. But the people who are doing these programs are unable to complete their tickets, because most skilled trades require 9,000 hours of certified work and that usually takes five years. Every year that you move to another level, you have to get paid more. Those are the rules around apprenticeships.

But it's getting very competitive with temporary foreign workers who are brought over with their tickets. They're journeymen and they cost the same as or less than a second- or third-year apprentice. I'm seeing it everywhere in Toronto with our community colleges. These kids can't get third and fourth year. They're enrolled; they're ready to rumble, and they can't find the hours to finish their tickets. This is an incredibly frustrating situation for young people who are playing by all the rules and still can't get in.

[Murray Rankin, NDP, Victoria, BC]

I'd like to come back to you. I have another question.

Professor Schirle, I'd like to go to you if I could, if you can hear me.

I really appreciated your comments about the impact on women of having their first child at this age of their life. You indicated that at least the opportunities for young women are growing and that the gender gap is diminishing, but nevertheless I want your comments on the importance of child care for young workers, and particularly for young women workers.

I was talking to a young worker from Quebec in my office today. He's a contractor. He has a young child. He lives in Quebec. His child care expenses are $280 a month. His friend in Ontario pays $1,800 a month. Professor Schirle, I'd like your reflections on the implications of child care for young workers.

[Dr. Tammy Schirle]

As a mother of a toddler in Ontario, I can appreciate the costs that we have here.

Child care is really vital for women to enter into the labour force when their children are younger. When you look at the data I showed, for instance, on the wage gaps between men and women, when women first start out in the labour market in that 25- to 29-year-old range, the gap isn't very large. Most of it has to do with selection into different types of fields of work, humanities versus STEM fields, these kinds of things. It's after a few years, when they've had to take departures out of the labour force for child care and other reasons, that they have some skill depreciation and that has a long-run impact on their wages for the rest of their lives.

Now, in a perfect world, with perfect marriages and perfect marriage contracts, that could be rather inconsequential. You can negotiate that within your family. But we do not have complete contracts there, so it is women who bear the burden typically associated with child care. Improving the child care system, I think of this as a market failure, and improving the child care system to better facilitate young women in the labour force would certainly have its benefits, in my opinion.

[Murray Rankin, NDP, Victoria, BC]

Thank you, Professor Schirle.

I only have a few seconds left so I'm going to go back to Ms. Yalnizyan and give her a chance to complete.

You raised seven really interesting proposals when you gave your initial presentation, and I needed you to clarify a little bit on the cost-free investment one, your notions on building Canada...one-fifth of the money. Could you speak a little bit more about that?

[The Chair, Conservative, James Rajotte]

Just a very brief response, please....

[Armine Yalnizyan]

It's pretty straight up. You're spending the money; you can call the tunes. If you want to actually use that money to be a community benefit and bring more kids up to speed through training, you can do it. It's your money.

[The Chair, Conservative, James Rajotte]

Okay, thank you.

[Armine Yalnizyan]

Our money....

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Rankin. That's right, it's your money.

We'll go to Mr. Adler, please, for your round.

[Mark Adler, Conservative, York Centre, ON]

Thank you very much, Chair.

Thank you all for being here today.

Mr. Poschmann, you're looking rather lonely there, so I want to direct a question to you first. Could you please comment on whether there is any empirical evidence whatsoever that older workers compete with younger workers for entry-level jobs? Are you aware of any?

[Finn Poschmann]

Thank you, Mr. Chairman, and Mr. Adler. I was hoping it was going to be a tough question like the meaning of complete contracts in marriage, but this one's pretty easy.

There's no question that now and then you're going to bump into that kind of conflict. But to presume that it is an eternal conflict and that it is readily accessible of some logical policy response is a different question altogether. The term that labour economists use is “lump of labour”. If you're going to have a conflict between new entrants, current entrants, older entrants, that's only a binding constraint if you really think there are only so many jobs to go around. In a growing economy, that's just not the case.

Things like employment set-asides or special programs in public contracting are going to involve trade-offs and other kinds of unfairness, and if I were an older worker looking to get back into the labour force, I'd be really upset to find that I couldn't bid fairly for a job against someone who is younger, who had preference for the contract.

[Mark Adler, Conservative, York Centre, ON]

Thank you. I want to come back to you, so just stay on the ready.

Ms. Lennox, is it fair to say, in any way, that entrepreneurship can solve our youth unemployment crisis?

[Victoria Lennox]

I think it's fair to say that it can make a big dent in it. When I was in the United Kingdom during the recession in 2008, they were hit hard. As a student there, I studied for my master's, and no one could find jobs. That's why we created a national charity with the government for entrepreneurships to make sure every campus across the country had entrepreneurial activities at the grassroots level. They continue that today, and it's made a massive difference in that country, and I think it can do the same here in Canada.

[Mark Adler, Conservative, York Centre, ON]

Okay, thank you.

Mr. Antunes, when we look at the youth unemployment crisis, I think what we need to do is differentiate between those who are, say, between the ages of 15 and 24, who would roughly be considered youth—it's a common definition—and then those who are just in between jobs or they're just graduating. There's a variety of reasons that people within that age group are unemployed.

Now, what we need to do also is to look at those who are chronically unemployed, those below that group who are also of the same age but are not in school, have no skills, have no good prospects. That number is a lot smaller, of course, because it's a subset of the entire youth, aged 15 to 24. Could you comment on that level of chronic youth unemployment as opposed to youth unemployment, as such? What could be done to maybe solve that chronic youth unemployment problem?

[Pedro Antunes]

That is a tough question. I'm not sure that I have seen much data on that particular segment. We certainly have heard about it on a global basis. They're called the NEETs—Not in Education, Employment, or Training—but I'm not quite sure what those numbers are, to be honest, in terms of the Canadian situation.