Finance Committee on April 2nd, 2014

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

Thank you very much. I am brand new to this committee; I am substituting for someone.

I've been thinking.... We all think about this issue a lot. We hear that we need to have more on-site training and that governments need to invest more in this. There are different models, of course. The government has come out with the current model, and there's going to be financing and so forth, but I'm trying to understand the dynamics of this whole issue.

You have the schools, the community colleges, which teach specific skills; it could be in knowledge-based areas such as engineering or law, and community colleges will teach all kinds of other skills on real-life equipment and so on.

Then when you think of the workplace, you think about the employer who hires someone who has gone through, say, Algonquin College and knows how to do CAD/CAM, for example. They put them to work and then have to teach them a bit about the product they're making and so on. That is more like an apprenticeship.

When we talk about the money that businesses need for training, what are we talking about? As I say, the school system is giving people skills, and yes, people have to choose the right avenue, because you have to be useful in life—unless you're a politician, I suppose. So what's the role—this is a bit of a naive question, and it's meant to provoke an answer—that the employer plays in this, other than showing the new employee, who already has some basic skills, the nuances of that particular firm's product or that particular firm's system, and so on?

When business says it needs more money for training, what is it talking about?

[Sarah Anson-Cartwright]

I'll start, being here representing business, as my colleague Monique is as well.

I don't know that we're asking for more money for training, but certainly there is an expressed interest that business step up its investment in employee training. That's something that has been noted in a lot of research, that Canadian businesses don't seem to be making the direct investments to the degree that our American counterparts are.

But we have to take into context the on-the-job training that is happening. As CFIB has noted, in small business firms that amounts to a very great deal; their estimate is $18 billion a year in small businesses' training their employees on the job in an informal way. That is not counted as formal, direct investment.

The up-skilling that is needed—

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

Could I just interrupt? I'm not trying to be provocative here, but are we saying that business, especially small business, in retail, for example, or in the hospitality services industry, which needs to take its employees through different steps of the process; it's the way to bring someone into the company.... Are we saying that they need wage subsidies to cover the period of time when that new employee is not as productive as he or she will be a year from then? Are we talking really about wage subsidies when we talk about government money for training inside companies?

[Sarah Anson-Cartwright]

Do you want to jump in, Monique?

[Monique Moreau]

Sure. I'll speak to that.

Some of the research that we have demonstrated shows that the most effective way to help a business is to give them a relief on payroll tax. What we would suggest and what we have promoted in the past is such things as the EI hiring credit, whereby the smallest of businesses, those with less than about $400,000 in payroll, when they get an up to $10,000 increase in payroll, get an up to $1,000 tax credit from Revenue Canada. They don't administer it. Revenue Canada decides. They don't have to apply for anything. It's automatically calculated at the end of the year, recognizing that if you have had an increase in your payroll tax over the last year, the reason is most likely that you have trained someone and have brought on a new staff member.

I challenge a little bit the notion that employers aren't doing enough. As Ms. Anson-Cartwright mentioned, our research shows that $18 billion a year is being invested by small business. Yes, some of that will be specific to the business, but in other cases it's just giving especially youth their first chance. You're teaching basic customer service. You're teaching basic responsibility, management skills. That is transferable, and that's what happens.

We have a shortage of qualified labour because bigger businesses come and take those now newly trained employees from the small business and move them up.

[The Acting Chair, Conservative, Dave Van Kesteren]

Sorry, you're out of time. Thank you.

Mr. Hawn.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Thank you, all, for being here.

Were any of you on the fact-finding mission to Germany led by Minister Kenney the other day? Two folks were on it.

I'll start with Ms. Anson-Cartwright.

Could you give me a 60-second pitch on what you learned? I was talking to Mr. Kenney and they're doing some pretty remarkable things specifically with regard to youth employment, apprenticeships, and so on. What was great about it, and what should Canada be looking at potentially?

[Sarah Anson-Cartwright]

Thank you very much, Mr. Hawn.

Absolutely there were a lot of great take-aways. We were in Germany. I think everybody acknowledges that they have far and away the best, most integrated, structured, historical, and institutionalized approach to apprenticeships. Mind you, that extends well beyond the fields we have apprenticeships in. In Germany there are 350 occupations with apprenticeships. It's a much larger capture.

In Canada 77% of apprentices are actually employed in a small or medium-sized firm. Our small businesses struggle with hiring an apprentice and being able to keep them employed. The apprentice may have to be let go, and so on. In Germany they find a way to create consortia of small firms to help with that. That's a very useful approach. As I said, they have a lot of structure and buy-in across employers, educators, governments, and unions. They're all together at the table. That would take a really dedicated leadership approach to achieve in Canada.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

It wouldn't happen overnight, but you're on the table.

Mr. Reid.

[Sean Reid]

I'll just add to Sarah's comments. There are two other take-aways for us.

First of all, I talked about barriers to perception in my comments. One business leader we met with talked about a parity of esteem between the trades and other more academic fields. Essentially, about 60% of school leavers move into the trades. Simply put, trades are upheld at a different level.

The second thing is that the mobility and harmonization of the system across the country are remarkable there. I talked about mobility as a barrier here. There, there's no question that an apprentice can move from one place to another or move out of one stream and into another stream. They have a level of mobility to find the right fit that simply doesn't exist in our system today. That's another area in which we could definitely make some improvements.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Is that simply due to the fact that geographically they're much closer to other opportunities than would be the case here in Canada?

[Sean Reid]

It's also systemic. They call it permeation. There's a lot of permeability between the different streams. That is something quite intentional in their system.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

I think the important point you made there, and I think Ms. Anson-Cartwright brought this up in her comments, is the esteem in which trades are held.

[Sean Reid]

There's no question.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Mr. Pilarski, in terms of labour market R and D or educational R and D, my understanding is that about 98% of it goes to universities and about 2% goes to technical trade schools. You obviously do a lot of trades training, and you could have a very subjective answer to this. If we could take that from 98% and 2% to 95% and 5% for places like Alberta and elsewhere, what impact might that have on developing the labour market?

[Peter Pilarski]

First of all, SAIT, the Southern Alberta Institute of Technology, actually does a little bit more than NAIT, the Northern Alberta Institute of Technology, in terms of R and D. It's more of a research technical institution. I think you see that at SAIT it has a different approach. SAIT, for example, has developed a degree in construction. They've actually taken the trades and they've been able to add to a straight trades certificate and actually give somebody an opportunity to get higher education.

I'm not sure if that answers your question, but there is a focus at SAIT and we're actually starting to see some results. Maybe if we saw more money going into R and D for trades schools, we might see more of that kind of innovation happening.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

I don't know what that difference of 3% would be in dollars. I think, frankly, that NAIT and SAIT and other schools like those would probably be in seventh heaven if they could get that kind of funding.

[Peter Pilarski]

I would agree definitely.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Still with you, Mr. Pilarski—

[The Acting Chair, Conservative, Dave Van Kesteren]

You're just about out of time, Mr. Hawn.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Well, just about isn't quite out.

[The Acting Chair, Conservative, Dave Van Kesteren]

You're pretty much out of time. I want to be fair to everybody.

Mr. Rankin.

[Murray Rankin, NDP, Victoria, BC]

Thank you to all of our witnesses for your patience. All the presentations were great.

I only have a couple of minutes.

I want to do justice to you, Mr. DiCaro, because I don't think anybody has asked you to talk about the other two recommendations. Perhaps you wouldn't mind elaborating on them. You had three, as I recall, and you just managed to get one out before you were cut off.

[Angelo DiCaro]

Yes, I appreciate it.

As I mentioned, the first one was about looking at retail and hospitality and looking at a multi-stakeholder dialogue in those sectors. It would be a dialogue about how things such as on-the-job skills training could be improved, especially as it relates to young workers. Also it would be about even basic transferable skills training, which in some cases unions will take on and bear the burden of that, and assist with. There could be some dialogue with that. That doesn't exist right now in Canada.

One other suggestion we had was to attach youth employment targets to major public infrastructure projects. We've seen some success with this and some developments in the province of Ontario.

Also, really try to tighten up existing wage subsidy programs. Right now it seems as though a lot of them that are national in scope are very much focused on short-term jobs. If we can attach some of those to longer, more permanent jobs, I think that would get us a long way toward solving some of the poor labour market outcome problems we have.

[Murray Rankin, NDP, Victoria, BC]

My next question is for Mr. Lortie.

I want you to talk a little bit more about pensions. First of all, I really appreciate what your brief says about the work-life balance. I know how difficult that's going to be. But because you made a statement that I didn't quite understand, I wouldn't mind asking you a bit further about it.

You say in your brief that in your opinion the federal government must assume a leadership role and promote pension plan improvement in Canada. Then you say it must also prioritize the right for all workers to be covered by a pension plan to which each employer is required, by law, to pay a premium. Well, isn't that just a description of the Canada pension plan and the Quebec pension plan? Or are you saying something more than that, like that requirement is not being enforced or something?