Finance Committee on May 15th, 2014

[Matthew McGuire]

No.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Rankin.

Mr. Van Kesteren, go ahead, please.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Mr. Worswick, I'm going to go with you. I want to talk some economics.

You said, I'm going to quote from an article, “The reason employers choose to bring in foreigners rather than hire local youth is the 'elephant in the room' in the debate around temporary foreign workers, Worswick said, and it has to do with work ethic”.

I have a son, and he's pretty sharp. He's a little suspicious of evolution. He said, “Dad, if we'd evolved, I think we would have turned out to be like a big old snake. We'd have about one meal a month, just lie around, and not have to do a lot. Instead, about three times a day, I'm hungry and it just kind of reminds me I have to get up and get back to work.”

I'm probably a little older than you are, but you probably have the same memories. I remember as a kid in my neck of the woods down in southwestern Ontario—a lot of farming goes on there—we couldn't wait until harvest time, the spring or the fall, because if we wanted to wear blue jeans when we went back to high school, we had to make a little bit of money. It's somewhat ironic that the very people who criticize the foreign worker program the most are the ones who have implemented these things that have caused it. I'm just wondering if you want to comment on that.

I have one final observation. We always have had foreign workers, haven't we? We used to call them immigrants. Again, back in my day, people would come into this neck of the woods. I know our friends from Quebec were the ones who picked the tomatoes. We just had this steady supply of people, but we've run out of that. Is there any turning back? Is there a way we can get out of this?

[Prof. Christopher Worswick]

There's a lot there to talk about. I'm very much making a distinction between immigration and temporary foreign workers. I think they're two very different programs.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

They served the same purpose years ago.

[Prof. Christopher Worswick]

I think they both still serve the same purpose in the sense that they're both sources of labour supply or labour services to our economy, but with immigration we're making a commitment to bringing a person in and allowing them to stay permanently. We typically do this without any requirement. Well, traditionally, there's been a small employer nomination track, and it is now likely to grow. But historically, we haven't said you can't come unless the employer says they can't replace you.

I do think they're different. I think the movement towards temporary foreign workers is quite recent, with the exception of the agricultural worker program.

You mentioned migration of young workers from Quebec into other parts of the country. That was an important source of labour to the agricultural sector. I have no problem with that. I believe in free mobility of labour within Canada.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

They're not coming anymore. That's the point I'm making. They're not coming. The kids aren't going into the fields, and so we—

[Prof. Christopher Worswick]

I would say it depends on the wage rate. I think if employers pay a high enough wage, they will find a supply of local labour.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

But you're an economist—

[Prof. Christopher Worswick]

Yes.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

—and we both know that when we start messing around, when we start doing things, there are always ramifications.

You must agree that we have industries, that we've created industries, which we've agreed are critical to our region.... They're spinoff—we consider that spinoff as the reason for that—but we are competing with, say, the Americans, who have a huge pool of labour from Mexico in terms of migrant workers or illegal immigrants.

I guess this is the question I'm asking: have we put ourselves in a corner where we really have no choice? I'm talking about the low end of the spectrum.

[Prof. Christopher Worswick]

I firmly believe we have a choice. II'm not advocating this, but we're talking hypotheticals. If we hypothetically decided to stop temporary foreign workers for less educated workers, it would hurt some individuals and some firms. I don't think it would have a large impact on the country.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

It would wipe us out in, say, Chatham-Kent—Essex, in the Leamington area, where they rely solely on the foreign worker program for the farming.

[The Chair, Conservative, James Rajotte]

You have 30 seconds left.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

We're at the point now where we must have that pool of labour.

[Prof. Christopher Worswick]

I guess, rightly or wrongly—I know we don't have much time here—I would probably exempt the agricultural sector because I don't see big problems in it. It's a bit of a cop-out, but we've had that program for a long time. Most of the stories don't seem to be coming from it.

But I take your point that it might be hard in certain regions.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Too bad we don't have more time, because I think we could talk about this for a long time.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Van Kesteren.

I'm going to take the final round. I appreciate a lot of the clarification by many of you on your suggestions for amendments.

I want to follow up, in the time I have, with you, Mr. Lavoie. You said in your statement, “Our members' survey indicate year after year that more than 50% of manufacturers are currently facing skills and labour shortage...”. That's certainly what I hear in my region, and it's certainly what I hear from a lot of business organizations. Yet there have many national studies done, by the C.D. Howe Institute, Parliamentary Budget Officer, TD Economics, essentially saying that there is no national labour shortage whatsoever, that this is a problem that has been overblown in terms of its attention.

What is your response to that? It's certainly not the reality faced in my riding, but my riding may be an anomaly. You're a business organization with members across the country. How do you respond to those kinds of reports?

[Martin Lavoie]

I would say that if you talk to colleges and polytechnics and you ask them how many people they take in their programs, or what their rate of placement is, a lot of them are approaching above 95%. They tell us that they have more applications than they can take; they could place more people.

I don't know how to reconcile these numbers, but what I hear from my members and from applied research and colleges is really in line with what we're hearing from our members. I can't see how I can reconcile why they're saying that or why they think there's no problem. I don't see why our members would say so if it weren't a problem. The labour and skills shortage is one of the top issues I keep hearing all the time across the country.

[The Chair, Conservative, James Rajotte]

It's one of the top issues consistently that you hear from your members.

[Martin Lavoie]

Consistently with research and development as well.

[The Chair, Conservative, James Rajotte]

Are there certain sectors within the manufacturing coalition that face bigger challenges than others?

[Martin Lavoie]

It's pretty broad. It's not one particular sector. We've heard it recently from even the food processing sector. We've heard it from the metals and the plastics, from natural resource-related sectors, from construction related to manufacturing. We've heard it in a lot of different skilled trades for sure.

[The Chair, Conservative, James Rajotte]

Okay.

In my remaining time, I want to go to you, Professor Worswick.

I come from Alberta. I represent Edmonton—Leduc, which has areas like Nisku that are suffering from a real shortage of all types of labour. Just looking at your recommendation on the temporary foreign worker program going forward, if you look at the three prairie provinces—I'm going off memory here—I think for 2013 the unemployment rate for Saskatchewan was 4%, for Alberta it was about 4.6%, for Manitoba it was 5.5%, for Ontario and Quebec it was around 7.5% and 7.6%, and it was higher in Atlantic Canada. Obviously we have different regional realities in this country. We're facing a bigger challenge on the Prairies in terms of accessing labour.

Should we have a temporary foreign worker program that recognizes different regional realities and says that employers in regions where it's 4% unemployment ought to be perhaps facing a different reality from employers facing 11.5% unemployment?

[Prof. Christopher Worswick]

I support that kind of direction. I've made this point clear, I think, in other venues that temporary foreign worker programs make a lot of sense in booming regions of a country, where you might have to see very large wage increases in order to attract workers from the less successful regions.

Especially with something that might be related to a commodity cycle where the boom might not last forever, do you really want to attract a bunch of people across the country who might have to go back again to communities that have been hurt?

I do support a limited temporary foreign worker program. I like the idea of focusing it on more skilled and educated people, because I think the supply responses are smaller there, because you might have to wait until someone finishes their training before they can really enter that area. Targeting it at regions of the country that are booming makes sense.