Finance Committee on Sept. 19th, 2017

[Claude Lavoie, Director, Economic Studies and Policy Analysis Division, Economic and Fiscal Policy Branch, Department of Finance]

Thank you very much for your question.

Obviously, we follow the issue of inequality very closely. There are different ways to do this, such as by looking at the distribution of income among different income groups in Canada.

Over the past 40 years, there has been an increase in inequality in the income that people earn in the labour market. The rich get richer than the poor. Revenues increase much more at the top than at the bottom of the income distribution. We're talking about pre-tax income.

Taking into account taxes and transfers, income growth was more even and somewhat higher on the higher income side, especially when we're talking about the 0.1%. The federal system of taxes and transfers is effective in redistributing revenues. Will it continue to be? That is one of the concerns of the present government, and we are looking at it.

The Gini coefficient is one of the indicators of inequality often used. It can also be illustrated as the ratio of the richest 40% to the poorest 45%; it has pretty much the same function. This coefficient increased significantly during the recession of the mid-1990s and of the 1980s. This coefficient has been stable since the 2000s and has not increased significantly recently.

Compared to other countries, based on the same measures, Canada is in the middle of the pack with respect to inequality. We are not among the best, and there is room for improvement.

I hope I've answered your question.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Absolutely. I understood that the main solution seems to be the federal system of taxes and transfers or social programs.

I would now like to ask a question about the transition toward a greener, more environmentally friendly and more technological economy, of course. That's what we're looking at.

Is the available workforce sufficient to make this transition? If we don't have the labour force required to achieve the new economy we are creating, what will the main challenge be for the government?

[Lisa Setlakwe]

I will ask my colleague, Krista Campbell, to answer your question, and some of our colleagues who will come later will be able to give you additional answers.

[Krista Campbell, Director General, Digital Transformation Sector, Department of Industry]

Thank you for your question.

The approach that the government has taken recently in thinking about the overall supply of labour has indicated that we really need to focus on domestic talent and the transition to a new digital economy, an economy that expects people to be comfortable with technology and with significant amounts of information and data, and to work in very different ways. It's putting pressure on the education system and on employers to ensure that they have good intake systems and effective work-integrated training programs.

My colleague outlined some of the initiatives that ISED is responsible for. Colleagues from Employment and Social Development, who will follow, will be able to speak to some of those initiatives. The idea of being able to bring in highly specialized talent is a key pillar of the global skills strategy, which colleagues at Immigration, Refugees and Citizenship Canada could also speak to. However, you are exactly hitting on the core issue, which is, one, that the number of people is really important and getting as many people into the labour force as possible is critical for overall success; and two, to make sure that there is a marrying up of the skills and the training.

I would like to highlight a couple of very small programs, but very important ones, that are at the crux of the inclusiveness of the innovation agenda. We'll be rolling out some programs over the course of the fall with respect to accessible technology, development of technologies used by people who may have some kind of impediment in terms of accessing the Internet because of technological barriers.

A digital literacy program we're rolling out will be looking to help ensure that excluded groups, whether it's people who have language difficulties, newly arrived Canadians, or people who maybe aren't as comfortable in the digital world, get some of the training they need so that they are more confident, comfortable, safe, and secure doing things such as ongoing training, banking, or health care services online.

As well, we're looking to further some of the work that the government can do with respect to STEM training for younger students, as well as for post-secondary students.

[The Chair, Liberal, Wayne Easter]

Thank you.

Thank you, all. We are going to have to cut it there.

Ms. O'Connell, we'll put you first in the next round.

Our original worry was that giving you folks all the time we had was going to be too much time, but we certainly changed that in a hurry.

Thank you very much to the witnesses who are here. We'll call up the Department of Employment and Social Development, and other people from the Department of Finance.

Thank you very much, witnesses. I know we had a discussion that wasn't on your topic in the beginning, but you have really provided us with very sound information, so thank you.

[The Chair, Liberal, Wayne Easter]

I call back members to the committee, please. We will start the second panel.

We have from the skills and employment branch of the Department of Employment and Social Development, Ms. Wernick, who is the associate assistant deputy minister; Ms. Demers, the director general of strategy and partnerships; and Mr. Brown, acting director general of employment insurance policy.

From the federal-provincial and social policy branch of the Department of Finance, we have Glenn Purves, the general director—welcome, again, Glenn; and Mr. MacMinn, senior economist.

Thank you for coming. The floor is yours for an opening statement. I will admit that we're under a pretty tight time frame; sorry for making you wait.

[Rachel Wernick, Associate Assistant Deputy Minister, Skills and Employment, Department of Employment and Social Development]

Good afternoon, Mr. Chair and distinguished members of the committee. Thank you for the opportunity to describe Employment and Social Development Canada skills and training programs.

As you know, Canada is experiencing the effects of an aging population, rapid technological change and globalization that have put a strain on productivity growth and competitiveness. Canadians are experiencing these changes through shifts in the labour market that are reshaping the nature of jobs and raising the level of skills and education required to be successful.

In this context, Canada's prosperity will increasingly depend on an inclusive labour market, where all Canadians are equipped with the skills that they need for the changing nature of work, and where employers are able to access the skilled labour they need to be innovative and competitive.

I am pleased to share with you some of the work that ESDC is doing to address these priorities. Let me start with youth. We know that Canada's prosperity will increasingly depend on creating a pathway to success in education and employment for our young Canadians. Helping young people gain the skills, abilities, and work experience they need to find and maintain good employment will be key to laying the foundation for their success in the labour market over their lifetime. To tackle this challenge, ESDC invests approximately $330 million per year in the youth employment strategy.

Budget 2016 made additional investments of over $278 million, bringing the total funding for 2016-17 to more than $606 million. With this investment, we doubled the number of Canada summer jobs available to young Canadians, which was over 60,000 jobs.

Budget 2017 proposed an additional $395.5 million over three years, starting in 2017-18, for additional work and skills development opportunities for youth. Combined with the 2016 measures, these investments will help more than 33,000 vulnerable youth develop the skills they need to find work or go back to school, create 15,000 new green jobs for young Canadians, and provide over 1,600 new employment opportunities for youth in the heritage sector.

While a large part of Canada's success rests on supporting youth in successfully transitioning into the labour market, they still face barriers.

To assess the barriers faced by vulnerable youth in finding and keeping jobs, an expert panel on youth employment was launched in October 2016 and delivered its final report last spring, which will help guide our work on the renewal of the youth employment strategy.

As well, the new youth service initiative, which will be launched later this fall, will help young Canadians gain valuable work and life experience as they contribute through service to communities across Canada. This initiative will provide $105 million over five years and $25 million per year ongoing.

An important way ESDC is supporting successful transitions from studies to the workplace is through the student work-integrated learning program, which was launched in August of this year. The program provides funding support in the form of wage subsidies to employers to create new work placements for students enrolled in post-secondary education during their studies.

Through this program, ESDC is developing stronger linkages and partnerships between industry and post-secondary institutions by creating these new work-integrated learning opportunities, particularly in science, technology, engineering, and math.

There are additional incentives available for placements created for students in under-represented groups, including women in STEM, indigenous students, persons with disabilities, and recent immigrants.

This program is expected to produce up to 10,000 new work placements over the next four years in several sectors, including biotechnology, information and communications technology, environment, aviation and aerospace.

As you know, there is a clear link between education and productivity. The department continues its efforts to facilitate access to post-secondary education by encouraging Canadians to save and by increasing access to, and the availability of, student financial assistance.

I am pleased to report that, further to budget 2016 commitments, enhancements to the Canada student loans program to increase the amount and availability of Canada student grants, as well as the measures to make student debt more manageable, have all been implemented.

In a changing economy, Canadians throughout their life need to embrace continuous learning and upgrade their skills so they can find and keep good jobs.

As part of Canada's innovation and skills plan, the government aims to encourage Canadians to upgrade their skills through several measures: by expanding eligibility for Canada student grants and loans; by making it easier for adult or mature learners to qualify for Canada student grants and loans; and, by making better use of the flexibilities in the EI program that allow EI claimants to pursue full-time, self-funded training while maintaining their EI status. Consultations with provinces and territories on these measures have begun with the view of an implementation date of the end of summer 2018, which will correspond with the start of the school year.

Turning to other areas of importance for improving Canada's overall productivity, the need to generate opportunities for those who are traditionally under-represented in the workplace remains of paramount importance. Maximizing the participation and better utilization of these under-represented groups will be key to addressing anticipated labour force and skills shortages and to supporting long-term growth.

ESDC provides a full continuum of services for indigenous people across the country, from pre-employment training, such as literacy, numeracy, and other essential skills, to more advanced technical training, and to employment for skilled jobs through the aboriginal skills and employment training strategy, or ASETS. Over the past years, ASETS has served over 300,000 clients, with over 100,000 finding employment and close to 50,000 returning to school.

In response to growing demand from indigenous peoples for skills development and job training, budget 2017 announced an additional investment of $50 million for this strategy.

Going forward, indigenous skills and training remains a top mandate priority for Minister Hajdu. In the past year, we have engaged extensively with indigenous partners to see how we can improve and strengthen indigenous labour market programming through a longer-term strategy. Results of all of these consultations will be informing the renewal of the aboriginal skills and employment training strategy post 2018 and will ensure that we are meeting the training needs and improving the labour market outcomes of indigenous people.

To help newcomer immigrants overcome integration barriers and fully participate in the labour market, budget 2017 proposed the creation of a targeted employment strategy for newcomers. The strategy will include improved pre-arrival supports, a loan program to assist with the cost of foreign credential recognition, and targeted measures to help them gain Canadian work experience. It will also complement the work already being done in the department with provinces and territories on foreign credential recognition.

In addition to these federal programs, ESDC makes significant investments in skills and training through the labour market transfer agreements. Each year, the government invests nearly $3 billion through the agreements so that provinces and territories can offer a range of programs, from skills training to career counselling to job search assistance, to help the unemployed and under-employed improve their skills and get their next job.

Budget 2017 included significant additional funding and committed to reforming and consolidating the labour market transfer agreements to ensure that programs become simpler and more flexible to adapt to the changing jobs and skills needs. Key priorities under the new agreements will be to ensure that training and employment supports are more client focused, more responsive to employer needs, and informed by strong performance measurement and innovation. Negotiations with provinces and territories on the next generation of agreements have begun and are ongoing.

Speaking of skills training, the new organization for skills development and measurement announced in budget 2017 is still at the design stages, but it has the potential to greatly influence future investments in programming. The Advisory Council on Economic Growth and the Forum of Labour Market Ministers have recommended new approaches to tackle skills gaps and support lifelong learning. The new organization will work in partnership with willing provinces and territories, the private sector, educational institutions, and not-for-profits to address these issues by identifying the skills required by employers, exploring new innovative approaches to skills development, and sharing information on best practices and research to help inform future skills investments and programming.

With a better understanding of the in-demand skills, the new organization will support the development, testing, and evaluation of innovative approaches that will help employment training service providers to adapt to better meet employers' needs and evolving job demands.

[The Chair, Liberal, Wayne Easter]

I'm starting to worry a little about the time left to get into questions.

[Rachel Wernick]

No worries. I can skip this one section and move right along.

[The Chair, Liberal, Wayne Easter]

Okay. Go ahead.

[Rachel Wernick]

The last area I want to talk about involves some measures directed more at businesses.

To facilitate access to talent, we also operate the Job Bank, a website that connects employers and jobseekers across the country, which has recently been modernized and improved. In cases where qualified Canadians and permanent residents are not available, we have the temporary foreign worker program to ensure employers have access to skilled workers they need. Budget 2017 announced the continued delivery of this program and the international mobility program.

On June 12 the new global talent stream was launched across Canada. It is a 24-month pilot project under the temporary foreign worker program that gives Canadian employers a faster and more predictable process for hiring the specialized and highly skilled talent they need to scale, grow, and expand their businesses.

I would end by saying that the initiatives that have been introduced in the past two years have set the stage for immediate and long-term benefits for Canadians who are navigating the impacts of a rapid technological change in an evolving labour market. There is much work to do. We work in partnership with our key stakeholders, provinces, and territories, and we will continue to explore how to ensure that policies and programs are flexible and responsive to the needs of Canadian workers and businesses.

Thank you. We will be pleased to answer your questions.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Ms. Wernick.

Mr. Purves, do you have a short statement as well?

[Glenn Purves, General Director, Federal-Provincial Relations and Social Policy Branch, Department of Finance]

I have no statement to make. Thank you.

[The Chair, Liberal, Wayne Easter]

I know there's a lot of information there, and we can pull that up on the record. I'll tell you, having just sat here for the two previous witnesses as well, I wish there were a way for an MP to be able to pinpoint what programs across government are available, because we're always searching. There has to be a simpler way.

Constituents come in asking whether there are programs, and the staff in our offices.... I know you folks know them, but we don't know them all, and I doubt if you folks do either. That's not under just this government; it was under the other government as well. There are programs, but trying to put your finger on the one that may work for a constituent is always a problem.

Mr. McLeod.

[Michael McLeod, Liberal, Northwest Territories, NT]

Thank you, Mr. Chair.

Thank you to the presenters today. It was a very good presentation.

I certainly appreciate the work you're doing in the area of youth and the under-represented groups, especially the indigenous populations.

I heard many good things here today, and I think there's a real need to really focus on probably our fastest-growing population in the country, the indigenous people, who have high rates of unemployment. We have large pockets across Canada of unemployed indigenous people. It's estimated that we have well over 150,000 people sitting in aboriginal communities in the west, including the north, who are unemployed.

There are many challenges, of course, including education levels, addictions, and mobility—things you would think of as simple. Receiving a pardon for a criminal record is something that's been raised. We certainly have to rethink and modernize our tool kit, as was mentioned earlier today. We need to focus on healthy people and healthy communities, and that means jobs. That means education for aboriginal people, training, and opportunity. That's for all populations in all parts of Canada.

I'm really encouraged by what you're doing here in terms of developing a long-term strategy. My first question is to try to get a feel for how much involvement and collaboration you're getting from the aboriginal people across Canada, the indigenous people. Are they participating? Are you getting good feedback? How is that going?

[Rachel Wernick]

We have been engaging extensively. Over the course of a full year, we engaged with a view to developing the successor program for ASETS, the strategy that expires at the end of this year. We've had extensive engagement across the board in that context. Regional, national, local delivery organizations have fed into that. We also had written submissions from each of the NIOs, the national indigenous organizations, and proposals for what they would like to see in the successor strategy. We even continue to have discussions in the context of the government's new permanent bilateral mechanisms, the nation-to-nation discussions. There are working groups, ADM-level discussions with each of the NIOs, as we explore how to respond to the commitments that are being made in the broader reconciliation agenda. There is complete collaboration and joint priority-setting and working together on the successor strategy right now.

[The Chair, Liberal, Wayne Easter]

You have time for a short one, Michael.

[Michael McLeod, Liberal, Northwest Territories, NT]

Could you quickly tell us what the impact of the ASETS program has been up until now and what you expect it to grow to in the new successor program?

[Rachel Wernick]

To date, the programs have served over 400,000 clients, with close to 133,000 finding work and more than 60,000 returning to school. One of the changes we're exploring with the successor strategy is the potential to measure and capture clients who move up the skills spectrum. You can see from the results measurement that we're doing that it's quite binary. It's either they went back to school or they got a job. Our indigenous partners are telling us, and which makes a lot of sense, is that for a lot of the clients they are serving success is moving from very low literacy to higher literacy and numeracy, and that isn't being captured. As we move people up the skills continuum, we need those longer-term interventions for quite a few of the clients. We need to align the services we offer with their personal aspirations, whether it's to go back to school, to go to a more technical job, etc.

We've had a lot of success with the program, as you can see from the statistics on jobs found and returns to school. Now we want to capture and do more work in the full skills continuum to reach those clients who are starting from the furthest back.

[The Chair, Liberal, Wayne Easter]

Thank you, both.

Mr. Kmiec.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Thank you, Mr. Chair.

Mrs. Wernick, to start, I would simply like to mention that the French and English versions of your speaking notes aren't the same.

Somewhere on page 13 of the version I received, it reads “CIMT - espace réservé”.

[Rachel Wernick]

I apologize. All I can say is that we will look at it and make sure that we provide you with an adequate version of the document.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

That will be for the next time.

[Rachel Wernick]

Yes.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

This council that was being set up, the LMI that was going to be collected, did you consult with the different HR associations from every province before moving ahead with this, and are they involved in the production of this LMI?