Finance Committee on Sept. 19th, 2018

[Pierre Poilievre, Conservative, Carleton, ON]

My question is for the witnesses from the Canadian Apprenticeship Forum. One of the obstacles to increasing participation in the trades is the difficulty in getting people licensed to practise in regulated occupations. In my constituency, I have newcomers to Canada who were in the trades in other countries and yet can't get their credentials recognized in this one.

As far as I know, taking apart and putting together a transmission is the same in most countries around the world. It doesn't make a lot of sense to me that a qualified Gujarati mechanic can do his job in India but can't do it here in Canada.

What suggestions do you have to break down the barriers that some occupational licensing rules can present to highly skilled immigrants and others who have skill sets that are not formally recognized by the licensing system?

[Raymond Massey]

Thank you for the question.

I've been involved with apprenticeship for quite some time. As a result, I was able to sit on the CCDA, the Canadian Council of Directors of Apprenticeship. That is the provincial and territorial directors of apprenticeship across Canada, who get together to work on various initiatives to try to streamline the apprenticeship system. Harmonization is one of their efforts. Right now, each provincial and territorial jurisdiction has its own model for delivering apprenticeship training. There has been an effort for the last three or four years to try to harmonize standards across the country.

Part of that effort is about foreign credential recognition and being able to take some of the credentials that someone has earned in another jurisdiction—another country, for instance—and look at how that matches up against Canadian credentials. Some work has been done in that area, but there's a lot more that needs to be done. It's ongoing at this particular time.

I don't know if Sarah has anything to add to that. Work is happening. What we're talking about right now is reaching out to our stakeholder group and trying to get them engaged and get them to tell us what they need. Sometimes there are some issues on job sites that demand training that's a bit different from what's available in other jurisdictions or other countries. They're working on that.

[Sarah Watts-Rynard, Past Executive Director, Canadian Apprenticeship Forum]

I would repeat that. Work is definitely being done at the provincial and territorial level in terms of thinking about prior credential recognition.

[Pierre Poilievre, Conservative, Carleton, ON]

Right.

[Sarah Watts-Rynard]

The challenge comes in the provinces and territories where there is real demand. We need to be directing skilled immigrants to where there is demand. There's an opportunity to look at the credentials and accept them into a piece of the apprenticeship system, not necessarily accept them at par. We could say, “In Canada, what you know would be recognized at the level of a third-year apprentice, so let's slot you in there, get you connected with an employer, and take you to the Canadian credential.”

[Pierre Poilievre, Conservative, Carleton, ON]

You know, I hear a lot about this. There are meetings happening. Work is being done and we're all trying to get it together, but it just seems frustrating that this hasn't moved more quickly. I'm not blaming the existing government. It is a multi-jurisdictional problem, principally or mostly in the provincial jurisdiction, but you do have a national association here.

I wonder if the solution isn't to get to a skills-based licensing system rather than a process-based licensing system. What I mean is that if someone can do the job and they can prove through rigorous testing that they can do the job, do we really need to go around the entire world and try to accredit every single educational institution that exists on planet Earth in order to determine which ones match our standards and which don't?

I mentioned Gujarat because I actually have a former constituent who has a low-wage job as a technician when he's pretty much qualified to be a mechanic. He should be making three or four times what he is making, but because of a bureaucratic obstacle, he's not a licensed mechanic.

Why can't we license people based on their abilities rather than have all these bureaucratic processes?

[Sarah Watts-Rynard]

I sympathize with your constituent, because we absolutely have an opportunity in the skilled trades to do competency-based credentialing. It is a unique environment with lots of cases. This is not about what school you trained at, what your credential is, and where it fits but about whether you are actually able to do the job. The difficulty that we find many of the provinces and territories and their regulatory authorities have is that in Canada, the final exam is a multiple-choice exam, applied in English or in French, and it is not competency-based. Competency-based testing is extremely expensive. That's probably the reason it's happening.

Is there an opportunity here? There absolutely is. There is no reason why somebody can't prove that they can do the job and then be given some kind of laddering into an apprenticeship program or some kind of recognition. I do think the provinces and territories are struggling to find a way of doing this that is equal across the country. That's part of what Ray was talking about in terms of those directors of apprenticeship working in that area. Are there opportunities here? There absolutely are.

[The Chair, Liberal, Wayne Easter]

Thank you.

Mr. Julian and Ms. Malcolmson, I think you're going to split your time. The floor is yours.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Yes, thanks very much, Mr. Chair.

Thanks to all our witnesses. I wish I had half an hour to question you all. You're giving a lot of depth to your presentations. I only have five minutes, though, and I'm splitting it with Ms. Malcolmson.

Mr. Sanger, that was a very interesting presentation. We know already that in terms of competitive advantages, our universal health care system has a competitive advantage of about $3,000 a year per employee. A Canadian company doesn't have to pay that cost. An American company does. That is a major advantage to any Canadian company.

I understand from your presentation that you're talking about child care and pharmacare as further investments that should be made to improve the competitiveness of Canadian companies, including that $4.5 billion that would be taken off the books of Canadian companies and assumed through a universal pharmacare plan.

You raised the issue around e-commerce companies and the fact that they are getting off the hook from paying a wide range of taxes and obligations that Canadian companies have. You also raised the issue around the $700 billion basically being parked—dead money—with that surprising statistic that as tax cuts have kicked in for the corporate sector over the last 20 years, business investment in machinery and equipment has actually declined.

These are, I think, surprising and important things for the committee to note. Could you add anything in terms of what this committee needs to consider before we put forward our recommendations in the pre-budget report?

[Toby Sanger]

I'll pick up on maybe a couple of issues. I know that the full expensing of capital is a big issue and there are indications there. I think CIBC said, okay, if you're going to do it, do it in as narrow a way as possible. So that's another bank that has said you shouldn't pursue those things.

I think it's quite surprising for a lot of economists and others to see declining rates of investment in machinery and equipment in a lot of different areas. It's partly because the economy is changing in different ways. Tax cuts aren't going to provide the bump in that area. We have very differently structured companies at this stage, so broad-based tax cuts are probably not going to do that, just as they haven't in the past. I think tax measures should be time-limited and reviewed in different ways. If—

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thank you. I'm going to cut you off so I can hand the second half to Ms. Malcolmson.

[Sheila Malcolmson, NDP, Nanaimo—Ladysmith, BC]

Thank you, Mr. Chair, and thank you to my NDP colleague for sharing his time.

I want to take up one of the issues raised by the Canadian Federation of University Women in its brief but not mentioned in its remarks.

With respect to pay equity, you're asking for the hiring of 50 public servants to work as pay equity commissioners and supporters, and also for $80 million per year toward the new pay equity commission. Do you share my wish that this had been in last year's budget so that it would have been ready for this pending legislation? Do you share my frustration that it's now two and a half years after the tabling of the special pay equity committee's report, which said that we can't wait or had something in the title along those lines? What has been the cost of waiting with respect to women?

[Geneviève de Breyne-Gagnon]

In the sector, women share the frustration of the pay equity task force, which dates back to 2004. The recommendations made in 2004 were then remade in 2016 by the Special Committee on Pay Equity. Right now we are really glad to see proactive legislation, but at the same time we are worried because it will be part of the budget implementation act. It should really be stand-alone legislation that specialists can look at and comment on.

In our budget, we ask for $80 million for an enforcement mechanism, which would be a pay equity commission, and for 50 enforcement officers. This estimate was done by Fay Faraday and Jan Borowy from the Ontario Equal Pay Coalition. It's based on estimates from the Ontario pay equity office's budget when it was a full-fledged budget in 1992, and it's also based on the need that we see from this legislation, which is high.

Women have been making complaints about pay equity. It's complaints-based, and now we want to see this be proactive. It's not only up to women to deal with that; it's up to society. We hope that this can be addressed in the next piece of legislation and that it can be adequately financed.

[The Chair, Liberal, Wayne Easter]

I'll have to end it there.

Mr. Fergus, go ahead.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

Thank you very much, Mr. Chair.

Since I have only five minutes, I will unfortunately not be able to put questions to all witnesses.

I would like to start with the Canadian Trucking Alliance. Mr. Laskowski, you said that the “Driver Inc.” model, where drivers incorporate themselves before selling their services to carriers, was problematic. Can you elaborate on how changing that determination for tax purposes would resolve the issue?

[Stephen Laskowski]

I think it's multi-stepped. You heard from a number of witnesses—and I'm going to borrow from them—that it's about proactive enforcement, as opposed to reactive enforcement. It's about clarification of the law. I think the CRA has a role to play here. The incorporation of employees is not just a trucking issue; it's an issue in other sectors as well. It's just that our sector has a bigger problem with it. So, it's about enforcement. It's about a simple administrative matter, probably in tracking. The CRA could demand that truck drivers be issued either a T4, which all employees get, or a T4A for contractors. Quite frankly, it's about enforcing the law. I don't believe we have that right now. It's a matter of ruling, clarification, T4As and then enforcement.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

My second question is for the Canadian Apprenticeship Forum representatives. You presented very clear recommendations.

In your first recommendation, you talked about the Red Seal endorsement program. If that accreditation was given more recognition, as you would like, would professional associations be likely to stop supporting that program?

[Sarah Watts-Rynard]

I think that the first recommendation is really about how we can start thinking about that Red Seal endorsement, which is something that has become recognized over time as a credential. We can start recognizing that, even when we're interviewing for positions within the federal government or within our contractors, and thinking about that as being equal to another kind of credential.

In human resources management, often the first question is, “Do you have a university degree?” What that does is undervalue even at a high level.... What it does is say to young people that they can get their Red Seal credential, but it's never going to be good enough. This goes back to university-first culture. If any kind of credential is recognized at the same level, then I think it will tell young people and tradespeople that the credential is valued. We'll start to see post-secondary institutions have opportunities to ladder into MBA courses and into other higher education, with this as an equivalent to an undergraduate degree.

I think this is one of those things that have very little to do with spending money. It has a lot to do with valuing that as a form of post-secondary education so that the credential has real value in the economy.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

I would like to continue on this topic. Could newcomers also have access to that program through distance education to obtain their accreditation?

[Sarah Watts-Rynard]

The Red Seal program is currently administered by the Canadian Council of Directors of Apprenticeship and ESDC through the Red Seal Secretariat. There is really no reason, seeing as the exam is a multiple-choice exam.... There are a number of upgrading, training and preparation courses. There's no reason not to make that available, not only to newcomers, but also to prospective newcomers who are in their home country and are looking for a transition to the Canadian workforce.

[The Chair, Liberal, Wayne Easter]

Thank you.

Mr. Kelly, go ahead.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Thank you, Mr. Chair.

My question is for the Canadian Apprenticeship Forum. Many of the very well-paying jobs in my riding are in the skilled trades, particularly in the resource sector. Do you have concerns about the future demand, in particular for welders, electricians and millwrights, these trades in Alberta, in the absence of major projects being approved for construction?

[Raymond Massey]

The answer to that question, Pat, is absolutely yes.

It wasn't that long ago that we were concerned about getting enough qualified tradespeople to build up the infrastructure in the oil sands and the petroleum industry. Now it's not just about building up those projects; it's about maintaining those projects. It was only a couple of years ago that the workforce needed to maintain those projects overstepped the building of those projects. That's not going away anytime soon.

One of the challenges we have in the apprenticeship community or in the trades community is that, when the economy takes a dip like that, people leave. It's always hard to backfill that once the economy picks up again. We also have an aging workforce. That's always eating at us. It's not just in our sector, but in all sorts of sectors. We heard from the trucking sector, for instance, that they're facing the same issues.

What we talked about in our brief was really trying to develop programs, the parity of esteem, and trying to make programs more accessible, because apprenticeship for a lot of people is one of the country's best-kept secrets. They don't truly know what's involved in it. Part of our brief speaks to the need for us to get out there and communicate that value-added proposition to Canadians.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

I'll direct my second question to the Credit Union Association.

You mentioned the uneven taxation in financial services. You talked about overall competitiveness and choice in financial services. I'm going to give you some time to elaborate on that a bit, if you could, and explain what you mean by uneven treatment.

[Athana Mentzelopoulos]

Briefly, the structure of big banks gives them access to different vehicles for...I don't want to say tax avoidance, but I can't think of another word right now. Essentially, it allows them to shelter some of their income.

Because of the structure of co-operatives, we just don't have access to some of those vehicles. We are looking at other tax treatment that could show the value for some of those co-operative efforts— investment shares and that kind of thing. We don't have a structure. We're domestic, so we don't have international operations, for example, that allow for some income to avoid Canadian taxation.