Human Resources Committee on Oct. 3rd, 2006

[The Chair, Conservative, Dean Allison]

I call this meeting to order pursuant to Standing Order 108(2), the study on employability in Canada.

I do want to thank our witnesses for coming out today. Thank you for taking the time.

I know, Mr. Cardozo, you had some words to speak of in The Hill Times about how important this study was. So we appreciate your being here as well to share some of your wisdom and insight with us.

We'd ask that you keep your opening comments to seven minutes each so that we can get through with some questions and answers from all the parties concerned.

Mr. Cardozo, I believe you're going to lead off, for seven minutes, please.

[Andrew Cardozo, Executive Director, The Alliance of Sector Councils]

Thank you, Mr. Chairman and members of the committee. It's a pleasure to be here today.

My name is Andrew Cardozo and I'm the Executive Director of the Alliance of Sector Councils. It's a great pleasure to be here to speak to you about employability. In my opinion, this issue is vitally important to the success of our economy. As you know, there is a critical skills shortage in some regions of Canada and in certain sectors of the economy. Today, I'd like to discuss solutions and the role of the national Sector Councils.

Simply put, sector councils are partnership organizations that bring together the main stakeholders in key sectors of the economy to develop and implement industry-driven--and I stress industry-driven--labour market solutions, and they do this sector by sector. The solutions are thus tailor-made for each sector. Typically, sector councils include employers, employees, educators, governments, and other relevant stakeholders. They are funded by a combination of public and private sector funds.

I would like to suggest that skills shortages are the number one issue facing employers in Canada, and as I said in a piece I wrote for The Hill Times recently, Mr. Chairman, I do think this committee gets it. You understand that this is one of the most important issues facing our economy. I'm pleased to say that the federal government has been supporting the work of sector councils for close to two decades. Developed first by the Conservative government in the 1980s, the program has continued to grow through the Liberal government, and again now under the Conservative government.

While we are on the subject of party support, I will tell you that the Quebec and Manitoba governments, be they Péquiste, Liberal, or NDP, have also been supporting and working with similar provincial conseils sectoriels and sector councils in Quebec and Manitoba, respectively.

How did we get to this situation of skills shortages? Simply put, the economy has been in a growth phase for some time now. This growth is coupled with a declining birth rate and an aging workforce, many of whom are taking early retirement, which further exacerbates the skill shortages and thus puts the economy at risk. Demographic issues aside, the effective training and development of Canada's youth remains a challenge. Educators are not communicating the needs of the economy to the future workforce, and the education system has not been training these young people for the precise needs of employers.

Immigration is only a partial solution, but there too, we are not bringing in the people and the skills that we need. For example, while the need for skilled trades has been growing, the number of immigrants we are bringing in with skilled trades training, which is only about 4% or 5%, has been decreasing in the last few years. For newcomers, as you know, the issues are also integrating immigrants into the workforce and the recognition of foreign credentials that are so vital.

I want to mention two major issues, and I think I am preaching to the converted, because I think you agree with these issues, but I do want to place them on the record.

Having a skilled workforce is a national issue and a Canada-wide issue. In order for Canada to prosper and remain competitive, obtaining skilled workers is essential. Increased national leadership on this issue is required in the years ahead. Employers from all parts of the country need access to highly trained and skilled workers in each sector of the economy, and workers from every region should have access to high-skilled training--an educated workforce.

The second issue is advancing Canada's prosperity, productivity, and competitiveness. It is clear that a more skilled workforce means a more prosperous and a more productive workforce, and as a result, increased efficiency and decreased waste. As Canada seeks to compete increasingly with the U.S., Europe, and places like China and India, it is important that we have the kind of skilled workforce that can allow us to compete with those countries.

Let me touch on a few solutions, which I have described in greater detail in our written brief. These include an enhanced relationship between government and sector councils to bring stakeholders together to address labour market challenges and to implement solutions, preparing more sophisticated labour market information on particular sectors of the economy to assess what the skills shortages are and where they are coming up.

Labour market information is a complex amalgam of a number of different statistics and polls that are done. It's a matter of getting these to be more sophisticated, and thus being able to get more granulated, more specific information for particular sectors of the economy in particular regions and even in particular cities in the country.

Increased opportunities for apprenticeship and trades are very important. And here I note the government's plan, as announced in the recent budget, in terms of enhanced apprenticeship programs. This is very important and very timely.

In closing, I want to mention a few other issues with regard to integrating the under-represented groups in society. This is not only a matter of addressing the interests of those individuals who come from the so-called under-represented groups, it's now a matter of the whole economy, because the whole economy needs access to all the people who are available to work. These include working to increase the workforce participation of aboriginal people; finding ways to ensure efficient foreign credential recognition--and I want to note again, here, the government's plan to introduce an agency to assess and recognize foreign credentials, another very important development--helping employers with the hiring and retention of new immigrants; increasing the opportunities for Canadians with disabilities, which I know is a matter of particular interest to some members of this committee; and last, increasing the opportunities for women in non-traditional occupations.

I'm very pleased, Mr. Chairman, that my colleagues from particular sector councils will talk about how these issues play out in two key sectors of the economy, namely, mining and the high-tech sector. And they will be able to give you some real examples of how they have made a difference in creating a more skilled workforce in those two sectors.

Thank you, Mr. Chair.

[The Chair, Conservative, Dean Allison]

Thank you, Mr. Cardozo.

We're going to move on to Mr. Hébert from the Mining Industry Human Resources Council.

Mr. Hébert, for seven minutes, please.

[Paul Hébert, Executive Director, Mining Industry Human Resource Council]

Mr. Chairman, committee members, my name is Paul Hébert. I'm the Executive Director of the Mining Industry Human Resources Council. It's a pleasure for me to be here today to address the committee.

It's my pleasure to be here to give you a very brief overview of the minerals and metals sector in Canada and its importance to the economy.

There are about 388,000 Canadians employed in this sector. Some of Canada's largest employers are counted among mining industry employers, and they include companies such as Alcan, Barrick, and Teck Cominco. Mining contributes about 4% to the GDP.

The segment of the industry that my organization represents, which is exploration mining, smelting, and refining, employs about 130,000 Canadians.

Corporate income tax paid by the mining industry in 2004 was about $702 million, representing a 94% increase over the year 2000, and that's excluding oil and gas. The oil and gas industry on their own paid $3.2 billion in income tax, representing a 234% increase over 2000.

We're talking about a sector that's of great importance to the Canadian economy. It's really an engine of Canada's economy. It's one of Canada's most productive industrial sectors. However, because of some of the factors that Andrew just mentioned, we're facing some serious challenges. Yes, much of our workforce is planning to retire. We're also coming out of a period of particularly low enrolment in mining-related programs, and we're facing some recruiting challenges as well.

There is, of course, the demographic bubble that all sectors have to deal with. Our situation is even a little worse because we're coming out of a period when there was little hiring done, and the average age continued to increase while new entrants weren't coming in.

To give you an example, the age cohort of people aged 40 to 54 represents about 50% of our workforce. The same cohort for the rest of Canada's workforce represents only 39%. There is a significant proportion of workers aged 50 and older in all mining occupations. If we compare that to workers aged 30 and under, we see a stark contrast. For example, in skilled trades and semi-skilled occupations, we see that only about 7% of employees are under the age of 30.

We know that up to 40% of our workforce will retire over the next 10 years. Those workers will take with them an average of 21 and a half years of mining sector experience, representing a dramatic loss of intellectual capital to our sector. Some of the risks associated with that include increased production costs and a potentially negative impact on safety.

We have demographics coupled with enrolment trends. Very quickly, the period of 2000 to 2004 saw a 19% increase in overall engineering enrolment. During the same time, 40% fewer students enrolled in mining and minerals-related engineering programs. We have a confluence of factors that are creating this perfect storm of skill shortages in the minerals and metals sector.

To quantify it, the total cumulative demand over the next 10 years for people is projected to range between 57,000 people under a no-growth scenario and up to 82,000 people under a high-growth scenario.

The challenge in meeting skills requirements includes the issue of education and training. Both employers and educators tell us there are skills gaps. There is a need for tighter relationships among individual institutions and employers and for nationally standardized skill sets and curricula.

In particular, when looking at the skills requirements of the northern workforce and rural and remote areas, essential skills become of primary importance. We're again looking at training somewhere in the neighbourhood of 60,000 to 80,000 people over the next decade.

Technological change also factors into the challenge as the rapid evolution of this technology puts a lot of pressure on individual institutions to keep their equipment current.

In addressing these challenges, the industry has set out a number of objectives. The first, which Andrew touched on, is to increase and make the best use of all sources of supply: women, who currently represent only about 13% of our industry; aboriginal people; new Canadians; and older workers. Aboriginal people present both a bright light and an opportunity. The mining industry is among Canada's largest private sector employers of aboriginal people, who make up about 5% of our workforce.

The second objective is to address these skills gaps through developing programs to attract retired workers and retain older workers; promoting and increasing mentoring programs, and that includes not only mentoring new employees, but beginning those relationships even early on when students are still completing their studies; and developing a collaborative cross-industry education and training strategy so that we have consistency and mobility across the sector.

That standardization of skills and training delivery will provide the industry with a mobile workforce with the skills it needs today and will need into the future.

In conclusion, I would say that the minerals and metals sector will be facing a crisis in the next 10 years. Employers and organized labour, as well as industry associations, have taken up the challenge, each doing their own part, but we will need to increase those relationships and improve on the work we're doing, and that includes the role of government that can be brought to bear on these issues.

Thank you.

[The Chair, Conservative, Dean Allison]

Thank you, Mr. Hébert.

We're going to move along now to Mr. Swinwood, who is representing the Software Human Resource Council.

You have seven minutes, sir.

[Paul Swinwood, President, Software Human Resource Council Inc.]

Good morning, and thank you, ladies and gentlemen of the committee.

My name is Paul Swinwood, and I am president of the Software Human Resource Council. I would like to thank you for the opportunity to share in this examination of employability issues.

The Software Human Resource Council is a not-for-profit council, one of 33. We work with industry, education, associations, and governments—and I'll put an “s” on “governments”—both federal and provincial, to address employment issues affecting the IT sector. Our goal is to ensure that Canada has an adequate supply of IT workers to compete in today's interesting global economy.

The council, over the last 12 years, has done a lot to lead us to believe that in order to succeed, our nation must focus on its current high-wage economy—and I have some numbers I'll follow through on—and especially in the IT sector. The current IT sector is responsible for 600,000 jobs in the Canadian economy, $137 billion in revenue, and billions more in exports and capital expenditures.

Also, the IT sector is very fast-paced. For those of you who have been following it, we change the technologies about once every two years. It's an interesting place to have been for the last 40 years.

IT is prominent in every sector. We enable the successes for each and every other industry, and clearly, the IT sector has a major impact on the Canadian economy as a whole and what drives our economy.

As concerns the workers, the IT workforce, the professionals, so far in 2006 the unemployment rate in Canada's IT sector has been hovering between 2% and 2.5%. This compares to the 6% unemployment rate nationally for all sectors. This has made for a very tight labour market, and nine of the provinces and territories have identified the IT sector and computer professionals as sectors with skill shortages.

To compound this problem, there has been a 70% decrease in enrolment in computer science programs over the past five years. The additional concern surrounding this is that 50% of the IT workforce is made up of university graduates, and another 27% are college or CEGEP graduates. Also, a combination of new technologies, offshoring, and outsourcing has and will change the face of IT over the near future. This, combined with our impending baby-boomer exodus, is equalling major problems for our sectors as we go forward.

So what are the key labour market issues for our sector? The first surrounds competencies. Employers are looking for professionals who not only can do the technical work, but more importantly, can become part of the solution and add value for their business. They are looking for people who can meet with customers, market and present ideas, and communicate with colleagues and work in teams. It sounds simple.

There is a significant lack of employees in our field with what we call “the package”. The package is made up of the IT skills, the business management that I mentioned earlier, and interpersonal skills. Employees with all these skills are in short supply, and in fact, workers with these skills enjoy a premium compensation. I just met with a company yesterday that was talking about a 10% compensation benefit for people with those skills, in order to attract them.

One of our goals moving forward is to find a way to ensure there's a constant stream of employees with the package entering our workforce through the educational system, the career changers, and by utilizing internationally educated professionals.

The Software Human Resource Council has devised an occupational skills profile model related to the NOC codes to define the occupations in our sector. We currently have 27 different occupations that we track, and another nine are in development.

We believe that in order to begin addressing the need for employees with the package, the OSPM is being expanded to include interpersonal skills and business skills, as well as the new and emerging technologies. The major effort that we're looking at is in retraining managers. Strong management is a major retention strategy for most IT companies.

The second issue we've identified involves education, training, and learning. IT workers are highly educated. More than half of them have university degrees, and many have PhDs. It's a highly qualified and educated workforce. The technical training these professionals have is on par with anywhere in the world. Our university and college systems provide world-class technical training. In addition, industry averages 10 days of training--that's formal training--per year, per worker, for each of these 600,000 workers. This proves that both industry and the workforce are investing in the future of the IT sector. However, there's still room for improvement.

In both continuing education and in post-secondary institutions, there are challenges. Employers, the market, industry, need workers not only with technical skills but with interpersonal and business skills. Too many of our post-secondary schools still offer adequate or advanced technical training, but nowhere do they give business strategy, marketing, and general liberal arts mixed in with the technology. However, there is real demand for such rounded workers.

Through research, SHRC has identified and sees value in the increase of workers with the package, and we are working with the educational institutions to revise their curricula to better reflect the broad needs of industry and incorporate the soft skills and business skills into the curriculum. SHRC also endorses the need for vertical integration of competencies through the educational continuum.

The third issue we're working on, secondary and post-secondary enrolments, I will skip through fairly quickly since I've been given one minute to take on this. If Canada is to be globally competitive, we need to have more people enrolled in our post-secondary education.

The final issue is career mobility, diversity, and equity. Twenty-seven percent of our workforce is female; 10% of the workforce are visible minorities; 1% are aboriginal. That 1% translates to about 6,000 aboriginals, of which 5,500 will have a post-secondary degree. We have some interesting challenges as we go forward.

With that, I'd like to conclude. The information we have presented represents some of the challenges we're facing within the IT sector. We are in a global economy and a global race for being competitive. We need people who are highly educated, well trained, and well skilled.

Thank you.

[The Chair, Conservative, Dean Allison]

Thank you, Mr. Swinwood.

We'll now start our first round of questioning, seven minutes to include both questions and answers.

Mr. Regan, seven minutes, sir.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you very much, Mr. Chairman, and thank you all for appearing before us today and for giving us your thoughts. They're very valuable and important to us in this study.

I think in some of the documents you've given us there is an indication of the quantification of skill shortages that you're seeing in your industries. But if you haven't, I know that...for instance, in the executive summary of the brief from the Mining Industry Human Resources Council, the indication is that the cumulative gap you see over the next 10 years is 70,810 positions as a shortage in that area. I guess I'd ask the other two also--and perhaps it's in your documents, I haven't noticed it yet--if you could quantify for me what you're seeing in your areas.

Second, what are the top three measures the Government of Canada should be taking to address the skills shortage?

Third--and I'm sorry to give you a list of questions, but I'll start with this and see how we go through the seven minutes--what do you see as the role of basic literacy, for example, in terms of your industries? For instance, we're seeing more and more need for highly skilled workforces. You need people who have basic skills, the basic foundation, because simply reading the manuals can be more complicated these days for mechanics, and in all kinds of fields. One of the challenges we face in meeting the skills shortage, it seems to me, is how to move people from the margins of society, those who don't have strong literacy skills, up to a point where they can then work on becoming tradespeople or developing skills that can be useful in the kinds of industries you're talking about today.

Mr. Swinwood talked about the need for more people to be enrolled in post-secondary education, and I wonder if there are one or two key measures that you see the Government of Canada taking to assist that.

If that isn't enough, l'll have more later.

[Voices]

Oh, oh!

[Andrew Cardozo]

Mr. Regan, I'll answer a couple of those and leave some time for my colleagues.

I should stress that in terms of the organization I am here representing, the Alliance of Sector Councils, it is a coalition of 30 or so.

I'll draw your attention to appendix 1 in our written submission. What we have done is outlined the skill shortage in various key sectors. I don't have a global figure for you, but just to cite a couple of them, the construction industry will need to replace about 150,000 workers in the next 10 years. In the trucking industry there will be a shortage of about 37,000 people a year over the next five years. If you think about that, it means you won't get your Prada fashions, you won't get your loaf of bread delivered to your store, if the trucks aren't running. Trucking is just one of those very important areas.

In terms of the top three recommendations, I'll just mention one, the one we're here to highlight, and that is the partnerships that are formed through sector councils. It's important to stress that they're more than a partnership of talking heads; they're really a partnership of action and of making things happen. What happens within these sector councils is that they identify and implement solutions. You have all the players that are relevant to each of the sectors around the table, and they come up with solutions and actually implement them, whether it's in terms of providing training to people in the workplace or providing courses to high school students or providing courses that will be delivered in high schools, universities, and colleges, or other training.

We're not doing all of this everywhere. Some of the more mature councils that have been around longer are doing a lot more than some of the newer ones that are developing. But it's that kind of partnership for developing and really making things happen, which I think is a hugely successful objective and program that has been part of the federal government's program for a while.

[Paul Hébert]

On the quantification you have in the document and the top three priorities, I would say that ongoing and accurate labour market information is essential to the mining industry and to the system that provides the people with the skills it needs. That is to say, the universities and community colleges need to know how many of what kinds of people with which skills will be needed when, so that they can add the seats that will deliver those people.

Along the same lines, the second would be to continue to support the development, updating, and administration of occupational standards. In mining this is very important because many of the production occupations are not regulated; they aren't recognized trades. We are working with industry to develop those standards, and that will continue to be very important going forward, especially as we see new Canadians entering the sector. In order to have a means of recognizing foreign credentials, we need to know what industry needs today. We need a list of the skills and levels of skill required to compare those against what new Canadians can bring to the table.

Third, as we try to make best use of all sources of supply, we're also focusing on retention. We need to keep the people who are currently in our sector and who will enter our sector going forward. Part of that includes making sure that young Canadians have the appropriate information with which to make informed career choices, that is, accurate information, so that they're not surprised down the road by what they didn't know the sector was, then end up choosing something else. With that accurate information they can make an informed choice, thereby increasing retention and minimizing all the costs associated with churn and training new entrants.

[The Chair, Conservative, Dean Allison]

Mr. Swinwood, there are about 45 seconds left.

[Paul Swinwood]

Let me just touch on a couple of things.

First of all, Canada's birth rate is around 337,000 people a year, growing at about 3% to 4%. We're looking at 330,000 to 350,000 young people coming through the system. We need the ability to be able to impact on those people and make sure they understand what the options are as they come through, because decisions are being made in grades 7 and 8 that prevent them from going to post-secondary education in a lot of cases. Having the right information available at the right level, getting to the primary schools, the high schools...and that's about as late as you can go in terms of having people make decisions on careers. They're being streamed out at that stage.

Also, we need a national approach to skills upgrading. I realize this is Canada, I realize we have the federal-provincial negotiations, but we need a national approach. We are not 13 countries competing with India; we are Canada. We have to take a look at a national approach that will make Canada successful on this.

I've used up my 45 seconds.

[The Chair, Conservative, Dean Allison]

You've used that and a little bit more--but very good.

[Paul Swinwood]

But I don't feel strongly about that, by the way.

[The Chair, Conservative, Dean Allison]

Thank you very much.

We're going to move on to the next questioner for seven minutes.

Madame Bonsant

[France Bonsant, Bloc, Compton—Stanstead, QC]

Good afternoon. You spoke at length about the shortage of workers. I've toured my riding and I know for a fact that there are secondary schools in every riding. Do you have any plans to make the rounds of secondary schools to give students some idea of skills development initiatives in your sector?

Given the high dropout rate among high school students, these youths are not all likely to be engineers or surgeons. However, not all your industries are looking for engineers and surgeons. They have a greater need for so-called blue collar skills.

Mr. Swinwood, is it your intention, as you stated, to give these young people academic and professional training as early as their third year of secondary school? They could receive 15 hours of training per week in your facility, with the rest of their time spent in the classroom. Would this approach not be conducive to the kind of skills development you have in mind and not help these youths build a future for themselves?

I have a second question for you. Are you prepared to hire people 50 years of age or older who, after losing their job, have retrained in the forestry, furniture or textiles sector? Are you prepared to hire them to give them a second chance?

[Paul Swinwood]

There are three different things we're already involved in. First, we have created a set of learning outcomes for grades 11 and 12 . We have been working with six provinces at this time to give them the knowledge and experience of what the IT sector is all about through changing the curriculum that is delivered by the provincial ministry of education. So we're already doing that.

It's been very successful in British Columbia. Our first delivery of it involved 100 students who were all at risk. They were students who they were afraid were not going to complete grade 11, let alone grade 12. This was funded by the apprenticeship group that was expecting them to go out to work. Only two of those students got jobs out of high school; the other 98 went on to post-secondary education. We think that's a very successful program.

We're now working with Alberta. The Toronto District School Board has implemented it in Toronto to try to attack their 42% drop-out rate, I believe it is. So we're implementing that in a couple of the inner-city schools to be able to give them this opportunity.

We partnered with Industry Canada and the computers for schools program, where they take used computers from the government and provide them to some of these inner-city schools that can't afford them. So we've done it through partnerships with industry and education.

On the retraining and re-skilling of people, we have been attempting to work within the system of how retraining and re-skilling works. At the present time, the funding available is for a maximum of six weeks.

One of the issues when you're re-skilling someone is that you have to re-educate them and provide them with the background and the knowledge. So we need a slight change in the re-skilling funding model, to enable people to have the support to go back and get the education to be employable in our sector.

[France Bonsant, Bloc, Compton—Stanstead, QC]

I knew a man who worked for 35 years as a welder. He lost his job and applied for a new one. His prospective employer had a particular job requirement. The company was looking for a high pressure welding machine operator. The man would have had to take a six-month course and was prepared to attend evening classes. The company, however, was unwilling to accommodate him. It therefore lost out on the opportunity to gain an experienced worker, even though he did not have the required certificate.

Do you allocate to companies a percentage of your budget for continuing education?

[Paul Swinwood]

Yes, our sector probably spends three to five times the national average on re-skilling and skills upgrading of our people. You will find that a lot of the people from the high-tech sector have gone back to community colleges to take skills upgrading, even though they're university graduates.

It's the way our system can work in Canada, and it's a wonderful system to be able to do that through the CEGEPs and community colleges, working together with industry. We have a lot of continuing education programs, and I'm now impacting some of them to get the soft skills in there as well.

[France Bonsant, Bloc, Compton—Stanstead, QC]

I see.

In Quebec, post-secondary education programs are a provincial responsibility. The problem here is the lack of federal government funding for post-secondary education. We'll work hard to obtain funding for these young people, to point them in the right direction and to ensure they receive a good education.

[Paul Swinwood]

I have observed exactly the same thing.

[France Bonsant, Bloc, Compton—Stanstead, QC]

Thank you very much.

[The Chair, Conservative, Dean Allison]

You still have some time left.

[France Bonsant, Bloc, Compton—Stanstead, QC]

Have you ever asked the chambers of commerce for assistance? They are familiar with their territories. Quebec has local employment centres and Carrefour-jeunesse centres. These agencies are familiar with both the strengths and weaknesses of young people. Do you work with these agencies? I'm talking about Quebec. I'm not familiar with the situation in the other provinces and I don't know if they have the same type of system in place. Have you thought of turning to the chambers of commerce for help in finding workers and as a source of information about the workers and professions you need?