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.