Thank you very much for the invitation to be here today.
Yes, we understand that the committee wishes to conduct some discussion and some study around employability issues, so we have come prepared today to deal with three of the six that you've chosen: skilled worker shortages, labour mobility, and recognition of foreign credentials. There will be a group from the department who will come back next week, June 8, ready to discuss with you the others: seasonal workers, older workers, and workplace literacy.
If I could, I would begin by introducing my colleagues. With me is Cliff Halliwell, who is our director general of policy research and coordination; Barbara Glover, who is the acting director general of labour market policy; and Corinne Prince-St-Amand, who is the director general for foreign worker programming and immigrants and has responsibilities as well for the Agreement on Internal Trade and mobility.
We have provided you with materials on today's issues in both official languages which we believe will be helpful in highlighting relevant facts and research on the issues that you are examining.
I will begin my comments with a brief description of the Canadian labour market, followed by a short synopsis of today's three issues. I will then be pleased to respond to any questions that you may have.
On the labour market context, the Canadian labour market is performing well. Participation in employment rates rank in the top of the OECD, and the unemployment rate, at 6.4%, is at its lowest in three decades. Job growth continues to be strong, with 220,000 jobs created in 2005, of which 205,000 are full-time positions. This is actually the twelfth consecutive year of gains in full-time employment. As well, average hourly earnings have risen by 3.5% in 2005.
While Canada has trailed the U.S. in labour productivity growth in recent years, last year, again in 2005, labour productivity in the Canadian business sector rose for the first time in three years. It was up by 2.2%, which actually represents the strongest annual productivity performance since the beginning of the decade, the year 2000.
Moving forward, a number of current and emerging drivers could actually both exacerbate challenges and present us with opportunities. This morning I would like to name a couple of the key ones: globalization, the commodities boom, the knowledge-based economy, and the aging of our population.
The U.S. is still our predominant trading partner, but emerging economies, notably China and India, are providing new markets for our goods and services and are also a source of growing competition in a number of sectors, notably manufacturing.
The commodities boom has been an increasingly important source of both regional and sectoral growth and change in the country. In particular, labour shortages are substantially more pronounced and persistent in western Canada as a result of the strong growth of the energy sector in that region. At the same time, however, higher energy prices, combined with the stronger dollar and increased international competition, are indeed creating challenges for the manufacturing sector in central Canada, and there continues to be persistently high unemployment in areas of eastern Canada.
The fourth key driver here, as we look at our labour market, is the move and the increasing shift to a knowledge-based economy. As the magnitude and pace of technological change intensifies, labour demand is increasingly skill biased. Emerging across a number of sectors, you'll see rising skill requirements in health, oil and gas, construction, mining, and definitely other skilled trades.
Finally, on the reality of an aging population, while it brings forth a number of challenges in the Canadian context, its most pronounced effect is likely to be that of its impact on our future labour supply. Slower labour force growth will make it difficult to sustain past growth rates and improvements in our standards of living.
In summary, we can really see the need for a highly skilled labour force, one that's adaptable, flexible, and resilient in the face of all these pressures of change.
If I could, I'll now move specifically to skilled workers and shortages in that area.
Labour market indicators such as the employment rate, the unemployment rate, the labour force participation rate and real wages, provide no strong evidence of a generalized labour shortage in Canada at the present time.
However, a balance between overall labour demand and labour supply usually hides many instances of imbalances in specific regions, sectors and occupations of the labour market, with excess supply in some sectors coexisting with excess demand in others.
At the present time there are indications of shortages in several skilled occupations, in particular the health sector. We see these as a result of rising demands associated with population aging, combined with retirements among health professionals. We also see shortages in the oil and gas sector, largely as a result of the large investments in that sector, particularly in western Canada, and in management, largely as a result of the levels of retirement we are experiencing.
Most of the skilled occupations that are currently facing demand pressures are expected to remain in that situation over the next several years. Again, contributing to this will be the retirement of the baby boomers, opening up jobs across the spectrum of the occupations.
Market signals, such as higher wages, can certainly help to reduce those shortages over time by encouraging students to enrol in programs that lead them to be able to work in those occupations, and by encouraging employers to move from less buoyant or less healthy sectors to the hotter sectors, or the hotter regions and occupations.
But it goes without saying, certainly, that supporting high levels of PSE and training throughout the lifetime of Canadians really is important so that they have the necessary foundational skills to often be able to make adjustments to changes in the labour market.
I would just note here that in the recent budget for 2006, the federal government did propose a number of initiatives in support of a more skilled and educated workforce. Among those initiatives are plans to discuss with provinces a new approach to long-term and predictable support for post-secondary education and training, some immediate investments in post-secondary education infrastructure, and measures to support apprenticeship, among others.
With that, I would now turn to labour mobility as the next topic.
Labour mobility is the ability of workers to move between jobs, occupations, sectors and regions.
The type of mobility that we tend to focus on most, is the ability of workers to move to a different region or province to find a job—geographic labour mobility. The free flow of workers between provinces is an important component of Canada's economic union.
Labour mobility is the ability of workers to move between jobs, occupations, sectors, and regions of the country. Just to probe a bit deeper, I want to underscore three reasons it is important.
First, mobility is essential to growth and prosperity, as it shifts labour to more productive uses—to firms and workers that the Canadian economy can benefit from.
Second, labour mobility enables adjustment, including from the forces of globalization and technological innovation, which are changing the types of businesses and employees that are successful in Canada. To be able to adapt to these changes, workers need to be able to move from declining sectors and declining careers into other growth areas.
Third, no doubt citizens have the right to move within Canada. Enabling workers to move strengthens Canada's economic union and the economy as a whole.
There is no specific target for how mobile a workforce should be. In the absence of artificial barriers, market forces should determine how much movement you want to see. If a booming sector requires more workers, it can get them by paying higher wages or by offering relocation incentives, etc. However, if workers with good skills and experience are prevented from taking those jobs because they can't get licensed in different provinces or areas of the country, the labour market is indeed not functioning properly.
Some of the largest barriers to mobility involve workers being re-accredited, or their credentials being re-recognized, as they change provinces. Provinces, territories, and the federal government have agreed to work on the elimination of these barriers in the regulated professions. You will find those commitments where they were first agreed, in the Agreement on Internal Trade signed in 1994. However, progress has been slower than ideal.
A survey done by the federal-provincial-territorial Forum of Labour Market Ministers in 2005 found that 35% of workers had difficulties getting relicensed as they moved between provinces. An even higher proportion than that—50%—had trouble getting relicensed if indeed they were foreign trained, having acquired their credentials outside of Canada.
Concluding my comments on labour mobility, I will move on briefly to the recognition of foreign credentials. Immigration is expected to account for all net labour force growth within the next 10 years, so immigration does provide part of the solution to meeting our labour force needs of the future and our productivity challenges.
But research tells us that approximately 60% of employed immigrants in Canada don't work at the same level of job as they were doing before coming here, regardless of their education level. The biggest reasons for this are that we're not recognizing their credentials, they have insufficient language capacities, and they lack Canadian work experience required by employers.
Human Resources and Social Development has had in place for a number of years now a foreign credential recognition program, by which we're working with provinces, territories, other partners, and stakeholders such as regulatory bodies, sector councils, provincial assessment agencies, and post-secondary institutions to implement fair and more transparent credential recognition processes to address this problem facing skilled immigrants.
Since its inception in 2003, the program has funded a variety of projects, including diagnostics, research, partnership building, engagement of employers, and development of tools and processes to help speed up the processes of assessing and recognizing credentials, and making those processes more efficient, such as by using online regulatory exams, as well as piloting certain overseas integration services.
Initially, after consulting with the provinces, the program people focused their efforts on three regulated occupations, doctors, nurses, and engineers--in the case of the first two because of shortages across the country, and in the case of engineers because the majority of economic immigrants who apply to come to Canada actually identify engineering as their profession. Subsequently, based on further discussions over the last 18 months to two years with provinces and territories, we've now moved on to begin work with five other health occupations in demand--pharmacists, occupational therapists, physiotherapists, medical lab technologists, and medical radiation technologists.
Here too, as a next step, the recent federal budget set aside $18 million to be spent over the coming two years to consult with provinces, territories, and stakeholders on a mandate, a structure, and a governance for a national agency, and then to see us take the first steps toward the creation of such an agency to assist in this area of assessment and recognition of credentials.
Mr. Chair, that's it for me. We'd be pleased to answer any questions on those comments or on the materials we've brought, or on anything else the members would wish to put to us.
