Human Resources Committee on March 27th, 2007

[The Chair, Conservative, Dean Allison]

Thank you, Ms. Lemay.

We're now going to move to our last representatives this morning. From the Canadian Federation of Independent Business, we have Ms. Pohlmann and Ms. Charron here today.

I just want to thank the CFIB, which has presented throughout the hearings. No presentation has been the same, so we appreciate your bringing your different perspectives each time. Welcome. You have seven minutes.

[Corinne Pohlmann, Director, National Affairs, Canadian Federation of Independent Business]

Thank you.

Good morning. It's a pleasure to be here to talk about employability issues from the perspectives of small and medium-sized companies. As stated, my name is Corinne Pohlmann, and with me is Lucie Charron, our economist. She will be providing a brief overview of the current situation for SMEs in Canada, and I'll then follow up with some of the current challenges that SMEs are facing in dealing with some of these issues.

Before we get started, though, I want to give you a quick reminder of who we are. The CFIB represents over 105,000 independently owned and operated businesses right across Canada. You have in front of you a breakdown of our membership, so you can get a good feeling for where our members are located and what sectors they're in. You'll also note that they're a pretty good reflection of Canada's business population.

I'll now turn it over to Lucie.

[Lucie Charron, Economist, Canadian Federation of Independent Business]

Thanks, Corinne.

As most of you already know, Canada's small and medium-sized business sector is the backbone of the Canadian economy. It accounts for roughly 50% of our GDP and almost 60% of our total employment.

In terms of job creation, this part of the economy plays a disproportionately large role. This was highlighted in a recent study by Industry Canada that looked at net job creation by firms that have been in continuous operation for over ten years, something actually highlighted at the top of page 2 in our slides. Basically, this study indicated that when it comes to hyper- and strong employment, the smaller and medium-sized business sector has made a remarkable contribution to the Canadian economy over the last decade.

The next question we need to ask ourselves is if we want this sector to continue to grow and thrive. We need to understand its current challenges and issues. As Corinne mentioned, we represent 105,000 members. One of the things we do to stay abreast of current issues in the small and medium-sized business sector is regularly survey our members.

One of the questions we consistently ask our members is what their top issues of concern are. If you look at the bottom of page 2, the slide “SME Priority Issues” highlights our latest findings on that very question. As you can see, our members' top three priority issues right now are the total tax burden, government regulation and the paper burden, and the shortage of qualified labour.

If you look at the slide following that one, you'll notice that for a number of years now we have been watching the concern over the shortage of qualified labour gradually increase. In fact, in some provinces, like Alberta, the concern over the shortage of qualified labour has become so serious that it has actually surpassed the total tax burden. That's something we have never seen before in all our surveying, and we've been tracking these issues for a very long time.

Why should we care about this? We don't expect the problem to get better. We actually expect the problem to continue growing. A good example is that in December, 31% of our members indicated that they expect to increase full-time employment within their firm. These are relatively healthy levels, and we expect these levels to stay healthy. But what this means is that it will become harder and harder to hire more people.

If you look at the next slide, this is problematic because it's creating a rise in the number of unfilled positions across Canada. For example, the long-term job vacancy rate, which highlights the number of positions that have been available for four months or longer, has steadily been increasing since 2004. This is problematic because it's having a serious impact on the economy, in the sense that it is forcing businesses to forgo new opportunities or expansion opportunities simply because they do not have the resources to pursue these new opportunities. Although the problem is more acute in some provinces, like Alberta, it is a problem that we have identified across the country, in every province.

I'm now going to pass it back to Corinne.

[Corinne Pohlmann]

We know the shortage of qualified labour is a problem. We need to understand it.

On the next page is another recent survey, in which the CFIB found that SMEs have the greatest need for people with college education or apprenticeship training. This is followed by those that need people who have graduated from high school or have two years of on-the-job training. In fact, fewer than one in ten are looking for people with a university degree or management skills.

As you can see, there's really little variation in this need of skills by province. When you look at the next chart, though, there's a tremendous variation in the SMEs' demand for skills by sector. When you look at this, you can notice that almost half the business services, for example, are looking for people with a university education; two-thirds of construction firms need people with a college education or apprenticeship training; three-quarters of the transportation firms want people with a high school education; and almost 40% of agriculture firms need people with really no formal education. That's where their demands are. This really highlights the importance of making sure that you work with industry sectors when you're trying to deal with shortage-of-labour issues or shortage-of-skills issues.

When you look to the next page, how are SMEs dealing with this issue? The majority are actually hiring underqualified people and training them into a position. Doing this can bring additional costs and challenges for an employer. For example, we are increasingly hearing from our frustrated SME members that they are losing employees who are being recruited by larger firms after the SMEs have invested heavily in training them into those positions.

Interestingly, though, more and more SMEs are also improving their salaries and benefits. For some of them, this can mean they have to increase their pricing, lower their profits, and make do with less in order to compete for the people they need.

However, what is really of greatest concern to us, as Lucie pointed out, is the growing share of firms that are ignoring new business opportunities as they simply do not have the personnel to take such opportunities on. This will ultimately hurt economic growth, and it is the primary reason we need to find ways to address this issue.

In today's labour market, we know SMEs are doing their best to adapt. Many are training more than ever before, and they plan to do even more in the future. This next slide really is just here to illustrate the importance of informal training among small and medium-sized companies. The idea is that when you take on new training initiatives and want to aim them at the business market, those initiatives must take into consideration informal training practices if you want to have any kind of influence on the SME sector.

SMEs are also turning to non-traditional labour groups. The next slide really gives you a highlight. It's from Alberta, where we have done most of this work. All I want to point out here is that what is in parentheses is from 2002, and what's above the parentheses is from 2005.

In every sector in Alberta, we've seen businesses take on more folks from the non-traditional labour groups and have success in hiring them. The biggest increase has been among people with disabilities, with the number of firms having successfully hired them going from 16% to 27%. So they are moving in that direction.

Finally, I want to point out to you a new study that was released in December, on small business and immigration. We're trying to get an understanding of how businesses are dealing with immigration issues or all labour groups, and we started with new immigrants. What we found—this is on the bottom slide—is that 22% are actually hiring new immigrants. The bigger the firm, the more likely they're going to be hiring.

Probably the biggest and most key factor that came out of that study—and this is in the chart on the top of the next page—is the fact that there is a mismatch between what our small business sector needs when it comes to skills and what new Canadians come into Canada with, either through the permanent immigration system or through the temporary foreign worker program.

Just as one example, if you look at the professional category, which includes people with university degrees, about 7% of jobs among SMEs require people with a university degree, yet 65% of people coming in through the permanent economic immigration program have university degrees. Of those coming in through the temporary foreign worker program, 30% have them. So it's no surprise that we're finding so many frustrated highly skilled new immigrants in Canada who are unable to find jobs to match their skills. We need to find a better way of matching those two things together.

I will leave it there. We have a series of recommendations on the next two slides, from lowering taxes to allow for more salaries and training, to reviewing policies and programs, and so forth.

I know I'm running out of time, so I will leave that in your hands, so that you can go through it when you have a chance.

We'll be happy to answer any questions you may have.

[The Chair, Conservative, Dean Allison]

Thank you very much.

What we're going to do today is the same thing as we've done in the last couple of days. We're going to go with a first round of five minutes, just so we can get in two or three rounds of questions.

We're going to start with Mr. Silva, for five minutes.

[Mario Silva, Liberal, Davenport, ON]

Thank you very much, Mr. Chair.

And thank you to the witnesses, also, for being before our committee.

This is a very important issue for the economy of our country, of course, addressing all the issues around immigration and labour shortage in the country and what the best policy is.

I always feel that both our labour strategy and our immigration strategy are almost 10 years behind, and by the time we straighten this one out, we'll be another 10 years behind. I'm not necessarily faulting the present government, because I think this has been an ongoing issue for a very long time.

Some of you might be aware that I've been on the issue of undocumented workers for a long time.

We talk about the knowledge economy, which is really great. And we've certainly given a lot of points in our immigration system to a lot of engineers, for example, to come into Canada. I hear the number might be about 20,000 people every year.

The reality is how we're defining what a skilled worker is. In markets like Toronto, Vancouver, and even in Calgary, bring me a hundred terrazzo makers, a hundred pipefitters, a hundred carpenters. They will get jobs more easily than a hundred engineers will, even if they've graduated from the University of Toronto's engineering department. There is just such a huge demand for those types of skills, but they're not qualified in our point system, which hasn't given any value...which is really unfortunate. But there are not enough terrazzo makers. They're a dying breed in Toronto. We don't have enough carpenters anymore, or bricklayers. The average age of a construction worker in Toronto is 55 years old. That's the same average age of truck drivers as well.

People don't realize that these issues are not going to go away unless we somehow tackle them as well.

To the Canadian Federation of Independent Business, you have to also articulate, because I'm sure it's affecting your members as well. It's affecting their businesses, their ability to purchase homes and make investments. This is all trickling down to us, and we're not really catching on.

I realize there is a need to qualify the people who are here, and I feel a great sympathy for a lot of them because of our federal system and how one is able to get their profession accredited in Canada. But there is really a big piece of the pie in the labour market that is not being addressed by anybody.

We are still, on a daily basis, deporting people to their countries, people who are fully integrated in this country, who have jobs, who have homes, who have cars, who have children born in this country. It makes absolutely no sense that we're spending millions of dollars to deport people who are fully integrated, with good jobs.

And a construction job in Toronto is not like a construction job in Mexico. You're not getting $20 a week; you're making about $100,000 a year. It's incredible how highly paid they are. It's a very good job. More of these jobs are training people on their different sites and providing courses as well, so it's becoming a sophisticated type of position. I think that also has to be given some credit.

I would also ask that you, Corinne and Lucie, encourage the government to move in that direction, to recognize these people also as skilled people. They don't have to have an initial after their name, but these people do provide very valuable resources for our economy.

[Corinne Pohlmann]

If I may comment on that, that's exactly what the purpose of this report was. It was really to try to highlight the fact that what our members need are tradespeople, apprenticeship training, college education. Those who are being brought into the country are folks who are much more highly educated, and they get frustrated because they can't find the jobs that they have been trained for, and so many other jobs go lacking.

It's absolutely what we've been trying to push strongly in the work that we've been doing on the immigration system. I think the point system should better reflect the fact that the skills that are required in our country need to be those with trades and college education just as much, if not more so, than people who are more highly educated.

So absolutely, we can agree 100% with everything you're saying. We believe that.

We've also strongly encouraged more immigration programs that will allow for folks who may not necessarily have the higher levels of education. There are some good pilot projects started, but they haven't been expanded beyond certain parts of the country. For example, there's a pilot project out in Alberta that talks about bringing in folks to work in the hospitality sector and so forth, people who require a high school education. They are being very effectively used in those regions that need them. Those sorts of programs need to be looked at more closely and expanded to other parts of the country that really are in desperate need of people.

[The Chair, Conservative, Dean Allison]

We're almost out of time.

Ms. Lemay, you wanted to add something as well?

[Marie Lemay]

Yes, what I'd like to say is that I think it would be a huge mistake to say it's one or the other. I mean, I can't speak as much for the best type of skilled trade, but I can tell you that I travel the country, and there is a need for educated engineers.

What may be very surprising to you--it was surprising to us--is that when we started our program on the FC2I--from consideration to integration--we found that we do not to this day have the labour market information about where we need what type of engineering in this country. We're starting it now. We've got funding for it, and we're doing it now. That is really very important information.

But I can tell you that from anecdotes...and Toronto has always been our piece of mystery in all this, because all across the country the message is very clear. I had a VP stand up at a conference last year who said, “My challenge is that I have to hire 800 engineers in my Calgary office before the end of the year, and 1,000 in my Houston office. Where do I get these people?” And it's not just Alberta. But Toronto is the exception to the rule in the sense of trying to understand, and that is what this labour market study is going to give us.

[The Chair, Conservative, Dean Allison]

Thank you.

And thank you, Mr. Silva.

We're going to move to Mr. Lessard, for five minutes, please.

[Yves Lessard, Bloc, Chambly—Borduas, QC]

Thank you, Mr. Chairman.

First off, I want to thank you for your attendance here this morning and for sharing your knowledge and opinions with us.

My first question is for Ms. Lemay, but may also be for the Canadian Federation of Independent Business. It has to do with your comments on immigrants. I met with an immigrant group, the Fondation pour l'intégration professionnelle et politique des immigrants du Canada, two weeks ago. The group's representatives lamented the fact that immigrants do not have enough information when they arrive in the country—an issue you referred to this morning—so as to know how much extra effort they will have to make to adapt and upgrade their training.

If I'm not mistaken, Ms. Lemay, you were suggesting a working group or an office which could carry out this work. It isn't only about making immigrants aware of the requirements regarding their qualifications or their prior training. Should Canada not also make enquiries of countries where there is a large pool of immigrants, say China or India, regarding their training requirements for each one of the various degrees obtained?

[Marie Lemay]

Mr. Lessard, that's a very good question. Our study showed that information is very important. The more immigrants have access to accurate information before they make their decision, the more their expectations will be realistic. This may come as a surprise to you, but the first stage in the project was a snapshot. We tried to find out who was responsible for what piece of the puzzle, Canada-wide. It involved a number of jurisdictions. Sometimes, the information that was given to immigrants was completely false. That was no one's fault. Everyone has good intentions. It was normal for expectations to have been so high, and for people to have been so disappointed once they arrived in the country.

With respect to education, it's very important to be able to cooperate or discuss matters with countries from which there are large pools of immigrants, to see how their system compares to ours. That is one of the things that the Canadian Council of Professional Engineers does. We manage the accreditation of engineering programs throughout Canada. So we have expertise, and we meet with representatives from other countries to see how we could facilitate program recognition.

On an individual basis, one of our study's recommendations was to create a data base which could be used by all members of our council, by the professional engineering bodies, to have one single quick and transparent way of evaluating foreign credentials. The process is underway. We should have access to this data base shortly, and we know how important it is, in the selection process, to be able to tell foreign engineers whether they need to take additional courses or not. We will be in a position to do that. It would certainly be a plus, during the process, for people to be encouraged to contact us so that we could provide them with this information, etc.; it isn't only about education, there are many other things as well.

[Corinne Pohlmann]

If I could also respond, in regard to the foreign credential recognition programs and so forth that are being pushed forward, I think information is absolutely essential for the new immigrants who are coming into Canada. But the same information needs to be also provided to employers so that they can understand what it is that new immigrant is bringing to the table. It's one thing to have a professional who has an order in Canada, who may be able to help you with that. It's another thing when you're talking about a very generalized degree or even work experience, and understanding, as an employer, whether that experience is relevant to the position they have available to them.

So I think employers in Canada also need some of that assistance and information in order to better evaluate the people they're bringing into their firms. They have legislative requirements that they have to meet, in terms of safety for example, and they want to make sure that the people they're bringing in are going to meet those requirements.

So information is essential for the new immigrant. But it's also something that small businesses, in particular, need in order to be effective employers.

[The Chair, Conservative, Dean Allison]

You've got 30 seconds, Mr. Lessard.

[Yves Lessard, Bloc, Chambly—Borduas, QC]

We've just discussed the potential pool of workers within the immigrant population. We can't forget aboriginal people and people with disabilities. We haven't discussed people with disabilities much. We've heard from a number of organizations representing people with disabilities at this committee. There's a great deal of experience and studies have been carried out, but it would seem to me that the effort is not up to par with all these studies. What is going on? It seems as though employers are having a hard time integrating people with disabilities into the workforce. What is the first barrier to hiring people with disabilities that you have experienced?

[The Chair, Conservative, Dean Allison]

Just a quick response, because we are on overtime.

[Corinne Pohlmann]

If I may, probably fear. They don't understand what they need to do to accommodate somebody with a disability. I think understanding that is the biggest barrier for them. Rather than trying to understand, they'd rather look elsewhere.

In jurisdictions where they have no choice—and I think in Alberta you're seeing huge advancements in that particular area—employers are looking at people with disabilities more and more, because their options are fewer and they're making the accommodations they need. I think the biggest barrier is fear. They just don't know what they need to do to accommodate somebody with a disability.

[The Chair, Conservative, Dean Allison]

Ms. Moore, Mr. McKeown, do you want to add to that, just quickly?

[Bill McKeown]

I've spoken to inquiries and I've found their two concerns are fear--they don't understand how somebody with vision loss can do a job--and then the other thing is the added cost. We always hear that they would have to adapt the workplace. Who's going to pay for that? How are we going to make that happen?

[The Chair, Conservative, Dean Allison]

Thank you very much.

We're going to move to Madame Savoie, for five minutes, please.

[Denise Savoie, NDP, Victoria, BC]

Thank you very much for your presentations. You raised very important questions. I'll start with Ms. Lemay.

You said that only 20% of engineers were women. We women only account for 20% of parliamentarians. So, we also have our work cut out for us, as you see.

I wanted to start by raising the issue of accreditation on a national scale. Take engineers, for instance, because that is your field. Is it not absurd for there to be differences between the provinces? I would hope that when I am standing on a bridge it is as safe in Ottawa as it would be in Vancouver. Why would there be differences in accreditation from one province to another in this field? We could also discuss doctors. If I were to break a leg in Ottawa, I would certainly hope the treatment I would get here would be as good as in Vancouver.

Is accreditation the preserve of professional associations?

[Marie Lemay]

I'll answer your question point by point. To start, I would say that from an engineering standpoint, there aren't really any differences.

[Denise Savoie, NDP, Victoria, BC]

There aren't.

[Marie Lemay]

The first step is education. Then you need to acquire experience, pass an exam and obtain a licence. We have offices throughout the country, and one which gives accreditation for all engineering programs. That is how it works everywhere. If you get your degree in Quebec and you want to be able to practice in B.C., you get a checkmark next to education. However, given the nature of our country—and that is its beauty—there are various jurisdictions and provinces. The issuing of licences is a provincial area of jurisdiction. Each province has legislation regulating the issuing of engineering licences, and the body is trained to issue these licences.

For quite a while now the profession has been attempting to standardize the accreditation process for the 12 groups which grant licences, to facilitate moving from one province to the next.

In 1999, we signed an interprovincial mobility agreement. We were one of the first professions to do so. Today, over 2,500 engineers a year ask for licences in other provinces. They do so under this agreement, and in 99% of cases, they obtain their licence within five business days, and in more than 50% of cases, it probably only takes two days.

Mobility is now a reality. In four provinces they now simply ask to see our licence before they give us another. There's no real difference. To answer your question, I would say it goes back a number of years now, perhaps even to the Constitution.

[Denise Savoie, NDP, Victoria, BC]

All right.

Let's now discuss immigrants. You rightly said that we have some work to do upstream, before they even arrive in Canada. What are the shortcomings you have noticed in our process? What should we do to address the problem?