Thank you, Mr. Chair.
It's a pleasure not only for me to be here today, but also my colleague Mr. McKinstry, who's a senior policy analyst with our organization.
I won't take a lot of time today. I'm just going to raise three or four points and focus a little bit on some recommendations to you, and I'll be happy to get into a discussion about those.
I also won't say too much about the Canadian Chamber. I think most of the folks around the table are quite familiar with our organization. We do represent about 170,000 businesses across the country. As you can appreciate, our members are employers, who have a direct interest in the range of employability issues, and I hope to touch on some of those today.
Given the current state of our economy and our good economic performance, resulting in a 32-year low in unemployment, which has presented the labour market with some new and interesting challenges, namely the need for greater productivity in the face of new global competition and the emergence of skills and labour shortages, the chamber is pleased that your committee is undertaking the effort to study issues pertaining to employability in Canada. Skills and labour shortages are becoming increasingly apparent in many industries and regions of the country, and if this situation persists, it will continue to constrain our economy's ability to grow and develop.
We will focus our comments today and some recommendations on issues regarding the need for increased mobility of workers. We will talk a bit about employment insurance and the system that we have today, and the need, in our view, for some enhancement there and some reform dealing with how it can discourage workforce attachment and labour mobility--two important points in terms of the study or the work you're doing.
We want to talk also about high marginal income taxes for low-income workers, an issue we've been dealing with through several budget cycles, and we'd like to put that point on the table today. One issue that I know many of you are familiar with is credentials recognition. And finally, we'll talk a bit about apprenticeship programs, another important component of our economic development.
First of all, let's talk a bit about mobility of the labour force. The mobility of labour within Canada is certainly essential to ensuring a well-functioning economy. Labour mobility refers to the ability of qualified workers to practise their occupations wherever opportunity exists. Currently, 15% to 20% of workers in Canada work in regulated occupations and trades. Most regulated occupations and trades are governed by regulatory bodies at the provincial level or by provincial governments themselves.
Chapter 7 of the 1994 Agreement on Internal Trade intended to enable any worker qualified for an occupation in one province or territory to be granted employment opportunities in that occupation in any other province or territory. Progress to fully implement chapter 7 of this agreement on trade has been unduly slow. For many occupations, licensing requirements vary significantly between provinces. Regulators of many professions are still grappling with issues such as legislative change, scope of practice, educational requirements, and assessment mechanisms. The chamber recommends that chapter 7 of the AIT be fully implemented.
Workers who cannot move freely and practise their occupation throughout the country will be limited in their ability to take advantage of opportunities for their career, and the extra costs and delays for those who are registering to practise their profession in another province represent a financial loss to the employee and an economic loss to society. Additionally, there is a loss of productivity and competitiveness if employers face delays in filling job openings when having to hire employees from out of province. This can have the secondary effect of detracting investment. As such, the chamber recommends that federal government encourage provincial and territorial governments, professional bodies, and trade unions to resolve outstanding rules and regulations that discourage the free movement of labour.
I'll deal for a moment with the employment insurance system.
Our current system, in our view, does not do nearly enough to encourage workforce attachment and labour mobility, and in some cases is a barrier to labour market participation. The primary purpose of our EI system, which is funded by both employers and employees, as you well know, is to provide temporary financial assistance to those who lose their job through no fault of their own. However, the manner in which the system is designed can discourage workforce attachment, labour market participation, and labour mobility. This is because individuals can remain in seasonal occupations--just to pick one example, and I'll come back to that in a moment--as many in this country do, and collect EI benefits for the remainder of the year. In addition, there are no benefit sanctions built into the EI program. As such, repeat users of the system receive the same level of benefits as first-time or infrequent users.
I'd like to spend a minute on one recent program re-announced by the government that greatly concerned us and employers across the country, and that is the EI benefits pilot project, the so-called seasonal gappers program. This 18-month pilot project, offered to those who live in regions where unemployment exceeded 10% at the time--that's now been changed to 8%, which we can talk about--will increase EI income support by providing access to five additional weeks of benefits to EI claimants, up to a maximum of 45 weeks of benefits.
The Canadian Chamber believes this is counterproductive to addressing the labour and skills shortages that are prevalent throughout Canada. Further, the chamber recommends the re-establishment of EI as a true insurance program. That, I think, is the most significant issue we have to grapple with when it comes to talking about the employment insurance program--to get it back to what it was intended to be. This would enhance the efficiency of labour markets, stimulate productivity and economic growth, and therefore increase the standard of living of all Canadians over time.
High marginal income taxes for low-income workers: it sounds like a real disconnect, and it is. It's a really unfortunate one, and one that through several budget cycles, as I mentioned, we've been trying to address in Canada. Hopefully we will get there.
More needs to be done in terms of providing tax relief for low- and modest-income earners, especially families earning between $25,000 and $45,000 a year. For these families, whether a single earner or, say, a couple with two children, high marginal tax rates discourage work effort, because many of the public transfers they receive--for example, child tax benefit, GST and provincial sales tax credit, property tax credit, student financial assistance, and social welfare--end up being clawed back as income rises. Indeed, for many low- and modest-income families, the effective marginal tax rate, after factoring in income-tested benefits, is higher than 60% and higher than the rate facing Canada's top income earners. This is not only inequitable but it also sends a strong negative message about the merits of working, saving, and upgrading one's skills in the economy.
As such, the chamber has recommended that the federal government allocate most of the planning surplus to tax reduction, particularly for low- and modest-income families, because they face the highest marginal rates of all as a result of clawbacks of multiple benefits.
In terms of foreign credentials, each year Canada receives, as I think you well know, somewhere between 220,000 and 245,000 immigrants in total. I should point out that this number includes refugees, which is a significant component as well.
Many of these immigrants are highly skilled. Despite having a higher level of education, immigrants face an increasingly difficult time in the job market, and suffer economic loss because their education is not recognized. Statistics Canada reports that 70% of newcomers who tried to enter the labour force identified at least one problem with the process--for example, transferability of their foreign qualifications, lack of contacts, and language barriers.
Many skilled immigrants who come to Canada are finding it difficult to obtain employment in the profession or trade in which they hold credentials because such credentials are not recognized by employers or professional associations. This presents a significant obstacle to attracting immigrants and it undermines our competitiveness. No mistake should be made: immigration is a competitiveness issue, given our demographics in this country. Furthermore, faced with having to incur costs to repeat their studies or undertake additional training, some simply give up, resulting in a productivity loss to our economy.
The chamber believes the federal government has a role to play here, a fundamental role, in addressing the disconnect between the immigrant's application process and foreign credential recognition. As such, the federal government must work with provincial and territorial governments, professional and trade associations, educators, and immigrant service organizations to initiate development of a fast-track foreign credential assessment and recognition service for Canada that could be used to evaluate professional trade qualifications and certification in regulated and non-regulated occupations.
Just in the interest of time, Mr. Chair, I didn't get into a number of issues today in terms of what the recent budget did, but we fully recognize that there was also a focus on that very issue in the recent federal budget.
In terms of apprenticeship programs, Canada does not train enough apprentices to meet current and future demand. That's the statistic we deal with. Currently Canadian employers pay between 75% to 90% of the cost of apprenticeship programs that link training and employability. Apprenticeship training is provincially and territorially driven, but it requires the participation and commitment of the federal government as an overseer for national goals and standards, market orientation, and competitive positioning internationally.
Standards respecting the quality and relevance of the apprenticeship programs are lacking, and accessible information about jobs is missing, particularly for those needing to make career changes. Access to specific training without duplication is needed.
A broader range of competency, such as mathematics, science, business entrepreneurship, team building, and leadership development is required within the traditional curriculum. Skilled trades must attract an equitable representation of students, retain them in the industry, and recognize the value of their training and skills internationally.
Currently there is a gap between training that is provided and skills that are required. In order to bridge the gap, data needs to be collected to quantify and qualify specific needs for training people. The information could then be used by employers, government, post-secondary institutions, and industry associations as the basis for appropriate programming to meet the needs of industry.
The recent budget recognized this need for greater apprenticeship participation and provided some positive support measures to both employers and apprentices. However, a sustained effort is required by both government and business to ensure that there are adequate opportunities for individuals to enter into apprenticeship programs.
Those are our formal comments today, Mr. Chair. We appreciate the opportunity to make them and would be happy to elaborate on some of these points as we go along.