Human Resources Committee on June 20th, 2006

[Denise Savoie, NDP, Victoria, BC]

Thank you.

I'd like to talk about accessibility of skills training, or lack of it. In my riding office I've heard from countless individuals who would like to take training, who are adults, and have families--some of the examples you gave, Ms. Seward. It is clearly a huge problem.

Going back to EI, we've been given the statistic that $2 billion of revenue from premiums paid is just going back into general revenue. What do you think of using some of those funds to allow these adult workers to benefit from employment programs, entrepreneurship programs, whatever they might be, whether it's at the low level of literacy, right up? At the moment it seems they have to be either in a specific category of younger workers or receiving EI benefits. So we've created a whole number of barriers to receiving training. I have a number of cases in my riding that illustrate that.

I'm wondering if you would comment on that.

[Sharon Manson Singer]

Thank you very much.

First of all, we have to recognize that fewer than 50% of workers in Canada are covered by EI. That's another shocking statistic, and in some provinces it's less than that.

In the old days, it used to be that a job was your first form of income security, and then if you fell out of a job, you fell onto EI, and that was your next form of income security. And then, if you fell off EI, you fell onto welfare. But now that's switched. We have more people on welfare than we have on EI. So the access issue with respect to EI is very difficult for most workers, because they don't have it.

Using the funds that are there is really looking at less than half the workforce in Canada. It means that the way the program is designed doesn't match the way people are now working. We have a very different kind of work history and work pattern, especially for some of these vulnerable workers we've been talking about who are less educated, are in lower status jobs, and have more bouts of unemployment. They just don't have access to it. As we said about Pedro, who has EI, he's going to be one of the lucky ones because he's going to have access to adult skills building and training. But those people like Nadia and Debbie who are not covered by EI because of their work hours, because of their lack of work experience, do not have access to it.

Coming back to the expenditures issues and ways that we can build incentives, I think we need to look at other models, not just EI, because it is not going to address the majority of our workers in Canada.

[The Chair, Conservative, Dean Allison]

Thank you, Ms. Manson Singer.

We'll move on to Ms. Yelich for the last question of this round for seven minutes, please.

[Lynne Yelich, Conservative, Blackstrap, SK]

Thank you.

I really appreciated all the presentations. I know we will have to have you back. I think you all are groups with solutions, and you are certainly going help us at this critical time we've reached.

I have a couple of questions. You spoke--I think it was Michael--about chapter 7 and the slowness of the implementation. Do you have any cost analysis of that? I'm thinking that it varies from province to province. Would you have what that costs our economy in dollars or in some means?

I'm going to ask them really quickly, and then I'll sit back.

The other comment made was about encouraging businesses.... I really don't want to bring this into the debate. I only want you to go home, think about it, and come back next fall and tell me what you think. Right now there are reports out that women aren't going into the workforce because they don't have child care. I'm of the mind that it is time for businesses to step up to the plate and bring in child care spaces for their companies or businesses. So you're not going to look for some central location in downtown Toronto, or downtown here; if you work at an auto dealership, if you work at an apartment or somewhere downtown, or anywhere, the child will be close to the parents.

I want you to think about that, about encouraging that. I think that's an encouragement for businesses. So I'd really like you to think about that, because I don't want to get into any sort of child care debate right now.

The cost analysis in chapter 7 would be enough, thanks.

[Michael Murphy]

I'll start my answer to the question with respect to the costs of that particular chapter of the Agreement on Internal Trade with a general comment that it's a question often asked.

I'll say two things. First, we did a study several years ago at the Canadian Chamber that tried to come up with a bit of a global impact in terms of what the barriers to internal trade and the movement of goods and people and services in the country were costing the economy at the time. So we have some old data on that.

I think it's fair to say--and my colleague Mr. McKinstry just recently appeared before the Senate banking committee on this issue--that I don't think we have anything specific today.

Rob, maybe you can add to the answer I've just provided.

[Robert McKinstry, Senior Policy Analyst, Canadian Chamber of Commerce]

That same question was posed to us when I appeared last week before the Senate Standing Committee on Banking, Trade and Commerce, and my response to them at that time was to encourage the federal government or the provincial governments collectively to undertake such a study.

We believe the information would be incredibly important in terms of advancing the issue itself and in bringing more information in terms of the real costs to the economy. Right now we can simply provide examples, but I don't think that level of understanding will really move the yardstick in terms of governments taking action to resolve the existing internal trade barriers.

[Lynne Yelich, Conservative, Blackstrap, SK]

I wondered if you could alarm some provinces into considering it, as B.C. and Alberta have done, and Saskatchewan--and we can go on. When you cite Saskatchewan, I can see why you're doing studies there, because they are all crown corporations. There's not much of a business atmosphere there.

Mike.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Mr. Murphy, I sense that you have more to say. Could please explain more specifically how you feel EI is being used in ways for which it was not designed?

[Michael Murphy]

Sure. Let me start with two or three important broad points. The first one, which I've already mentioned, is that the system has effectively been changed so much from its intended purpose. That's the biggest single difficulty with it today. We no longer have a true insurance program; we have a grab bag of social policies wrapped under this payroll tax program, which both employers and employees pay. So you start with that fundamental problem, and the numbers are now pretty staggering. Half the premiums collected go to pay for things that have nothing to do with regular benefits for employment loss.

So you start with that, and this is going to create all kinds of difficulties. I think Sharon just mentioned one of them. If you're thinking about good public policy in terms of social programs you want to develop, you're already cutting out a whole bunch of people who are not paying EI premiums, because they're not employed or not part of the program in some way. That's clearly an issue.

In terms of dealing with some of the specifics that exist, I mentioned the 1.4 times premium that employers continue to pay today. This is a decades-old decision. The world of work and the marketplace in Canada today are very different from the world at the time this rule was brought in. We don't think there's a rationale anymore to continue to ask employers to pay 1.4 times the employee premium. Our recommendation is to phase it out over a number of years—say, four years—and get it down to a level premium.

We're also very concerned about employer over-contributions to EI. In our view, this is a major issue in that employees with an over-contribution in a particular year will get that refunded through the tax system, but that's not true for employers. We have spent a lot of time trying to get moving on this issue. What we are told is that it would be administratively difficult to design a system in Canada's the tax program to track and refund employers who make the same overpayment as employees when they change positions during the year, and the payments are made again.

We've quantified the problem to the extent that we think this is not trivial. Perhaps it's in the several hundreds of millions of dollars a year of over-contributions by employers. So while there are some other issues under the broader framework, those are two specific ones we think should be addressed.

[The Chair, Conservative, Dean Allison]

Okay, that's it for time.

We're going to move on to our second round.

Mr. Regan, you have five minutes.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you very much, Mr. Chairman.

I'd like to thank our guests for joining us this morning.

Let me first ask a question to Ms. Manson Singer. You had some comments about literacy, which has been a big interest to me.

A couple of months ago I heard the new president of the Nova Scotia Community College, Joan McArthur-Blair, speak to the Halifax Chamber of Commerce. One of her comments was that the biggest challenge community colleges face is literacy. It wasn't exactly what I would have expected coming from her. You would have thought it was funding or something more related to their actual activity. But obviously, at the base of adult learning is literacy.

I'd like you to expand on this from the topic you started there. Also, are you aware that literacy funding by the federal government is under review, and that calls for proposals have not gone out since April 1?

Ms. Yelich can correct me if I'm wrong about that. We're still waiting for those. I know that literacy in Nova Scotia, for example, has had no funding since March 31.

Is it your view that the Government of Canada needs to invest more in literacy, the same amount, or less?

[Sharon Manson Singer]

Thank you very much.

I am very much aware of the issue with respect to literacy and colleges. CPRN recently hosted a national round table on quality in post-secondary education. We had several university presidents and presidents of colleges participate, about 40 people altogether.

Clearly the place that adult learners are most often attracted to, certainly the kind of adult learners that we're talking about in terms of these vulnerable workers, is the community college. That is often the place where basic adult education is offered as a place for them to go.

Again, though, the issue with respect to literacy and access to these literacy training programs is complicated by the fact that there is no one-stop shop, and for the most part, with respect to access, the websites that are there are very difficult to read. Imagine if you're a person who has a low level of literacy and your only access point is an Internet site that you can't read. It doesn't do much to help.

What we are seeing that is very beneficial is a kind of hotline approach, with trained counsellors on the other end who understand the specific needs of these adult learners, because of course, that's going to be the easiest way for them to access our system and make a big difference.

So with respect to raising the level of literacy in Canada, when we're talking about nine million working-age Canadians without basic levels of literacy, as an issue of productivity it is very important for us to invest in assuring that this population in particular is lifted up. It's a staggering figure, and we are far below OECD countries in terms of our investment in our adult learners.

One of the things that we think is important as we talk about these kinds of incentives is to really create a culture of a right to learn and an expectation in our society that we will continue to learn, and that adults too have a right to learn. So those are things that we can look at and put in place as part of our contribution to building literacy in our country, because building literacy builds productivity. It's a simple equation.

[Geoff Regan, Liberal, Halifax West, NS]

I hope I'll have another chance to talk about this idea of the right to literacy and to understand more your thoughts on what that right would mean, what its extent is, if there are the limits on the right, and so forth.

But let me move to another question--for Mr. Murphy--because I have only a limited amount of time.

One of the comments we heard today, I think from Ms. Manson Singer, was that employers don't think that low levels of literacy are an economic problem.

That was Ms. Seward. Thank you very much.

How significant a problem do you think it is that employers don't see this, and what is the role of your organization in trying to combat that misapprehension, if that's what you think it is?

We heard also that employers don't see immigration as key. That's very disturbing, and again, the same questions apply. How significant is that, and what's the role of the chamber in trying to inform businesses and make them see the importance of immigration?

Lastly, on seasonal industries, it was definitely Ms. Seward who talked about seasonal industries in, for instance, Prince Edward Island and your experience there. I would like to hear your response to her comments about the fact that there are coastal communities all over Atlantic Canada and Quebec, for example, that rely on the fishing industry, to which the fishing industry makes a very substantial contribution. There are other seasonal industries, such as tourism; sometimes forestry is seasonal, of course; fruit-picking; and a variety of others that play a role.

Some of those employers must be members of your organization. What do you say to them about how they can have employees if there isn't something to support seasonal workers? How would you address that?

[The Chair, Conservative, Dean Allison]

You're almost out of time. You have all these long questions with very short answers.

[Michael Murphy]

I've got three questions, and I'll try to be very brief.

Literacy is obviously a question of huge importance for the economy. We hear statistics about high school dropout rates, and the numbers are staggering in terms of the problem in the economy. Clearly, that's going to be a problem for all of us in business and the economy if you can't get the right kind of basic skill sets. I can't say that I have ever heard a member tell me that they didn't want me spending time on literacy. I get feedback, believe me, daily from members regarding how they want me to spend my time. There's no shortage of that input.

In terms of education, if I can use the broader term, we at the chamber have chosen to focus our energies on the post-secondary level. That's not to say that K to 12 and what we're doing or not doing in the educational system aren't important, but we have focused very much on the post-secondary side. There are a number of reasons for that, which I won't get into at the moment.

With regard to immigration, I manage our policy process at the chamber. We have our annual meeting every year in September; this year we're going to be in Saskatoon. I already have five different submissions from various local chambers across the country on immigration issues they want on the agenda of what we will be debating in Saskatoon. The interest level from my membership on the issue is certainly high. That's why I spend a fair amount of time on the issue. I think Mr. Coderre might be aware that the chamber, as a whole, has been very active on the immigration file for many years now. Certainly through the 2002 reform process, it played a major role.

On seasonal industries, you're darned right that these are our members as well. As opposed to what I'm telling them, some of the feedback I get from them is that they can't find workers. They can't find the people they need to get the job done. Part of the reason for that, I would submit, is that the incentive for them to go and do seasonal work isn't there. We hear frustrations from people who are in the fruit business and in others— Rob, I don't know if you've got other examples—and they are saying we've got to do something.

Those are very quick comments, Mr. Chair, and I appreciate they may have been a little faster than they should have been.

[The Chair, Conservative, Dean Allison]

I appreciate that.

We will move on to Mr. Lessard, for five minutes please.

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

Thank you, Mr. Chairman.

I would like to refer very briefly to a statement made earlier by Mr. Murphy, namely that the number 6 pilot project has not proven to be of any value. It seems to me that this statement is incorrect and not consistent with the facts. In fact, it has been proven at the department that this project, aimed at helping the persons who were falling into a “black hole“, had met its goals in 98 per cent of cases.

However, I partly agree with Mr. Murphy when he says — this is somewhat of a generalization — that employment insurance is mostly used for social programs. Obviously, this is not consistent with our wishes. As for Mr. Lake's question, there are no examples. There again, we are getting into general ideas. I understand that his main concern is that employers are paying one tenth of 4 per cent more than the employees.

I would like to address my next question to Ms. Manson Singer and Ms. Seward. As we know, one solution for eventually meeting the manpower shortages would consist in incentives given both to older workers and those who have quit or lost their job to encourage them to stay on the labour market. In fact, most of them would wish to do so, especially those whose retirement fund is not very substantial.

Let me give you the example of a worker from the Montmagny area who is 57 years old and who lost his job when he was 55. He spent two years in training and applied for 91 different jobs in the same year, including outside his region. This man is in good shape, physically and intellectually, but because he is 57 years old, he was called for an interview by only one employer. Yet he wants to work. I know his name and I know where he lives. However, I could give you dozens of other examples of this kind.

How can we address such a problem? We are wasting the talents of a qualified member of the labour force, a person who even took extra training in another area. Here we have a person who is in good shape, a person whose knowledge, skills and knowhow are at the society's disposal. Yet we are not able to benefit from all that or to find an appropriate job for this worker. How should we manage this issue? I suppose that you have already given some thought to this matter.

[Sharon Manson Singer]

Let me start by talking a little bit about the aging workforce.

CPRN now has a study under way, as part of our human capital adult learning and work segment, assessing the implications of an aging society for skill shortages. We're very directly looking at ways in which we might use our talented and skilled aging workers to make a difference in terms of helping with skill shortages.

One of the issues that I think you're describing in terms of the response of the employer to an older worker is one of simple discrimination. I think it's never simple when it is discrimination. Developing a flexible adaptive workplace also means that we need to have a way of viewing an older worker as a valuable resource, rather than someone who should be pushed out for those young workers who don't exist.

I think there are a number of simultaneous issues involved when we're talking about older workers. There's the relationship between new income from employment and the effect it has on pensions. There are disincentive issues with respect to the tax levels on that new income. There's then the issue of a flexible, adaptive workplace that may not value those older workers in the way it should.

I think we have done a great deal of work in the past in this country on helping to change public attitudes towards workers. This is a new area for us, and one that we will have to adapt to because we have a shortage and we're going to have to find more ways to use people.

[The Chair, Conservative, Dean Allison]

Thank you. That's all the time we have for this round.

Ms. Savoie, five minutes.

[Denise Savoie, NDP, Victoria, BC]

Thank you very much.

It appears the more time that elapses when someone graduates or leaves high school for a working career, the higher the illiteracy rates are and the greater the lack of numeracy ability is. It speaks to me of the absence of a culture of learning in our society generally, on the one hand.

On the other hand, many of you have said that employment insurance is not doing the job and you're unhappy with it for different reasons. I believe, Ms. Singer, you said that we need to look at models other than EI.

Is it the way we're using EI? Is it indeed a different model? Is it both? If we have time, I'd like a response from all of you.

I don't think, Mr. Murphy, you're suggesting that employers should not contribute to training. I don't think that is what you were suggesting.

I'd like some clarification and some answers.

[Shirley Seward]

In addition to the use of EI for training, I think it's extremely important in Canada that we have a real commitment to upgrading skills at the pan-Canadian level.

There are programs in Canada, in the province of Quebec, for example. There are different fiscal measures and other measures in other countries that are designed to try to increase the amount of training that is provided to workers in the workforce. I think it would be extremely useful if this committee could look at that range of policies.

They're not only fiscal policies. There are programs in the U.K., for example, that assist employers in providing better training, as well as more training. Those are very important.

In terms of what we call the youth-to-school transition, you're absolutely right that the longer it takes for students to get into the workforce, the more they lose their skills. They lose all of their skills, and this is very serious.

I think we have to put a great deal of emphasis on helping young people get into the workforce, working with some of those very valuable older workers you were referring to in order to learn from their skills, and the transition will be easier. We can do it through collaborative arrangements between the school system and employers so that students know at a very early age what the possibilities are and can make the transition more smoothly.

It seems to me we need a pan-Canadian commitment to lifelong learning that does not stop after people come out of grades K to 12 or the post-secondary system; we need it throughout life.

[Sharon Manson Singer]

To add to that, I would say the learner pathways to this kind of adult education should be efficient, easy to follow, and short, so that they're not a maze of incomprehensible, uncoordinated approaches that have no financial support. We want people to be efficient; we want them to be productive. The learner pathways to adult education need to be well defined, efficient, and short so that we are supporting people to come back into learning in a way that is going to meet their needs.

As adults, we don't like to stand in lines, and we don't like to be told to go to the wrong place at the wrong time and not have the supports there that we expected to have. We want our life to be efficient, and so it should be. I think this is something we owe to Canadians: well-defined learner pathways, short, and efficient.

[The Chair, Conservative, Dean Allison]

Are there any other comments?

[Michael Murphy]

I'll just mention that the chamber has two focuses. When you think about all the things the federal government can spend money on, there's a great wide list, and the demand on government is ferocious from so many sources. Our focus is on productivity and the standard of living. We have been recommending that we start thinking about targeting spending a lot more than we have. The two things we've settled on—for a variety of reasons, but they're basically dealt with by talking about productivity and standard of living—are infrastructure and education.

Education has a great many components. We zeroed in a little on post-secondary education for some specific reasons related to what it can do for the economy, but education, nonetheless, made our “top two” list of things for government to do.

When you come to deciding how you're going to do this, my beef with EI, not to prolong the point, is to say that it is clearly not the only vehicle you should be thinking about here. That's a program that has a purpose. If you want to design a program—and I don't disagree with Shirley at all in thinking about something a bit more globally—education and training, if they're going to have the priority they should have, should be thought about other than as a quick add-on to some other program that has an entirely different purpose. That's the context within which I was coming at the issue.

[The Chair, Conservative, Dean Allison]

That's all the time. We'll move to Mr. Lake for five minutes.