Human Resources Committee on May 15th, 2008

[Garth Whyte]

Yes.

[Lynne Yelich, Conservative, Blackstrap, SK]

You said you were non-stock-market. For the committee, does that mean hairdressers, hair styling shops, or what? What are the small businesses? Just give us the statistics.

[Garth Whyte]

We represent small and medium-sized enterprises, which are businesses with fewer than 500 employees. Our average member would have 10 employees. We have members with one employee and members with no employees. To become a member, a person has to own his own business. That's our definition.

[Lynne Yelich, Conservative, Blackstrap, SK]

How many of these people try to avoid employment insurance by not offering it? Is this possible with contract work?

[Garth Whyte]

I wouldn't have a handle on that. Lots of times, we have found that employees are on contract at their request. Right now, we're finding with this market that the employers have to be as flexible as possible to accommodate the employee, which is a good thing.

[Lynne Yelich, Conservative, Blackstrap, SK]

Could you give us a profile of the people you represent today from coast to coast?

[David Stewart-Patterson]

The Canadian Council of Chief Executives is on the other end of the spectrum of the business community. We limit our membership to 150 people. Each of these individuals is either the chief executive officer or a major shareholder of a large Canadian enterprise. I think our average member company would have annual revenues on the order of $5 billion.

[Lynne Yelich, Conservative, Blackstrap, SK]

Are there any statements you want to make about your organization?

[David Stewart-Patterson]

Perhaps I can just follow up on some of the comments, because I think we end up in the same place, but our members would come at it from a somewhat different perspective.

Certainly our members have been increasingly concerned in recent years about what is developing into a serious structural shortage of labour. We are seeing that shortage of labour not just in the hot spots where it started and is most acute—in areas like Alberta, spreading into Saskatchewan, and so on—but we are also seeing members who are concerned about a structural shortage of labour in every region of the country in every industry.

However, I think we would come at it by saying that it is critical that we look at all barriers that may be inhibiting each Canadian from achieving his or her full potential. That covers a range of policies, from barriers to education and training to tax disincentives, whether it's the kind of issue Garth was talking about or the rate at which we claw back child benefits and the extent to which that's a disincentive for people trying to get ahead, through to things like credential recognition and how we help immigrants fill gaps between what they have and what they need to have in order to practice their profession here in Canada. So there's a whole series of policy issues and policy levers, and I think the employment insurance system is one of those levers. Our members typically take a more holistic view of these things. We don't look at employment insurance premiums in isolation; we look at the overall tax burden, both in terms of the overall rate and the complexity and the costs of compliance.

Frankly, large companies have more options. When it comes to dealing with a shortage of labour, generally speaking, larger companies are offering higher-value, higher productivity jobs, which means that to the extent qualified labour is available, they can afford to bid more for it in the labour market. They also tend to have economies of scale when it comes to offering training internally; they don't depend on external suppliers for training services to the extent that a small or medium-sized business has to. As large employers, they can also attract labour from other locations. Whether that's what we see happening in places like the oil sands, where companies are flying in workers from all over the country, large companies do have the resources to seek out qualified labour overseas and to try to bring it into this country—although there are serious problems with the immigration system.

They can also go to where the people are who can work. I know of at least one of our member companies that's consciously going into smaller communities because the work can be done there. They recognize that there are people in those communities who want to stay in those communities, and they're taking advantage of that labour—which may, in turn, be causing problems for the local restaurant owners, because they're offering a different kind of work. But larger companies also operate multinationally, and therefore if they can't find the people they need here, they can also move the work outside of Canada. That's another option, obviously.

[Lynne Yelich, Conservative, Blackstrap, SK]

Gord is anxious to get a question in, so I won't ask--

[The Vice-Chair, Liberal, Michael Savage]

Mr. Whyte might have a quick response on this.

[Lynne Yelich, Conservative, Blackstrap, SK]

I just want to make a really quick comment. On the weekend, in the Saskatoon StarPhoenix, I think McDonald's was offering $11- or $12-an-hour jobs, with benefits and opportunities to grow. So I think Saskatchewan's economy is not reflected, as we saw in the employability study. I think, as Mr. Whyte said, jobs are becoming quite well paid.

I think Gord wants to ask a question, so if you could answer quickly....

[The Vice-Chair, Liberal, Michael Savage]

We only have 30 seconds left, so I think we'll have to have Gord the next time, and he can share with Mike then.

Mr. Whyte, did you want to add something?

[Garth Whyte]

Thanks. I just wanted to debunk some myths. First off, as I said in my testimony, we are looking at this in a holistic manner, at both immigration policy and training, and we're doing a major training survey.

As far as the difference between our two groups is concerned, in our non-stock-market economy, when times are tough, we hold on to our people. In the stock market economy, when times are tough, they cut people.

Secondly, we did a major survey with a large firm, Hewlett Packard, asking Canadians their views of their dream job. They said it was owning their own firm. In the past, it used to be, “I want to work in a big business or in government.” Today they want to work in a small firm, or own their own small firm. That's been shown with public opinion surveys over and over.

Why is that? They see these jobs as high quality ones, with higher value for living, and there are a lot of things there. So I'd hate you to leave with the impression that only large firms have good jobs; that's not true. Actually 60% of total employment is in firms with less than 500 employees.

[The Vice-Chair, Liberal, Michael Savage]

Thank you very much.

We have time for one more round.

Ms. Dhalla, five minutes.

[Ruby Dhalla, Liberal, Brampton—Springdale, ON]

Thank you very much for your presentation.

I just want to touch upon two things. Both of you have mentioned your support for the creation of this independent board. We know that from the information we've received right now, they've stated that the board would consist of a board of directors of seven, along with a chief executive officer, and it would be allowed to invest.

Could you perhaps both give us your perspectives of what you would perceive this board would look like and what the mandate should be?

[David Stewart-Patterson]

Our expectation is that the board would be composed of people who have expertise in the relevant issues. Good corporate governance rules would apply to this, as they would to any crown corporation, so I would expect to see that the Governor in Council, in making appointments to the board, would be looking for relevant expertise on all of the matters that would come under its jurisdiction.

One issue that came up in another committee, with respect to the composition and mandate of the board, was to what extent it would have the capability to kind of conduct independent analysis. In our view, the board should have the mandate, in fact, to not just look very narrowly at the rate-setting exercise, but I think to conduct analysis and offer advice to the government. I think the composition of the board should reflect that level of expertise as well, and not just actuarial expertise.

[Garth Whyte]

I would agree with that. Having had experience with workers' compensation boards across the country, you see different models. One is a purely political model, where you just put people in there as political appointments, and then all of a sudden that will influence the rate-setting mechanism. So we'd like a stable board, if possible. We'd like a non-partisan board, with people with expertise, which I'd like to see a committee agree upon.

Informally, it's been identified that the nomination committee will be the EI Commission, but I don't think it's formally stated in the act. I'd like to see it formally stated in the act because that would give employers and employees more say, rather than the political party in power.

I'm assuming it's a part-time board. We're talking about managing a $2 billion surplus. I don't know how much is full-time.

Also, I'm concerned about administrative costs. I don't know how much support is being put under here, and I'd like to look at that.

So I don't have the full scenario, but I think the model could work. We'll have to see.

[Ruby Dhalla, Liberal, Brampton—Springdale, ON]

The other question I have concerns page 12 of your presentation, where you asked businesses how helpful each of the EI programs have been to their particular business. The results were actually quite interesting when I looked at them. As an example, you talk about the labour market partnerships that are provided under EI programs. I believe 10% of the people said they were helpful, 40% said they weren't, and then 34% said they were not even aware of those programs.

As you continue and ask about skills development or targeted wage subsidies or job creation partnerships, there is a very high percentage of people who are not aware of particular programs.

We're talking about the creation of the board, but I think for all of the committee members, and even in terms of feedback, could you perhaps identify the reasons--and I'm sure it's multi-faceted in nature--businesses are not aware of all these EI programs that are in existence?

[Corinne Pohlmann]

Again, we're still analyzing a lot of this data, but part of the answer to that is that they're not well publicized, so they don't necessarily know about these programs.

Many of them are programs that maybe their employees know about, but it's good for them to know about them as well, because they can perhaps let their employees know--when things happen where they have to let them go, for whatever the case may be--that these programs exist.

I think most importantly, a lot of these programs were created at a time when our labour market was very different, and they're not necessarily as targeted today to what the needs are today. I think that's part of the reason people don't know about it, because it's not necessarily reflecting the needs of what the labour market needs right now.

[The Vice-Chair, Liberal, Michael Savage]

Thank you.

We'll move to Mr. Lake.

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

I want to thank all three of you for coming in today, from both organizations.

It's interesting hearing Mr. Whyte talk about reducing the paper burden when I'm looking at this “The Time has Come to Fix EI!” action alert. One of the suggestions I'd have is, instead of using a mailing address, if you could put an e-mail address in there, that would maybe reduce a little bit of the paper burden, because we could--

[Garth Whyte]

You don't want that to happen.

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

From our standpoint, it's a lot easier—

[Garth Whyte]

You don't want that to happen.