Evidence of meeting #29 for Human Resources, Skills and Social Development and the Status of Persons with Disabilities in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was engineering.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

  • Tracey Leesti  Director, Labour Statistics, Statistics Canada
  • Marc Lachance  Assistant Director, Labour Statistics, Statistics Canada
  • Josée Bégin  Director, Centre for Education Statistics, Statistics Canada
  • Michael McCracken  Chair and Chief Operating Officer, Informetrica Limited
  • Marie Carter  Chief Operating Officer, Interim Chief Executive Officer, Engineers Canada
  • Alana Lavoie  Manager, Government Relations, Engineers Canada

3:35 p.m.


The Chair Ed Komarnicki

We won't hold that against your time.

Ms. Leesti, carry on with your presentation.

3:35 p.m.

Director, Labour Statistics, Statistics Canada

Tracey Leesti

Returning to the job vacancy slide, the number of unfulfilled vacancies provides another potential measure of unmet labour. This is a measure that StatsCan had not collected for many years, but with funding from HRSDC for the development and initial collection in January 2011, we began collecting information on job vacancies, fulfilling a critical data gap, as identified by the advisory panel on labour market information.

The vacancy statistics complement the LFS data by providing insight into whether the supply of labour is matched by the demand for labour in terms of geography and sector. The job vacancy rate is defined as the number of vacant positions divided by the total labour demand; that is, vacant positions plus payroll employment.

In the three months ending in September 2011, the national job vacancy rate was 1.7%. This is the time period for which we have the most recent data, and it's a very new survey. As we saw in the previous graph on employment, the sector of mining, quarrying, and oil and gas extraction has been the fastest growing in employment since July 2010. This is reflected in the overall labour demand. As can be seen in this graphic, mining, quarrying, and oil and gas has the highest vacancy rate, at 4%.

The category of professional, scientific, and technical services had one of the highest vacancy rates, at 2.5%. The health sector is slightly above the Canadian average.

3:35 p.m.


The Chair Ed Komarnicki

Just a moment.

Go ahead.

3:35 p.m.

Director, Labour Statistics, Statistics Canada

Tracey Leesti

This type of data on job vacancies will also provide important information on the relationship between the number of vacancies and unemployment. For example, an increase in the number of vacancies at the same time as an increase in unemployment—or even if unemployment remains flat—could reflect a mismatch due to structural factors.

The next slide shows vacancy rates, the unmet demand, by provinces and territories. As you can see, both Alberta and Saskatchewan had the highest vacancy rate of 2.6%, while the eastern provinces posted the lowest vacancy rates as of September 2011.

Now that we've looked at the demand side, we can turn to the next slide and look at the supply side. A low unemployment rate for a specific occupation may be an indicator of tight labour supply. In this graph we present the unemployment rate by occupation groups at the national level. The graph shows that health-related occupations have the lowest unemployment rate at 0.9% and 1.9% for the first two categories on the graph in red. They're well below the national rate of 7.4%, potentially indicating a short supply of labour in these occupations.

Also of potential interest are the natural and applied sciences and related occupations, as well as transport and equipment operators. Again both bars are in red, and you can see that they're below the national average in unemployment.

At the other end of the spectrum, lower-skilled labourers and trade helpers have had the highest unemployment rates at around 12%. One must remember, however, that not all workers in one occupation can fill all the jobs in the group. For example, a shortage of nurses cannot be filled by other workers in the health sector. Another reason why there can be higher unemployment is related to the location of the supply and demand.

Turning to the next slide, we look at unemployment rates for selected occupation groups across provinces. In this graph, among the occupation groups of interest for this committee we see that the unemployment rate was lower for the higher-skilled occupations in natural and applied sciences, as well as in health in all provinces. They were lower and relatively even across the provinces.

On the other hand, while the unemployment rate was also low for occupations in the primary industry and processing, manufacturing, and utilities in the prairie provinces and Alberta, it was higher in all other provinces, indicating there may be potential supply in other areas of the country. The LFS data are also available by economic region, which could also identify regional differences within each province.

Now that we've covered some of the indicators of labour demand and supply, we'll focus on some of the characteristics of potential labour supply, namely graduates and immigrants.

I will pass the presentation over to Josée.

3:40 p.m.

Josée Bégin Director, Centre for Education Statistics, Statistics Canada

Thank you, Tracey.

The chart on slide 7 shows the total number of university graduates in Canada, by field of study, in 1992 and 2008. Fields of study are ranked by the total number of graduates in 2008. The top two fields of study in both 1992 and 2008 were business administration, management and public administration and the social and behavioural sciences and law.

Ranked at or near the bottom in terms of number of graduates in both years were mathematics, computer and information sciences and the physical and life sciences. Health-related fields of study and to a somewhat lesser extent, architecture and engineering, saw relatively large increases in the number of graduates between 1992 and 2008.

That being said, data for 2000, not shown in the chart, show that in the case of mathematics, computer and information sciences, the number of graduates stood at 6,000, a number that was much higher than in both 1992 and 2008. That was a reflection of the very high demand for workers in the high tech sector in the early 2000s. The number of graduates in that field then dropped off sharply in 2008, following the high tech bubble burst in the early 2000s, likely having an impact on the field of study choices made by students first entering university in 2003/2004.

Women accounted for 56% of those who graduated from university in 1992; by 2008, the female share had risen to over 60%. Women also increased their share of graduates from less than 50% in 1992 to over 50% in 2008 in physical and life sciences, and technologies, and agriculture, natural resources and conservation.

In fact, women have increased their share of university graduates such that, in 2007, they accounted for more than half of graduates in all fields of study, except for three: architecture and engineering; mathematics and computer sciences; and personal, protective and transportation services.

Let’s look at slide 8 now. The following chart presents the proportion of employed university graduates in low- to moderate-skill jobs. By low- to moderate-skill jobs, we refer to those classified as occupations that usually require secondary school and/or occupation-specific training as well as those where on-the-job training is usually provided.

This chart indicates that the proportion of university graduates employed in low- or moderate-skilled jobs—termed underutilization—has increased in the past two decades.

That being said, it is important to note that the rate of underutilization for Canadian-born graduates remains essentially unchanged: the increase in underutilization is almost entirely an immigrant phenomenon. This corresponds to an increasing earnings gap between Canadian-born and immigrant graduates. Not shown is that there is also an underutilization gap for women, but it is small compared to that for immigrants and shows no clear trend.

There you go.

3:45 p.m.


The Chair Ed Komarnicki

Thank you very much. There are certainly some interesting trends that you've picked up from your charts. Thank you very much for that presentation.

I'll ask Mr. McCracken to present on behalf of Informetrica.

3:45 p.m.

Michael McCracken Chair and Chief Operating Officer, Informetrica Limited

Thank you very much for the opportunity to meet with you. I thought it would be useful for me to share with you some comments as we look at the skills gap stuff. Maybe I can turn a few lights on for those of you who are preparing what sound to be two very interesting documents.

When we think about the labour market, some carry an image of a barbell—two weights on the end of a thinner pipe. The one end is manual services, the middle is sort of the routine medium skills, and the ball at the other end represents the abstract high skills. If that's the way the labour market looks, and some would say that it's close enough, you can begin to probe those terms—manual services, routine skills, and abstract—and concern yourself with what needs to be there and what the skills actually translate into. Certainly formal education is needed less for the manual services. More is needed for the routine, and it's almost a necessity for the abstract, high-skill jobs.

The people who work in what's called STEM—science, technology, engineering, and mathematics—are found in the abstract block. Of course, this isn't a static picture. People move around. People move from the manual services to routine, and from routine to abstract. Indeed, as StatsCan's nice chart shows, people also move from what might be viewed as abstract high skills into medium skills and they are underutilized.

Another way of looking at it is a slightly more complicated view. It says that every job or occupation is made up of two characteristics: the knowledge work and the service work. What combinations might there be? You think of a fast-food worker as someone whose service component is high. The knowledge and subject matter specialization may be relatively low. A production worker in a plant, on the other hand, may have fair knowledge or medium knowledge of what he or she is doing, but the service emphasis—the interactions with other people, with customers—is less.

When you move out further, on to the high knowledge workers, you find some, again, who don't have a very large service component. These are people such as R and D engineers and research scientists. You have another group that relies, in a sense, on that combination of service and knowledge. A simple example you see running around town are Nerds on Site. They fix people's personal computers on a regular basis, which combines a service element with high-tech knowledge. There's a whole bunch of higher-tech jobs that are combinations of those two, such as consultant, sales engineer, and software application tech support. All of these require the ability to interact with people as well as a knowledge base that is crucial for what they're doing.

Let's talk about the services jobs very quickly. Some are low wage. There is little formal education and a short on-the-job training period. The interaction between customer and worker is important, and literacy is important. Literacy supports training and communication in that group. Park those thoughts, because we're going to come back to that in a moment.

The policy thrust you'd like to emphasize for low-skill jobs would include high school education and literacy at or above level three. You may want to think about increasing the minimum wage so that people who are working in those areas have the time and resources to take some further training. You might also encourage employers to offer training during working hours.

For the knowledge workers it's a little different. They need more formal education. They need some communication skills with clients and with other employees. But for that group, your policy is really for the post-secondary education system, including graduate school, initially, training during working hours, reducing immigration backlog in high-demand areas, if you, again, have shortages in that area that you want to do something about.

If you take one step back and ask what it is you're trying to do, I think the aspiration that would be shared by all parties and by all Canadians would be that we want to realize a high-wage workforce. In some sense, we want the results of our overall workforce to have a compensation that is as high as can be obtained in reflecting their various skills. You're going to get that if you move towards full employment.

You should encourage wage increases rather than discourage them. We should try to strengthen some of the institutions that support the way in which labour markets work, particularly the minimum wage system. We should move towards a living wage with indexing. We should be encouraging unions to form and to participate in wage-setting, training, and other conditions of work. Those kinds of approaches will give you that high-wage workforce.

I have a couple of quick comments on the workplace. I know my time is tight. In workplace training, consider a grant-levy system to fund the training of employees. Courses could be in-house or through outside suppliers. Participation requires that training take place during the workday. This is something that came out of the advisory group on working time and distribution of work, where we found that it was key for women particularly, but also for men, who have obligations outside of the workplace and work time, to be able to take their training in normal hours. The notion that you're going to study nights for your job may sound great unless the two of you are raising five kids and trying to get them all into bed.

Apprenticeship programs, a more formalized way of workplace training, can be encouraged, broadened in many occupations. We don't do well there relative to other countries, other than the U.S., which doesn't do very well at all. The co-op programs are useful for those in university, by giving them the opportunity to combine work and education in what they do.

So what should government do? Well, it can certainly help people move permanently or on a temporary basis to tight areas. What should government do about so-called shortages? It can help people move from surplus areas. It can certify skills that will make people able to recognize potential employees who have the necessary skills. Information about the job market is always helpful. Infrastructure is important for doing that, the systems for keeping track of openings.

Sometimes you have to ask, what should government not do? In essence, the one thing we don't want them to do is to avoid a macro response. If wages improve, if people start moving around and saying we have to slow this all down through restrictive fiscal and monetary policy, that would be a mistake.

Employers have a real role to play. They're the ones who are employing these people. They're the ones who are screaming about shortages. They're the ones who are saying government should provide work-ready employees. Well, first off, you should question that. It's not clear that that's the role of the education system or the governments.

On their actions on their own behalf, they could help raise wages if you're having shortages. Recruit more broadly. Provide flexible schedules. Upgrade the skills of your existing workers. Improve productivity. Restore internal career ladders that have, by and large, disappeared in most organizations. Workers and unions can also help. They certainly encourage skill certification, mobility as needed, workplace training participation. Developing literacy levels at every opportunity should be another thing you undertake.

The final message is, don't panic about shortages. Some local labour markets are tight. You've seen some interesting new data now from the vacancy survey. We say something is tight when it's 4% or 7% of the vacancy rate to the total employee base. That's not a terribly difficult issue. If we look at vacancies relative to the unemployed, what we find is that there are many more unemployed than there are vacancies in all industries and in all regions.

Mobility, postponement of projects, and we talked about how higher wages, training, and higher productivity can all help.

You should also realize that the source population in Canada will continue to expand, and those are the people who are 15 years and older. The labour force will continue to expand as new entrants in numbers exceed those who are retiring, leaving, or dying. The labour force participation rate, depending on how you measure it, for the total labour force is going to be declining. If you look at only the 15 to 64 age group, it will continue to rise. Indeed, if you look at every age-sex group, participation rates are rising, and rising out through 2025, 2030, and 2035.

What happens, though, is that you have a weighting issue in which the elderly, in significant numbers, are retiring and bringing down the overall participation rate, even though the elderly participation rates are rising from very low levels.

Let me wrap up, then, by simply saying that I think focusing on the skills rather than on the occupations is an important thing. I think you have to take a long-term view. You heard about a signal being given on the computing side, for example, which transmits to people deciding what career choice to make four, five, or six years earlier, and by not making a choice to go into that field now, it leads up to low numbers four or five years later. So these are lags, and they aren't the kind of thing you run out and fix before the next election. Well, maybe in the next election we could do some work, but you're not going to fix it in the next month.

So take the time, think about what you want to do, and think about the kind of society you want to live in.

Thank you.

3:55 p.m.


The Chair Ed Komarnicki

Thank you very much, Mr. McCracken.

It was interesting. You made some mention about moving people to the tight areas from the surplus areas, and you might have some questions flowing from that. Of course, I know your firm does a certain measure of forecasting and analyzing future labour market demands, and you might have some questions on that too.

We'll start first with Ms. Hughes. Go ahead, please.

March 14th, 2012 / 3:55 p.m.


Carol Hughes Algoma—Manitoulin—Kapuskasing, ON

Thank you very much.

Mr. McCracken, that was very informative. This is basically what we have been saying on this side, that we actually have to be proactive instead of reactive.

I wonder if you could just elaborate. You talked about the participation rate. If I interpret correctly what you've indicated, it is that although there are shortages in certain areas, there are people who will be able to take on the demand that's coming up. Is that correct?

3:55 p.m.

Chair and Chief Operating Officer, Informetrica Limited

Michael McCracken

Yes. I think if you look at the national view, the participation rate is the fraction of the people who are over 15 and want to work, are looking for work, or are working. The labour force is rising for those who are 15 to 64.

Even for those 15 and over, although the participation rate in aggregate is coming down somewhat, the total labour force continues to expand. There are new bodies—in other words, net—entering into the labour force. This is with some immigration going on. It's sort of the base level we have at the current time, but not extraordinary means of running out and hiring temporary workers and going down that road.

When you start looking at a particular area, however, you have to contend with the issue of mobility of people outside that area, people leaving. There are certain parts of this country that have declining population. If they had a problem trying to find skills, etc., they may be doing that off a smaller base. Unfortunately, of course, what happens when people move is that they often take their jobs with them or are unemployed. Hence you're not, in some sense, losing anything.

We have some very low unemployment communities in Canada, but that's because a lot of the labour force is gone and employment has declined. You're sort of saying that you're not learning the right thing from looking at this unemployment rate for this region.

I would be an optimist, though, in terms of what we can do. Keep in mind that every year, thousands of people move from one part of Canada to another. There's more migration, as we would call it, back and forth from one province to another than there is total net immigration of people from abroad. If you're concerned about getting your labour market to function well in a particular area, then you should be looking at the much broader picture.

For example, Nova Scotia at the moment is trying to increase the number of immigrants. It has a department to do that. I said rather cynically one day that they had more people in the department that they had immigrants. There's a lot of movement of people in migration from the rest of Canada—some going home, some going there to retire, some going there to work with particular skills. You'll see a big jump in that as people go to work in Nova Scotia for the shipbuilding exercises as they get under way.

Just think of that as a fluid exercise. It's awfully easy to fall into the trap of just thinking that these are all sort of fixed containers. You really ought to be thinking of them as a pool. You have coloured water that you pour in one spot, and you pour another colour in here, and you just watch it, and things start moving around and eventually the whole thing is grey.

4 p.m.


Carol Hughes Algoma—Manitoulin—Kapuskasing, ON

Do I still have some time? Okay.

Throughout your presentation you really reinforced what we—our party as well as the labour movement—have been saying: people need living wages, and we need to be able to have employers ensure that if people want to upgrade their education, especially if there's a possibility that the place will be closing down at some point...that's extremely important in order to have better skills or for people to upgrade their skills.

The other thing is that when you're indicating the participation rate, I think it also reinforces the fact that the government stance on the OAS is actually not what it should be. It reinforces again the fact that we shouldn't have to worry about whether or not we can afford the OAS for our seniors.

I just wanted to throw that in there. Again, I'm just wondering if you can talk about the rural aspect and the remote aspects of where the challenges are sometimes.

4 p.m.

Chair and Chief Operating Officer, Informetrica Limited

Michael McCracken

I'll leave aside the OAS issue, because I don't think I mentioned it. It's outside the HR purview.

Now, let me make my comments brief. It's always a problem in rural Canada just getting the jobs there. There are some, with the construction jobs during resource development, etc., but it is tough, and unemployment rates tend to be higher in rural Canada.

Many of these remote areas that we speak of are dominated by aboriginal populations. They may be on reserves. It may be 50% to 60% aboriginal in a population area. That's another area where we need to do a lot, and we need to do it in a concentrated way. The potential is large.

On the practice of what we've been able to accomplish, there are a few good examples, but there are a lot of missed opportunities. It's a challenge, and obviously what you want to do in planning is to think about what it is that brings everyone along. But the policies appropriate for the 90% of people living in urban areas may not be what you want to use for the 10% of people in the rural areas.

4:05 p.m.


The Chair Ed Komarnicki

Thank you, Mr. McCracken.

We will move now to Mr. Daniel.

4:05 p.m.


Joe Daniel Don Valley East, ON

Thank you, Chair, and thank you to the witnesses for being here.

My question is to Mr. McCracken.

4:05 p.m.

Chair and Chief Operating Officer, Informetrica Limited

Michael McCracken

You have to ask them questions too.