Thank you very much, Mr. Chair.
Good afternoon, ladies and gentlemen of the committee. Thank you for the invitation to join you today.
My name is Avvey Peters, and I'm vice-president of external relations at Communitech. We are the technology organization in the Waterloo region, Ontario. I have also have the pleasure of working with Communitech's national initiative, the Canadian Digital Media Network, which is our effort to connect Canada's digital media industry clusters.
At Communitech we work on the front lines of Canada's tech industry. We serve a network of more than 800 technology companies, which generate more than $25 billion in revenue. Our work connects us to companies at all stages of growth, from more than 350 active start-up companies employing fewer than five people to Canada's largest software company, Open Text, and Canada's largest technology company, Research In Motion. The Waterloo region tech sector employs more than 33,000 Canadians.
I share this background because it's the vantage point that gives us insight into what tech companies need to be successful and into the challenges that they face.
Consistently, technology companies tell us that their number one barrier to continued growth and success is a lack of access to talent, and not just technical talent; business skills are a crucial component for a successful tech company as well.
This challenge has led Communitech to launch a multi-faceted talent strategy focused on helping tech companies secure the skills and experience that they need to grow and to generate greater prosperity in Canada. This strategy includes activities that range from the operation of a region-wide jobs portal, waterlootechjobs.com; a series of recruitment events carried out in tech clusters across the continent; a virtual career fair; training and education events designed to help companies cultivate and retain the talent that they have now; strong partnerships with post-secondary education institutions to increase the ability of tech companies to recruit from colleges and universities; the promotion of a cooperative education system among tech firms as a talent attraction tool; and a youth outreach program developed to encourage greater numbers of students in grades 7 through 12 to pursue studies leading to careers in the STEM disciplines: science, technology, engineering, and mathematics.
I can provide more detailed information about our Waterloo region talent strategy later on, but what I'd like to share with you today is relevant not only to the Waterloo region tech sector but also to tech clusters across Canada that share similar talent shortages.
I'd like to focus on the two key elements I think are vital to improving the ability of Canada's ICT companies to attract top-quality talent. The first is easing just-in-time talent acquisition processes, and the second is creating a culture that builds the right kind of talent.
With respect to just-in-time talent acquisition, some recent work has demonstrated a nearly full employment rate in Canada's tech sector. We are facing a critical shortage of talent. The short-term risk for technology companies is that they can't fully realize the growth opportunities that they have today when they can't recruit the necessary talent to make their businesses grow. We know that the people most in demand in Waterloo region are engineers and software developers and that there's a premium on individuals with at least five years of experience in those fields, but not all engineers and software developers are created equal. Depending on the needs of the business, a tech CEO may want to hire a .NET developer, an AJAX developer, or a Java developer. These skills are not interchangeable. Similarly, she may need a logic design engineer as opposed to a field service engineer or a systems engineer.
The fact is that when companies find themselves at the point of needing specialized skills, they cannot afford lengthy hiring or training processes. The lack of ability to respond just in time puts a damper on that company's growth, so hastening the process by which Canadian firms can land top talent, and top international talent, is key.
One way we can do this is by speeding up the time to secure a labour market opinion so that companies don't lose the opportunity to attract top candidates. In some cases, eliminating the need for that labour market opinion may be the best option.
Just-in-time recruitment is particularly necessary in the attraction of senior business leaders. If a Canadian company cannot easily bring top talent to Canada, it will be likely to set up an office around that talent wherever that talent is. Global tech and business leaders are talent magnets. The loss then is not one Canadian job, but several.
We were encouraged by the government's indication last week in the budget that it would support improvements to foreign credential recognition and move to an increasingly fast and flexible immigration system to meet labour market needs. This is the kind of thinking that will help Canada's tech companies to be successful.
Declining enrollment in STEM disciplines is the canary in the coal mine for the future of Canada's tech industry. Without a steady stream of new high school graduates headed for careers in STEM disciplines, the tech industry and all sectors of the economy will suffer. Across Canada we need to encourage our youth to pursue career paths that will lead to greater economic prosperity for all of us.
A big part of this problem is cultural. We need to instill the excitement of discovery and invention in today's youth and offer them exposure to STEM careers through business visitation programs, experiential learning opportunities, and online engagement. Today's youth are digital natives. They will bring these skills to bear in any industry. The key for us is to pair their digital literacy with a desire to pursue STEM careers and a strong understanding of business.
When secondary school students have moved on to higher education in colleges and universities, cooperative education is a critical way to foster the skills the tech companies need to be successful. Co-op has been a part of this success story in the Waterloo region since the early days of companies like Watcom, MKS, and Research in Motion. These organizations began by employing co-op students and continue to employ them today. In addition, many high-growth tech companies benefit from access to co-op students, relying on them to build their companies.
A co-op employer tax credit is a strong incentive for tech companies to take advantage of the talent produced by local colleges and universities. Co-ops strengthen the affinity students have to their local industry and community and lessens the likelihood that they will seek opportunities in other tech clusters like Silicon Valley or Boston. In Ontario, the co-op employer tax credit reimburses employers 25% of eligible expenditures up to a maximum of $3,000; smaller businesses are eligible for a higher credit rate of 30%.
I urge the federal government to consider matching this kind of incentive to increase the opportunity for Canadian co-op students to gain experience in Canadian companies. This significantly increases the likelihood that they will accept full-time employment in Canada after graduation.
Once technology professionals are on the job, retention of that talent is critical to the success of the company. On-the-job training ensures the longevity of tech skills. Cross-mentoring between professionals who are new graduates with current skills and experienced colleagues whose business skills come from deep-domain expertise or project management experience is vital. We must continually demonstrate the career path for tech professionals through on-the-job training. Making training credits available for this kind of learning can be a significant talent retention tool. After all, today's coder can be tomorrow's chief technology officer.
Canada can produce the best ICT workers in the world, but we need to create strong talent and retain as much of it as possible. Canada's economic health is tied to the prosperity of the ICT sector, which encompasses life sciences, digital media, clean tech, defence and security, and advanced materials. There are close to 10,000 companies, representing 800,000 Canadian jobs; helping this sector find the talent it needs to thrive will yield more economic prosperity for Canadians.
Thank you for your time this afternoon. I look forward to your questions.