Thank you very much, and thank you for inviting us here today to talk about fixing the skills gap.
I wanted to start by defining apprenticeship, because this is a term that is commonly used, and we find that apprenticeships and the apprenticeship system are not well understood within the skilled trades community, let alone in the wider community.
Apprenticeship is a workplace-based training. It's generally 80% on the job and about 20% in a training institution. Apprentices must be registered by the provincial apprenticeship authority and ordinarily by an employer, so they have a job and they're employed prior to registration. Technical training takes place at a college or union training centre, with a private trainer, or online. Once an apprentice has completed the required hours of on-the-job training and modules of technical training, that person is able to challenge a certificate of qualification exam.
The benefits of this type of training include the ability to earn while you learn, to receive certification and good pay, to find career opportunities across Canada, and to become an entrepreneur and start your own business.
We wanted to talk today about some of the challenges. The Canadian Apprenticeship Forum has been hearing about current and anticipated skills shortages in sectors across Canada and how they affect productivity, the ability to innovate, and economic prosperity for a company, for a region, for a province, and for the country as a whole.
In 2011 we did a survey with employers, and 71% of employers told us that the skills shortages are affecting or will soon affect their ability to take on new contracts and do business, but only about 30% had an active plan to address that HR concern. Some of our research has also identified a number of barriers to apprenticeship. These are for employers but also for apprentices and other apprenticeship stakeholders. The barriers include a lack of awareness about apprenticeship, negative perceptions of trade careers, unstable employment, unwelcoming workplaces, cost of apprenticeship, basic and essential skills of apprentices, and shortcomings of workplace and technical training.
For today's presentation, I want to talk about three broad areas of challenges. I'm going to start with the skills mismatch that exists in Canada.
We have a high rate of youth unemployment. It was almost 15% in February. We know that youth underemployment is an even bigger problem across the country. We have a negative perception of careers in the trades, a perception that the trades represent a pathway of last resort. At the same time, we have severe skills shortages.
The average age of a newly registered apprentice is 26. One of the problems we're finding is that the school-to-work transition isn't being managed effectively. We're pushing youth to go in other directions, and they're finding trades careers relatively late.
Another one of the broad areas of concern is employer engagement. Even if we manage to convince youth that there are jobs available for them, we do still need to make sure that there are employers who are willing to take them on as apprentices. We feel it's necessary to continue to talk to employers about the return on training investment when it comes to apprenticeship. We've done quite a detailed study about return on training investments, looking across 21 trades, in small, medium, and large businesses across Canada. We spoke with those employers who actually hire apprentices and asked them about the financial costs of apprenticeships in terms of wages and benefits, administration costs, cost of a journeyperson's time, and materials.
For every dollar they spend in areas like this, we find they have a return of $1.47, and that's when you start to look at charge-out rates and the financial value that an apprentice brings to a workplace. It's important to continue to talk to employers about that, because we know that among skilled trades workplaces, only about 19% hire and train apprentices, and 50% of employers in skilled trades areas don't really have a very good understanding of apprenticeship. They don't understand what their responsibilities would be or how they would get involved with apprenticeship. Fourteen percent of these employers told us they would hire apprentices, if only they would come and knock at their doors. “We don't know where to find them,” they said.
So we do know that we have a lot more work to do in terms of speaking to employers about how this is a source of skilled trades workers.
The final broad area I wanted to raise with you is around apprenticeship completion.
In 2009 Statistics Canada data told us that there were about 409,000 registered apprentices across Canada. In the same year, around 31,000 apprentices completed and received their certification. So while we've seen registration rates double in the last ten years, completion has remained relatively stagnant. That completion rate isn't moving very much.
While the barriers to completion are complex, and I certainly wouldn't say that there are one or two solutions, I think there are some areas where something could be done federally with systemic barriers like inter-jurisdictional mobility of apprentices, so that when they have their certification, they're completely mobile between jurisdictions. But in the course of an apprenticeship, if someone were to lose their job in one part of the country, they would find it very difficult to move and have their hours and their training recognized in another part of the country.
As well, we hear—and this is from coast to coast—about EI wait times. Because apprentices are considered to be employees, they're eligible for EI when they do their technical training. But if you can imagine going to technical training, having a mortgage, a car payment, and a family to support and not actually getting your EI until you're back at work.... In some cases, people are waiting eight or ten weeks to receive their first EI cheque, and that does make it a little more difficult to motivate somebody to go back for their second or third round of training. When we talk about a completion rate, it's important not to put up barriers like that.
As well, there are incentive and completion grants that are offered by the federal government, but those are taxed back. Those are subject to taxation, which would lead more people to ask themselves if this is something that's worth applying for and waiting for.
I'll speak briefly about some of the recommendations we have put forward. I've provided a brief to all of you today, which goes into a little more detail, but I think this speaks to a need for better career awareness of trades and apprenticeship with regard to employers, youth, and the general public, and also to the professionalization of the trades—to start thinking about certification as something that has value for a journeyperson but also for their employer and the general public.
We hear about small and medium-sized businesses facing a number of barriers. They're not sure they have enough continuous work and they're not sure they can offer the full scope of the trade. As a result, they might not participate in apprenticeship training. There are some innovative approaches around consortiums, where you have small and medium-sized businesses getting together and sharing an apprentice, but that would certainly benefit by a review of the way tax credits are applied.
Also, I think the public sector really needs to recognize their role, not just as a funder but as an employer and as an owner community. By employer, the public sector actually employs only a quarter of.... When you look at the ratio of apprentices to journeypersons for those employed in the public sector, it's 3%. In the private sector, it's 12%.
When you talk about the owner community, the public sector is a huge user of skilled trades services and contracts for maintenance, construction, and fleet services, and they do have the ability to put a point system into bid documents or some additional motivation for contractors to hire and train apprentices.
Beyond that, and going back into completion, I think there's a need to look more closely at interjurisdictional mobility between the provinces and the territories, and certainly fast-track apprentice EI claims when they're going into technical training.
Finally, as I said, there are opportunities there to use tax levers as well around the incentive and the completion grants, credits for employers who train apprentices, taxes for those who perhaps don't, incentives for employers to train more apprentices than they need, and then maybe some supports for underemployed people to consider a second career.