Human Resources Committee on June 13th, 2012

[The Chair, Conservative, Ed Komarnicki]

All right.

[Chris Charlton, NDP, Hamilton Mountain, ON]

Stay with us overnight and celebrate.

[The Chair, Conservative, Ed Komarnicki]

To be on the safe side, we will suspend. If something changes in terms of whether it's going to be longer, we'll send a message to you here so you can be sure that you can go. But if we can get it done within a fairly reasonable time, we'll come back to try to conclude. All right?

I'll suspend the meeting.

[The Chair, Conservative, Ed Komarnicki]

I will bring the meeting to order.

Just for the benefit of the presenters, there will be bells shortly. By unanimous consent of all committee members who are here, we're going to proceed into the bells to conclude your presentations, and then we will adjourn. It seems likely the most reasonable thing to do under the circumstances.

Ms. Reynolds, go ahead.

[Joyce Reynolds]

Thank you, Mr. Chairman.

I was just saying that the Conference Board of Canada projects a shortfall of labour in Canada of about one million people by 2020, with 200,000 in our industry alone. All industries are going to be hit, but our industry particularly hard.

One reason for this is our reliance on young people. Of today's restaurant workers, 43%—that's more than 483,000 employees—are 15 to 24 years of age. Restaurants are the number one provider of first-time jobs in the country, providing one in five jobs for youth. Statistics Canada projections indicate that by 2020 the population of those between the ages of 15 and 25 will decline by 300,000.

When the labour shortage hit Alberta in the middle of the last decade, the impact on restaurants was devastating. Employers were working 17-hour days, spending too much time on food preparation and service and not enough time on managing their businesses and training and mentoring their staff. Labour shortages were forcing operators to reduce hours, reduce menu offerings, shut down parts of their operation, and abandon expansion plans. Average weekly wage increases were double those for the average industrial wage earner in Alberta. Despite the huge jump in wages, the average number of employees per restaurant fell from 14.3 in 2004 to 12.4 in 2005, representing a shortage of 13,000 people. For the first time in a decade and a half, the number of food service establishments declined. So the industry actually contracted when food service demand had never been higher.

We need to ensure that there are policies in place so this will never happen again.

What are the barriers to filling low-skilled jobs in particular, and what are the solutions? l'd like to address first domestic workers and then foreign workers.

To attract more Canadians, restaurant businesses have had to become more flexible and creative in their recruitment of workers and to place a higher priority on retention of existing employees. Restaurant operators are increasing benefits and increasing capital investments in labour-saving devices, but opportunities are limited in a service environment. Restaurants are also putting more emphasis on attracting and accommodating under-represented groups such as aboriginals and persons with disabilities, and are looking for new pools of talent, such as older workers.

Because restaurant businesses must provide services when Canadians and tourists want to eat and drink, they are often open seven days a week, and up to 24 hours a day. This situation provides flexibility for some workers, but it creates challenges for others due to family, day care, and transportation needs.

I am pleased to acknowledge that some solutions we identified to government to reduce low marginal tax rates for low-income Canadians and to encourage work in our industry have been adopted. The working income tax benefit, increased basic personal income tax exemption, reduced clawbacks for income-tested programs such as the guaranteed income supplement, and, most recently, reduced clawbacks for EI recipients and new initiatives to better connect EI recipients with jobs all help.

Along the same line, we would urge government to introduce a basic exemption of one year into the employment insurance program, similar to CPP's year's basic exemption, in order to make EI more progressive and fairer for lower-income workers.

But these measures are not enough to overcome the demographic reality confronting the Canadian labour market and our industry. We need to have access to foreign workers and immigrants at all skill levels. Despite the relatively soft labour market in some parts of the country, the industry is experiencing serious labour challenges in many others.

Last year over 24,000 LMOs were approved for food service jobs. The biggest demand was for food counter attendants, kitchen helpers, and related occupations. This was followed by cooks, food service supervisors, and food and beverage servers. If it weren't for the temporary foreign worker program, some operators would have had to close their doors. The temporary foreign worker program has helped our members to stabilize their businesses and retain their domestic employees and has reduced the chaos that resulted from understaffed restaurants.

We still have some concerns about the high percentage of application rejections of LMOs in some regions compared to others, and inconsistencies in how the program is administered. We need to further streamline the program to allow for bulk applications and more efficient processes.

The temporary foreign worker program, while needed—

[The Chair, Conservative, Ed Komarnicki]

Ms. Reynolds, even though we're a bit pressed for time, you need to slow down a little bit. It makes it easier for the interpreter.

[Joyce Reynolds]

Sorry. I'm really trying to stay within my five minutes.

[The Chair, Conservative, Ed Komarnicki]

I know. We'll give you a little extra time. Go ahead and slow up a bit.

[Joyce Reynolds]

The temporary foreign worker program, while needed, is expensive, it's administratively burdensome for restaurant operators, and it doesn't solve their long-term structural labour market needs. We need to better develop bridging programs between the temporary foreign worker program and permanent residency. We support government plans to modernize our immigration system so that it better matches workers with jobs and puts more emphasis on Canadian worker experience, but this must apply to jobs of all skill levels and not be restricted to NOC codes A, B, and O.

Finally, we would like to see the working holiday program expanded through the negotiation of a larger cap and longer permit periods.

To conclude, we appreciate the government's willingness to study labour shortages and barriers to filling low-skill jobs. The numbers of people needed to fill job vacancies in the years ahead are daunting for all categories of workers—skilled, semi-skilled, and unskilled—and we look forward to partnering with government on solutions that will ensure continued economic growth.

Thank you.

[The Chair, Conservative, Ed Komarnicki]

Thank you very much for that presentation.

We have heard from a number in the fast-food service industry, hospitality industry, and they've raised some of the issues you raised here as well.

Next we have Contingent Workforce Solutions, Jeff Nugent, president and chief executive officer. Go ahead with your presentation.

[Jeff Nugent]

Thank you, Mr. Chair.

Thank you to the member for Mississauga—Streetsville for the invitation.

I'm a little bit new to this process, so please bear with me. I don't represent an association or a total industry; I'm representing myself and my company.

I'm the founder and CEO of Contingent Workforce Solutions. It's a four-year-old entrepreneurial company that helps employers manage the administration and employment and tax law issues around engaging with contract and self-employed workers.

We manage the on-boarding paperwork, the verification of business registrations, time and expense tracking, and invoicing and payment of these contract workers. Over the last four years we've grown organically to over $25 million in sales. Last year we were ranked the fastest-growing company in Canada.

Prior to founding Contingent Workforce Solutions, I had a lot of history in the talent acquisition space. We are a company that is independent of the industry or the position titles of the workers who our employers are hiring. This gives us a very broad perspective on the workforce, the gaps in the workforce, and some of the high or hot skills that are needed in the workforce. In a lot of cases, employers will hire contract workers instead of full-time workers in situations where they can't find full-time workers.

I'm also, in preparation for this meeting.... I'm a member of ITAC, which is the Information Technology Association of Canada; ACSESS, which is the Association of Canadian Search, Employment and Staffing Services; the IT staffing firm association; the CME; Alberta Construction Association; Progressive Contractors Association of Canada; and the CFIB. Because we aren't industry-specific, we've joined a lot of these various industry associations to gain access to the membership and to get an understanding of each of the employers within them, which also gives us this broad perspective.

I'll start in on my presentation by saying that Canada's workforce is changing. Demographically we have an aging population, resulting in potentially a significant percentage of the population exiting the workforce. We have generation Y and the millenniums—that is, those who are highly educated but often very underemployed. Self-employment is now the fastest-growing segment of the workforce.

These facts are creating both opportunities and challenges for employers and government. Employers need to adjust to create ways to get work done in non-traditional ways. Government needs to create policy and programs that support industry in the new ways they are getting work done and in developing the skills that industry needs for today and for the future.

From my perspective, we're seeing what I call “in-demand” skills, very highly sought after and in large numbers, in the skilled trades: engineers, welders, pipefitters, millwrights, electricians, bricklayers, boilermakers, etc.

In ICT, in technology, there's a real shortage of workers.

There's a shortage of general labourers. We're seeing employers being forced through very non-traditional means to attract these types of people.

As we heard from Joyce, in the retail and hospitality sector there's a real shortage of workers.

In terms of filling the demand for these skills, it's really a “build or buy” scenario. The building part is creating domestic skill sets, and the buying part is immigrating in the skill sets that we need to help industry have the skills they need to get the work done.

We need to have a better understanding of where the hot skills are, and where the needs and the demands are, prior to just moving forward and hearing from different groups or industry-specific groups that are always demanding for themselves and really not looking at the broader spectrum. I guess that's your job here, to listen to everybody and then decide how to allocate things.

I think it really comes down to needing that demographics data and the data of where the future needs will be, and then creating policy to create better links among industry, education, and government policy.

For action items or recommendations, I'll read from a briefing note that I have submitted. It will be translated and you will receive it shortly.

Some recommendations that I see in creating those better links include developing quarterly tracking of industry skilled workforce demographics today, and what job postings are out there and the actual hiring that happens, in order to gain a better understanding of the trends in the workforce and the future needs. Also, I think discussions like this one and other round tables should take place on at least a quarterly frequency among industry, education providers, and immigration leaders, to discuss trends in industry skills needs and to adjust policy as required.

On the domestic skills development front, we really need to create better awareness of what the in-demand skills are, both at the institutional level and at the individual resource level. With better awareness of the in-demand skills, educational institutions can change their curricula to develop those skills we need, as well as counsel students at a youth level to move them towards where the in-demand skills and jobs are.

Also, one of the areas that I see being of particular interest is the area of funding additional educational programs—outside of the traditional educational system—that allow students and youth to try jobs requiring in-demand skills. I was in the U.K. last July. The City of Westminster actually funded four to five crews of skilled workers or tradespeople who, in vans filled with power tools, went to the high schools and did projects in which students built things using their hands. They've been seeing a real influx of people in shop class and those types of things because they've allowed people to try it.

Last on the awareness side of things is the creation of mass media awareness. We're in this world of social media, American Idol, and those types of things, and the perception of what's a cool job and what isn't can be created by enhancing awareness. Skills Canada holds a skilled trades competition each year at the regional and then the national level. The winners at the national level go on to the world event and are treated like rock stars. Who's the best welder? Who's the best pipefitter? They do those types of things.

So by looking at having federal funding for such programs and having more awareness around the programs, even by broadcasting them on the CBC, it will create awareness—“hey, that's pretty cool”—and as a byproduct, you'll probably also hear them talking about what high-paying jobs there are in Saskatchewan and Alberta for these types of skills. That will result in an influx of people for those in-demand skills.

[The Chair, Conservative, Ed Komarnicki]

Briefly wrap up if you could, please.

[Jeff Nugent]

Yes, no problem, Mr. Chair.

In my brief I have other recommendations for providing tax credits and subsidies to individuals and/or industries that train workers for in-demand skills. There's a real need, if you can't develop the skills, to buy the skills or immigrate the skills in. I've talked about ways of streamlining the LMO and the visa-granting process, and also about allowing for mobility of workers within the temporary foreign worker program through the use of staffing firms, which will allow for mobility of those workers between employers. I also recommend providing funding to landing service programs that help newcomers integrate into Canadian society.

Thank you very much.

[The Chair, Conservative, Ed Komarnicki]

Thank you for that presentation.

We'll hear from Lindsay Kennedy with the Canadian Literacy and Learning Network. Go ahead.

[Lindsay Kennedy, President and Chief Executive Officer, Canadian Literacy and Learning Network]

Thank you very much.

I almost feel as though I should title my presentation “And Now For Something Completely Different”.

As the title of our organization—the Canadian Literacy and Learning Network—indicates, my focus in speaking with you this afternoon will be literacy and essential skills.

First of all, I'd like to thank you for the opportunity to present to you today and indicate that I find it very easy to address both of your study subjects, as they are so inherently connected. The foundation of strong literacy and essential skills is now absolutely necessary to enter the labour market at any level, and no workforce can acquire the skills without that foundation set of skills.

I'd like to point out that low job skills, as we used to know them, no longer exist. Most of them have really disappeared. Most of them have been automated in the last decade. The gap has occurred where we have not equipped those who have traditionally held those positions with the skills to continue to work in those positions. What's emerged is the fact that we have an ever-widening gap between high- and low-skilled Canadians.

On the internationally recognized scale of literacy and essential skills—and Canada was a participant in two separate studies, in collaboration with the OECD—level three has been established as the level Canada's workforce needs to function at in order to allow Canadian businesses to stay competitive in a national as well as a global context. I don't want to risk oversimplifying things, but on a scale of one to five, levels one and two are the levels you're at when you're learning to read and you're gaining your foundational skills. Once you attain skills and you're functioning at level three and up, instead of learning to read, you're reading to learn. So there is a transition in how you use those skills and how important they are to you. Requiring skills at level three is the case not only for the knowledge-based economy but really across all sectors of industry. Moving into the future, it is ever more evident that people need to continuously upgrade their skills.

The difficult reality we're facing as a nation—and I know this is perhaps not news to some of the committee members—is that 43% of Canadians have literacy levels below level three. As I just indicated, level three is that kind of cut-off point, such that if you have skills lower than level three, you have difficulty functioning.

In terms of numbers—because 43% is just a percentage of what?—this means that for 9.8 million adults in this country, according to the 2011 census, who are between the ages of 16 and 65, the ability to fully participate in life, community, and work is severely compromised.

Looking for a long-term approach and opportunities at this critical point in time, CLLN recently conducted research that explores the potential of an investment in adult literacy to reduce government and business expenditures on employment insurance, workers' compensation, and social assistance benefits. We compared literacy statistics, income and earnings statistics, and information about people in receipt of payments under those benefits programs, and we found a strong correlation that suggests that the lower your level of literacy, the more likely you are to have accessed these programs.

We'll be releasing a detailed analysis later this month, but here's a quick preview of some of the more striking findings.

It would cost $16 billion to increase literacy levels of all working age adults to level three. However, the return on this significant investment would be, in our view, rather compelling: individuals' earnings could rise, due to an increase in labour productivity, by as much as $83.9 billion annually.

Employment insurance, workers compensation, and social assistance payments could drop by as much as $2.917 billion annually. This combined annual increase in savings does not include government savings and increased revenue from income tax rolls.

The Canadian Chamber of Commerce has said that more people with advanced skills are needed for Canada to compete and prosper in a global, knowledge-based economy. In our opinion, you can't build a skilled labour force without the basic foundational literacies and essential skills. Investments in those with low skill levels will provide a long-term solution. Investments in raising the literacy and essential skills levels will provide a greater return on investment than moving people up between the higher levels and will ensure that more Canadians have what is needed to fill the skills gap.

To fulfill Prime Minister Stephen Harper's promise that he made in Davos—namely, that the Canadian government will move ahead with “transformations necessary to sustain economic growth, job creation and prosperity now and for the next generation”—we need a pan-Canadian human capital strategy. This strategy must have the goal of a Canadian workforce with advanced skills at its centre, and that goal can only be built on a strong foundation of literacy and essential skills.

Thank you.

[The Chair, Conservative, Ed Komarnicki]

Thank you very much for that.

I guess we have been able to conclude all the presentations. If there's anyone else who was a presenter and would like to add to anything they've said, this would be a good opportunity. We're going to close without having the usual round of questions, but first I'll see if anyone else wishes to add anything.

Mr. Jones.

[Ken Jones]

Yes, I have a couple of points.

Certainly, in terms of the system we developed, it's active. It's not a dream. We have 5,000 individuals on the system essentially looking at approximately 215,000 jobs. So on the issue that was raised here, jobs are available.

However, what we do need, I think, if we look forward as a country, is that we need to translate this system into French. It's an English-based system, so it has some disadvantages for a country like Canada. Also, we need to build some additional heuristics to really data-mine what we have there. Data-mining would allow us to look at the Canadian labour market virtually in real time, every 48 hours, in terms of what's happening by sector, by job type, by skills requirements, by region, by small town and big town, and in terms of north, south, east, and west.

Given that data, we'd be able to identify labour and skill gaps that exist now. We'd be able to translate those into potential skills or training activities across the country more quickly. Also, we'd be able to inform policy, because ultimately we'd be able to develop data metrics about the Canadian labour market, which everyone could use more effectively.

So I'd just like to make the point that the data is there and it's real, and we could really start to address some of the fundamental problems about jobs and employment in this country.

[The Chair, Conservative, Ed Komarnicki]

Thank you very much.

Anyone else? No?

All right. I'd like to thank all of you for attending. My apologies for the disruptions and for having you stay here past the allotted time. We certainly appreciate your indulgence.

With that, we're going to adjourn and make sure that Mr. Nugent can catch his plane.

And a happy birthday to you, Mr. Nugent.

[Jeff Nugent]

Thank you.

[The Chair, Conservative, Ed Komarnicki]

We're adjourned.