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—