Human Resources Committee on Oct. 16th, 2012

[The Chair, Conservative, Ed Komarnicki]

I call the meeting to order.

We thank the witnesses for attending this morning. We'll have a presentation from the panel, from all three of you. After that we will have a question and answer session of seven minutes for each party on a rotational basis.

We'd like to welcome Micheline Racette and Mr. LaRue—it's good to see you again—and Monika Bertrand.

I'm not sure who is going to present first. Is it Mr. LaRue?

[Jean-François LaRue, Director General, Labour Market Integration, Skills and Employment Branch, Department of Human Resources and Skills Development]

We have just one presentation, and they're here for support on questions and answers on the related programs.

[The Chair, Conservative, Ed Komarnicki]

Okay. Feel free to go ahead with the presentation.

[Jean-François LaRue]

Good morning, Mr. Chair and distinguished members of the committee.

On behalf of HRSDC, I would like to thank you for the opportunity to speak with you today. My name is Jean-François LaRue. I'm the director general of the labour market integration directorate in the skills and employment branch. In lieu of Catherine Scott, the director of the trades and apprenticeship division, I have with me the assistant director, Micheline Racette, as well as Monika Bertrand, the director for labour market programs for youth and people with disabilities.

I would like to speak to you today about the importance of apprenticeship to the Canadian economy and about some of the associated challenges and federal support for apprenticeship and tradespeople.

As my colleagues who appeared in the context of your recent study, “Fixing the Skills Gap: Addressing Existing Labour Shortages in High-Demand Occupations” indicated, the Canadian economy is increasingly marked by growing skills shortages notably in highly skilled and in-demand occupations, among which the skilled trades figure strongly.

In fact, in 2010, approximately 2.9 million Canadians, or 17% of the labour force, worked in skilled trades.

Apprenticeship and the skilled trades offer promising career opportunities for youth. Increasing the overall supply and mobility of skilled tradespersons continues to be important, not only to filling job vacancies in the trades but also to ensuring Canada's continued economic growth and prosperity.

As many of you know, apprenticeship is a proven labour market-driven method of training, combining on-the-job training with in-class technical instruction that leads to certification in a skilled trade. The duration of apprenticeship training varies from two to five years. Approximately 80% to 90% of an apprentice's training is spent in the workplace, with the remainder at a training institution.

I cannot emphasize enough the critical role of employers as they make the decision to hire and register apprentices and provide essential on-the-job training. I'll get back to that concept a little later on.

Federal support for the Red Seal program is also an important theme. Provinces and territories regulate and administer apprenticeship programs and certify tradespeople. This has resulted in 13 distinct apprenticeship systems across Canada. While acknowledging provincial and territorial authority in this area, the federal government has long been committed to increasing the appeal of apprenticeship in the skilled trades and connecting youth to employment opportunities in this area. It does so via the interprovincial standard Red Seal program. This program reflects half a century of successful federal, provincial, and territorial partnerships involving the development of common occupational standards in examinations for the Red Seal trades in close collaboration with industry.

Working with provinces and territories through the Canadian Council of Directors of Apprenticeship, also known as the CCDA, HRSDC helps to deliver and manage the Red Seal program, which currently includes 53 trades. As of 2010, about 80% of registered apprentices in Canada were in Red Seal trades. As an industry driven program, the Red Seal program is Canada's standard of excellence for the skilled trades. It ensures the recognition of the qualifications of a certified tradesperson across Canada. Over 26,000 Red Seal endorsements are issued annually.

The Red Seal program encourages harmonization of apprenticeship systems across Canada. For example, interprovincial program guides have been developed for use by provinces and territories to inform in-school technical training portions of apprenticeship programs. In addition, through the Red Seal program, a number of tools and resources have been created to help apprentices build their essential skills.

Also, on a related matter, chapter seven of the Agreement on Internal Trade is designed to facilitate labour mobility in Canada, and that includes the mobility of trades workers. As a result of the 2009 amendments, any worker certified for a regulated occupation in one province or territory can, upon application, be certified for that occupation anywhere in Canada without any additional material training, experience, or assessment. This includes workers with skilled trades certificates with or without Red Seal endorsement.

The Agreement on Internal Trade reaffirms government commitment to the Red Seal program as a well-established means of developing common standards for the trades or harmonizing those standards.

Looking forward, one of the priorities of the Canadian Council of Directors of Apprenticeship for 2013 to 2016 is to promote greater consistency of requirements for skilled trades training, certification, and standards across jurisdictions. The Canadian Council of Directors of Apprenticeship is also undertaking work to streamline processes used by provinces and territories to assess the eligibility of foreign-trained workers to become certified in Red Seal trades.

Despite anticipated shortages in the skilled trades, multiple factors may discourage Canadians from entering a skilled trade and from completing their training. This is a long-standing issue—this is not new—and no simple answer to this problem exists.

Under-represented groups in the trades, such as aboriginal peoples and foreign-trained workers, face unique barriers including challenges with essential skills, limited social and family networks, and difficulties with credential recognition, among others.

Youth in particular are not drawn to the skilled trades after completing high school. We can note that the average age of entry into apprenticeship is 25 years old. Several surveys have revealed that youth mistakenly view the skilled trades as dangerous low-paying jobs with little potential for advancement.

In fact, similar misconceptions held by parents, teachers, and guidance counsellors may cause them to steer high school students away from the skilled trades in favour of university studies. The national apprenticeship survey of 2007 demonstrated that just half of registered apprentices had been aware of apprenticeship in high school, and only one-third had taken vocational or technical programs in high school.

Further, the belief that a career in the trades does not offer youth a viable financial future is inaccurate. In terms of wages, data from the labour force survey indicate that the average weekly earnings of skilled trade workers were consistently higher than the average for all occupations over the last decade.

Despite these misconceptions, apprenticeship registrations have been rising over the past two decades. In fact, enrolment in apprenticeship programs has increased by 120% since 1995, a reflection of sustained labour market demand.

However, almost 50% of apprentices still do not complete their apprenticeship program. There are many potential explanations for this.

According to the 2007 national apprenticeship survey and the research undertaken by the Canadian Apprenticeship Forum, also known as CAF, individuals may discontinue their apprenticeship due to insufficient work or income, too much work that prevents them from attending technical training periods, or a lack of essential skills.

Sometimes, difficulty in finding an employer who can train across the whole scope of the trade could cause an apprentice to discontinue their training. In tight labour markets, attractive job offers could contribute to apprentices obtaining a well-paying job and leaving their training program. For example, this could be the case in trades where certification is generally voluntary, such as with machinists or roofers.

A recent Statistics Canada study demonstrates that individuals who complete their program and become certified have hourly wages that are 25% higher than those who do not complete. In addition, those who complete their programs have better earnings potential, more job satisfaction and are more employable.

Given the importance of on-the-job training, employer participation in apprenticeship is, as I have said, crucial. Employers ensure that apprentices receive supervised training in the full scope of the trade.

Although about one in five employers does invest in apprenticeship, retention of apprentices through completion can sometimes be an issue. Employers may fear that the individual will leave after certification. Others are reluctant to pay the apprentice the full journeyperson wage level. For small businesses, investing in training can be difficult, and many may not have a journeyperson on staff to mentor the apprentice. All of these issues can present challenges for apprentices seeking sustained employer support.

Federal supports, as well as measures launched by provinces and territories, help address some challenges associated with the entry and completion of apprenticeships. Key among federal supports are the apprenticeship grants, which include the apprenticeship incentive and apprenticeship completion grants. Together they offer up to $4,000 to support Red Seal apprentices.

Over 355,000 apprenticeship grants have been issued since the program's inception in 2007, representing a total investment of nearly half a billion dollars. So far, HRSDC has obtained positive feedback from apprentices, provincial and territorial apprenticeship authorities, and employers about the grants. Early evidence shows that the grants are assisting apprentices to cover apprenticeship-related costs and are encouraging apprenticeship progression and completion.

In addition to the apprenticeship grants, measures have been put in place to encourage employers to hire new Red Seal apprentices. The apprenticeship job creation tax credit for employers provides a maximum credit of $2,000 towards the wages payable to apprentices in each of the first two years of their training program. The tradespersons tools deduction provides a deduction of $500 for tool costs in excess of $1,000. Finally, trade examination fees incurred by apprentices are eligible for the tuition tax credit.

The federal government encourages Canadians, including young people, to enter the skilled trades through a host of other initiatives. For example, qualifying apprentices can receive income benefits through the employment insurance system during their periods of classroom training. In 2010-11, 38,000 claims for apprenticeship were established, with a total of $170 million in benefits paid to apprenticeship claimants.

Through Labour Market Development Agreements and Labour Market Agreements, provinces and territories use federal transfers to support their apprenticeship systems. They also implement programs to address barriers to entry to apprenticeship for under-represented groups, such as women, immigrants and aboriginal Canadians.

Through the skills and partnership fund, the federal government is investing $2.4 million in the aboriginal apprenticeship initiative at the Gabriel Dumont Institute in Saskatchewan for training and employment. An additional $8 million over three years has been contributed by the institute, the provincial government, the Saskatchewan Apprenticeship and Trade Certification Commission, and private sector employers.

The national youth employment strategy, also known as YES, is also designed to help young Canadians gain the skills and experience needed to get into the workforce. In 2010-11, HRSDC, through YES, helped almost 57,000 youth get the job skills and work experience they needed to successfully enter the labour market, including in the trades.

In budget 2012, the government announced a $50 million initiative in YES funding to help connect young Canadians with jobs that are in high demand, such as the skilled trades, and to help them develop the skills and experience required by employers.

Skills Canada, with federal funding, also promotes careers in the skilled trades and technology to young people, in particular through the annual Skills Canada National Competition.

The Working in Canada website is another way our department is connecting youth with in-demand employment, including the skilled trades. It does this by providing occupation- and location-specific labour market information for job seekers, workers, and businesses. It provides occupation and career information, including educational requirements, main duties, wage rates and salaries, current employment trends, and outlook. Moreover, this is a tool that can be used worldwide.

Traffic numbers for the Working in Canada website are about seven million hits per month. That includes hits for the job bank.

Mr. Chair, in conclusion, I want to mention an innovative partnership involving HRSDC's Canadian Council of Directors of Apprenticeship and the Department of National Defence. This partnership has resulted in tools that allow provinces and territories to recognize the training of military tradespeople who may wish to become certified in some Red Seal trades. Currently, correlation studies indicate there are nine military trades that match up well with 13 Red Seal trades. Most of these are high-volume and in-demand trades, such as automotive service technician, construction electrician, plumber, carpenter, and cook.

This partnership provides an effective pathway for retiring military tradespeople transitioning to civilian careers in the skilled trades, and it complements the helmets to hardhats initiative that was successfully launched in budget 2012. The helmets to hardhats initiative aims to connect retired Canadian Forces members and veterans with career opportunities in the construction industry by bringing together union, private sector, and public sector resources.

Mr. Chair, I am certain that all of us in the room today agree that increasing participation and completion in apprenticeship programs is a win-win scenario for everyone involved. For individual Canadians, including youth, apprenticeships provide the skills and experience needed to qualify for in-demand jobs. Employers have better access to a larger pool of labour that is equipped with the skills and experience they require, contributing to Canada's continued economic growth and long-term prosperity.

Although significant progress has been made, the Government of Canada is committed to its ongoing work with provinces, territories, and industry to support apprenticeships in the skilled trades. While a suite of programs is already in place and is functioning well, the federal government will continue to evaluate the effectiveness of these instruments. In particular, it will explore ways to engage employers and increase the appeal of apprenticeship programs to Canada's youth.

To maintain the momentum, all stakeholders, including government, employers, industry, parents, and educators, must commit to ongoing collaboration to build upon successes and lessons learned.

We thank you for the opportunity to participate in this study and look forward to the committee's recommendations.

My colleagues and I welcome the opportunity to respond to any questions you may have.

[The Chair, Conservative, Ed Komarnicki]

Thank you. That was certainly an insightful presentation.

We'll now open it up to questions. The rounds will be seven minutes as opposed to the usual five minutes. It seems to stretch in any event.

Ms. Charlton, go ahead.

[Chris Charlton, NDP, Hamilton Mountain, ON]

Thank you so much to all three of you for being here this morning. You gave a terrific overview of the state of apprenticeship programs and the federal government's involvement with those programs. I very much appreciate that. I think it grounds our study well.

I have a couple of questions and they go in different directions.

Are there any federal government programs that relate to either recruitment or retention with respect to apprentices that existed in the past but don't exist now?

[Jean-François LaRue]

I'm not sure; on top of mind it doesn't come back to me.

[Chris Charlton, NDP, Hamilton Mountain, ON]

I'm from Hamilton, a steel town. It strikes me that apprenticeships certainly used to be a big part of all the big industrial plants, but we've seen a real decline in terms of employer participation in apprenticeship programs.

I wonder if you could talk about what those factors might be. Are they purely economic factors in that employers think there is no bang for the buck, or was there a time when they could find enough skilled trades so that they didn't think they needed to be training? Right now what we have in this country is not so much a labour shortage but a skills shortage, and I think to some extent employers didn't plan for where we are now.

[Jean-François LaRue]

Yes.

Before coming to this presentation we had a lengthy conversation about the various factors. The thing that really struck me was the extent to which the factors that are at play are complex.

I think there are two sides to the equation, certainly in terms of completion. If we talk about completion, I think the role of the employer, as I said in my speech, is really critical. On the other side of the equation there are the individuals and the attractiveness to them, what they're being told. I said in my speech that sometimes perception plays a strong role, and sometimes it stems from guidance counsellors and teachers. This is not a new issue. This has been long-standing. I think we have tried over the years to promote trades as a venue for youth and it's been challenging for all sorts of reasons. Youth perceive these jobs sometimes as not having a lot of career advancement, as not being challenging.

That being said, as I indicated, we see registration increasing systematically. I think we're being successful in attracting people in trades. There's obviously the demography of this country. There's also the fact that this is an issue driven by labour demand, or if you want, industry. Youth are looking at this and there can be spells of unemployment and challenges in terms of getting their training.

As a good economist, my training would say that when we look at the data there's a lot of noise, and to actually identify one specific factor that would explain why youth are not necessarily attracted to trades is very difficult. I think it's a myriad of effects. That's also the reason we offer a suite of programs. It's not just one program; it's about trying to tackle the issue through various means that we have access to.

[Chris Charlton, NDP, Hamilton Mountain, ON]

I'm interested in your comment—and I hope I'm not putting words in your mouth—that to some extent this is an industry-driven demand.

[Jean-François LaRue]

Yes.

Sorry, I should say a labour-driven industry. You need to have construction projects. You need to have them in the region where the apprentices are available, more in the sense that this is a pro-cyclical type of industry.

[Chris Charlton, NDP, Hamilton Mountain, ON]

I appreciate that, and I certainly understand that's where the job opportunities and the training opportunities are. On the other hand, apprenticeship training can take up to five years and you cannot get a journeyman on a day's notice. You can't say on a Friday that on Monday you need some skilled folks because you're going to have a ton of opportunities. It seems to me it does require some long-term planning and a long-term commitment.

I appreciate the industry focus, but if we want to make apprenticeships more attractive to young people, I think we also need to come from the student-centred perspective, from the apprentice-centred perspective, and have a commitment to them that if they're contemplating a five-year investment before they get their ticket there will be support for them through those five years. I know a number of people who gave up their apprenticeships. They were within a year of finishing and the employer said, sorry.

Is there anything we can do as legislators to make sure that people don't bail on their apprentices and leave them with nothing after the apprentices made a four-year investment in their training?

[Jean-François LaRue]

That's the reason we're acting on both sides of the ledger, as I said. For example, we have the apprenticeship job creation tax credit. That's a credit to employers of up to $2,000 for apprentices. We're also providing grants to students. They're not what I would call student loans, but they're actual grants, up to $4,000 as well, if they complete.

[Chris Charlton, NDP, Hamilton Mountain, ON]

Are the grants needs based? Does every apprentice upon completion get $4,000 from the government?

[Jean-François LaRue]

They get what we call the apprenticeship incentive grant, which is $2,000. There's the apprenticeship completion grant, which is another $2,000. For entering, they get the $2,000 in grants. If they complete the apprenticeship, they get an additional $2,000, for a total of $4,000 over the course of their program.

We support the individual, and we also support the employers who provide the training. Employers only get a benefit the first two years. If the program, as you pointed out, lasts five years, we have examined the possibility of extending that credit. This idea has been floating around for some time. There are the first two years. I think you know that it's a complete suite of programs.

Obviously the question is whether this is the optimal way of promoting trades. This can cost quite a bit of money fairly quickly. Could the same amount of money be used through advertising campaigns? Would that better reach some of the individuals? Perhaps we could conduct specific projects through some of the targeted initiatives which over the years we have found sometimes can be more effective. We're trying to balance all this.

[Chris Charlton, NDP, Hamilton Mountain, ON]

Are you suggesting that the grant that currently goes to employers may not be as effective as initially hoped?

[Jean-François LaRue]

Absolutely.

[Chris Charlton, NDP, Hamilton Mountain, ON]

Has there been any analysis of whether it has made a positive impact in terms of retention of apprentices?

[Jean-François LaRue]

It's certainly a fairly recent initiative. There is a lag in the data, so it's very hard to demonstrate the affect it has at this point. We have our survey indicating that the apprentices and the employers appreciate the service they're receiving. It's reaching the intended individuals and it's recognizing the cost and it removes some of the financial hardship that individuals may face as they pursue their program.

[The Chair, Conservative, Ed Komarnicki]

Thank you, Ms. Charlton. Your time is up.

Did anyone else wish to make any comments relative to that?

Go ahead, Ms. Bertrand.

[Monika Bertrand, Director, Youth and Labour Market Programs for Persons with Disabilities, Department of Human Resources and Skills Development]

I want to add that under the youth employment strategy, for example, we have the skills link program. While we do not support apprenticeship training from beginning to end, the program supports youth who may have difficulty finding an employer to finish their apprenticeship. Through the program, we provide a wage subsidy to a potential employer to help the youth finish an apprenticeship and get the credential.

[The Chair, Conservative, Ed Komarnicki]

Okay.

Mr. Daniel, go ahead.

[Joe Daniel, Conservative, Don Valley East, ON]

Thank you, witnesses, for being here today.

My question comes from a British background and the apprenticeship programs there. Many of those programs start with students right out of school at age 16 or so. Have you done any comparisons of apprenticeship programs in Europe, Britain, Australia, or anywhere else compared to the ones we have to see what benefits they have?

[Jean-François LaRue]

To be honest with you, I'm not too familiar with these studies. I'm told there are some out there in terms of examining the different practices. There's a fair amount of expertise within the CCDA in terms of various apprenticeship programs.

We're certainly interested in what's going on in the U.S. right now. This is an area where there is a vast pool of available workers in the trades. One of the important aspects is bringing workers from abroad as well. I'm stretching your question to cover the issue of foreign workers. It is certainly the aspect of assessing those foreign workers, not necessarily in the traditional way of a Q and A assessment or test, but using multiple assessment instruments to do that work.

[Joe Daniel, Conservative, Don Valley East, ON]

My question wasn't directed towards foreign workers, but more to the apprenticeship programs—