Human Resources Committee on Dec. 4th, 2012

[Dr. Andrew Sharpe]

I think the statistics belie this idea that there are not enough positions there. In 2008, as I mentioned, there were 100,000 new registrations in apprentices, so there are lots of positions. Employers need to produce more and then they'll hire workers, and they could, as part of those workers, hire an apprentice. If the economy is strong, I think the positions will be there.

[The Chair, Conservative, Ed Komarnicki]

Thank you.

Ms. Murray, do you have some questions?

[Joyce Murray, Liberal, Vancouver Quadra, BC]

Thank you very much for being here to help us understand this important issue.

My questions are in three zones. One builds on—I think it was Mr. Mayes' question—the federal role. It seems that there are different ways of tracking, and there are different counts of completion rates, and so on. Is the area of measurement an area that the federal government could potentially take a role in, stabilizing apprenticeship success and completion rates, and I guess successfully getting a job, stabilizing how that is tracked, or is that already tracked by the federal government? Is there a proper system in place to track it nationally, and if not, why not, and could that be a role for government? Were we to do that nationally, there would be more of a sense of in which trades the registration rates are low and where the completion rates are low, and there would be more comparability. I guess it's what you measure. You can improve that idea. That's one I'd like you to talk to.

Second, there has been a huge increase in women in trade apprenticeships. What accounted for that increase? What kinds of things were successful, or is there data on that? What do we need to do to have more women enter traditional trades?

Third, what are the best practices internationally? What would be three best practices that might be helpful in terms of the Canadian context that could be utilized here in Canada to make progress on the apprenticeship front?

Thank you.

[Dr. Patrick Coe]

The registered apprenticeship information system tracks each apprentice and gives you, at the beginning of the year, whether this is a new registration or a continuing registration. Then at the end of the year it tells you if this is somebody who has completed, dropped out, or is continuing on to the next year. The set-up is there I think for this data to exist.

There are other characteristics of apprentices that are reported there, and they're not all reported that well. Quite often there is missing data, and in some variables there's not enough data to do anything with because it's not reported for so many apprentices.

A way of encouraging employers to actually complete this thing I think would be useful. Maybe some credit if you actually send in the form with all of the boxes completed would be useful. Then, across apprentices, we could look at how some of the variations in their characteristics are related to their progress through the program, because we could link individuals to see how they do.

If we have an individual and we know his age, sex, race, and so forth, we can track. We know because of where they are what their requirements are, because we know the provincial requirements and how long they were employed for. This information would allow us to track individuals through, and I think do a much better job of trying to explain why some individuals complete and some don't.

At the moment, the survey is there. I just don't think it's completed well enough. Maybe adding a few more variables and questions to that survey that employers have to fill in would be a big start.

[Prof. Christopher Worswick]

I could make a couple of comments. While there has been progress for women in moving into skilled trades and apprenticeships, we still see fairly low rates. I think there's a parallel to what we looked at in our study in terms of immigrants, whether they be male or female, from non-traditional source countries and attitudes towards doing an apprenticeship.

One of the issues is that we have just seen university attendance and completion rates go up so much for that group. We've also seen that for women, where the universities in Canada, on average, at the undergraduate level are overrepresented in terms of women as undergraduate students. That's a good thing.

I think this is a policy challenge. We see these individuals achieving very high levels of education, and yet we wonder whether some of them might be happier or have better labour market outcomes down the road if they go into skilled trades. I think that's an important factor.

I think also, potentially, discrimination is a factor, where for some women entering into traditional skilled trades, they may be entering into a male-dominated environment and it may not be that easy.

I think there's a challenge there in separating those two things out. I think that's an area for future research. There may be some policies designed to help women break into male-dominated skilled trades that could be looked at.

[The Chair, Conservative, Ed Komarnicki]

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

I'd like to thank the witnesses for presenting and for answering the questions.

We're going to have to squeeze our time together, so without suspending, I'd ask witnesses who presented to leave and the new witnesses to come to the table. We'll continue without taking a break. We may have to bridge your time. We want to be sure we hear the second panel and at least get some rounds of questioning in if we can.

We thank you once again, and we invite the new panel to come forward.

Thank you very much for that quick exchange in coming to the table.

We will hear from Mr. Benoit Dostie, associate professor and director at the Institute of Applied Economics; Robert Crocker, principal, Atlantic Evaluation and Research Consultants Inc.; and John Meredith from the University of British Columbia.

I'm not sure which of you intend to proceed first.

Mr. Dostie, go ahead.

[Dr. Benoit Dostie, Associate Professor and Director, Institute of Applied Economics, HEC Montréal]

I've been asked to keep my comments short, and I'm much faster in French than in English, so I will switch to French right now.

I worked on a study on the differences between apprentices who complete their program and those who abandon it. You heard a little bit about the context previously. There is a considerable increase in the number of registrations in apprenticeship programs. However, a large number of these apprentices do not complete the program. We see dropout rates in the order of 50% and 60%.

The first finding was that the groups who drop out are generally speaking similar to those who abandon their studies in the traditional school system. They are the apprentices who have a physical handicap, are immigrants or have younger children. They are all more inclined to abandon the program than the others.

Another very important factor is the level of education of the students before they undertake the apprenticeship program. Those who have a higher level of schooling, who have a high school diploma, for instance, are much more likely to complete the program.

Age is also a factor. Earlier, we were saying that 25 is the average age of those who begin apprenticeship programs. I would like to add one thing. Over half of apprentices begin before the age of 25, but several are older when they begin. And so the average is 25, but the majority of them begin at a younger age. The younger they are, the more likely they are to complete the apprenticeship program. And so we would like to see them start at a younger age, but not too young. Indeed, the number of years of schooling they have before they begin their program is important.

When we examine the length of the program, that is to say the time they spend in the apprenticeship program, we see that there are a lot of dropouts in the fourth and fifth years. A lot of them finish the fifth year but afterwards, there is a considerable increase in the number of those who leave the program. It is important to keep the programs relatively short if we want to promote their completion.

We also examined the importance of support networks. We did not find that having parents or other family members in the same trades had a notable influence. However, if the apprentice does his program with a few other colleagues at the same time, he is much more likely to complete his program.

We see that the apprenticeship programs that have technical components also have higher success levels.

Finally, the apprentices who do their practical training period in a medium or large business are more likely to complete their program than those who do their practical training in small businesses.

Thank you very much.

[The Chair, Conservative, Ed Komarnicki]

Thank you for that.

Mr. Crocker, go ahead.

[Robert Crocker, Principal, Atlantic Evaluation and Research Consultants Inc.]

Thank you.

Some of the things in my initial comments have already been said, so that will help shorten things a bit. I have a few quick comments on the trade labour force itself.

I think you all know that it's around 11% to 12% of the total labour force. What's less clear perhaps is that it's stable and perhaps marginally declining. It's not a growth part of the labour force. It's important to note that only about a third of those working in trade occupations actually have any form of certification. Most other people are either apprentices or are just uncertified. They're working without having been certified.

For all levels of formal education, however, with the exception of university graduation, those in the trades tend to have higher average earnings than those in other occupations. On the other hand, on average, trade occupations have higher unemployment rates. I think you can recognize how that may relate to the seasonal and sporadic nature of some of the trade occupations.

It's already been mentioned that apprenticeship is a late-entry career path, with an average age of registration of about 26 years and of completion of about 31 years. Most apprentices have had previous work or post-secondary experience before registering. That suggests that apprenticeship is kind of a second choice, or perhaps lower than that. It takes about a decade for half of any single registration cohort to complete. After that, almost nobody completes. They either drop out or they continue with careers as apprentices without ever having any plans to complete. According to the national apprenticeship survey, lack of work is the main reason given by apprentices for not completing.

A more obscure aspect of apprenticeship and trades is that historically about 40% of those certified in the trades have become certified without ever taking an apprenticeship. These people are known as “trade qualifiers”. They simply document their work experience and challenge the final exam. Trade qualification is in fact the only route, other than apprenticeship, to certification in the trades in Canada. There are other routes available in other countries.

On the question of appeal of apprenticeship to Canadian youth—one of your important topics, I think—only about 4% of high school students aspire to the trades as a career. However, 10 years later, about 10% of these people actually find themselves working in the trades. That's consistent with the idea of late entry, and it's also consistent with the notion that perhaps it's second or third choice as a career.

In contrast with the case in some other countries, high school education in Canada is deliberately intended to be generic, keeping students' post-secondary and career options open as long as possible. In countries where specific vocational tracks exist, these effectively lock students into a path that precludes entry to post-secondary education and careers requiring higher education. I'll say a word more about that in a minute. I would argue, therefore, that it's inappropriate to focus on creating a specific route to apprenticeship for high school students.

On the question of labour market supply and demand, conventional wisdom holds that there is a labour shortage in the trades. However, most of the recent projections that I've seen with real numbers on them suggest that the supply of completing apprentices—which is increasing fairly dramatically, by the way—will be sufficient to meet the projected demand over about the next decade in a number of major trades. That seems to fly in the face of everything we hear. The unanswered question, of course, is whether there's a shortage of tradespersons in general or whether the shortage is more specifically of certified people, and particularly of people with the Red Seal endorsements.

There's some evidence that a regional imbalance is a significant issue, with shortages in some regions and surpluses in others. If you have spot shortages, that can create the illusion of general shortages, because of course it's the shortages you hear about; you don't hear about the surpluses.

On the question of improving certification completion rates, the trades are unique among skilled occupations in continuing to demand a lengthy period of on-the-job training while minimizing the role of in-school training. Most other occupations have long ago moved to more formal education and less work experience as the basis for certification.

The largest single issue in apprenticeship at the moment is not recruitment, but completion and certification of those who are already in the system. In the Red Seal trades, the Red Seal exams have been adopted as the certification exams in most jurisdictions. Any improvement in certification rates will also, apparently, yield a parallel increase in Red Seals.

Finally, let me summarize by making a few comments on possible directions the committee might consider.

First of all, as I've said, focus more on completion than on recruitment. In my view, one of the most cost-effective ways to increase the number of certified tradespersons would be to have policies designed to encourage more uncertified workers to become certified as trade qualifiers.

Consider the possibility of replacing subsidies to employers to take on apprenticeships, which has become fairly common, with incentives to make the work experience period shorter and more intensive, treating it more as training and less as low-paid work.

Consider the possibility of new programs, with increased emphasis on in-school training and less on work experience.

Finally, by all means, find ways to encourage high school students to acquire more exposure to the trades, but don't attempt to streamline high school students into specialized trade or vocational programs, because these are typically dead-end programs in high schools.

Thank you.

[The Chair, Conservative, Ed Komarnicki]

Thank you very much.

Mr. Meredith, go ahead.

[Dr. John Meredith, Adjunct Professor, Department of Educational Studies, University of British Columbia]

Good morning, ladies and gentlemen, and thank you for inviting me to address this committee.

My name is John Meredith. I'm a consultant on skills policy and an adjunct professor in the Department of Educational Studies at the University of British Columbia. I'm also a past apprentice, Red Seal tradesman, and vocational educator.

For the last couple of decades, discussions of apprenticeship policy in Canada have been couched in terms of crisis and guided by a few key propositions.

First, it's understood that apprenticeship is a vitally important institution and the principal conduit of labour to trades occupations.

Secondly, the apprenticeship system's output is apparently not keeping up with labour market demand, which is a pattern that will result in destructive skill shortages if not corrected. Not enough young people enter trades apprenticeships, and, with a 60% dropout rate, not enough complete their training. At the same time, not enough employers are offering training places that apprentices need.

Since it’s understood that trades jobs are good jobs, and trades labour is in high demand, this lack of engagement by both sides of the labour market poses an interesting puzzle for policy analysts and has led to some further propositions about the causes of the apprenticeship crisis. Apparently, potential participants are simply unaware of the benefits that apprenticeship and Red Seal certification could bring them, and they’re also deterred by the direct costs of participation.

Accordingly, federal policies have placed a priority on raising esteem for trades and apprenticeship through public relations efforts and on offsetting the costs of participation by means of direct subsidies, including the apprenticeship incentive grant, the tool tax credit, and the apprenticeship job creation tax credit.

Let’s quickly examine some of these claims in the light of recent research.

First of all, is apprenticeship actually the main source of skill supply to trades occupations? Until quite recently, we didn’t actually know; however, the 2006 census offers a huge advance, since it lists apprenticeship certification as one of its educational categories. The census shows that apprenticeship training accounts for a surprisingly small proportion of the trades labour force, as Bob mentioned.

Overall, about 37% of Canadians employed in apprenticeable occupations actually hold trade certification as their highest educational credential. Considering that about one third of those certificates were issued to trade qualifiers, we can estimate that the apprenticeship process contributes closer to 25% of the labour supply in the skilled trades. At that level, apprenticeship completers are significantly outnumbered by workers with a high school education or less, who make up about 38% of the trades labour force.

Next, what about the value of trade certification? We’re told that there is very high demand for the Red Seal, but a variety of barriers prevent people from attaining it.

Here again, some recent research is illuminating. In 2011 the CCDA commissioned a survey of over 3,000 employers of tradespersons to assess their esteem for the Red Seal.

The first finding was that 51% of private sector employers didn’t even know that the Red Seal existed—hardly a sign of its vital economic importance. But among those employers who did know about it, the views are also telling. On the one hand, the majority said that the Red Seal is an indicator of skill and, given the choice, they’d hire someone with a Red Seal before someone without one. But would they actually pay for that difference? Asked whether the Red Seal is useful to their organization, employers who said “no” outnumbered those who said “yes” by 33% to 29%.

Finally, how effective have direct subsidies been in promoting apprenticeship participation? According to the limited evidence, not very.

In 2009, HRSDC commissioned a formative evaluation of the apprenticeship incentive grant. Two thousand apprentices who had applied for the AIG were asked how the grant had affected their decision to persist with their apprenticeship. To quote the report: “Almost all applicants”—98%—“indicated that they would have continued with their apprenticeship if they had not received the grant. Similarly, [88.9%] of applicants who did not receive the grant still continued with their apprenticeship training.”

It would be difficult to find a purer example of what economists call a “dead weight” subsidy than the AIG.

Apprenticeship processes can be highly effective, not only in generating skill and preparing young people for successful careers, but also in mobilizing private investment and fostering industrial innovation. For proof, we need only look to some of Canada’s most advanced competitors, such as Germany and Japan, or even to occupations at home that use variants of vocational apprenticeship, such as law, medicine, and engineering.

These examples remind us that the key to promoting investment in skills by both learners and employers does not lie in public relations campaigns or indiscriminate subsidies. It lies in ensuring that those who invest in skills can count on reaping a greater reward than those who do not.

Thank you very much.

[The Chair, Conservative, Ed Komarnicki]

Thank you. Those were some interesting comments, for sure.

We'll start with Madame Boutin-Sweet.

[Marjolaine Boutin-Sweet, NDP, Hochelaga, QC]

Thank you, Mr. Chair.

Gentlemen, thank you for being here today.

My first question is for Mr. Dostie.

You mentioned that certain groups were less likely to complete their apprenticeship programs, in particular immigrants, handicapped persons, aboriginal persons, and students who have children of less than 18 years of age.

We have been given a lot of information, of statistics and observations illustrating the situation, but we have not heard many reasons explaining why things are the way they are. I would like some more explanations. What are the obstacles these groups face? In my opinion, it is easier for students who have children under 18, but perhaps a little harder for the others.

What are the obstacles these groups encounter? Do you see any possible solutions to overcome them?

[Dr. Benoit Dostie]

We did not examine the obstacles that apprentices face as such, or the reasons they mention, but we did ask them that question in the National Apprenticeship Survey. Previously we mentioned that many abandoned their studies because of the lack of jobs.

I think one of the reasons many apprentices register in the program when they are older is that the information about these programs is not accurate. I first became aware of what plumbers earn when I called one to fix a leak in my bathroom. The information regarding the advantages of these programs should be disseminated to the client groups concerned.

[Marjolaine Boutin-Sweet, NDP, Hochelaga, QC]

The job shortage is going to have an adverse effect on everybody, and not just aboriginal persons and the other groups concerned.

Mr. Crocker also referred to a job shortage.

You mentioned that the apprenticeship programs should perhaps be shortened, since people abandon the program when they are in the fourth or fifth year. You also mentioned that people drop out of the program because there aren't enough jobs. What can we do to solve that problem?

[Dr. Benoit Dostie]

In the previous session, we mentioned that the length of the program had no influence on whether or not people completed it, but here we are basing our information on the official length of the program. A lot of apprentices do not respect the official program deadlines and fall behind. I don't know exactly what we can do to motivate them to complete their program more quickly.

Some say that we should offer them some advantages such as increased support from employment insurance, for instance. Some negative reinforcement might also be in order. For instance, masters students at the HEC in Montreal who have not completed their thesis in five years have to start their studies all over again. We observe that when the buffer period is increased, the level of diplomacy increases as well. I don't think there is such an incentive system in the apprenticeship programs.

[Marjolaine Boutin-Sweet, NDP, Hochelaga, QC]

If the problem is that they cannot continue because there aren't enough employers hiring them, that isn't exactly the same situation.

You also mentioned that their prior level of education was a factor in whether or not students completed their programs.

Earlier, my colleague asked some questions about the federal level. Basic education seems to be a recurring theme, because it has been raised by several witnesses. I would like an answer in that regard from one of the witnesses.

[Dr. Benoit Dostie]

Several apprenticeship programs have a final exam at the end which the apprentice must pass. If the apprentice has a good basic education in addition to the official qualifications for the apprenticeship program, this helps him to pass that exam.

On the one hand, we want to encourage mobility by having certification programs, but on the other hand, certification programs require that apprentices have better basic skill levels. So there is a balance to be found between those two elements.

[Marjolaine Boutin-Sweet, NDP, Hochelaga, QC]

I have a brief question for one or the other of the witnesses.

Do you think we should include basic training in the apprenticeship programs? Would that be a solution for the federal level?

[The Chair, Conservative, Ed Komarnicki]

Whoever wishes to take that may do so.

Mr. Crocker, go ahead.

[Robert Crocker]

My sense is that it's less of a problem now than it was in the past. As others have said, a large number of people in the trades have high school or less. Right now, however, almost everyone graduates from high school. Going forward, my sense is that lack of high school education is likely to be far less of a problem than it was historically, when people found their way into the trades after dropping out of high school, say.

I would comment and agree that having a high school education—and there is good evidence of this—contributes to the ability to pass the exams. The exams have a fairly substantial literacy component in them, and we've discovered, particularly in the carpentry exams, that a large part is basic high school mathematics. If you don't have high school mathematics, you will struggle with that exam. That's true for trade qualifiers.

Apprentices have much less of a problem. My sense is that going forward, as I said, that problem is likely to largely resolve itself.

[The Chair, Conservative, Ed Komarnicki]

Thank you very much.

As we see, the bells for the House opening are ringing. After the House opens, there may be another set of bells for a vote. In that case, I would ask unanimous consent of the committee to proceed for an additional 15 minutes. Until that happens, we will go to Mr. McColeman for five minutes.

Go ahead.

[Phil McColeman, Conservative, Brant, ON]

Thank you for being here, gentlemen.

I want to give a bit of context to my comments. Yesterday we had a reception of the board members of the chamber of commerce, as well as Senator Ogilvie, who is a former scientist, a university president for 13 years. Among the comments that were made, first of all, was that the chamber of commerce treats skills shortages as its number one issue this year and next year, so this is exactly its single focus. Senator Ogilvie commented that the curriculum as it stands right now at universities would be just about the worst way to develop skill sets for being employable. It was quite a bold comment.

I want to boil my question down to this: How do we make apprenticeship, trades, skill development—meaning that when they graduate, students are employable in a particular field—a first choice for students?

I go back to the years when I took tech in grade 7 and 8 as an entry and an introduction to technical things, working with my hands, doing things. It was mandatory in the curriculum of Ontario at the time. I watched my high school that I attended in Ontario absolutely abandon a whole wing that was tech-related.

I think Dr. Crocker hit the nail on the head in a couple of ways. I believe we've completely removed it out of the primary and secondary school education facilities, in many ways, and we've said let's graduate people in general arts and liberal arts—which is fine; there's nothing wrong with that.

[The Chair, Conservative, Ed Komarnicki]

I will interrupt for a moment to say that the motion was moved in the House to move to orders of the day. There will be 30-minute bells and a vote at 10:33. I would suggest, with consent, that we proceed until about 10:17 and then break for the vote. Is that acceptable?

[Some hon. members]

Agreed.