Human Resources Committee on May 28th, 2013

[Margaret Gillis]

I think there are a number of initiatives we're already undertaking that work towards that, because the big impacts on health, of course, are healthy eating, physical activity, and some of the broad measures we are already involved in with our eating guides and our physical activity programs, which we promote both for older people and for families and young children as well.

I think we have made some specific investments already in disease-specific strategies like the strategy for cancer control, the partnership against cancer, the Canadian diabetes strategy. So there has been a lot of work done in terms of looking at ways to keep Canadians healthy in the broad sense through public health. Of course the other side of this is the health care system, which also works to keep people working.

[Dr. Yves Joanette]

I'll just mention that we should never forget, as well, the built environment. That's very important, because the built environment is determining some of the ability to maintain mobility and to have access to work.

Canada has a good track record. The World Health Organization recognizes the leadership of Canada in age-friendly communities, but more work has to be done and more implementation. I would imagine that through the Société canadienne d'hypothèques et de logement building codes, for instance, could facilitate this.

[The Chair, Conservative, Ed Komarnicki]

Thank you, Mr. Daniel.

Did you wish to make a remark, Monsieur Bédard?

[Jean-Luc Bédard]

Yes, please.

As I mentioned before through another question, there's also the question of vocational training in the workplace and also the occasion for experienced workers to transfer their knowledge as experts in the workplace.

Of course if they are fired or if a plant closes, that expertise may not be pertinent anymore, but there are a lot of possibilities through vocational training to rechannel their potential. A lot of them are willing to go further, whether by personal motivation or also financial....

[The Chair, Conservative, Ed Komarnicki]

With that we'll move to Mr. Cuzner.

Go ahead.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Thanks very much, Chair.

I'm going to veer off just slightly but tie it in with something Ms. Gillis shared with us, because I respect the insight of the panellists we have today on this.

As many challenges as we have today, your comment was that you're trying to speak to the younger people, and that's where you will really make a difference in addressing health issues, obesity being the elephant in the room, but it's a big one, and we certainly understand that.

There's ample evidence there. It still shocks me when I open a newspaper and see a class of high school kids and three out of the five are battling a weight problem, and mainly the girls; it's mainly females.

Do you see the challenges you guys are dealing with now only getting worse further down the road?

[Margaret Gillis]

It's hard to say. I guess, again, the studies will prove that or not prove that.

I think we recognize now that it's very important to work together to address the issue of obesity, for example, and of course you correctly connected that to chronic diseases. As we know, there are connections between those two.

There is a lot of work going on across the lifespan on that front. I mentioned earlier some of the work on physical activity. The provinces and the federal government agreed to work together on health promotion just for the exact reasons you have raised, which is that all levels of government need to look at ways in which we can assist Canadians to be healthier, and the issue of increasing obesity is an example of why we need to do that.

So there is work under way now to look at ways to deal with interventions on the issue of obesity, most certainly in the Public Health Agency of Canada but really across all three levels of government.

One good example was the one you mentioned, Dr. Joanette, namely the age-friendly city movement, which Canada worked on with the WHO and is now in nine of our provinces as the basis for active aging. It looks at all kinds of issues in keeping people active but also making sure that the infrastructures are there in our communities, so that older people can continue to be active, for example.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

But you're saying that you're comfortable that there's enough research going on now into the issues that will help us chart the course.

[Margaret Gillis]

Yes, I think there's a lot of research going on. Also, I think there are activities going on to try to make that happen across all of our governments.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Yes. It would be neat to measure whether or not we're having success in some of that research.

Dr. Joanette.

[Dr. Yves Joanette]

I certainly appreciate your comment because after decades and centuries of life expectancy increasing around the planet, some experts are saying that in some areas we're probably heading to where we might see a plateau, or even a diminution, a decrease in life expectancy, because of badly managed early conditions in life. This is why at CIHR, the Institute of Aging is associating itself with the Institute of Human Development, Child and Youth Health.

I'm sorry to refer to the Canadian longitudinal Study on Aging again, but it's an important piece to inform us. We are even having discussions on the possibility of adding an intergenerational aspect to this study in order to look exactly at the very early determinants of diseases and health. This puts emphasis on the fact that this is a life-course approach. You don't manage your health and aging at 65 plus one day; it starts early.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Yes.

That being said, with the research that's ongoing, you work with a number of stakeholders on various research. Do you guys actually fund research?

[Dr. Yves Joanette]

The CIHR is the main funding body for all Canadian researchers in university and research centres throughout Canada.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Okay, yes.

[Dr. Yves Joanette]

This is where researchers find their support, and where a billion dollars, more or less, of investment is going, either in research projects initiated by researchers or research projects where we give some indication because we feel that we hear the need, like the one you're expressing today.

[The Chair, Conservative, Ed Komarnicki]

Thank you, Mr. Cuzner. Your time is up.

I'd like to thank the panel for sharing your their thoughts, views, and suggestions. Certainly there are some complexities that further studies will deal with. Thank you very much.

We'll now suspend for five minutes while we install the next panel.

[The Chair, Conservative, Ed Komarnicki]

I will call the second half of our meeting to order.

I gather we're not getting incoming video. It was there just a moment ago, so it's probably a technical issue that we can deal with.

We have with us here today, from the Université du Québec en Outaouais, Professor Ali Béjaoui. We're hoping to hear from you. We also have Professor Chaykowski, from Queen's University. And we're waiting for a connection with the Council of Senior Citizens Organizations of British Columbia.

What we'll probably do is to start with your presentation, and then when the video conference comes through, we'll bring them in.

I'm not sure who is going to start.

Go ahead.

[Dr. Ali Béjaoui, Professor, Department of Industrial Relations, Université du Québec en Outaouais]

Good afternoon, everyone. Thank you for this invitation.

I am sorry, but I have not prepared a presentation. So I will try to use the 10 minutes to give you a summary of the research on population aging I have conducted over the past 10 years. I may leave you more time for questions.

In 2004, I began working on the issue of population aging. I worked at the Strategic Policy and Management Branch of the Privy Council Office. I helped formulate the OECD recommendations. In 2006, I began another project on labour market flexibility, and I combined the two projects. A report was published by the Centre for Interuniversity Research in Analysis of Organizations, CIRANO. So I will try to summarize the results of that report for you.

When I began my research work on population aging, that issue had three aspects. I will try to briefly explain my contribution to the research projects on population aging.

The best known aspect of population aging is a declining birth rate, coupled with an increased life expectancy—a combination that increases the dependency rate. Fewer and fewer people will have to support a growing number of seniors. This aspect attracts the most attention owing to the impacts on health care spending and pension plan viability.

Another aspect of population aging—which we have been anticipating for years—is the mass retirement of baby boomers from the workforce. That underscores the labour shortage issue those mass retirements can lead to. There are questions on training, mobility and on the way to attract those older workers.

In this whole debate, the aspect that has received the least attention—and this is the aspect I have been studying—is employer response. We were able to analyze the offer thanks to data availability. We asked older workers what could motivate them to remain in the workforce longer. They said they were interested in working conditions and flexible working hours. The offer—in other words, ways to retain older workers—was given serious consideration.

In order to remove barriers and allow people to remain in the workforce longer, employers should also show commitment and implement practices that promote the retention of older workers.

I have looked at the least-studied aspect—which is referred to as the increase in the average age of the workforce. That aspect is not only related to aging. The population is now increasingly educated. People begin working later in their lives. Consequently, they continue working until a later age. Some immigrants begin their career later in life and will consequently retire later. That is all taking place in a service sector that promotes retention. That is why the average age of the workforce has increased. What is happening? This trend creates a pyramid or an imbalance in company workforce demographics. That means that there is a growing number of older workers. This will have an impact on payrolls and costs for employers.

Using data that matches up employers and employees, I tried to determine how companies were responding to that demographic composition of their workforce. How are companies responding to the increase in the number of older workers? They are responding in two ways.

Companies' first option is to use variable pay schemes, a form of wage flexibility—either through individual performance bonuses or team performance bonuses—in order to avoid seniority-based wages. That is a form of flexibility companies are trying to establish to manage their payrolls.

Another option is the use of part-time, temporary and self-employed workers. That is another form of flexibility—called numerical flexibility—that helps reduce payrolls.

It is clear that, as the proportion of older workers increases in a company, the use of part-time workers increases as well. We can say that part-time work is not a problem because, on the one hand, it helps companies adjust to a turbulent context and, on the other hand, it allows older workers to combine work and phased retirement, young people to combine work and studies, and women to combine work and family responsibilities. So it seems that flexibility is not a bad thing in itself and that it helps satisfy the needs of employees and employers.

However, when we consider it in a life-course perspective, over the long term, that flexibility can influence access to training and social benefits. It can also affect the accumulation of pension funds. Flexibility can have long-term consequences in those areas.

Therefore, I have come to the conclusion that there are two kinds of flexibility. Employers seek flexibility by using an increasingly flexible labour force composed of part-time, temporary and self-employed workers. However, that is not the kind of flexibility employees are looking for. They want flexibility in terms of working hours and working conditions. How can a balance be struck between those needs? That is the challenge in terms of public policies on labour.

The European experience shows that addressing that flexibility issue provides an opportunity not only for seniors, but also for the general population. I will give you an example. Older workers need flexibility, but young people are also increasingly seeking that flexibility, as are women. It is no longer so much an issue of work-family flexibility, but, above all, work-personal life flexibility. Greater focus should be placed on labour market transitions. In addition, we want to know what the effect of that flexibility is on labour market exclusion.

Let's take for example the transition from school to the labour market. If a policy aims to determine whether immigrants need certain qualifications to integrate the labour market, the risks or obstacles involved should be identified. If the problem stems from a lack of qualifications, our graduates also need that experience on the labour market to have a successful transition to the workforce. So the problem stems from a lack of labour market experience.

If we want to have a phased retirement policy to help older workers remain in the workforce, why not have the same policy for disabled people? Why not view partial retirement in the same way we view partial disability?

So the current challenge in public policy is to find a way to address risks instead of groups.

Our economy was in a context of labour shortage. All our programs and policies were implemented in that context. I am trying to elevate the debate. Employers want to retain workers. They have established defined benefit pension plans. The seniority principle was used to retain that labour force. Forced retirement was instituted, and it also helped employers get rid of employees whose performance was unsatisfactory. Mandatory retirement has been abolished so that interested workers can stay, but employers are sometimes stuck with certain employees. I have talked to chamber of commerce representatives. No one is saying this, but people don't want to keep all the workers. In addition, who will take charge of training?

The challenge still consists in considering that notion of flexibility, the demand for flexibility and the importance of training. It is a matter of figuring out how to address these issues in a broader context than that of population aging.

Thank you.

[The Chair, Conservative, Ed Komarnicki]

Thank you very much, Mr. Béjaoui.

We will now move to Mr. Chaykowski for your opening remarks.

Then we'll have questions from the members of the committee after you complete your presentation, and hopefully we'll be able to get the videoconference from British Columbia.

Go ahead.

[Dr. Richard Chaykowski, Professor, School of Policy Studies, Queen's University]

Thank you very much, and for the invitation to appear.

My remarks are drawn from and really build upon the federal 2008 report of the expert panel on older workers, for which I was the research director, as well as my own research on older workers and disabilities. I have prepared some remarks, and I think I'm basically going to follow along the lines of those remarks that I prepared.

I hope to provide you with what is primarily a labour market and workforce perspective on the issue of opportunities for older persons. The first question I would pose is, why would we worry about encouraging older workers to stay in the labour force?

First, from a labour market viewpoint, the aging of the labour force translates into a declining growth rate in the labour force. This can lead, of course, to lower growth in total economic output and may even affect output per person as well. The labour supply issue could be quite significant. Best estimates are that immigration alone cannot come close to counteracting the effects of the aging of the population on the labour force, so there are two considerations. First, more older workers can be encouraged to participate in the labour force at all ages on an ongoing basis. Second, older workers can be encouraged to work for more years.

Second, from a personal economic viewpoint, some older workers may need the income, either as a primary source of income or to supplement a pension.

Third, from a personal or social viewpoint, older workers may seek fulfillment from meaningful employment.

I want to turn briefly to some background labour market context for older workers. It's pretty clear that workplaces and labour markets in general are subject to several long-term pressures that are particularly relevant to older workers. First and foremost, of course, is economic globalization and all that this entails. This has created significant pressures on certain industries, causing job losses in such industries as forestry, paper, segments of manufacturing in some primary industries, and is especially relevant in single-industry-town situations. Second is technological change, which renders certain skills obsolete, requiring basic retraining and education. It also requires constant up-skilling, with new skills being required on the same job, and this is especially a challenge for older workers, who typically have lower levels of education.

I want to turn very briefly to labour market characteristics of older workers.

What is the situation of older workers in the labour market, recognizing, of course, that it changes over time and in relation to overall economic conditions? First, with respect to the configuration of jobs, older workers tend more often than other groups to find themselves in non-standard jobs that are part-time or in contract-type positions. This provides flexibility for older workers to meet other requirements, such as a desire for fewer hours to meet their personal preferences, supplement retirement income, or balance work and other family obligations. However, other older workers may work part time or non-standard work but not be able to obtain full-time employment that they desire.

Second, both the employment rates and participation rates of older workers are by far the lowest in the labour force. They tend to be less than 40%, relative to about 65% to 70% for the workforce generally.

Third, with regard to the unemployment experience of older workers, their rate of unemployment tends to be lower than the overall unemployment rate, but once employed, their period of unemployment tends to last longer and their loss of earnings relative to pre-unemployment earnings levels tends to be larger. That is, the new job the older worker gets typically pays less than the job they just lost.

There are also important differences in unemployment rates of older workers: a lower unemployment rate in urban areas relative to rural, and significant differences across regions of Canada, typically running lower moving from the east to the west.

Finally, I'd like to turn to some of the barriers for older workers. Many older workers have been employed in industries and/or in single-industry areas that are in decline, or they simply experience long-term employment situations. And older workers tend to have less education and advanced training, whereas the younger groups tend to be better educated and trained. So several problems arise.

First, many older workers have skills that are very specific to their previous or long-term job, and retraining may need to be extensive in cases where an entirely new job is the objective.

Second, investing in older workers, in terms of training and education, leaves a shorter period in which to capture returns to that investment, and the fact that many have lower levels of education to start with means that further learning is even more challenging.

Third, older workers may experience bias from employers who simply believe that younger workers are better learners.

Fourth, in seeking jobs elsewhere, relocation costs can be quite high because of home transfer costs, community investments, family bonds, and so forth.

Finally, with respect to aging and disability, the percentage of employed Canadians with a disability rises from just over 3% among those between the ages of 20 and 24 to reach well over 12% by the time Canadians reach the 60 to 64 age range. We can therefore predict with some confidence that a growing share of Canadian workers will have disabilities and will want or need to continue working, notwithstanding the fact that they have disabilities.

If they are to work productively and with equal opportunity, many will need employers to design, adapt, and manage workplaces so as to enable them to overcome activity limitations; in short, they will need accommodation.

In our own research we find that a sizeable fraction of persons with disabilities say they are not receiving the accommodations they in fact need in order to work, and to work productively. Widespread employee reports of accommodation shortfalls are consistent with other research documenting the frequent negative influence of information gaps, stereotyping, economic incentives or disincentives to accommodate these workers, workplace cultural resistance, and so forth related to persons with disabilities.

These considerations point to the need to consider a coordinated national strategy to address workplace accommodation gaps. This approach has the benefit of providing a degree of universal measure that enhances access to effective accommodation across all employees in workplaces, while ensuring there is minimal opportunity for economic disincentives to accommodate. A universal program in this specific area could, for example, take the form of a highly coordinated federal-provincial set of policies that taken together provide fairly complete coverage.

In conclusion, I'd like to identify several overarching themes that emerge regarding older workers.

First is simply acknowledging that there is a meaningful role, or roles, for the federal government in supporting the participation and employment of older workers.

Second is that active support measures for human capital development, including general education and specific training, remain essential to encouraging meaningful work for older persons, and to achieve results on a broad scale government support, at some level, would likely be required.

Third, the federal government should consider, first, targeting policy very carefully, especially in terms of addressing specific barriers to older workers; second, continuing to examine current programs to ensure that they minimize disincentives to participate in the labour force; and third, taking a lead on encouraging accommodation for workers with disability, a problem that will become increasingly important as the workforce ages.

Thank you.

[The Chair, Conservative, Ed Komarnicki]

Thank you very much for that presentation.

We'll now move to Ms. Charlton.

Go ahead.

[Chris Charlton, NDP, Hamilton Mountain, ON]

Thank you very much, Chair.

And thank you to both of you for very excellent presentations. I'm a bit sorry that I have only seven minutes to continue this conversation.

I want to start with a general observation. We have 1.4 million unemployed Canadians right now, and in my home town of Hamilton the youth unemployment rate is twice the national average. So when we talk about the need to retain older workers, I think there are significant regional discrepancies in labour force development, particularly with respect to skills shortages. I think both of you have talked about that in different ways.

Mr. Chaykowski, you just finished by talking about the government needing to be very careful about not creating disincentives for participation in the labour force, yet I think about my sister-in-law, who is a teacher and eligible to retire in January. She wanted to continue teaching until June to finish out the school year, but the school board is actually buying her out because it's cheaper for them to bring in younger teachers. And again, there are a significant number of young Canadians looking for work—which again is perhaps a regional issue.

On retention, I want to talk specifically to you, Mr. Béjaoui, about it because I think you talked about pensions as being both a carrot and stick for retention.

In some workplaces, if you have a defined benefit plan you may well decide that you want to continue to work, because you want to maximize your pension benefits at the end of your working life. On the other hand, if as a government policy you raise the age of OAS eligibility to 67, for example, it's no longer a choice for many people whether they want to continue working; they have to. So in that case pension policy is a stick rather than a carrot.

I wonder if you could comment about pensions in particular with respect to retention.

[Dr. Ali Béjaoui]

When I discussed pensions, I talked about harmony among our policies, programs and the labour market. During the shortage period when the defined benefit pension plan was established, it was consistent with the need to retain workers who had to stay longer. In addition, life expectancy was 69 years of age. The period was limited. Today, those pension funds are expensive for employers who want to retain workers longer.

That used to be a retention tool, but it isn't any longer. We then saw the appearance of defined contribution pension plans, which are more popular today. The risk is transferred from the employer to the worker.

I said that pension funds can be a retention tool, but that was in a context where the mandatory age of retirement was 65, and life expectancy was 69 years. That tool has done its job. Now, it's very expensive for the employer.

[Chris Charlton, NDP, Hamilton Mountain, ON]

Sorry, I don't mean to interrupt you, but I have a couple of other questions.

Neither of you, when you spoke about older workers, particularly defined older workers. Again, coming from Hamilton, I would certainly agree that we have a lot of industrial workers, a lot of manufacturing sector workers, who lose their jobs in their fifties. For us, we treat those workers as older workers with respect to labour market adjustment programs, that is, for retraining, skills training.

I think, though, there's a difference between workers in their fifties and early sixties, and workers who perhaps see themselves beyond the age of what used to be a normal retirement age, which is 65. I wonder if you might want to reflect on that age qualifier with respect to your presentations.

Mr. Chaykowski.

[Dr. Richard Chaykowski]

Sure. I can take a bit of a run at that. May I also address the unemployment question that you raised because I think that's extremely important?