Thank you, Mr. Chair.
Hello. My name is Louis-Martin Parent, and I am a senior policy analyst at the Canadian Federation of Independent Business, the CFIB.
With me here today is Corinne Pohlmann, CFIB's vice-president of national affairs, who will be answering questions with me in the small amount of time we have.
We're pleased to be here with you to present our members' experiences in hiring and retaining older workers, as well as policy recommendations on how to best encourage this relationship. You should each have a copy of our presentation as a PowerPoint deck with you in English ou en français, and I will be going through that presentation today with you.
First I'd like to spend a few moments talking about CFIB and the way we operate. CFIB is a not-for-profit political advocacy group that represents the views of more than 109,000 business owners across the country, in every industrial sector and region. We are 100% funded by our membership and are strictly non-partisan. Our policy positions are taken based on member feedback from surveys on all issues relevant to them.
Before starting on slide 3, I'd like to note that for the sake of clarity we'll be using 60 years of age as the cutoff for “older worker”. Obviously people have different definitions of “older worker”, but we're going to use this for our presentation.
Our members have a keen interest in the issue of older workers, not just because of general social issues but also because of the skills and labour shortage problem. This is not just a western Canadian problem; many SMEs in Ontario and Quebec and in Atlantic Canada have reported important skills and labour shortages in their sector or region. National data from 2012 shows that more than 60% of members said that it was somewhat or very difficult to hire new employees in the past three years.
There is no single cause to the shortage-of-labour issue, and there is no single solution to the challenge, either. CFIB believes that an important part of the solution is to improve the participation rate of those traditionally under-represented in the labour force, such as older workers.
To further underline the need to better integrate older workers, I'd like to cite Stats Canada's result from the most recent census:
The number of seniors is approaching the number of children. Between 1992 and 2012, the number of seniors increased 57.6%, while the number of children fell 3.6%. As a result, on July 1, 2012, children outnumbered seniors by 476,300, compared with close to 2.6 million on the same date in 1992.
Finally, for your information, we are currently consolidating our shortage of labour survey data for a mini-report slated to be released later this summer.
The next few slides, starting with slide 4, present data from a 2007 report on older workers in our western provinces. In all, 47% of members in western Canada said that they currently employed workers 60 years or older. Moreover, the tendency to hire older workers increased with the size of firm. For example, 65% of companies with 20 to 49 employees had older workers on staff, compared with 47% of firms with 5 to 19 employees.
More than 50% of firms in manufacturing, transportation and communications, and wholesale reported having older workers. The industry with the lowest incidence of hiring older workers was the primary sector, at 39%.
Slide 5 shows that small businesses value many different traits brought by older workers to their company. In particular, the industry experience or technical knowledge accumulated over many years is a valued skill that 89% of the members say is important to consider when hiring older workers. Strong work ethic and loyalty often also come up as other positive traits, with 85% and 78% of members respectively pointing to these two aspects as beneficial.
Our study asked members what challenges they face in hiring older workers, and slide 6 shows a selection of responses. Overall, the difficulties in accessing and drawing from this pool could be loosely grouped into the following areas: challenges in finding the workers; challenges in updating the required skill levels, especially in computerized environments; and health concerns, such as increased insurance premiums, the ability to do the work required, and job safety.
It's very important to note that many members responded by saying that they had no challenges in hiring and retaining older workers.
Finally, many employers have modified the nature of the job in order to take advantage of an older worker's specific skill set, as demonstrated by the last quotation on slide 6, and also by the comments Barbara made earlier today.
Slide 7 indicates that hiring older workers depends on many factors, some of which can be controlled by the employer, some by the employee, and some by government.
Our 2007 study asked members how they retained existing older workers. Over 60% of businesses said they had a specific arrangement with their workers on the hours of work, and 45% said they changed the job to suit the needs of the worker. However, over one-quarter of members said no changes were necessary. Still, employers have shown flexibility both in terms of scheduling and in terms of the work being performed.
We should also note that when analyzing the results, it was those businesses that reported having difficulty retaining older workers that were more willing to adapt to the older worker, showing perhaps that the shortage of labour problem is driving this need to adapt.
The next few slides, starting at slide 8, will look at ways to incent workers to stay in the workforce longer. These modifications are important, given our changing demographics, and labour shortages in particular.
The decision in Budget 2012 to increase the age of eligibility for old age security to 67 from 65 was supported by CFIB members, again likely due to the shortage of labour problem. You will note that the majority of respondents were supportive of the measure, with the caveat that workers in the public sector receive a similar increase.
Slide 9 shows that 66% of SME owners believe the OAS changes will result in more people staying in the workforce and will help reduce potential labour shortages.
The government recently also made changes to the Canada pension plan in terms of eligibility and contributions. You'll see on slide 10, on the positive side, that providing the option of delaying CPP in favour of higher future benefits should help address labour shortages. On the other hand, our members have raised concerns about the changes to CPP contributions. It is good that we are encouraging workers to stay in the workplace; however, we should not make this punitive for employers. The changes now make it so that if a worker is over 65 and chooses to keep contributing to CPP, the employer has no choice but to contribute as well. We have had many businesses that were caught by this recent change and were faced with $5,000 tax bills per older worker. This is a disincentive to hiring older workers.
Like CPP, employment insurance is a payroll tax and is therefore particularly harmful to a business's operations, as it is a tax on jobs. That is why SMEs support the EI hiring credit, in particular, because it is administratively simple and is credited directly to the payroll account. But the point of EI is to be an insurance program in the case of job loss. For some workers this might not be as much of a concern as it would be for the rest of the workforce. They may be working in a position as a favour to an ex-employer, for example, or as a temporary measure to fund a certain personal project or endeavour. In these kinds of situations, could we not make paying into EI voluntary?
To reinforce that point, in the 2008 survey 71% of members said workers over 65 should be exempt from paying EI premiums, versus 23% who disagreed.
Finally, I'd like to sum up by saying that SMEs value the contributions of older workers. Though some flexibility in working arrangements can be required, the net benefit seems universally positive. When looking to encourage the integration of older workers into the workplace, the government could help by providing more information on where to find qualified workers and by creating broadly accessible tools that promote hiring in this manner, like the EI hiring credit.
To that point, EI contributions could be voluntary for both the employer and the employee over a certain age threshold, given that their use of the program would likely be lower. We also suggest that when an employee over 65 chooses to keep paying into CPP to draw higher benefits, which is their right, employer contributions should not be mandatory.
Thank you very much, and I look forward to your questions.