Human Resources Committee on May 29th, 2014

[The Vice-Chair (Ms. Jinny Jogindera Sims), NDP, Jinny Sims]

Thank you, Madame Groguhé. You are way over time. Sorry.

I just want to remind my colleagues that five minutes is the limit. We want to make sure that all parliamentarians have equal access, so try to pay some attention to the chair. I hate to interrupt somebody mid-sentence.

Mr. Maguire.

[Larry Maguire, Conservative, Brandon—Souris, MB]

Thank you very much.

Thank you to the presenters for your words this morning.

To Mr. Mendelsohn, the Mowat Centre has done a number of studies on employment insurance, and has done good work with it. One of the things that we face all the time in government, and that I'm sure industry faces, is the unequal distribution of employment across the country—or unemployment, if you will—in certain sectors and in certain areas. Ontario was certainly hard hit from the 2008 situation.

Before I get both groups to expand on that, Mr. Mendelsohn, you had to do your wrap-up pretty quickly. Perhaps you can just expound a little bit more on those four points: the easier use for the LMDAs; the labour-style transfers you were talking about; how you would use those updated numbers from 1996; and how, with regard to the provinces—obviously we try to work better with provinces every day, if we can—we ought to make sure these programs are being presented proportionately.

[Matthew Mendelsohn]

Quite succinctly, the labour market agreements were developed, in part, as a specific recognition that the LMDAs and EI don't work particularly well in Ontario. Everyone here is aware of the challenges of EI reform. In the 2000s there was a recognition that, rather than try to change all of the LMDA funding, a different program ought be created to be available to workers not eligible for EI. A lot more of those were in Ontario, and those were long-term structural unemployed and new entrants to the labour market. Ontario has more young people and immigrants entering the labour market who are outside the EI system.

So the main recommendation—we could certainly talk about this in more detail—is to grow the labour market agreement working federally and provincially with federal transfer style agreements that all provinces could use with the federal government and with employers to target their own particular needs rather than have this set of criteria that really is 20, 30, 40 years old that says you can only get access to the training programs if you are eligible for EI or if you just recently exhausted your EI, which leaves a huge swath of the workforce, whom I think everyone is trying to better train.

In terms of the specific changes in 1996 allocation formula, again I don't have to tell anyone here that changing allocation formulas that provide more funds or less funds to different provinces is always challenging. But I think as a matter of principle we have to say that the 1996 formula has to be updated. It has to be more in line with the contributions made by provinces, or it has to be per capita, or it has to be really needs-based, but right now tying it to changes from 1996 makes no sense.

[Larry Maguire, Conservative, Brandon—Souris, MB]

Would you like to expand on that?

[Marc Brazeau]

Attracting the best and the brightest is our focus as an industry, like a lot of the other industries. So if the best and the brightest don't fit the definition that's currently established for the LMDAs, then it's a challenge for us.

Like my colleague here, we promote flexibility and we want to see a program where certain individuals are not discriminated against just because of their current situation. We simply want to find the best employees and match them up with the best jobs and the best skill sets they can bring to us.

I don't know, Robert, if you want to add anything?

[Robert Pitt]

No, I completely concur. Like you said, Larry, the demographics are changing across the country, moving from Ontario into the west and moving from Atlantic Canada into the west. There's a lot of movement going on.

[Larry Maguire, Conservative, Brandon—Souris, MB]

Do either of you see anything in regard to labour mobility rulings, and that sort of thing? I dealt with this a little bit provincially, and the borders are not porous for labour movement across them. What could be done to make them a little more porous? It wouldn't solve all the problems by any stretch of the imagination, but how can we have a more flexible system or more porous system to allow people to be more mobile than they are today?

[Marc Brazeau]

Maybe I'll start. We're in an industry where a car is a car, so whether you are in the east part of the country or the west part, you're basically working on the same type of vehicle.

I think there are a couple of things there that are facts, and one is that in general, a lot of Canadians have the ability to be mobile but don't necessarily take advantage of that opportunity to be mobile. I think that's a reality that we face.

Second, to your point about the need to tighten up some of the Red Seal standards to ensure that all jurisdictions and all provinces are accepting the certain level of standards that are available, I think that's an area that could be improved upon, absolutely.

[The Vice-Chair (Ms. Jinny Jogindera Sims), NDP, Jinny Sims]

Thank you so much.

Your time is up.

Now we are moving to Mr. Cuzner.

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

Thanks very much, Madam Chair.

First to Mr. Mendelsohn, if you challenge a five-year-old's authenticity on the LEGO tie, if that were a real LEGO tie, you could break that bad boy down and have it back as a bow tie in a matter of minutes.

[Voices]

Oh, oh!

[Matthew Mendelsohn]

You are a master builder evidently.

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

I'll get both of you to weigh in on this. We did a previous study on apprenticeships and we know that there's an alarming attrition in apprentices. Enough of them start the programs, but they just don't finish the programs, and we have this drop-off rate. One day of hearings stands out in particular. We had five apprentices here and we went right down the line, and each of them said that when they had returned to school, they were supported through the EI system. Now only 28% of Ontarians, according to your figures, would even qualify for this. Their level of frustration about getting that financial support through their study period was one of the main reasons young people are dropping out of apprenticeships.

But what both of you are saying is, I believe, is that we should allow for a program that disengages the supports for those apprentices from the EI system and have them supported some way through the training program. I'd like your comments on that, please. Is that what I'm hearing from both of you?

[Matthew Mendelsohn]

I don't know enough about the apprenticeship point that you have just made to comment on it in detail. I agree that we need more apprentices and that particularly some western provinces are doing better on the ratios than Ontario is.

What I would say is that our general thrust is that the EI system needs more flexibility. One of the things we recommended in a major report a few years ago was that people could go back to finish their high school while on EI. Right now, if you're just trying to get your basic high school and you have lost your job after several years, you can't do that. The apprenticeship may be similar.

But in general and as a matter of principle, allowing a lot more flexibility so that Canadians can pursue training opportunities of various kinds—and across provinces, to pick up on Mr. Maguire's point that there is an economic union here, so that you don't lose your training opportunity if you move from one province to another—all of these flexibility things would make a lot of sense. I'm also sure that they would apply in the example that you raise as well.

[Marc Brazeau]

I would say, strictly from the point of view of our industry, that the apprenticeship program is our bread and butter. We're seeing diminishing numbers; we're seeing a high drop-off rate, something you alluded to.

There's a responsibility that we assume as employers, by the way. We're not washing our hands clean and saying that we've done everything; there is much more that we can do as employers to embrace apprenticeship even more and to make sure that there is proper mentorship and coaching on site, and so on.

But if through LMDAs there were an opportunity to define apprentices differently from the rest, so that there was a greater focus upon and a greater flexibility in apprenticeship, that would be great news for our industry.

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

The second thing is that there has been a fair amount of concern that when the job grant was created, money was taken from the LMAs, money that went to help especially persons who had challenges with literacy and numeracy.

Do you see some type of flexibility being developed through the LMDAs that might be able to accommodate some of the dollars lost through the reprofiling of the LMA money?

[Matthew Mendelsohn]

I think it's very difficult. It's very difficult because the LMDA is funded by employer and employee contributions. At its core it's an insurance program. As a matter of principle, if there are a bunch of people who are outside that system and not making contributions to EI, it makes perfect sense that they can't get access to the LMDA money.

So yes, you can have some more flexibility to make sure that people can move through provinces or pursue different kinds of training, whether apprenticeship or high school. But at the end of the day, the way the labour market has changed means that the federal funding priority has to shift toward LMA-style agreements and put more federal resources there, so that we capture more workers who need more training.

[Marc Brazeau]

If there's an opportunity to attract and not to exclude the best and the brightest as a result of their not falling within the definition, I think there's a need to look at that, because the critical skill shortages that we will see in the future will require us to be as flexible as possible in the ways we assist those people to integrate back into the workforce.

[The Vice-Chair (Ms. Jinny Jogindera Sims), NDP, Jinny Sims]

Thank you very much. That's perfect timing.

We're now moving on to Mr. Butt.

[Brad Butt, Conservative, Mississauga—Streetsville, ON]

Thank you very much, Madam Chair.

Welcome, gentlemen. It is excellent to have you here.

I was interested in what you had to say, Mr. Mendelsohn, given that I'm the only Ontario MP at the table and that you gave some specific Ontario examples.

I want to follow up a little bit on what you said about the 1996 rules and agreement and about how the funding is done, what it is based on, and about its being a time for updating. I couldn't agree with you more; this is one of the reasons we're doing this study. It's why we're here: to make sure that the funding is realistic in terms of what the needs are.

I just want to get a more specific sense from you. Are you recommending, concerning the $1.9 billion being spent under this program, that the money should be allocated to provinces on a per capita basis? Are you tying it to unemployment rates? What is your formula, the one that you think would make this program fair?

In every federal program we run, we run into a fight—I hate to say it, because we don't want to fight with the provinces—or into this challenge. With all due respect, if Ontario gets more, the people in Cape Breton probably get less, and Mr. Cuzner would not be very happy about that.

What is the answer? You've been on the provincial side in negotiating these agreements. What recommendation do you have for us at the federal level as the best way to allocate this money across the provinces? Is it needs-based, or is strictly per-capita-based, in your view?

[Matthew Mendelsohn]

I appreciate the challenge, I appreciate the difficulty, I appreciate the inter-regional dimension of this. When money is on the table in these things, if someone is getting more, someone is getting less. I appreciate all of that.

We have not come up with a specific recommendation in terms of the formula. We always say that it needs to be principles-based and justifiable. Right now, the current formula, based on the 1996 changes, is not justifiable.

I think you can make a really strong case that it should be per capita. I think you could make a really strong case that it should be based on percentage of unemployed—that's a needs-based formula. I think either one is fine. They wouldn't lead to huge changes. Obviously unemployment is higher in New Brunswick than it is in Saskatchewan, but the changes aren't really large. And so, whether it's based on the percentage of unemployed or is per capita-based, I think you'd get much closer to a fairer formula. And if people are trying to move that way, you can always have transition mechanisms that help ease the transitions along.

The real focus is to get training dollars to where they are most needed, so that we can improve our human capital and help support it. Right now, there are lots of people who can't get access to the major federal funding, that $1.95 billion that we all contribute to.

[Brad Butt, Conservative, Mississauga—Streetsville, ON]

Okay.

The second question I have—because this will be it for my time, I'm fairly sure—can be answered by both organizations, I think.

Here's the other thing that we always struggle with. Do we have strict national standards across the country, such that provinces really have very little flexibility in adjusting for regional needs? Or do we err on the other side: do we have benchmarks or targets, but tons of flexibility in the LMDA agreements with the provinces to adjust for these regional differences?

I'd like both of your senses. Maybe AIA can start, and then Mr. Mendelsohn can answer second.

[Marc Brazeau]

We would favour as much flexibility as possible, because the winds shift, the needs will shift, the demands will shift.

To address your earlier question about the formula, I like to see a formula strictly based on where the needs are, rather than per capita-based. What are the jobs that are needed? How do you invest to fill those jobs? We would like to see as much flexibility as possible, in terms of that formula.

[Matthew Mendelsohn]

I agree fully with that. I think the federal government always has to be realistic about what it can know and can do, and the labour market training needs are different in Saskatchewan from those in Nova Scotia. At the end of the day, I have not heard anyone say that the federal government wants to get back into the business of actually delivering training programs on the ground. That function rests with provinces and with municipalities. It is often connected to the education system and PSE system and to colleges that are run or managed by provinces.

I very much support the federal government's playing a leadership role, a steering role, but by negotiating agreements that provinces feel they can deliver on. The way we would deliver programs in Toronto and the needs there are very different from what they are going to be in Cape Breton.

[The Vice-Chair (Ms. Jinny Jogindera Sims), NDP, Jinny Sims]

Thank you very much. Your time is up.

Monsieur Brahmi.