Human Resources Committee on May 29th, 2014

[Tarik Brahmi, NDP, Saint-Jean, QC]

Thank you, Madam Chair.

Mr. Mendelsohn, I imagine you understand that employees and employers are somewhat reluctant to the idea of redirecting funds collected under the EI regime to those who haven't paid into it. In this particular case, we're talking about employees.

If we look back at the fund over time, we know that $57 billion from the EI fund was redirected to the overall budget. So, historically speaking, there's some understandable reluctance around redirecting money to people who didn't pay into the fund. Does your recommendation reflect the situation in Ontario? Do you think that other provinces, and in fact the entire country, would want or agree to allocating money from the EI fund to employees who didn't pay into it?

[Matthew Mendelsohn]

Thank you very much for the question.

As I was saying earlier, I think it would be very tough to give other workers access to the EI contributions employees have made. I completely agree with you. But I think the option of exercising more flexibility when it comes to applying employer contributions to a larger number of workers is still possible.

Ontario is facing the biggest challenge, but every province would do well to better allocate federal funding. This is just one suggestion, but it might be possible to lower all employee and employer contributions, and increase spending on more generalized training through the LMDAs. That's one possibility.

[Tarik Brahmi, NDP, Saint-Jean, QC]

Mr. Brazeau, in your presentation, you said that one of the problems with LMDAs was that they didn't target a specific industry. And, at the same time, you are asking for greater flexibility around what training dollars are used for. Isn't that somewhat of a contradiction?

If we calculate the formula for funding access on an industry basis, as you suggest, rather than using a province's population or needs in relation to the unemployment rate, it could result in an industry not spending all of its training dollars in a given year. And that money could have gone to another industry in need. Such a formula could, in fact, limit the possibility of transferring funding from one industry to another. Conversely, you want greater flexibility. Isn't there a contradiction of sorts between those two things?

What method or formula for funding allocation would you propose to eliminate that contradiction?

[Marc Brazeau]

I'll use Quebec as an example.

Quebec has a law requiring employers with a total payroll of $1 million or more to invest 1% of that amount in training. Many of our members who are subject to the condition use that funding.

If the money isn't used, it goes to an organization charged with allocating it to where it is needed. And that could mean another industry. There are groups responsible for doing that. Quebec has a labour sector committee that we work with, called the Comité sectoriel de la main-d'oeuvre. The idea is to invest in training when the need is there. Flexibility is the key to the formula. In a particular year, training may not be necessary because no new technologies were introduced, but two years later, extra training may be needed.

The entire country would benefit from such a model. It works quite well in Quebec. I can tell you it has really helped our industry since it was put in place.

[Tarik Brahmi, NDP, Saint-Jean, QC]

Thank you.

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

You have 20 seconds.

[Tarik Brahmi, NDP, Saint-Jean, QC]

Okay. The next person can have the time.

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

Thank you.

We'll go over to Mr. Mayes.

[Colin Mayes, Conservative, Okanagan—Shuswap, BC]

Thank you, Madam Chair, and thank you to the witnesses here today.

I want to discuss a statement made about Ontario not getting a fair share of the LMDA allocation. I'm from western Canada. We pay more than our fair share. You might feel that you are not be getting your fair share, but we pay more than our fair share because we have low unemployment, we have high wages, and all those funds going into the EI fund are being used by other provinces.

If you were to allocate that larger amount to LMDAs for provinces that have high unemployment, they're not meeting the needs of low unemployment regions, so there has to be some mobility here.

The other thing is this. I've been in business all my life and on the shop floor if I see a lot of grey hair, I realize I have to find some younger people to train to take the places. I don't ask government to do that; that's part of my responsibility as a business person.

So to state that our Canada job grant is a waste of time is nonsense. We need to get the employers involved to match up with the people who are needed on the shop floor. The Government of Canada is saying, okay, we're going to help out to train, but there has to be some skin in the game by the employers because they're the ones who are going to benefit. They're the ones who haven't taken the time to train people knowing that they have an aging population. So I just want to put that on the table.

We're doing our best as a government to try to meet these needs through the Canada job grant and through LMDAs. We're looking at doing it better, and that's what we're here to talk about: how can we do this better? That's my question. How can we do this better?

[Robert Pitt]

Your point is well taken. You can tell by the look here that as an industry, a lot of us have the same hair colour and we need to prepare now for a large wave of succession at the business level and the employee level on the shop floor—and even at the ownership level. Your point's well taken.

The employer needs to start setting the bar for the future now. As an industry we're out to promote that on a daily basis.

[Marc Brazeau]

Yes. One example that I'd like to share with you is that we do work very closely as an industry with community colleges, whether it be NATE, Red River College, or Georgian College. We get involved very intimately with those colleges, and in some cases we fund programs specifically at the college system level. The contributions that we are making today are important ones.

We need to do more, absolutely, but you won't find an industry more in line with your thought process where it's an equal responsibility. It's not off-loaded onto community colleges, and it's not off-loaded onto government. It's an opportunity for those parties with a self-interest in this to work together to accomplish that.

I think that's where we have fallen short, Mr. Mayes. We have not done a good enough job to be on the same wavelength, on a consistent basis, to address where the needs really are.

I just want to mention our position, versus my colleague's position, with respect to Ontario. We don't share the same opinion on the need, perhaps, to prop up that one part of the region. We believe there's an urgent need all across the country for us to do more with skilled labour, and that's our focus on a national level.

[Matthew Mendelsohn]

Thank you very much for the question and that insight.

I certainly did not want to suggest that I thought getting employers involved in training was a waste of time. That certainly isn't my intention. We believe that employers must be more engaged with training.

What I was suggesting was that in Canada this human capital strategy needs to be driven by consultation and cooperation between federal and provincial governments. Announcing the Canada job grant in the way it was done—with the suggestion that money would come by clawing back provincial transfers, and that the provinces would have to match the funds, without any previous consultation—was not a smooth way to move forward this process.

I would say that employers do need to step up. One of the concerns that I have had with the Canada job grant is that we are suggesting that employers need trained workers—there's a desperate shortage of trained workers, as everyone is saying—and yet they need $10,000 from the federal and provincial governments for them to kick in $5,000 to the Canada job grant.

I am concerned about this subsidy to businesses to train workers when they say they're in such desperate need. I would agree with you that if businesses see grey hair and need workers, they should step up and train workers, without the government clawing back transfers to provinces that were designed to help the people who are outside the labour market get basic skills like literacy and numeracy. These skills are important in the long term.

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

Thank you very much. I'm sorry, you're out of time.

Now we're going to go back to Madame Groguhé.

[Sadia Groguhé, NDP, Saint-Lambert, QC]

Thank you, Madam Chair.

Mr. Brazeau, you just mentioned the 1% that is put towards funding. I am familiar with the system since it exists in France and works fairly well. The employer has direct control over how their needs are met.

That enables them to set up a whole training system using their human resources. And what that could really do for your industry is provide for internal coaches or mentors who could also coach young apprentices or others to replenish human resources. I understand your thinking completely. It's a great idea, but how could we put it into practice?

[Marc Brazeau]

Do you mean implementing the measure on a national scale?

[Sadia Groguhé, NDP, Saint-Lambert, QC]

Precisely.

[Marc Brazeau]

That's an excellent question without a simple answer.

[Sadia Groguhé, NDP, Saint-Lambert, QC]

I realize that.

[Marc Brazeau]

We're dealing with a number of different levels of government. Each province has its own responsibilities and independence. Some of our members outside Quebec have studied Quebec's model and put it in place themselves.

For instance, Kal Tire, a company in Vernon, B.C., has 250 stores in western Canada and Ontario. Underlying its approach is the desire to hire and train young people so they pursue a career in the field and work in a number of jobs. The company wants young people to build their careers in the field, so it invests in employee training. It has a training facility in Vernon where it trains young people and invests in their careers.

That's why I think the private sector offers us some examples we could model our approach on. Some companies in Quebec have already developed a similar model. I think we should promote these practices and parlay them into an overall success story.

[Sadia Groguhé, NDP, Saint-Lambert, QC]

The model is even more appealing because it allows money that isn't used or needed to go into a pool that is accessible to those who need it.

[Marc Brazeau]

The pool would be controlled.

[Sadia Groguhé, NDP, Saint-Lambert, QC]

Absolutely. That's really something.

I'd like you to comment on apprentices and apprenticeship.

The problem seems to be that young people aren't really choosing a career in the technical trades. Universities continue to churn out graduates who often can't find jobs, and yet there's a real demand for people in technical trades.

What can we do to promote the trades? What additional measures have to be taken to target those young people, who may or may not have finished high school? How do you envision that?

[Marc Brazeau]

Today, the model is broken. Young people are encouraged to register for certain college or university programs in fields that don't offer any job prospects after two or three years. We already know that. It is at that point that we need to take action. There's a lack of communication between colleges, industry and governments.

When colleges receive funding from governments, the money often goes to programs that don't lead to jobs after two or three years. We need to start by fixing that problem. We need to identify what the needs are and encourage young people to consider the trades, which offer incredible career prospects. But we're not doing that in a targeted or strategic way, and that's what has to change.

[Sadia Groguhé, NDP, Saint-Lambert, QC]

Very good.

Do I have any time left, Madam Chair?

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

You have about 45 seconds.