Human Resources Committee on Feb. 19th, 2019

[The Chair, Liberal, Bryan May]

Good morning. Pursuant to the order of reference of Friday, November 2, 2018, the committee is beginning its study of M-190, with regard to labour shortages in the greater Toronto and Hamilton area. The committee will hear from the sponsor of the motion and from department officials today.

Without further ado, I'd like to turn it over to the sponsor of this motion. For the next hour, we'll be speaking with MP Peter Fonseca from Mississauga East—Cooksville.

You have 10 minutes for your opening remarks, sir. Those 10 minutes are all yours. Go ahead.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Thank you very much, Mr. Chair, and thank you to the members of the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities. I thank everyone here for the opportunity to discuss this motion, M-190, and I thank you again for the unanimous support that this motion received on second reading.

Chair, I'd like to set the stage for motion M-190 today. Our government is proud of the $180 billion we're investing in infrastructure. Both our residential construction sector and our ICI—the industrial, commercial, and institutional sector—are experiencing tremendous growth. We have an economy that has created 900,000 net new jobs since we took office. Our unemployment rate is at a 40-year low.

Our government is seizing the moment and seizing the opportunities for everyone: all Canadians, women and girls, men and boys, indigenous, everyone, no matter the colour of your skin, your sexual orientation, the place you came from or when you arrived, whether many generations ago or just yesterday.

Members, we need all Canadians at their best, so that they—we—can take advantage of these tremendous opportunities and contribute as a collective and personally to this prosperity, all the while growing our middle class and those working hard to join it.

M-190 is aimed at addressing the ongoing challenges that the construction industry is facing due to a lack of skilled labour in the sector within the greater Toronto and Hamilton area, the GTHA. I'd like to see recommendations that can be put forward, along with an analysis of M-39, the Atlantic immigration pilot project, as a template, and the use of permanent immigration to assist in addressing this huge challenge.

The homes we live in, the businesses where we work, our hospitals, schools, roads, bridges, underground sewers and pipes, all of those places are built by construction workers. It's hard work, as temperatures on a work site can be as much as 30° below or 30° above. In many cases, it's back-breaking work for the men and women who build up our cities, towns and villages. Brick by brick, block by block and stone by stone, these mid-level skilled construction trades—bricklayers, form workers, framers and carpenters—are the backbone of the construction industry, and they're in short supply across the country.

The shortage is exacerbated, especially in the high-growth greater Toronto and Hamilton area. These are good-paying, family-sustaining jobs, but Canadian parents and schools are just not encouraging our kids to get into the mud-on-your-boots, dirt-in-your-fingernails type of work, as I always like to say. I've listened to stakeholders, labour leaders, workers, contractors and industry advocates together, who express major concerns in regard to a “severe”—in their words—labour shortage of qualified employees. With increased labour shortages, businesses not only are hampered momentarily, but also have significant planning and future growth challenges.

This motion is geared toward providing residents of the greater Toronto and Hamilton area, and all of Canada, with a plan for sustainable economic growth in the construction sector. The GTHA is home to a thriving construction industry. The construction sector has become Canada's biggest job generator, in percentage terms, consistently expanding and currently accounting for almost 5% of the entire Canadian labour market.

StatsCan projects that the population will grow and will reach an estimated 51 million by 2063. This projected increase in population will continue to drive construction demand for years to come. However, there is a critical shortage of skilled labour that is currently happening. Across Canada, it's expected that a quarter of the entire construction work force will retire in the next 10 years.

Just in Ontario, this mismatch of skills is projected at a $24.3-billion loss in forgone gross domestic product, and a $3.7-billion loss in provincial tax. Besides this forgone revenue, the labour shortage has far-reaching consequences for an industry that accounts for 6% of Ontario's GDP. As the Canadian population ages and more people are set to retire, it's estimated that 87,000 construction workers will retire within the next 10 years. That's nearly 20% of the Ontario construction workforce.

Looking forward, we see that an aging workforce and retirements will account for a higher share of new job openings over the next decade. While the age profile of the Ontario population shows that it is growing older, natural population growth plus immigration to the province should help sustain overall population growth across this scenario period.

Nevertheless, the pool of available local youth entering the workforce is in decline, while retirements are on the rise. Construction employment in Ontario has increased by approximately 200,000 workers since 1997 and now accounts for 6.9% of total Ontario employment. However, at the pace the industry is growing, it will not only need to replace this retiring personnel, but it will need to attract additional workers, with estimates ranging from 20,000 to 80,000 new recruits needed by 2027 to keep up with demand in Ontario alone.

Currently, a distortion exists among youth, skills and skilled trades. The nature of employment is currently changing. However, the skilled trades will continue having a strong labour demand in the foreseeable future. Skills Canada has stated that it estimates that in the next 10 years, 40% of new jobs will be in the skilled trades, but only 26% of young people aged 13 to 24 are considering pursuing a career in the skilled trades. This information is consistent with trades not appealing to those aged 13 to 24. Skilled trades tend to be a second choice for most, with routes to university or college seen as the preferred path. There has to be a concerted effort in demonstrating that trades are an equal route to personal success and satisfaction, an equal first choice.

Demand in the construction industry is expected to grow in the foreseeable future. Polls indicate that 32% of contractors expected more business in 2018 as compared to 2017, while 51%, when asked, stated they expected the same level of business and activity. These studies all point to a very confident and healthy construction sector.

Additionally, there will be a continued demand due to immigration growth, government affordable housing programs, climate change mitigation, maintenance and renovations. It's imperative to study the labour shortage in order to create policies that will enable that construction sector to thrive and continue to provide good, well-paying jobs for Canadians.

The incentive towards having young people pursue careers in the skilled trades may take time to catch on and be implemented. There needs to be a policy implemented that will ensure continuity between a generation of retiring skilled labourers and the construction industry's increased demand for skilled labour. Just four years from now, there will be more seniors than there will be children enrolled in high school, while by 2030, there will be just two people in the workforce for every one who is retired. This demographic shift that is beginning to take place will have a drastic impact upon the labour market, especially in the construction sector.

Critics argue that the skills shortage is exaggerated, as there remains youth unemployment within Canada. Yet professional associations, along with the industry professionals, all agree that there is a shortage within the workforce that will only continue to grow. Unemployment among older and experienced workers is at an all-time low, with the numbers dipping under 3%. This trend indicates that older workers are staying in the job longer, while younger workers lack the necessary skills to fill those vacancies. From a policy-making perspective, collaboration with all involved stakeholders is required—employers, apprentices, journeypersons, employees and unions. The entire scope of the phenomenon needs to be studied.

Private member's motion 39, about immigration as a means of growth in Atlantic Canada, commissioned a study of the ways to increase and retain immigrants to Atlantic Canada, with an objective of implementing policies that will strengthen the workforce and provide economic growth. Although there are differences between the construction sector and the entire economy of Atlantic Canada, valuable information is available from the implementation of M-39.

As the construction industry continues to grow, it's also subject to a dramatic demographic shift. Construction has provided opportunities for success for generations of immigrants and Canadians alike. The industry has provided skill-building opportunities while serving as a launching pad for so many immigrants coming to Canada in hopes of building a better future, helping to construct homes and building what is now the primary capital asset for most Canadians.

M-190 hopes to address the current challenges that are associated with the lack of skilled labour in the GTHA construction sector. I would like to see recommendations put forward to assist the industry and to look at the Atlantic model as a template for providing the industry with the skilled construction workers it needs.

Again, I want to thank the committee for this opportunity.

Chair, I look forward to answering the members' questions.

Thank you.

[The Chair, Liberal, Bryan May]

Thank you, MP Fonseca.

Thank you for bringing forward this issue. There are very few of us here who haven't had both employers and unions come to them over the last couple of years bringing this issue to light.

We'll start with questions from MP Barlow, for six minutes.

[John Barlow, Conservative, Foothills, AB]

Thank you very much, Mr. Chair.

Thanks, Mr. Fonseca, for bringing this forward. You and I had some conversations when this was being debated in the House, and I want to reiterate the concerns I had at that point.

Even though we voted to support the motion, I would have rather seen something with a larger scope. The fact that this has a pinpoint focus on the GTA and Hamilton area, and only in the construction industry, I think does a disservice. As you said in your presentation, this is an issue that impacts the entire economy. We in rural communities certainly hear about it in the agriculture sector, especially in food processing and large greenhouse operations, just to name a couple. I think this would have been a better motion had we been able to expand it to include other industries, but we are here and will deal with what's in front of us.

I found it interesting to hear you in your presentation speaking very proudly of the $180 billion that the Liberal government has committed for infrastructure spending. I think it's worth noting for the record, however, that only 6% of that $180 billion has actually been earmarked for any new project. That's well behind the pace you should reach.

I have had ministers in my neck of the woods multiple times announcing projects over and over again, including ones that were done by the previous Conservative government, such as the Green Line in Calgary. I would rather see resources put to addressing some of the concerns you have than pay for ministers to travel across the country re-announcing projects.

That being said, there is one thing I would like to ask you, and I would hope we get some resolution to it. We were trying to get the minister here to talk about the supplementary estimates.

One thing in the supplementary estimates that I find interesting is that $35 million has been set aside for a program about worker protections, which is basically an audit system whereby Service Canada auditors will go into businesses. They don't have to give notice; they can just walk onto the business premises, walk into the office and start going through computers and files.

The audits that are done on some of these businesses that are using the temporary foreign worker program specifically, or maybe even express entry, are very stressful. Some of our stakeholders have gone through this process, and the audit can take up to two years in some cases, which many times can bring a business to a screeching halt. If we are looking at ways to improve the temporary foreign worker program.... This is scaring some businesses off from even applying for it.

I would like your opinion on this $35 million that is in the supplementary estimates for this worker protection program, to increase the audits and inspections of businesses that use the temporary foreign worker program.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Thank you very much for the questions, Mr. Barlow.

What I can speak to is that, being on the road and speaking to the construction sector—that's the employers, the contractors, organized labour, non-union shops—I hear from them that they are growing and expanding. The one thing that is holding them back is the need for a labour supply.

There are homes on hold because they can't find the next bricklayer. For projects in municipal infrastructure, whether affordable housing or pipes or bridges, it's the same concern that continues to come up.

That's why I've brought this motion forward. I know you speak to all of Canada, and I've spoken to members from coast to coast to coast. I agree with you that there are labour shortages and there are gaps. Why is my focus on the GTHA? That's probably where the demand is greatest. If you look at the construction sector, in particular in the greater Toronto and Hamilton area, you see that it's growing at about double the rate for the province and the country, at about 8% growth.

What we've learned from the Atlantic model—and I'd hoped the committee would be able to look into the Atlantic model and what has come out of that—I would like to then be able to have that applied to the GTHA. That's why you want it contained. If it works there, it could be rolled out to your riding and to many of the members' ridings from coast to coast to coast.

I do understand that it is a challenge. In a way, it's one of the good challenges that we can have, with the amount of growth that we've had—900,000 net new jobs in the country—and the amount of investment that is going into infrastructure. I believe this is the right time to fill that gap and get away from these temporary foreign workers and the LMIAs, etc. What we're talking about here, just like in the Atlantic, is immigrants coming in and setting down roots, being able to have a bricklayer coming from another country—

[John Barlow, Conservative, Foothills, AB]

Thanks. I don't want to interrupt, but I just have 30 seconds left. I have one other quick question for you.

Have you had discussions with some of the provincial associations? We do have immigrants coming. I don't have any specifics, but they can't get their credentials recognized at the provincial level because of unions or provincial organizations and associations that won't recognize those credentials. We can do everything we can, but unless we bridge that gap as well.... I think that is something we have to focus on.

Have you had conversations with some of those provincial organizations to loosen some of those restrictions as well?

[The Chair, Liberal, Bryan May]

Please give a very brief answer, if you could.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

That's a great question, Mr. Barlow.

I've had discussions with all of them: the Canadian Home Builders' Association, the Ontario Home Builders' Association, BUILD, and our largest labour organizations. They're doing a great job. They're doing a lot of training, etc. We have to break this stigma where the trades are seen as a second choice and not a first choice. They are all onside. We want a concerted effort to be able to address this gap and to provide labour, not only for today, but well into the future.

[The Chair, Liberal, Bryan May]

Thank you.

MP Morrissey, you have six minutes.

[Bobby Morrissey, Liberal, Egmont, PE]

Thank you, Chair.

I would like to follow up on my colleague Mr. Barlow's question. Looking at the Atlantic pilot, one of the issues is that the prioritization or the identification of the skills gap still has a lot to do with the provinces. We have to identify that. A point that was made was that you need to get the buy-in at the provincial level, on the ground, so that will be critical in targeting and prioritizing the skills gap that you've identified in your area. Could you comment on that?

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

That's a great question, Mr. Morrissey. Having spoken with the major associations.... In Ontario, that's the Ontario Home Builders' Association and BUILD, which represents all of the various contractors, as an umbrella group. We've had ministers from the present government, as well as the previous government, who have spoken to this shortage. They would like to see something done.

[Bobby Morrissey, Liberal, Egmont, PE]

Will the Ontario government prioritize?

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

I haven't spoken to the Ontario government, but what we have heard from this administration, as well as the previous administration, is that this is definitely a pressure point, something that needs to be addressed. We're all trying to do it.

The best way to do it is to be able to get Canadian kids to fill those gaps. That's not happening as quickly as we need. With this aging population, this kind of tsunami coming along, what we need is a new way, a way to be able to fill that gap, and not in a band-aid, temporary type of solution. We're talking about permanent residency, citizenship, a bricklayer coming here, or a carpenter, form worker or framer.

Again, back to Mr. Barlow, as well as Mr. Morrissey, these are not regulated, certified professions. They're not like your electrician or pipefitter, etc. These are what may be deemed, at times—not by the industry but by government—low-skilled. You tell me that someone going out there and trying to build a wall of bricks or stone is a low-skilled worker. It's a poor term used for the industry.

[Bobby Morrissey, Liberal, Egmont, PE]

Yes, okay.

I have a couple of questions.

Mr. Fonseca, you're on the ground in your area, and you've identified this as a critical issue. Could you elaborate briefly on where in the country we are getting the disconnect between the statistics that are compiled by the department responsible—statistics that say that's not quite the case—and the reality? We do face it in several industries, and it tends to be in areas where the criteria we are currently using do not identify these as critical skills or high skills.

I want you to comment on that, and then I also want to follow up and ask you a question. You made the statement that you would like to see this committee put forward recommendations to address this. What are those key pieces? If you had two recommendations that you feel would address the situation that's confronting you in the unique area of the GTA, what would they be?

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

That is a magnificent question.

I think what often hampers government is that we are not nimble enough, fast enough or flexible enough to be able to address the need in the marketplace. By the time we're addressing that need, the need may not be there, or it has changed the whole labour market, the industry.

I go by what the associations say, what the employees say and what the employers say. Everybody is saying the same thing, which is rare.

[Bobby Morrissey, Liberal, Egmont, PE]

So you have unanimity on this issue.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Yes, there is unanimity.

Across the board, what they have said is that they are experiencing a severe—that's in their words, “severe”—labour shortage in the construction sector. It's not going to stop this year. What happens is that, as we continue to build, as we continue to see our population, our cities, our towns and villages grow—

[Bobby Morrissey, Liberal, Egmont, PE]

What's the recommendation, then?

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

The recommendation would be to listen to industry and to move more quickly as a government. Sometimes we have to get out of offices, put our feet on the ground and really go onto job sites and listen to what's being said. Then, we need to be able to act quickly for our economy, for jobs, for our workers and for our communities.

[Bobby Morrissey, Liberal, Egmont, PE]

Do I have a full minute?

[The Chair, Liberal, Bryan May]

Yes.

[Bobby Morrissey, Liberal, Egmont, PE]

Obviously, when you look at these, depending on the area or region you look at, there are different challenges. As a government member, I'm often forced to defend against, “You're allowing too many immigrants into the country, and they're taking jobs from Canadians,” which is a contradiction.

How do you balance the two, when clearly you can demonstrate that there is a critical need? Have you been able to quantify the cost to the Canadian economy of allowing this to go unaddressed? It would have a drag on the economy if we cannot provide the critical skilled labour in these key areas.

[The Chair, Liberal, Bryan May]

He has left you only about 15 seconds, I'm afraid, to answer that question.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

This is an economic driver. These are people who would be coming in and hitting the ground right away. They would be working almost on day two. They go through their health and safety check. They get on the job site, and they're contributing through taxes right away to our country. This would be a great opportunity for Canada to close a gap and grow jobs.

[The Chair, Liberal, Bryan May]

Thank you.

MP Duvall is next, for six minutes.