Human Resources Committee on April 9th, 2019

[The Chair, Liberal, Bryan May]

Give a very brief answer, please.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

I certainly think that's something that needs to be explored because that's something the government can do. I would suggest that we look at that. There are other legislative pieces and policy pieces that the government can definitely get involved with, including leave and things of that nature, but that's definitely something that should be considered.

Thank you.

[The Chair, Liberal, Bryan May]

Thank you very much.

Unfortunately, that brings us to the end of this part of today's meeting.

Terry, we're very pleased to have you here, and thank you very much for proposing this study.

We're going to suspend very briefly to get the department officials in their seats, so don't go anywhere. As soon as they're ready, I'll be gavelling us in.

Thank you.

[The Chair, Liberal, Bryan May]

We're going to continue with our study of precarious employment in Canada.

Joining us this afternoon from the Department of Employment and Social Development, we have Andrew Brown, director general, employment insurance policy, skills and employment branch. We also have Barbara Moran, director general, strategic policy, analysis and workplace information directorate, labour program; as well as Éric Michaud, director, economic analysis division, economic policy directorate.

From Statistics Canada, we have Josée Bégin, director, labour statistics division; and Vincent Dale, assistant director, labour statistics division.

Thank you, all, for being here.

We're going to start off with the Department of Employment and Social Development.

Éric, the next 10 minutes are all yours.

[Éric Michaud, Director, Economic Analysis Division, Economic Policy Directorate, Department of Employment and Social Development]

Good afternoon, Mr. Chair, Mr. Vice-Chair, Madam Vice-Chair and distinguished members of the committee.

I am here to speak to you about precarious employment in Canada. I am joined, as you mentioned, by Andrew Brown, Director General, Employment Insurance Policy, and Barbara Moran, Director General, Labour Program.

As you have heard a number of times over the past two weeks, the concept of precarious employment is broad and there continues to be a lack of consensus on a clear definition in Canada and globally. For example, some international organizations have tried to define what job quality means and what precarious working conditions are.

The Organization for Economic Co-operation and Development, or OECD, developed a framework to measure and assess job quality by analyzing three dimensions: earnings quality, labour market security and quality of the work environment. Along the same lines, the International Labour Organization, or ILO, has proposed four precarious employment conditions: low wage, poor protection from termination of employment, lack of access to social protection and benefits, and limited access of workers to exercise their rights.

Overall, precarious employment encompasses a range of factors that contribute to whether a particular form of employment exposes workers to employment instability, a lack of legal protection and/or social and economic vulnerability.

In addition to the absence of a clear definition of precarious employment, important data limitations exist for measuring these aspects of work, such as a lack of time series data. Therefore, proxies are often used to allude to precarious employment. Indicators include non-standard work, i.e., part-time and temporary work and self-employment; low-paid work; union coverage rate and access to pension plans and employee benefits.

While non-standard work is one of the most commonly used proxies of precarious employment, it is often a poor measure and can be misleading. The overall share of non-standard work in total employment has remained relatively stable in Canada since the 1990s, representing about 38% of all jobs since then. Similar trends are observable for low-paid work.

However, not all non-standard workers have poor-quality jobs and are in precarious positions. We have many examples of self-employed professionals in high-wage occupations, such as physicians, dentists, lawyers and accountants, successful business owners as well as high-wage contract workers in the information technology sector.

Furthermore, some individuals may also prefer a non-standard form of work for reasons ranging from personal preference, caring for children or going to school. About three-quarters of part-time workers choose this type of work voluntarily.

On the other hand, precarity also exists in standard employment, for example, if workers are uncertain about how long their jobs may last, or have low pay and no access to employee benefits. This is why non-standard work is a poor proxy of precarious employment.

Given that precariousness exists in both standard and non-standard work, there is a need to better understand the precarious employment situations for different groups in the population. In general, females are more likely to be in non-standard work and may face more precarious employment conditions than their male counterparts. A gap persists between genders when it comes to hourly wages and annual earnings.

Likewise, older workers are more likely to be in non-standard work, particularly part-time work and self-employment. Youth are also more likely to be in non-standard work, mostly because of the flexibility these kinds of jobs offer for students.

At this time, there is limited information on whether other vulnerable groups, such as visible minorities, indigenous peoples, persons with disabilities and recent immigrants, are more likely to be in non-standard work.

As we think about the future of work, technological change continues to impact it and could eventually change its very nature. This is leading to new forms of work and could lead to greater job insecurity for some. As such, it will be important to obtain better information on precarious employment and technological changes.

While potential job impacts of automatization remain difficult to assess, it is clear that some groups of Canadians could be affected more than others. For example, individuals who are over-represented in low-skilled, low-wage and routine occupations are at greater risk of being negatively impacted.

There is also the concern that the emergence of platform-enabled gigs, such as Uber, may put more workers at risk of falling into a precarious situation if they lead to a weakening in the employer-employee relationship.

While many labour market policies and programs were designed in large part to help offset the risk that workers and job seekers encounter in the labour market, they often require workers to have an employer-employee relationship and to work a sufficient number of hours to be eligible, e.g., the employment insurance program.

The study on precarious employment that you have undertaken could contribute to the discussion on the adaptation of the eligibility rules for precarious workers and help improve ESDC programs in that regard. In addition, the study could also link to the modernization of federal labour standards under the Canada Labour Code.

In 2017 and 2018, through budget implementation legislation, the government made several amendments to the Canada Labour Code that, among other things, will ensure fair treatment and compensation for employees in precarious employment. Having a better understanding of precarious employment could help us monitor the results of these legislative changes and inform future policy development.

Such a study could also run in parallel with the work that is currently being done by the independent expert panel on modern federal labour standards, which was recently established by the Minister of Employment, Workforce Development and Labour. The panel is examining several issues related to precarious employment, such as labour standards coverage for non-standard workers and the minimum wage.

In summary, while there are some similarities internationally, there is no consistency in how to define precarious employment. In addition, a lack of data is another important challenge that the government and people outside of the government are facing. My colleagues from Statistics Canada will provide you with some details about what is being done to address that challenge.

Thank you to the committee for this opportunity to share our perspective on the study on precarious employment in Canada. My colleagues and I look forward to your questions later.

[The Chair, Liberal, Bryan May]

Thank you very much.

Up next is Statistics Canada.

Josée, go ahead for 10 minutes, please.

[Josée Bégin, Director, Labour Statistics Division, Statistics Canada]

Mr. Chair and honourable members of the committee, thank you for the opportunity to take the floor today to talk about precarious employment in Canada.

Statistics Canada has been measuring key aspects of the labour market since at least the 1980s and, in many cases, since 1976. I would like to use my time to provide an overview of our data sources and of some of the main observations related to precarious employment. I would also like to give you an idea of our priorities over the next few years, especially when it comes to bridging gaps in statistics and responding to the realities of an increasingly digital economy.

I want to point out that, in addition to our common data sources, we have a large research capacity, and we would be happy to work with the committee to examine any issue or any specific research topic you may suggest.

Like my colleague from ESDC mentioned, there is still no single definition of precarious employment, be it in Canada or abroad. At Statistics Canada, we prefer to think of precarious employment as a set of multidimensional elements to consider. For the purposes of today's presentation, what we mean by precariousness is job or income insecurity.

That insecurity may be considered as a series of risks, with some being directly related to the employee-employer relationship, others to the family, and others to the economy in general and social protections.

Employment may be precarious if it has one or several of the following characteristics: wages, hours of employment or social benefits are insufficient to meet the needs of an individual or family; the employee-employer relationship is temporary or provides limited career opportunities; or working conditions are stressful or dangerous.

The risks or the level of precariousness an individual or a family must face can increase if key economic trends—such as international competition or technological change—put certain industries or professions in danger, and risks can increase or decrease based on social protections workers and their families have access to.

Considering those definitions, I would like to focus on three series of issues related to precarious employment.

The first series of issues concerns trends related to forms of employment over the past few decades. If we consider a typical job to be a permanent full-time job that includes social benefits such as a pension plan, data clearly shows that typical jobs have become less common since the 1980s, especially among young workers.

It is important to take note of differences between men and women during this period. For example, while both pension plan coverage and unionization rates have fallen for men since 1981, they have been relatively stable for women. This reflects a number of underlying trends, including increased participation of women in industries with higher rates of unionization such as public administration, health and social services, and education.

While trends in standard and non-standard employment are relatively clear, we do see some mixed signals related to precarity in a broader set of our labour market data. For example, since the late 1990s we have seen a decrease in the proportion of employees earning less than $15 per hour. Similarly, when we analyze data related to layoffs, we see that layoff rates have actually decreased since 1981, countering the perception of an increasingly unstable or insecure labour market.

A second set of questions occupying our attention is the contribution of non-standard employment to the Canadian economy. In addition to changes in practices within industries, our data suggests that increases in non-standard employment, such as temporary work, self-employment without employees and part-time work, reflects an ongoing shift in the relative importance of goods-producing industries to service-producing industries. For example, the contribution of non-standard employment to total employment is about four times greater in professional, scientific and technical service industries, which include legal, accounting, design and research services, than it is in manufacturing. There has been little change in these figures since 1997, and in both industries the contribution of each type of employment has been remarkably stable.

Over this period, however, total employment in manufacturing has decreased significantly while employment in professional, scientific and technical services has increased steadily, contributing to an overall increase in non-standard employment.

Another way of assessing the contribution of non-standard employment to the Canadian economy is to compare internationally. When we look at one measure, temporary employment, we see that Canada is slightly above the OECD average in the contribution of temporary employment to total employment.

This national average disguises considerable variations across Canada, both in the overall level of temporary employment and in the particular type of non-permanent work.

Regional variations in precarious or non-standard work are also illustrated with a more specific example. When we look at wage growth since the year 2000, we see clearly that gains have been strongest in oil-producing provinces. When we dig deeper, we see that within these provinces, between 2004 and 2015, growth was strongest among those with lower levels of education. This is, of course, a positive story, in that it illustrates the contribution of skilled trades and other types of labour to the Canadian economy.

Since the drop in oil prices in 2015, however, the story has been less positive, as those without a university degree have seen a decrease, in real terms, in their hourly wages. This simply illustrates that dependence on business cycles and commodity prices is a particular type of precarity.

A third and important set of questions related to precarity, which we are grappling with at Statistics Canada, is the impact of globalization and digitalization on the quality of work. One example of a possible impact is the emergence of digitally mediated employment, where work is secured entirely through a website or app and done either in person or virtually.

This type of employment may increase precarity to the extent that it involves a series of short-term gigs and is unlikely to offer traditional levels of benefits or social protections.

This type of work presents certain measurement challenges to Statistics Canada and our international peers. First, some workers in this situation may report on our labour force survey as being self-employed while others may report themselves as employees, making it difficult to properly measure changes in the size of this activity. Second, some of this activity may involve second or third jobs, which are used to supplement the income of a main job. Finally, much of this activity likely crosses international boundaries and may not be well captured in tax and other administrative data sources.

We are committed to adapting our existing measures and filling data gaps to address the realities of a changing world.

Before concluding, I would like to share with you some thoughts on future directions for measuring the quality of work generally and precarity in particular.

Statistics Canada is committed to a series of actions to address data gaps related to digitalization and globalization. This includes adding questions to our existing surveys and developing new methods for the collection and integration of data. Much of this will involve partnerships with other national statistical organizations that are facing very similar challenges.

Similarly, we are aware of the need for more and better data on the impact of automation, artificial intelligence and other sources of technological change. In particular, we are pursuing methods to improve data on the skills held by Canadians and required by employers. Finally, we are taking action to improve the availability of local and detailed labour market information on a range of topics. This will facilitate decision-making by employers, jobseekers, educators and parents.

I would like to conclude, Mr. Chair, by emphasizing that Statistics Canada holds a wealth of data on employment and the quality of work. I hope I have given you a sense of the insights that can be gleaned from these data, and of course, I would be pleased to furnish the committee, as required, with more specific data on the experiences of specific populations, groups or regions.

I'd be more than happy to answer any questions the committee may have.

[The Chair, Liberal, Bryan May]

Thank you very much. That's pretty much perfect timing, so well done.

We're going to move quickly to questions. Based on the clock we're each going to get at least one six-minute question.

To start us off, MP Diotte, you have the floor.

[Kerry Diotte, Conservative, Edmonton Griesbach, AB]

Thanks very much for being here. Those were lots of great stats, for sure, and it's quite a complicated issue, all in all.

I guess we get back again to defining precarious employment.

Mr. Michaud, you talked about the need to find a definition. I think this committee has been seized with that for some time. You said that while there are some similarities internationally, there's no consistency in how to define precarious employment.

I'm wondering if there's any country that has come close to or has a definition of precarious employment.

[Éric Michaud]

That's a good question.

I'm not sure about specific countries, but Australia had one and the U.S. had come up with one, or one that was proposed. Based on the reality of our labour market, their definitions are interesting and we can learn from them but they're not something I would suggest we mirror or replicate.

[Kerry Diotte, Conservative, Edmonton Griesbach, AB]

Would you be able to offer a bit of what their definition comprised?

[Éric Michaud]

Yes, let me just make sure I have it.

For Australia, a study found precarious employment could be summarized according to three broad domains: job insecurity, lack of control and working conditions. Those are some factors. In fact, I misled you. I said that they have a definition, but in fact it's a study. That's Australia.

The U.S. also had a study and the two elements that they suggest measuring would be the extent to which work is insecure, uncertain and unstable, and whether workers have opportunities for advancement in their current jobs.

[Kerry Diotte, Conservative, Edmonton Griesbach, AB]

Okay, that's a good start anyway.

Ms. Bégin, it was interesting to me, coming from Alberta, to see that the real hourly wage growth in Canada was influenced very much by the oil sector. When it was going strong, everyone was benefiting. Now that we don't have any pipelines and the sector is struggling, it has tailed off. Workers with lower levels of education were actually ill-equipped to adjust to the downturn and we can see the result of that.

Looking at some of the other stats you brought out, we know from Mr. Michaud's testimony about a persistent gender gap when it comes to hourly wages and annual earnings, according to some studies anyway.

Ms. Bégin, you talk about jobs offering pension plan coverage. If you look at page 4, it's actually down for men and stable for women, and unionization has fallen for men but not for women.

How does that jive with the gender gap, the so-called gap where earnings are allegedly falling for women? From your stats, it looks like they're better off, at least the employees aged 17 to 64.

[Vincent Dale, Assistant Director, Labour Statistics Division, Statistics Canada]

That's a good example of how, when thinking of precarity or job quality, you have to think of multiple dimensions.

We've given two dimensions there where the situation is relatively stable for women, where there have been decreases for men. You're referring, I think, to the gender wage gap, the gap in wages between men and women. We haven't showed that in the presentation, but if we had shown that, we would have shown a narrowing of the gap between men and women but still the persistence of a wage gap between men and women.

Again, that's another dimension of job quality, something we didn't choose to include in the deck.

[Kerry Diotte, Conservative, Edmonton Griesbach, AB]

On that topic, as my colleague was mentioning, oftentimes there are choices that people make. As my colleague was saying, women sometimes want that flexibility to stay home with their children, etc. Certainly, I would think that in the federal government and many provincial governments there would not be an issue with a wage gap whatsoever. In other words, the job somebody is doing, male or female, would have the same pay, obviously.

[Vincent Dale]

It's a very complex question. You'd have to look at the hours women work compared to men, for example. You'd have to take into account absences for child-rearing, etc. We do have very detailed studies on that. I'd be happy to refer the committee to those more detailed results.

[Kerry Diotte, Conservative, Edmonton Griesbach, AB]

You say that the gap is narrowing. Can you suggest any reason that's happening? I take it that men and women are getting closer to equality across the board.

[Vincent Dale]

Again, I think it's best if we refer the committee to a more detailed study, rather than having me make a mistake in some of the details.

[Kerry Diotte, Conservative, Edmonton Griesbach, AB]

You do have some details on that.

[Vincent Dale]

Absolutely. We'd look, for example, at the composition of wages by hours worked, as opposed to hourly wages. It may be that one is narrowing, but one is persisting. We break that down into different components in more detailed studies. I don't have the details at hand.

[The Chair, Liberal, Bryan May]

Thank you.

Next, we're going to MP Long.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Thank you, Mr. Chair.

Thank you to our witnesses for their testimony this afternoon.

This question is for ESDC. In previous meetings, we discussed how precarious workers don't have access to the same benefits and protections that permanent employees do. Is there a concern about how this lack of protections can compromise safety in a federally regulated industry?

[Barbara Moran, Director General, Strategic Policy, Analysis and Workplace Information, Labour Program, Department of Employment and Social Development]

Thank you for the question, Mr. Chair.

In terms of concern we may have around lack of protections for some of these workers, I think that's one of the issues some of the recent legislative amendments were attempting to tackle. It's saying that workers in more non-standard employment, temporary and part-time employees, for example, can face situations where they don't have the same wage rights, for the sake of argument. Some of the things you look at when you're considering that are equal treatment protections. One of the legislative amendments prohibits an employer from paying an employee a lower rate of wage than another employee if they're doing substantially the same work. Basically, it's saying that if you're a part-time worker and you're sitting beside a full-time worker doing the same job, you should be paid the same wage rate. That's not happening right now.

That's one of the examples. It's looking at other things, such as making sure you have an opportunity to be reimbursed when you have work-related expenses. You look at things like minimum age for hazardous occupations. Through these recent legislative amendments, there was a raising of the minimum age from 17 years to 18 years, and things like that. For employees in more precarious situations, you look at making sure they have labour standards protections at least equivalent to full-time workers, where you can.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Is ESDC concerned about precarious workers' lack of pension benefits and how that's going to impact people looking to retire, now and into the future?

[Barbara Moran]

Maybe I'll start by referring to an expert panel. I think you've heard that an expert panel has been struck that is due to report at the end of June.

One of the issues they are looking at is access and portability of benefits. Access to benefits has traditionally been based on full-time, long-term employment with one employer. It's looking at this issue of access to benefits in the federally regulated private sector. I will note that currently, under the Canada Labour Code, there is no general obligation to provide supplementary benefit plans. There are a couple of smaller provisions, but none that say employers must provide certain supplementary benefits.