Human Resources Committee on March 3rd, 2022

[Louise Chabot, Bloc, Thérèse-De Blainville, QC]

Why should it be standardized?

[The Chair, Liberal, Bobby Morrissey]

Thank you. Time has run out.

We'll go to Madam Zarrillo for two and a half minutes to close out this first hour.

[Bonita Zarrillo, NDP, Port Moody—Coquitlam, BC]

Thank you.

Again, it's going to be a gendered question around the care economy. It's going to be about pay equity.

I was looking at the Statistics Canada release from January 25. It stated that one-fifth of the employed labour force was working in care occupations, and that women made up the majority of that paid care in Canada. Unfortunately, immigrant women and those from invisible minority groups were less likely to hold well-paid care positions in relation to their male counterparts.

What tools does the federal government have to correct the pay equity gap, keeping in mind what I heard today around the child care pieces and that we're going to have to have a lot more child care workers? How can the federal government help with that pay inequity?

[Rachel Wernick]

I would begin by building on the last question and saying that the remuneration of health care workers is within provincial and territorial jurisdictions.

[Bonita Zarrillo, NDP, Port Moody—Coquitlam, BC]

Could you make some comments about upskilling and microskilling? I'm so happy to hear about that. I have heard about that in the community, as well. There's a small group of post-secondary educators that are coming together across Canada.

Is there data available? I really appreciated the comments today about not having to engage in full-time schooling, which can be difficult for women and people who care for a family or children. Is there any data about which industries are popular in this microskilling and upskilling, and if there is any segregated data around gender race, and even age on upskilling and microskilling?

[Rachel Wernick]

You are correct that one of the drivers for that long-term and home care pilot was how to improve recruitment to meet the needs of what is largely a pool of racialized women who work in this sector. That's why some of these innovative training models are what is helpful in terms of supporting those women.

Currently, that is the only pilot we have in the health care sector that's specifically looking at upskilling and re-skilling. It's in the long-term, home care, personal support worker space.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Madam Wernick.

This concludes the first panel. I would like to thank the witnesses for appearing and for providing the detailed information.

We will suspend for a few minutes while we transition to the second round.

Thank you to the department personnel for being available and answering our questions. I anticipate that you would follow up with written submissions to the committee on those questions that were technical and required statistical information.

[The Chair, Liberal, Bobby Morrissey]

I call the meeting back to order.

Committee members, we are ready to begin the second round of panellists with this study.

We are welcoming from the Business Development Bank, Monsieur Pierre Cléroux and Ms. Shannon Glenn; from the Canadian Chamber of Commerce, Ms. Leah Nord; and from the Canadian Labour Congress, Ms. Siobhán Vipond and Mr. Chris Roberts.

I welcome each of these organizations. You have five minutes to give opening statements to the committee, and I would ask that you stay within the five minutes to give the committee members ample time to question.

We'll begin with the opening statement from the Business Development Bank for five minutes. It goes to whoever wants to do it.

[Pierre Cléroux, Vice-President and Chief Economist, Research, Business Development Bank of Canada]

Thank you, Mr. Chairman. I'm going to make this statement.

Thank you for the opportunity to be here today.

There is no need to go into detail about the Business Development Bank of Canada, or BDC, which has 75 years of experience and has gained increased visibility since the start of the pandemic. However, I would like to remind you that the BDC is the only bank that is dedicated solely to entrepreneurs.

We are a Crown corporation which reports to Parliament through the Minister of International Trade, Export Promotion, Small Business and Economic Development. We operate as a lender and investor at arm's length from government. In this sense, we are a complement to private sector lenders rather than a competitor. This means we take more risk than other financial institutions and step in when the economy falters.

For instance, during the pandemic, we provided $2.8 billion in direct financial support as well as more than $4 billion in indirect support, working with financial institutions across the country. We also provide venture capital and advisory services.

It is in that latter context that I'm here. My economics research team supports, not only internal planning within BDC but also our clients, through regular publication of free reports and analysis to help them understand the economic context in which SMEs operate. These reports are framed as high-level observations about economic and market trends, coupled with practical advice for the entrepreneurs.

This labour shortage study builds on a similar study we did in 2018. These are some of the key observations, starting with demographic trends, that are well known but interesting to repeat.

The proportion of people aged 65 or more has increased from 13% in 2000 to 19% in 2021. Baby boomers are leaving the workplace, while the working-age population is growing at a slower pace. From 2000 to 2012, the labour force increased by 12%, but it's only expected to grow by 3.8% in the current decade and that number could even be lower. In other words, labour shortages are here to stay, especially in light of the expected demand for workers.

Layered on top of these long-term trends, the pandemic amplified the issue. Without COVID, there would be more than 440,000 more people in Canada. Immigration has declined by half because of COVID restrictions. The situation should resume in 2022. Further, 20% of workers who lost their jobs during the pandemic have changed fields of employment. As a result, the number of job vacancies has more than doubled since 2015, with the gap felt particularly in accommodation and food services as well as in manufacturing. These shortages have an impact on entrepreneurs, but there are actions they can take.

There are implications for limited growth, pressures on existing employees, compensation expectations and the ability to meet orders. The impacts are across the country, with businesses having difficulty hiring ranging from 29% in the Prairies to 67% in Ontario. Entrepreneurs have already adopted approaches to mitigate these pressures including 37% of entrepreneurs having adopted flexible work arrangements, 35% of them providing more internal training and 26% of them recruiting younger workers.

In addition to these tactics, our advice is that the following four proven strategies can help the most, given the recognition that labour shortages are a problem that's here to stay: first, use a formal hiring process; offer a competitive total compensation package; expand your hiring pool; and finally—and perhaps the most important advice that we give to businesses since the labour shortage will be here with us for quite a long time—invest in technology and automation. Our study is showing that technology adoption is the best strategy against the labour shortage.

Canadian businesses using automation are performing better and growing faster. Technology is now available for all sectors including services and retail. In that context, I want to highlight that BDC is pleased to contribute our efforts to the Canada digital adoption program, which was launched today by the Prime Minister and Minister Ng.

As part of stream two of CDAP, budget 2021 announced $2.6 billion for the Business Development Bank of Canada to help SMEs finance the implementation of their technology adoption plan. BDC will offer a 0% interest loan to improve productivity, better serve consumers and become more competitive.

Thank you for your attention. I hope this will lay a frame for a good discussion.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Monsieur Cléroux.

Next is the Canadian Chamber of Commerce, with Ms. Nord for five minutes or less.

[Leah Nord, Senior Director, Workforce Strategies and Inclusive Growth, Canadian Chamber of Commerce]

Good afternoon, Mr. Chair, vice-chairs, committee members and fellow panellists.

Thank you for the opportunity to be here and make an appearance this afternoon. I am speaking to you from Ottawa, the traditional, unceded territory of the Algonquin Anishinabe people. I go by the pronouns “she”, “her” and “elle”. Today, I'm wearing a white blouse, a blue blazer and a green scarf, and I'm working from my home office.

I am speaking on behalf of the Canadian Chamber of Commerce, which is Canada's voice of business. We represent 200,000 businesses across the country, across sectors and across sizes, including a network of 450 local chambers and boards of trade from coast to coast to coast.

I am the Canadian Chamber policy lead on workforce strategies and inclusive growth. This includes our work with the council for women's advocacy and our BIPOC leadership and inclusion council.

We are all aware of the labour shortages in this country. There is currently an unprecedented one million job vacancies in Canada. Vacancies in health care, construction, manufacturing, accommodation and food services, along with retail trade, are currently leading the way, yet we have shortages across sectors, communities and regions, and affecting every size of business. I am able to say, thanks to reports like those from Monsieur Cléroux, that businesses, including small businesses, are citing labour shortages as one of their most—if not the most—significant barriers to economic growth.

I can also tell you, for example, that between now and 2030, construction employment is expected to rise by 65,000 workers. I can tell you that in the residential construction sector, between now and 2030, approximately 620,000 workers are needed and, calculating retirements versus new entrants, there is an expected gap or need of 40,000 workers. I can tell you the age distribution of the construction workforce. I can tell you how many women, indigenous peoples and new Canadians work in the trade. I can even break these numbers down by jurisdiction.

What I can't do, for example, is the same for the child care and early learning professions. How many are currently employed in Canada? Where are they employed? How many are needed in the coming years, especially in light of new federal investments? I can't turn to a sector association, a professional association or an employment table, and I can't even look to StatsCan data. Therefore, our first and overarching recommendation is for labour market information, analysis and demand-side workforce planning for key professions and sectors in the care economy. The federal government can and should play a leadership role in facilitating, convening and funding these efforts.

I referred earlier to the Canadian Chamber's council for women's advocacy. It was established in January 2020 as part of our inclusive growth campaign and currently consists of a 15-member executive table. We were initially headed down one pathway of focus before the pandemic, but as with so much else, all changed with the pandemic. Our focus has shifted, and we've pivoted as well.

Through the 24 months of the pandemic, we have tracked the disproportional effect that the pandemic has had on women in the workforce. This is as employers, business owners and female entrepreneurs, as well as employees. We have also differentiated between women in the care and exposed economies versus those in the remote or work-from-home economy. Although there are challenges, and significant ones, for women in each, we have acknowledged that women in the care and exposed economies have been particularly burdened and that they are among the most marginalized.

Further, we have underscored that child care and early learning are an economic issue, not a women's issue. It is one of the three pillars of recommendations that we have made to the federal government. One of our recommendations within this is, “Ensure there is an ample and diverse workforce of childcare providers across the country by enabling remote learning for potential child care provider certification in rural areas, providing more money to increase access to early childhood education programs and facilitating labour mobility and certification recognition across domestic and international borders.”

We have likened child care and early learning to social infrastructure and, just like traditional infrastructure, like a bridge or a road, it will not materialize without a labour force to build and maintain it. We need an ample, diverse, qualified and motivated workforce throughout the care economy and a dynamic ecosystem that supports it in order to ensure an inclusive recovery and the economic growth that's necessary for this country.

I have a lot more to say on the care economy, temporary foreign workers, FQR, and procurement and diversity policies, but I will leave it there.

I look forward to your questions. Thank you.

[The Chair, Liberal, Bobby Morrissey]

You may be able to get to those, Madam Nord, in some of your answers.

We'll now go to the Canadian Labour Congress.

[Siobhan Vipond, Executive Vice-President, Canadian Labour Congress]

Good afternoon, Chair and committee members. Thank you for the opportunity to speak with you on this important subject.

The Canadian Labour Congress advocates on national issues on behalf of three million working people. Many of the workers we speak on behalf of work in Canada's child care, education, health care, social services, community care and seniors care sectors.

This HUMA committee study focuses on labour shortages, working conditions and the care economy. In our view, the staffing challenges in the care economy result from the following causes: heavy demand of unpaid work among the workforce dominated by women; staffing shortages fuelled by years and even decades of fiscal austerity and spending cuts, leading to high workloads and poor retention; low wages and poor working conditions; rising harassment and violence; and a lack of workforce planning.

While the pandemic had us celebrating care workers as heroes, all of these challenges were not only exposed but compounded, bringing care workers and care sectors to a breaking point. We need a new strategy of systematically investing in care workers to supply current and future labour needs. One important step in the direction of this new strategy is the progress towards a national system of affordable, accessible child care in Canada. This is a crucial investment in women's full and equal labour market participation. We want this to result in well-paid and high-quality early learning and child care jobs.

To continue to combat inequalities in the gender division of paid and unpaid care, and to ensure decent jobs and high-quality care for children, adults and seniors, it's essential to invest in high-quality public services and workforce planning now. That's why we are urging the government to establish a care economy commission to develop and implement a broader care strategy for Canada. At its heart must be a workforce planning strategy for Canada's future care economy workforce.

Now I'd like to offer some critical perspectives on the way labour shortages are portrayed in the media. In economics 101, if demand for workers exceeds supply, salaries will be bid up until the market clears. Most labour shortages should disappear as employers raise wages and attract more workers. However, wage growth has actually been modest.

Year-over-year average hourly rate growth has been about 2.6% over the last three months. This is in line with prepandemic wage growth and well behind inflation. Wage offers for new hires in some job categories has risen faster, but in many industries and occupations where employers are complaining about labour shortages, wage increases have been slower than average. This ought to be one clue that there's more to the story.

Another clue is that employers have been complaining about labour shortages all the way through this pandemic. In May 2020, the official jobless rate in Canada was 13.7%. One-third of the labour force was jobless and wanting work or was underemployed and wanting more hours of work. Despite this, employers began to complain about labour shortages.

In reality when we hear the complaint about labour shortages, what we are hearing is that it's difficult to find workers with exactly the right skills, attitude and work experience needed at the price that an employer is willing to pay.

Now to be sure, there are long-standing and genuine skill shortages in specialized skilled trades. Outside the building trades, however, employers often expect workers to show up ready to work on the employers' terms, having already accumulated the precise skills and work experience required. The notion that employers are responsible for recruiting and retaining employees, and then training and developing them to meet the changing skills needs seems to have been abandoned.

To be sure, there are many employers that invest in training and workforce development to cope with current and anticipated labour needs, but most employers in Canada invest very little in training and workforce development. When employers do provide training, they tend to provide it to workers who already have high levels of education attainment. Workers who need the training the most are the least likely to receive it.

From a lack of workplace pensions and benefits, to a lack of learning and training opportunities, to an absence of paid sick leave and adequate health and safety protections, far too many workers in this country are treated as disposable. This approach is a recipe for ongoing complaints about unfilled job vacancies and an inability to find workers. It's why unions talk about a good job shortage instead of a labour shortage.

I'll stop here, but I would be happy to elaborate on any of this in response to the members' questions.

Thank you.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Ms. Vipond, for those very informative comments.

We'll now go to questioning by the committee members, beginning with Madam Kusie for six minutes.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you very much, Mr. Chair.

Thank you very much to all the witnesses for being here today. My first question is for Ms. Nord.

Ms. Nord, what more do you think the government could be doing to help with the labour shortage?

[Leah Nord]

Good afternoon, and thank you for the question, MP.

We at the Canadian Chamber talk a lot about demand-side labour market information. It's not very, for lack of a better word, sexy or attractive, but this is the missing piece to a lot of the workforce puzzle. I only caught some of the previous comments as well, but, for example, for the labour force numbers, a lot of detail and work go into those—kudos where kudos is due—but that's only on the supply side of the story. That's not the demand side, unfortunately. A lot of the data that comes in is already dated and looks back instead of forward. Help on that workforce planning, particularly for the demand side, would be appreciated.

We talk about—and we can split some hairs here—jobs without people and people without jobs, so there needs to be help facilitating that. That's what we we call matchmaking, and in the first instance what is required is analysis. Do people have the skills and it's just that they're not getting to the right jobs? Is it a question of labour mobility issues here in the country, with, where jobs are located and so on and so forth, or is it the need for upskilling and re-skilling?

What I will say is that we have heard about a lot of pilot projects going on across the country in different areas, and those are great as a start, but I think the issue of scaling and helping and replicating is one that we're really going to have to examine going forward.

Thank you.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you, Ms. Nord.

Building on that, another interesting area we believe will help mitigate the labour shortage is automation. What could the government be doing to help incentivize automation, do you think?

[Leah Nord]

There was an excellent example of an announcement today. With respect to automation, before the pandemic, there was an interesting article that came out, around the end of 2019, that talked about how robots were going to automate 50% of the jobs in Canada. I think there are a lot of questions and almost scare tactics around this.

A lot of what even BDC's report refers to here is the automation for good. They're never going to be able to replace all of the humans all of the time, but they will have the ability to take those more mundane tasks that we won't have to do and bring forward the workforce, as well, not only in those niche areas but across the board. Funding that—and there are the high-tech niche areas but also the whole digitization of the country and, I would say, society as well—would be very much appreciated.

Thank you.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you, Ms. Nord.

I will pose a similar question to Monsieur Cléroux or Madam Glenn.

In the BDC study “How to Adapt to the Labour Shortage Situation”, you indicated that automation is particularly expensive for small and medium‑sized enterprises and that only one in four Canadian SMEs has fully automated at least one business function.

In your opinion, what incentives do they need to make automation a part of their business strategy?

[Pierre Cléroux]

I think there are two things. First of all, they need to understand how automation can help them. Often when we do conferences with our clients, we give them examples of businesses that have done it and the return on the investment. Our study is very clear. Businesses that invest in automation perform better and have a higher growth of profit and revenue. That's the first thing—to convince entrepreneurs that there's a big payoff for doing it.

Second, I think the program that was announced today is going to help finance that, because there are two forms of help. The first one is a plan for how you can invest in automation. This plan is up to $25,000 and it's free. The second part is a loan from BDC with a 0% interest rate. I think that will help a lot of companies in Canada to be able to invest in technology and automation.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Monsieur Cléroux, you mentioned that businesses perform better from a revenue perspective, but it's also indicated in your report that “Entrepreneurs who invest in new technologies and automation find it twice as easy to hire [new] workers”. Why do you think that is?

[Pierre Cléroux]

First of all, it's because they are growing. Also, it's because they market themselves as.... It's especially the new generation. They are looking for businesses that are up to date in terms of technology.

I remember a conference I was giving. There was a question to one of our clients. She had just explained that they changed their accounting system to make it all computerized. The question to this owner was this: “How did your employees react?” She said, “Well, they were the first to ask for it.”

When you invest in technology and you are really up to date, your employees, first of all, don't do some of the routine tasks they used to do, so they like it. It's especially the new generation. They want to work with the best and newest technologies. That's the reason it's easier for businesses that use a lot of technology to attract workers.

[The Chair, Liberal, Bobby Morrissey]

Thank you.

Now we will go to Mr. Long for six minutes.

Mr. Long.

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

Thank you, Mr. Chair.

Good afternoon to my colleagues.

Good afternoon to our witnesses. Thank you so much for your testimony this afternoon. It's very interesting.

I, too, want to thank MP Zarrillo for bringing this motion forward.

My questions will be for the Canadian Labour Congress.

Before I start, I want to thank you for what you do for workers, as you said, Ms. Vipond, 3.3 million workers across this country. I want to thank you for your leadership and for your advocacy. I know that your past-president Hassan Yussuff has been in my riding of Saint John—Rothesay many times. We've laid wreaths together on the National Day of Mourning. I always enjoyed my time when he was here.

Our government has been an ally and friend of unions since coming to office. I remember that in 2015 one of the things I was absolutely passionate about going to Ottawa for was to fight for the repealing of Bill C-377 and Bill C-525, with our Bill C-4. I remember working with the CLC to make that a reality.

We've engaged regularly with unions and stakeholders across the country in numerous areas of our economy, from the energy workers to the building trades, and from the care economy to the tourism and hospitality sectors, all of which are critically important in my riding. We've been there to address the challenges facing these industries with government support and improvements to existing rules and legislation, such as the Canada Labour Code and occupational health and safety for federally regulated sectors.

Despite health care being a provincial jurisdiction legislated and regulated by their respective provinces, I do believe the federal government can still play a role in the hiring, the retention and the retraining of staff while improving work conditions for all.

Recognizing that health care is provincially delivered, what further opportunities do you see between unions, professional orders and employees in the care economy and the federal government to deliver quality services?

[Siobhan Vipond]

Thank you for the question.

Yes, I appreciate the work we've been able to accomplish together.

This last time with COVID, with this pandemic, has highlighted the gaps within our systems, and health care is no different. When we look at that patchwork, we want to see a coming together and looking at a commission of care work, which includes health care, so that it's safer. There's a study from the CFNU around how people haven't felt safe at work over the last while, especially, and it's, quite honestly, an appalling number.

When we look at that, we see it has to be a bigger strategy. Yes, provinces have control over this, but the reality is that this leadership can come from that framework. That could happen across the country. We absolutely support that idea. Let's look at including more than just what our current health care structure.... I think we've seen in long-term care that this needs to be there. There needs to be a priority put on the care that is given versus a cost-savings approach. This is about the people needing the care and the people doing the care being treated appropriately and having good jobs.