Human Resources Committee on March 31st, 2022

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Excellent.

How would you say these labour shortages impact the supply and cost of groceries for Canadians?

[Kathleen Sullivan]

Public Safety Canada did a survey in January that found that, because of labour shortages, companies reported their food production had gone down by 20%. We're in a situation where it's hard to believe a country like Canada can't keep up with its own food production. It's dazzling. We know ours is not the only industry facing labour problems.

The impact of food supply is quite significant. There's also animal welfare. Dimitri pointed this out. A lot of the products that we manufacture involve receiving animals, and if we don't have people to receive animals in the processing plants, you cause a backup at the farm and cause a lot of problems for producers. There are concerns about the welfare and managing of those animals on farms beyond where they should have been.

In terms of food inflation, we are clearly seeing significant food inflation in Canada. The rate reported at the end of February was 7.4%. I think that's the highest we've seen since the 1990s.

Clearly, Canadians are paying a price for all of the effects that we're seeing in the food industry of labour and supply chain issues.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you.

[Kathleen Sullivan]

I should say that it's expected to go up again this year.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Indeed. Thank you.

Mr. Lee, the construction industry continues to face chronic labour and skills shortages. How, in your opinion, has this impacted the supply of houses in Canada?

[Kevin Lee]

We're definitely seeing construction delays. As Mike mentioned, our housing market index is showing a delay of 10 weeks on average across the country.

Remarkably, this past year, we had a very strong year in housing starts. We got 271,000 starts across the country under way. The big challenge is going to be whether we can close all of those. Can we complete all of those? With over 70% of our members seeing those labour challenges, there are definitely delays. The longer this shortage goes on, the bigger a challenge it's going to be.

We are optimistic, though, that with the new measures the government will hopefully be putting place, we can get access to more land and start accelerating the development approval process so that we can keep building, but it's definitely a big challenge.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

How have these labour shortages in other areas of the supply chain, besides construction, impacted building homes across the country?

[Kevin Lee]

In addition to the delays.... They are due to labour, but pretty much every product you can think of that goes into construction is being held up in some way, shape or form.

On top of that, what we've seen across the industry, like in many other sectors, is rapid price inflation on a lot of different products and materials. It's a combination of labour and everything else. We're seeing on an average 2,500 square foot home in Canada price increases for lumber all by itself of about $34,000, and over $34,000 for everything else, from plumbing fixtures to drywall to you name it. We're over $68,000 on average just in construction costs right now as a result of the scrambled up supply chain.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Madam Kusie and Mr. Lee.

Mr. Collins, you have six minutes.

[Chad Collins, Liberal, Hamilton East—Stoney Creek, ON]

Thanks, Mr. Chairman.

Welcome to all the witnesses. It's always nice to see someone as well from the Hamilton area. My first question will be for Mr. Collins-Williams.

As he knows, our government has prioritized affordable housing and housing affordability as priorities. There's a lot of discussion about the lack of housing supply and its effect on the cost of housing. How much of a role does labour supply and skilled trades factor into escalating house prices?

[Mike Collins-Williams]

I'd say it's a significant factor. Housing prices and what goes into the cost of a home are complicated. Essentially there are the land component, the materials component and the labour component. We're having a lot of challenges in filling positions in Hamilton and across Ontario, and I'm sure Mr. Lee could attest to that right across the country.

I think you'd be shocked if you walked around the average construction site in Hamilton and saw what the average age is. You have people doing some pretty difficult jobs who aren't exactly spring chickens. We need to attract more people into the industry, and part of that's on the industry to promote careers in construction. We certainly work with our local community colleges and high schools trying to get more young people to choose that career path, because it can be a very rewarding career path.

I think one of the challenges we have that we're looking to the federal government for help with is the economic immigration stream to bring in more skilled workers to help us fill those job positions. Anecdotally I hear from our members that the labour situation is so tough that you actually have different homebuilders almost poaching labourers from each other off their sites. This is a challenge across southern Ontario. We do have a housing supply challenge in terms of population growth, and we are building a lot of homes, but that certainly requires labour, in particular skilled labour.

A home is a complicated system. It does not require general labour, but a lot of skilled labour, particularly from different trades like electricians, plumbers, carpenters, roofers, etc. There are tremendous opportunities in the sector.

[Chad Collins, Liberal, Hamilton East—Stoney Creek, ON]

Thank you, Mr. Collins-Williams.

My next question is about just what you referenced there, and those are the labour shortages and the connection to immigration. I think you mentioned in your opening remarks a 17,000 worker shortfall in the industry. As you know, our government has prioritized immigration as one of its top priorities. In 2022 we're expecting to see 431,000 new Canadians, which I think is a record number, and we're obviously anxious see those people who are finding their way to Canada gainfully employed once they arrive.

How is your industry attracting new immigrants to the industry? Is there anything we can do with our policies related to the temporary foreign worker legislation to assist you in filling those vacant positions, whether they're the 17,000 that you referenced or the larger number that Mr. Lee referenced in his opening?

[Mike Collins-Williams]

I think there are a couple of threads there. It's incredible that Canada is a destination for the best and the brightest from around the world, who are choosing to come here and to be educated here and to live and raise their families here. But we also need to provide the supply of housing so that those people can be homed and achieve that great Canadian dream of home ownership and be able to settle into their community and thrive.

In terms of the employment opportunities, there are tremendous opportunities in the industry. If you look at previous waves of immigration, you see that much of southern Ontario, in particular, was built by Italian, Portuguese and Polish immigrants, and a lot of eastern European immigrants in previous decades. But there is a shift in where our immigration is coming from, and in some of the countries that people are coming to Canada from there's not as much of a propensity to enter into the construction sector. I think it's important that the federal government focus on attracting skilled workers who already have those certificates, whether it's, again, plumbers, electricians and some of those skilled trades we so desperately need.

We spent a lot of time in the past pushing the knowledge-based economy, which is fantastic. Canadians are very well educated, and I think we need to try to focus a bit more on bringing people into Canada who can do the jobs that we having such desperate trouble filling or getting young Canadians to pursue.

I would add that these jobs are highly skilled. This is not general labour. The economic immigrants bring talent and innovation and financial investments to Canada, so we'd certainly like a focus on the federal skilled worker program. Let's enhance and focus on skilled workers, because we need them in Hamilton, we need them in Ontario and we need them across Canada.

[Chad Collins, Liberal, Hamilton East—Stoney Creek, ON]

Thank you for those answers.

I think I'm out of time at this point, Mr. Chairman.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Collins.

That will give Madame Chabot a bit more time.

Go ahead, Madame Chabot.

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

Thank you, Mr. Chair.

I would like to welcome all the witnesses and thank them for their presence, their contribution and their evidence.

Basically, your three organizations represent the residential sector, which is about the need for housing, and the food sector, which is about the need for nourishment. So we are dealing with the basic needs of citizens. Your contribution is important and we should indeed support you.

My question is for Mr. Fraeys, from the Conseil de la transformation alimentaire du Québec.

What we're pleased to see, federally, is that the food manufacturing sector has been included in Canada's critical infrastructure sector. In this regard, you have illustrated the problems you are experiencing. For example, the problems associated with the issuance of labour market impact assessments, or LMIAs, are hurting many companies. As members of Parliament, we need to look at this. I know that you sent the minister an emergency program before the holidays to remedy the situation of temporary foreign workers. It is now April.

Have you received any clear answers regarding this emergency program? Have any solutions been put in place?

If not, why not?

[Dimitri Fraeys]

Thank you.

Yes, we are well supported by the Minister of Agriculture and by Ms. Qualtrough. We had a meeting with her last week, and she was very open and responsive. However, I must say that things have not necessarily changed for the time being.

We're concerned with processing times. Tomorrow is April 1, and farmers will start sowing their fields. Then we, the processors, will have to take the crops into the plants. On our side, we still have a small wait time of about three months, but it is essential that the workers arrive in the next few weeks. I will admit that we are very worried because, given the current processing times, we wonder how this will be possible.

Last year, in the case of the cucumber processing plants, the harvest took place in August and the workers arrived in September. This is not very useful. It's a waste of time for the officials who had to work to get them here. So we proposed to simplify the process so that it would be much faster. Earlier, Ms. Sullivan proposed the well-known emergency program. What we are asking for is reduced processing times, and we have proposed solutions to this end. For example, the LMIAs could be grouped together. As for visas, we could reduce processing times to a few weeks or a few months for Quebec, which also has the constraint of hiring French-speaking workers. We would like these processing times to become more reasonable. Before the pandemic, it was possible to welcome workers within three months. That is what we hope, in the very short term, for our industry.

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

Can you explain in detail the concrete consequences of processing times for an employer?

We sometimes hear that entrepreneurs abandon their project or their harvest altogether because they do not have this input from temporary foreign workers. In the context of the labour shortage, which has worsened, as you illustrated earlier, I would like you to tell us what prevents us from acting more quickly and what the concrete consequence of inaction is.

[Dimitri Fraeys]

In fact, as far as plants are concerned, the consequence is the rationalization of the product line. There are products that are no longer processed, because that requires more labour.

A little later, Ms. Leblond will explain what is happening in terms of slaughter.

In some plants, products are not produced and others are delivered late. As was mentioned earlier in connection with the houses, the supply times are also much longer, so the plants have to review their entire production schedule. When there are fewer workers, office workers have to step up to the plate.

In the agri-food sector, plants are often family businesses. The owners' sisters, aunts, mothers and uncles have to work in the plant to help out. Often, the owner works at the plant from 8 a.m. to 5 p.m., and does his office work in the evening or morning. So the work hours are long and the employees are tired.

I will give you an example. Last year, workers in a vegetable processing plant worked 12 days in a row; the employer had to give them a weekend off. However, if foreign workers had been present, the plant workers could have had a rest.

Hiring foreign workers serves as a safety valve for the plant workers and ensures health and safety in the workplace. It also makes it possible to feed the population adequately and to build up stocks for the next winter.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Ms. Chabot and Mr. Fraeys.

Now we'll go to Madam Zarrillo for six minutes.

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

Thank you so much.

Thank you to all the witnesses who have come in and shared today.

I heard about retirements quite a bit in the testimony. Maybe each of the witnesses could talk about their industry and retirements, and whether there was planning five years or a decade before.

If there was planning around retirements, why are local workers not backfilling? Why are some of these jobs not getting backfilled by local workers and how did we get to the point where we're relying so heavily on foreign workers?

[Kevin Lee]

I could jump in, if you like, and start in the residential sector.

[Kevin Lee]

This is not a surprise to us. This is not new to us. This is something that has been of concern for quite some time and something we've been talking about. We don't rely heavily, as a sector, on foreign workers as much as we do on immigration. For example, we're not big users of the temporary foreign worker program because we need people year-round and permanently. The recommendations we would have around things like temporary foreign workers go to the idea of facilitating pathways—as you're hearing from other witnesses—to more permanent residency.

One thing we haven't heard about yet, in this session, is the importance of a trusted employers program, which would dramatically help those who are having to use these types of systems repeatedly.

In terms of retirement, every sector is facing this because it's a matter of pure demographics in Canada. I know you heard earlier about the aging societies we have in many developed countries. It's something we've been looking toward. Everybody is looking to see what under-represented groups can be more fully engaged in employment. Therefore, we also need immigration.

I think you're seeing almost every sector look to productivity, as well, because, as you've heard, we're all competing for a very limited labour supply within Canada because of the demographics. We're all active in recruiting and trying to make our industries even more attractive to come and work in. Fortunately, in residential construction, we also have good-paying jobs, but it's a challenge. It's not new. It's not something new that we're talking about, but it's a big challenge for us and many other sectors.

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

Thank you.

[Kathleen Sullivan]

I can maybe step in and answer for food and beverage manufacturing.

On the retirement question, you're correct. We always anticipated a retirement cliff. Even before COVID started, we were starting to look at these issues to try to understand how we make sure we have the workforce of the future.

With COVID, though, the retirement cliff seemed to advance by a number of years. Going into COVID, we were facing about a 10% structural vacancy rate. In the last two years alone, that has increased to 20%. We have seen an exodus out of our sector and in many cases out of the workforce itself.

With respect to local workers, this certainly has been a challenge that a lot of industries are facing. In some respects, it appears we are almost at full employment levels. At this point in time, we really have to understand how we can expand the Canadian workforce. There are a number of different things.

One is looking at groups of people who are just not ready for the workplace right now. How do we remove the barriers they're facing and really empower them to join the workforce, whether in my sector or others?

In the past we've spent some time talking about how we need to do that. I guess crisis is a great motivator. It's becoming clear to everybody that we have to get very serious about how can we identify groups of Canadians who are not participating in the workforce and how we can help them get to that point.

In terms of the foreign workers, we are not a huge relier on foreign workers. Less than 10% of our workers are TFWs. The challenge we really face as a sector is that most of our workers don't qualify for immigration streams. They wouldn't gather enough points. Again, we face this challenge with our immigration streams and our point systems where we've chosen to focus on particular groups of workers or workers with specific skills.

We need skilled trades and scientists, but often we need general labourers and, for the most part, they can't get in through the immigration system. Often our companies will use the TFW program not for temporary jobs, but to bring people into Canada and then try to find pathways to permanent residency for them.

In our emergency foreign worker program, we're asking, frankly, for no more than a band-aid. We really need to start to understand how we can structure our foreign worker programs so we are attracting and bringing people into the country who can settle here, bring their families with them, really become Canadians and contribute to different Canadian communities.