Human Resources Committee on Oct. 2nd, 2025

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Johnson.

We're having a sound issue. I'm going to suspend for a few moments. We have to change systems before we get into the question and answer session.

We'll suspend for five minutes to change the system.

[The Chair, Liberal, Bobby Morrissey]

Committee members, we will resume, but the issue could present itself again, at which time I would have to suspend for a full reboot of the system, which could take 10 minutes. Thank you for your patience, witnesses. We'll see how we get along.

For committee members, the first round will be six minutes to each of the parties, followed by five minutes to the government, five minutes to the official opposition, and two and a half minutes to the third party. We'll follow that rotation to the end of the meeting.

We'll begin with Mr. Genuis, for six minutes.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Thank you, Chair.

Back in June, Conservatives sought emergency hearings on the unemployment crisis facing our country. Unfortunately, we did not have support from the Liberals to proceed with summer hearings on an emergency basis. We had to wait more than three months to get this work under way. I am very glad that we are finally beginning this critical study on the really catastrophic unemployment crisis facing young Canadians.

The unemployment rate for young people is at 14.5%. We have the worst employment rate in this country in well over 25 years. Despite not having the summer study that Conservatives were seeking, we've continued to highlight—

[The Chair, Liberal, Bobby Morrissey]

Excuse me, Mr. Genuis. Are you livestreaming?

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Yes, I am.

[The Chair, Liberal, Bobby Morrissey]

I'm going to suspend while I get clarification on direction on this.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

What?

[The Chair, Liberal, Bobby Morrissey]

I am suspending until I get clarification.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

What in the world is the issue with livestreaming on social media? That's very normal.

[An hon. member]

It's a public meeting.

[The Chair, Liberal, Bobby Morrissey]

[Technical difficulty—Editor]

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Thank you, Chair.

Thank you for noting that we're livestreaming these hearings on my social media platforms, which is, of course, very common and allowed. People can follow me on the various social media platforms if they're interested in following the livestream of this and subsequent meetings.

Chair, as I was saying, Conservatives sought emergency hearings on the unemployment crisis. Those hearings were blocked from taking place over the summer. We are finally getting down to work on that. I am very pleased that we're finally beginning this work on the catastrophic unemployment crisis facing this country.

The youth unemployment rate is 14.5%. We have the worst employment rate for young people in this country in over 25 years. Despite not having the forum of this committee to raise these issues, we've continued to meet with people and speak about them over the intervening months. We've highlighted a number of different causes of the unemployment crisis facing our country—a broken immigration system as a result of policy failures, misalignment in education and training, and serious problems in terms of economic policy. We've heard today from witnesses, including business owners in particular, highlighting economic policy failures that have played a significant role in this ongoing unemployment crisis.

Mr. Rizzo, you spoke about structural unemployment due to declining productivity over the last 10 years. I think it's important to underline how important productivity is as a measure of the health of the economy. It's not a measure of how hard people are working. It's a measure of how much a worker is producing in a given period of time. Increases in productivity require business investment and require systems and technology that allow workers to produce more in a given period of time.

I wonder if you could elaborate on your comment that we face structural unemployment due to declining productivity over the last 10 years and what you see as the factors contributing to this decline in productivity.

[Perry Rizzo]

Fundamentally, when companies are plagued with too many operating costs and high taxation, there is less money to invest. When you're competing globally, you have additional pressures to remain hypercompetitive.

If we take Ontario as an example and our ability to invest in manufacturing, which is very capital-intensive and long-term for paybacks, it's very difficult for us to invest the millions and millions of dollars necessary to invest in new technology to increase our productivity when we are largely deemed to be uncompetitive from everywhere else in the world. We have fewer resources, less funding and less money left over, simply put.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Thank you.

Can I sharpen the question a little bit, sir? What specifically are you seeing from the federal government that is making investments in manufacturing here in Canada and here in Ontario less competitive? What decisions from the national government are impacting that reality?

[Perry Rizzo]

I would say that the decisions are a lack of investment in manufacturing and a lack of creating policies that increase productivity or competitiveness. Those are wide-ranging. They're in almost every area. You have a combination of all kinds of lack of economic long-term strategic planning, which is affecting companies to plan and be competitive in the long term. Specifically, you have taxation policies that are known to be uncompetitive compared with the rest of the world. This is creating a big problem for people and for companies to move forward.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Thank you, sir.

I'll bring Mr. Johnson in on that.

Would you agree that we faced structural unemployment due to declining productivity over the last 10 years? If you agree, what do you think is contributing to that decline in productivity?

[Robert Johnson]

Yes, I would absolutely agree with what Mr. Rizzo said, exactly. The taxation policy that exists in Canada does not support the investments and the time it takes to.... Recently, Trump announced that you can depreciate an asset over one year instead of taking five years. As you turn around and longer depreciation is indicated, with the type of capital intensity that is in manufacturing, you have to get a return on that.

At the same time, I think there's a major shortage of certain skills that exists. The immigration policy that has existed for the last number of years, which I think is also—

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Thank you. I'm sorry, but I'm almost out of time. I will want to come back to that.

It sounds like you're saying that we have unemployment because of an unfriendly business environment, which is the result of high taxes. Is that a central part of the equation?

[Robert Johnson]

Yes, that's a critical one.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Genuis. Your time is up.

Madame Koutrakis, go ahead for six minutes.

[Annie Koutrakis, Liberal, Vimy, QC]

Thank you, Mr. Chair.

Thank you to all our witnesses for being here today.

I would just say to the last comment that my colleague across the way made that we're always looking for simple answers to very complicated issues. It's not as simple as Mr. Genuis would want the Canadians watching us to believe is the case.

In going forward with my questioning of the witnesses, my first question will be for Mr. Rudy Humbert.

We know that many young people in Quebec are confronting higher unemployment rates and that the Government of Canada has invested in programs like the youth employment and skills strategy or Canada summer jobs to help overcome obstacles.

Based on your experience, how effective have these federal programs been in supporting young Quebeckers living furthest away from the labour market?

[Rudy Humbert]

Thank you very much for that question.

These investments in young people are a step in the right direction. The current funding structure for these agreements is determined by the Quebec government and Services Québec. However, this structure has serious efficiency problems.

To give you some idea of the situation, three years ago, this strategy was operating on a budget of about $30 million. This year, the new funding agreement under the youth employment and skills strategy provides $18 million. Under this agreement, Services Québec charges a 20% management fee, which means that $4 million is lost to administration with little left over for youth services.

Furthermore, the Quebec government added on much narrower eligibility criteria than those provided at the federal level. It even prohibited Carrefour jeunesse emploi organizations from directly recruiting young people to take part in these initiatives.

Having access to these funds is a step in the right direction. However, we have to rethink the funding mechanisms to make them more flexible and universally accessible, and explore other ways of investing federal funds to generate more economic benefits and help Quebec's youth as directly as possible.

[Annie Koutrakis, Liberal, Vimy, QC]

Mr. Humbert, how can the government better support organizations like yours that provide employment services to young people in all regions of Quebec?

What measures could we take to support you more effectively?

[Rudy Humbert]

We need to have a discussion on the alignment between federal funding sources and the eligibility criteria set by the Quebec government. Basically, federal funding is blocked from reaching our organizations directly because of jurisdictional conflicts. We need to sit down with the federal government and the Quebec government to come up with the best way to deliver these funds more directly to young people.

To give you some idea, federal funding accounts for about 70% of investments in the Quebec employment sector. Because of the way they are administered, more than 25,000 young people were denied services in the past year. This includes youths who are underemployed, in school or interested in returning to school. However, that doesn't appear in federal agreements. We need to get back to the negotiating table and align the agreements with their administrative application, while taking current labour market realities into account.

[Annie Koutrakis, Liberal, Vimy, QC]

What is the biggest frustration for young people looking for work?

What are they saying about this?