Human Resources Committee on Oct. 7th, 2025

[Marilène Gill, Bloc, Côte-Nord—Kawawachikamach—Nitassinan, QC]

Mr. Chair, I have a point of order.

In connection with what Mr. Genuis said, I'm wondering if it would be possible to take a little time at the next meeting to discuss this motion and another motion that had been tabled. There was also the issue of the centennial flame.

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

Yes, we can do that after we receive the actual proposal.

[The Chair, Liberal, Bobby Morrissey]

It was not a formal motion. He was bringing it forward with consent, which was fine. We'll follow up on that.

Again, members, please direct all questions through the chair.

We welcome the witnesses to the panel. We have, from Cardus, Renze Nauta, program director, work and economics; from the Coalition of Concerned Manufacturers and Businesses of Canada, Catherine Swift, president; and from Polytechnics Canada, Sarah Watts-Rynard, chief executive officer.

We begin with Mr. Nauta for five minutes or less, please.

[Renze Nauta, Program Director, Work and Economics, Cardus]

Thank you, Mr. Chair.

I am Renze Nauta, and I'm representing Cardus, a public policy think tank, where I run a research program on work and economics. All of our work at Cardus is centred on the idea that every person has fundamental human dignity, and that public policy should reflect that fact. In employment policy, this requires a recognition of the dignity of work and the fact that work is about more than just money. Of course there is a financial component to work, as people bring home paycheques to support themselves and their families, and there is dignity in that, but even more fundamentally, the dignity of work means that the work itself, not just the paycheque, contributes to that person's flourishing.

Everyone has something that they can offer—a talent or gift, and their time. Work is about putting those at the service of others. This is ultimately what gives work its meaning, and it is through this gift of one's services that people connect with their community and help it to flourish. In other words, work makes people better people, and the data back this up. Cardus research shows that people who are employed have better physical and mental health, have stronger marriages and family relationships and are less likely to do drugs and commit self-harm.

Work is also important in forming people in virtue, and it plays a significant role in keeping people, especially young people, out of crime.

The youth employment issue that Canada is facing has to be viewed from that angle. Yes, there is definitely a cost-of-living crisis in Canada, and young people have tremendous difficulties making ends meet, let alone saving for a down payment on a home. However, an even greater concern is that a significant portion of this generation may not reap the social, not financial, benefits of work if they don't see work as a way to contribute meaningfully to their community.

A lack of meaningful work could have serious consequences both now and in the future, and I would like to focus on one particular aspect of this problem that Cardus highlighted in a recent report. Our research found that a significant proportion of Canada's working class is over-credentialed for the jobs that they are doing. In this report, we defined the “working class” as those working in jobs that do not require a post-secondary credential. However, in using data from Statistics Canada labour force survey, we found that over half of them have at least a college diploma, making them, by definition, over-credentialed for their jobs. Moreover, we found that this problem had worsened considerably over the last 20 years. From 2006 to 2024, the percentage of working-class people with a college diploma rose by nearly one-third, from 42% to 56%. The percentage of the working class with a university degree more than doubled, from 9% to 19%.

This phenomenon is especially acute among young people, but the problem persists through all age categories, suggesting that the challenges young people face in their early careers can have long-term effects throughout their working lives. We also looked at the demographic breakdown of this problem according to gender, region, industry and immigration status, and we can get into that in the Q and A

In short, many people are coming out of colleges and universities with diplomas and degrees that are simply not needed for the jobs they end up in. Of course, education is more than just training for future jobs, but we should not underestimate young people's expectations that their diplomas are preparing them for the workforce. They are left with debt after many years of study with little to show for it. This in turn fuels credential inflation, as young people feel as though they need higher and higher degrees to differentiate themselves from other workers in the labour market. I believe this phenomenon accounts for a large portion of the feeling of frustration in our economy, and in the working class specifically, whereby people did what they were supposed to do—that is, get an education—but can't get ahead.

It is a complicated problem, but part of the solution has to be to reorient our education systems so that they better align with the needs of labour markets. Young people should not be unduly pushed into higher education if that is not their calling. Our education systems should promote co-op programs to encourage students to have better appreciation for the variety of legitimate career paths, such as the skilled trades, that offer a fulfilling and lucrative future.

Our report contains other policy recommendations. I assume that my time is coming to an end, so I'll leave those for the Qs and As.

Thank you.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Nauta. You were a few seconds under.

We'll go to Ms. Swift for five minutes or less.

[Catherine Swift, President, Coalition of Concerned Manufacturers and Businesses of Canada]

Thank you.

My coalition, the Coalition of Concerned Manufacturers and Businesses of Canada, mostly represents small and medium-sized business across Canada. As you may know, many young people find their first jobs in a small business. This sector is a very important contributor to providing jobs for youth and setting young people on the path for a successful career and life.

The past decade has not been a good time for small firms. They have faced higher taxes, increased regulatory burden and a sluggish economy, dragged down by bad government policy. Other countries have performed much better than Canada under the same global circumstances, which shows that our economic problems are self-inflicted. The massive expansion of the public sector at the expense of private sector growth has also meant an increased cost burden on the private sector and damaged our economic productivity.

From 2019 to 2023, government employment grew by 13.3%, while the private sector grew by a mere 3.6%. The private sector, of course, pays for government. Naturally, this is not a sustainable path in future to have the money-consuming sector exceed the money-producing sector.

As many people have pointed out, the reckless changes in the immigration system that did work well previously for decades have had a serious negative impact on youth employment and the economy. Abuse of the temporary foreign worker program, student visas and so on is rampant, and yet the government doesn't seem to want to do anything about it. You can't pretend to be concerned about youth unemployment while not taking proper action to cut back on immigration that is not beneficial to Canada and not enforcing rules around such things as student visas being abused.

No more government programs are needed. In fact, many of them should be eliminated, as they distort the labour market in inappropriate ways. What needs to be done is a reduction in overall taxation so that there's much more money left in the hands of businesses to hire properly. Payroll taxes are especially damaging, as they are effectively a tax on jobs. They're also more punitive to small businesses, because small firms are more labour-intensive than our large businesses. We've seen increases in CPP and somewhat in EI in previous years, but these have been particularly negative for small firms.

We have a lot of members in the manufacturing sector. One of their comments was that they found youth not willing to work in a manufacturing company, as it might involve shift work and other conditions that young people find inconvenient. A job for a young person in manufacturing can lead to a very well-paying career. Disincentives for youth to pursue such jobs are unfortunate, not just for youth but also for our manufacturing sector. We know that we have a serious productivity issue in the Canadian economy. Manufacturers and the resource sector are the two biggest contributors to productivity.

I must mention the education system, even though it's not an area of federal jurisdiction, per se. It focuses more on training our young people to become social justice warriors and neglects the basic skills that would equip our youth for future success.

We spend a lot of money in Canada on our public education system, including federal transfers to provinces, yet we are bringing our children up in a system that does not prioritize basic skills like literacy, numeracy and problem-solving, and that doesn't do our young people any favours.

Our universities are especially bad. I've heard from a number of our members that they would rather hire young people right out of secondary school than let them be further indoctrinated in universities and then train them for whatever positions that apply.

Small firms are sometimes criticized for not paying a high enough wage, but it's becoming more and more difficult for these firms to pay a high enough wage because of our taxation, overly costly regulations and sluggish economy.

All governments must face the reality that Canada is no longer an attractive place to start a career or business. All those statistics we hear about billions of dollars in foreign and domestic investment fleeing Canada don't lie. If we don't address this soon, our youth will have a dismal future. We're a country with unmatched potential, but we've been crushed under the weight of bad government policies and declining freedoms. This needs to be reversed urgently if our country is to have a promising future.

Finally, today is October 7, the second anniversary of the most heinous, savage and barbaric event in recent human history. How do you think the way Canada has responded, in permitting more and more hate-fests on our streets and threats and disruptions to the lives of law-abiding Canadians, affects our youth and their futures? Universities today are apparently having celebrations about the atrocities of October 7. It is a disgrace that this is happening in Canada.

Remember Canada's motto of “peace, order and good government”? We don't have any of these in Canada right now. Unless government shows some courage and stops the increasingly violent hate-fest on our streets and at universities, the future will not bode well for youth or Canada as a whole.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Ms. Swift.

Now we'll conclude with Ms. Watts-Rynard for five minutes.

Ms. Watts-Rynard, go ahead.

[Sarah Watts-Rynard, Chief Executive Officer, Polytechnics Canada]

Thank you, Mr. Chair and committee members, for the invitation to provide testimony to support your study on youth employment in Canada.

I represent an association made up of Canada's polytechnics and institutes of technology. These institutions are leaders in the college sector, delivering hands-on training and experiential learning to nearly half of Canada's college population. They deliver advanced technical and technological education in close collaboration with industry. In fact, a study that we conducted in collaboration with The Conference Board of Canada earlier this year determined these institutions deliver programs that prepare graduates for 86% of the top 100 jobs in highest demand requiring post-secondary credentials.

The report illustrates strong labour market alignment in fields including health care, the skilled trades, advanced technology, and tourism and hospitality. These sectors consistently struggle to fill vacancies, and there's compelling evidence that polytechnic grads are in high demand.

To keep the talent pipeline strong, business partners regularly donate equipment, participate in classroom instruction and provide sizable philanthropic gifts. In 2025 alone, Imperial Oil donated a 40,000-square-foot facility valued at $37 million to the Southern Alberta Institute of Technology; Nutrien donated $15 million to Saskatchewan Polytechnic to support new campus development; and the British Columbia Institute of Technology raised $33 million from more than 45 donors to help build a new trades and technology complex.

Labour market alignment also shows up in our graduate employment rates. Within six months of graduation, a vast majority, more than 90% in some programs, are employed within their field of study.

Polytechnic students learn by doing. They graduate with both competence and confidence to hit the ground running. Not only do they develop relevant skills on real-world projects undertaken alongside industry, they also develop employer networks while they do so.

I had a conversation last week that illustrates my point. Magellan Aerospace in Winnipeg has 650 employees, 90% of whom are graduates of RRC Polytech. This firm is heavily engaged in Canada's defence industry, with technology and systems that are constantly changing. They partner with RRC Polytech to develop custom curriculums to stay ahead of their competitors and ensure they have the talent they need.

In the past, youth graduating into an unfriendly job market have found refuge at post-secondary institutions. In fact, nearly a third of polytechnic students have a previous credential or degree. Polytechnics have become finishing schools that translate theory into practical skills in high demand.

How might you interpret that information to improve federal policies and programs? While the federal government cannot drive demand for young workers, it can help ensure that youth enter the labour market with recognizable skills for high-demand occupations.

I recommend that you review the current emphasis of the student work placement program. According to ESDC, only 9% of that funding supports wage subsidies for college-level diploma students. While the funding isn't tied to specific post-secondary institutions, the sectors this program prioritizes tend to favour university students. There is an opportunity to better ensure that the program is being responsive to Canada's workforce needs.

I also recommend that you consider opportunities to strengthen labour market development agreements with the provinces. In some parts of the country, public post-secondary institutions are sidelined from funds designed to connect skills with critical labour market demand. That simply makes no sense.

Finally, recognizing that higher levels of youth unemployment always accompany times of economic weakness, the federal government should continue to consider ways to help youth ride out this part of the economic cycle. When youth unemployment rates hit a prescribed level, for example, you might consider enriching student grants to make sure that staying in school continues to be an affordable option.

Thank you for inviting me here today. I'll look forward to your questions.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Ms. Watts-Rynard, for your presentation.

We'll go to the questioning part of the meeting.

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

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

Thank you, Chair and thank you to all the witnesses.

I'll start with Ms. Swift.

You talked about policy problems over the last 10 years. It's my observation that the government often wishes to direct attention toward external events. They say that if things are going badly, it's because of things beyond their control. We know that in terms of the challenges with the American administration, the Liberals promised a deal by July 21 and haven't delivered on that promise.

Speaking of the last 10 years, it seems clear that you're suggesting that these are long-standing problems that have been emerging over time.

I wonder if you can maybe pre-emptively respond to those who say all these problems are the result of external events beyond our control.

[Catherine Swift]

You just have to look at the data. My background's economics, so I like to pay attention to that kind of thing. We've seen all the charts that show other countries are doing just fine in measurements such as GDP per capita. GDP per capita is basically a proxy for our standard of living. That's a pretty important measure for any country and we're down at the bottom.

What is really frustrating is it's not mysterious as to why we're doing so badly. Our major industries have been discouraged. This has been mentioned by previous people, so I won't belabour it. A lot of legislation has been put in place to make building anything in Canada very difficult. We kowtow to a lot of green policies—so-called climate policies or whatever you want to call them—which we have spent tons of taxpayer dollars on. They are never measured and to date I haven't seen one of those predictions actually come true.

All of these things contribute to a poor economy. Again, comparing ourselves to other countries, they're not having anywhere near the same trouble we are, so it's definitely self-inflicted.

Finally, let's face it: If the economy's not going well, nothing's going well. That goes for youth and it goes for anybody in the country. There have been far too many subsidies of businesses. All a subsidy does is benefit one business at the cost of another, often benefiting a weak business at the expense of a business that's paying taxes because it's very successful.

These types of policies are long-term failures. They are very problematic and, as a number of people have pointed out, in an economic downturn, young people suffer the most because that's when people say that they can't afford to hire a young person anymore, that they'll have to train them, and so on.

Small businesses want to do that. I've heard from small firms that say they like to hire a student every summer. These are sometimes two and three-employee businesses. When they can't afford to any more because it costs them so much to do so, they're very disappointed because small firms usually have a pretty good community orientation, and they want to help develop our next generation for a good future for the individual and the country.

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

Thank you.

Can you elaborate on what you said about problems of immigration contributing to youth unemployment? What are the areas where you've seen misalignment on immigration policy contributing to the current economic challenges and the unemployment issues?

[Catherine Swift]

It seems to be mostly with the student visa program. I've heard different numbers bandied about, but we know that a serious number of visas have expired. Our government immigration department doesn't seem to have any measurements of exactly how many that is and where these people are, Of course, they should be leaving the country after their visa expires; that's how it works, supposedly, but that's not happening.

A lot of these people find themselves in various positions in small firms. We've heard of a lot in the hospitality industry, for example. Naturally, that keeps out the young people who are truly Canadians and aren't on some kind of special temporary visa. We've heard from a lot of young people who have applied to a ton of these, and they're looking for part-time work or a summer job, maybe while they go to university or secondary school. They can't get those jobs because they're occupied by these people, many of whom, frankly, are not even legally in Canada right now.

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

Thank you.

In the time I have left I would like to go to you, Mr. Nauta.

You spoke about people getting credentials that maybe they would expect to be able to use in the labour market and that they're not able to use. They've spent time doing studies, accumulating knowledge, but knowledge that they're not actually able to use in the course of their jobs.

There are different levers when it comes to education at the federal and provincial levels. One option might be for the federal government to look at the levers it has and try to reflect the signals of the labour market in terms of student support.

Can you reflect on that and how exactly the federal government might engage this issue of credentials more likely to lead to employment versus others less likely to lead to employment?

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Genuis.

I'm sorry, you'll have to reflect on that at another time.

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

Chair, I have 20 seconds, and I think my colleague's phone shows the same.

[The Chair, Liberal, Bobby Morrissey]

Please continue.

[Renze Nauta]

Although education is primarily a provincial responsibility, the nature of policy in the last several decades has been that the federal government has taken more responsibility in that area in terms of funding. The Canada social transfer comes to mind. Workforce development agreements come to mind as well.

To your point, I do agree. Our data show that having some sort of price signal to indicate where students should be prioritizing their time in the post-secondary period would be valuable. It doesn't mean that education is entirely about what kinds of skills it's going to give them for the workforce. Obviously there are other things involved in education, but it is an important part of what students are expecting. I think it would be a benefit to them to have some sort of signal as to what the labour market is demanding.

[The Chair, Liberal, Bobby Morrissey]

Thank you. It was a six-minute round, not a five-minute round. Sorry about that.

We go now to Ms. Koutrakis for six minutes.

[Annie Koutrakis, Liberal, Vimy, QC]

Thank you, Mr. Chair.

Thank you to all our witnesses for their testimony here this afternoon. My first question is to Ms. Swift. I'm looking for some clarification.

In your testimony you said that there are far too many subsidies and they're too expensive or they cost too much.

Would you be able to define for me what "costs too much" means?

[Catherine Swift]

Generally speaking, government programs do not favour small businesses. There is usually a fair bit of paperwork that has to be filled out to access them, and they tend to benefit larger firms more than smaller firms.

Anybody can have a subjective opinion as to what's too much and what's too little. When you find small firms in particular struggling to obtain some kind of subsidy or something to incent their hiring of young people—of course you have to tax them to pay for that program—it's much better to leave the money in the businesses' hands to spend as they choose. We've seen a lot of evidence over the years that they make much better decisions for their own businesses, usually because their own livelihood is at stake in the process, than some government bureaucrat does.

There's such a plethora of programs of many different kinds, but there's very rarely any measurement of how effective they are. It would be good if we could have sunset clauses on a lot of these programs so that they would basically go away or die in a few years, or whatever is an appropriate time period, and then we could assess whether they really created jobs and did what they were intended to do. We don't have that now. So many of these programs aren't measured at all, and often they're driven more by political concerns than economic concerns: “What riding is this business in? Is it in a riding that my party won in the last election?” I've seen that far too often over the years. That's not a good criteria for spending taxpayer money. It should measurable and it should boost the economy, not simply be a politically motivated slush fund.

Of course we've seen subsidies to really inappropriate industries. Maybe it doesn't seem to directly involve the whole youth unemployment issue, but when you're spending billions and billions on failed businesses—electric vehicles is a very good example of that; we've seen many fiascos in that area—that takes money away from every business in the economy, and not just small firms, to be able to hire properly and pay their employees properly.

[Annie Koutrakis, Liberal, Vimy, QC]

I just want to say, for all the Canadians who are watching us today, that small business in Canada has one of the lowest tax rates in the G7. I'm trying to follow your testimony very intently and I have to admit I'm feeling a little confused. You're saying we're spending a lot of money on subsidies and they're not really going to the small businesses. Earlier in your testimony, you said small businesses would like to train young people but they find the training is too expensive.

Are you saying that subsidies that are currently available that small businesses can access are not enough, or are you saying that we have to eliminate them altogether? What is it that you think small businesses need in order to develop the young, attract them and incentivize them to go into skilled trades? I'm having a hard time trying to balance the two.

[Catherine Swift]

When you refer to the lowest tax rate in the G7, you're referring to the corporate tax rate for small business. Unfortunately, that's just one very small part of the pie. In fact, corporate tax rates are one of the least problematic tax rates because the business has to be making money to pay corporate taxes. The more problematic taxes are the payroll taxes, which I mentioned and which a business pays whether it's making money or not. They could be losing money and, of course, still have to pay those taxes. There are property taxes, which are not federal. There are health taxes in some provinces; Ontario has a health tax. All of those taxes that do not rely on whether the business is actually making any money are the most problematic taxes. You have to add up that whole burden. The whole regulatory—

[Annie Koutrakis, Liberal, Vimy, QC]

I'm sorry, but my time is running out and I have one more question. Thank you for that.

Ms. Watts-Rynard, in your testimony, you were talking about programs that may not be really delivering for students. Are there provinces that have particularly strong partnerships with federal programs in delivering youth employment outcomes through polytechnics that you're aware of and that you can speak to?

[Sarah Watts-Rynard]

Across the country, there are some programs that are very successful when it comes to getting that first experience. What we've seen is that doesn't necessarily incent ongoing retention and completion. I'll point to the skilled trades as an example. There are some really great programs that have come out of the government to provide wage subsidies for apprentices who are just getting started in the skilled trades, so there are a number of programs that are designed for that first experience. Retention and completion is where we struggle.

When youth unemployment rates are high, what we actually find is that you don't always get into the field in which you were studying, but those experiences are the things that people fall back on.