Yes.
We thank you for the opportunity to be here today. Along with me are Cliff Halliwell, who is our director general of policy research and coordination, and Éric Parisien, who is the director of the sector council program division.
First of all, I would like to say that we're very pleased to have contributed to discussion on this issue by assisting the Canadian manufacturers and exporters initiative, which led to the excellent Manufacturing 20/20 campaign, which provides an overview of many ideas for moving forward. Manufacturing 20/20 stresses the necessity of nurturing a skilled manufacturing workforce in light of changing demographics, increased international competition, rapid technological change, rising costs, and a strong Canadian dollar.
Canadian industry benefits from having access to one of the world's most highly skilled and well-educated labour forces. Canada's skilled and educated population, combined with an efficient labour market, have helped labour participation to climb to 67.4% overall, an historic high. At the same time, that employment growth has been stronger than in other G-8 countries over the last decade. Yet as we know, that workforce growth cannot continue to grow at the same rate, because, like all developed countries, our population is aging. This aging effect could lead to shortages of skilled workers and is one of the foremost concerns expressed by Manufacturing 20/20.
Manufacturing needs to attract new workers to replace retiring workers, but it also needs to focus on updating the skills of its existing workers to permit raises in productivity that will drive economic growth and ensure competitiveness. HRSDC believes that raising the skills of our workforce even further and in an ongoing fashion is a key means to improve productivity.
However, Canada is lagging behind other countries when it comes to investment in skills development in the workplace. In fact, only about 35% of the adult workforce participate in job-related formal training. Internationally, Canada slipped from twelfth place in 2002 to twentieth place in 2004.
We also need to ensure that the skilled workers we do have are matched with the jobs that are out there. Our analysis shows that we are not confronting a generalized skilled labour shortage in the economy, but we have problems of specific regional and sectoral shortages, described as mismatching, which are becoming more evident as the labour market tightens. For example, 42% of manufacturers surveyed in Alberta are facing production difficulties due to labour shortages, compared to only 4% in Ontario.
We are confronting paradoxical employment tendencies in manufacturing. We have skills shortages in some regions and industries, but net job losses overall. As you've already heard, manufacturing has lost about 200,000 net jobs since 2002. At the same time, there are critical shortages in a number of skilled trades that are essential for manufacturing. These changes in labour demand from employers and manufacturing are part of the ongoing healthy and productive process of adjustment. Government's role is to facilitate adjustment as it permits long-term growth, while hindering it would lead to economic stagnation.
On the labour side, we need to ensure that the economic union functions properly and that we have a mobile workforce with transferable skills. With respect to our department and skills initiatives, we coordinate certain initiatives to address workplace skills issues, lever more investment in skills development, and address labour market efficiency. One of our tools for addressing skills issues is the sector council program, which brings together stakeholders, industry, labour, skills providers such as colleges and training firms, and government. A sector council maps out the skills profile of a sector and then engages in planning, coordinating, and developing a supply of skilled people in response to sector needs.
So far we have established a network of 32 sector councils, including 10 sector councils that are active in important manufacturing sectors such as biotechnology, aviation, plastics, steels, automobiles, textiles, and wood products, covering around one-third of the manufacturing workforce.
The Textiles Human Resources Council, for example, shows us that skills development issues are important even when there has been an overall decline in textile employment. Textiles are transforming into a sector producing specialized products with greater added value, but this takes a new breed of highly skilled textile worker. The Textiles Human Resources Council is helping workers to upgrade their skills to meet this new reality, and it is the only body doing so, because there are no specialized post-secondary education courses in textiles.
The Canadian Steel Trade and Employment Congress provides another illustration of invaluable sector council work. This council completed a human resource study last year that provides a strong basis for moving ahead on a workforce development plan to deal with the need to replace trade skills in an aging industry.
Our department also helps manufacturing meet its labour requirements in a variety of other ways. Working with Citizenship and Immigration Canada, we play a vital role in better integrating and employing the labour skills of migrants and foreign workers. Announced in budget 2006 was the development of a new Canadian agency for the assessment and recognition of foreign credentials, which will directly benefit manufacturers by improving the supply and integration of immigrant skilled labour.
HRSDC is also working to improve the foreign worker program, which facilitates the hiring of temporary foreign workers. Nearly 100,000 applications from employers were submitted through our department in 2004.
Apprenticeship programs are also crucial for skills development, and they need to be more accessible and flexible, as Manufacturing 20/20 pointed out. HRSDC's interprovincial standards red seal program supports the mobility of journey persons, covering approximately 80% of registered apprenticeships in 45 regulated trades.
On top of that, the government has announced the new apprenticeship incentive grant, which will benefit 100,000 first- and second-year apprentices, as well as two new tax measures: an apprenticeship job creation tax credit for employers to hire new apprentices, and a new tools tax reduction for employee trades people to help with tool costs.
These are some of the ways HRSDC is helping the labour market supply skilled workers for the manufacturing industry. The full range of our efforts from employment insurance skills development measures through to the workplace partner panel is too long to list here. But we must also keep in mind that the federal government alone is not responsible for developing a skilled workforce to meet the needs of the manufacturing sector.
For example, most training is best provided locally, rather than centrally, by manufacturing firms themselves or by skills providers such as colleges or training firms. That is why our principal role is one of leadership and coordination. Our department's aim is to continue to move forward while engaging other governments, industry, labour, and educational institutions, and working in partnership to find new ways to creatively address pressing skills issues.