Industry Committee on Oct. 24th, 2006

[The Chair, Conservative, James Rajotte]

Welcome, everyone.

Ladies and gentlemen, we are having the 22nd meeting of the Standing Committee on Industry, Science, and Technology. Further to Standing Order 108(2), we're continuing our study of the challenges facing the Canadian manufacturing sector. With us here today are four representatives of unions from right across Canada.

We have, first of all, from UNITE HERE Canada, Lina Aristeo, Quebec regional director. Welcome.

Secondly, from the Centrale des syndicats du Québec, we have François Vaudreuil, president. Bonjour.

From the United Steelworkers, we have Jorge Garcia-Orgales, researcher. Welcome.

Fourthly, from the Canadian Labour Congress, we have the president, Ken Georgetti, with us.

Welcome to all of you. Thank you for being with us today.

We do have time for each of you to have your opening statements of ten minutes each--you can go up to ten minutes. You can take as little time as you like, but we would hope you'd be as brief as possible so we allow as much time as we can for questions from the members. We'll start in the order that I read out.

Ms. Aristeo, if you want to start off, you have up to ten minutes.

[Lina Aristeo, Quebec Regional Director, UNITE HERE Canada]

Good afternoon, everyone. We thank you for the opportunity to speak.

Although I'm sure some of the other people here today will talk about the crisis in general in manufacturing—because it is a crisis, so “crisis” is the word I'm using—with job losses and the closure of plants across Canada, I'd like to take my time, and I'll keep it as brief as possible, to talk a little bit about a more particular crisis in the apparel industry in Canada.

The apparel industry in Canada is the tenth largest manufacturing industry in the country, and in Quebec it's higher up on the list.

To give a brief description on what UNITE HERE does and who we are, UNITE HERE Canada is a union of 50,000 members, and we have 10,000 members in Quebec. Although I am making a national case for the apparel industry, you have to understand that it becomes a Quebec problem, particularly since 55% of the jobs are situated in Quebec.

Our union is the child of several different mergers. The old International Ladies' Garment Workers' Union and the Amalgamated Clothing and Textile Workers Union merged in 1995 to create UNITE, which in turn merged with the Hotel Employees and Restaurant Employees Union in 2004 to create UNITE HERE.

As our union has shifted and changed, it is only as a result of what has been happening in the industries that we represent, which are apparel and textile manufacturing workers, as well as hotel employees and restaurant employees.

What's going on in the apparel industry?

I'm sure you'll speak to plenty of people who represent the industry as well. I want to give you the perspective because sometimes we lack the human perspective on what this industry is and who it represents.

It's mostly in Montreal, and it's mostly immigrants, mostly women, mostly older women.

I'll give you the example of Lucia Sousa, a Portuguese immigrant who came to Montreal over thirty years ago. In her second year in the country she started working at Cardinal Clothes, and she has worked there ever since--until the 27th, when Cardinal is going to close its doors. Cardinal makes men's jackets and overcoats.

Another example is Carlos Costa, an immigrant from Chile who got his first job in the apparel industry and has worked at Jack Victor Ltd. in high-end men's suits for his whole life. Jack Victor is doing well. It's a men's suit company that is doing well, and he, his wife, his two daughters, and his son-in-law all work in the shop. You can understand that if this place closes, the whole family would be devastated.

We think of T-shirts, socks, bras, and underwear when we think of the apparel industry, but it isn't always that. Let's look at the industry that remains.

I'm not asking you to look to the past; I'm asking you to look to the future. What is the apparel industry in Canada today, and what could it be in five, ten, or twenty years down the line?

It's high-end men's tailored suits. We have a great reputation as the third largest city in North America...after only New York and Los Angeles, a place of distinction that I don't think we should lose. We make great labels: Tommy Hilfiger, Brooks Brothers, Nordstrum, Saks Fifth Avenue, Barneys New York, J. Crew, Paul Stuart, and Harry Rosen. The list is endless.

We have people of a certain celebrity who wear suits that are made in Canada, made in Montreal specifically, such as David Letterman, Neil Armstrong, and CBS sportscasters. There are people who will refuse to wear suits made in sweatshops because they hold a certain role in society. They are looked at.

Why should we as Canadians lose this place of distinction? They're wearing our stuff now and they should keep wearing our stuff. If not ours, they'll buy American-made stuff or European-made stuff.

This brings me to the reason I am here today. The United States and the European Union are our competing markets for the apparel industry in Canada. Let's look at what they've done to safeguard their industry.

They've put in place safeguard measures, which are provisions that exist in the World Trade Organization agreements. When the United States, the European Union, some South American countries, and South Africa, as little as a month ago, all put in place a measure to limit the imports from China of apparel coming into Canada, we have to ask ourselves why the Canadian government isn't doing the same.

This is what we've called on government to do, and what I'm asking the committee to consider as well: look at the possibility of putting in place and enacting these safeguards.

I'm sure most of you are probably familiar with what it is. But briefly, it would limit the growth of Chinese imports in apparel. If the growth of imports is already 10%, let's say, it would be 10% plus 7.5%. That's the limit on the growth we could put in place.

Now, the safeguard measures are measures that can only last for three years. Because of several different factors, we've lost the year, but there are still two years. I'm not at all talking from a protectionist perspective. It's not. Other countries who use free trade as commonly as possible have put in place these measures.

What I'm saying is that for these two years the companies need this. I talk to companies of distinction, such as Jack Victor, Samuelsohn, Confection de Beauce, who make different products but are all committing to saying they want to keep these jobs here, they want to keep their company open, and they want and need these safeguards. Let's not just listen to companies who import more than they produce. Let's look at the ones who want to keep this industry alive in Canada. They need these safeguards in place.

Giving them two years allows them to develop their markets, to specialize their niches, because yes, if the apparel industry continues to exist in Canada, it will exist only with those companies or manufacturers who have decided to develop a niche. Those who are just going to hang in for as long as they possibly can won't continue to exist in the short or medium term.

That's one solution. The other thing we're asking for, and I'm going to wrap up with this, is that after these two years, or in the case, for example, of Lucia Sousa who has lost her job, and of many others who are older workers, we need to have an older worker adjustment program, as we've had in the past. There was an announcement not long ago about some kind of adjustment program for workers, but it is completely ineffective. There's not enough money in it, it excludes Montreal, and it excludes apparel—and that's where the jobs are. We need a real worker adjustment program to help these people who are all over 55—closer to 65 than anything else—and that will permit them to take a retirement with dignity.

Finally, we should promote Canadian-made clothing and have procurement programs when possible. Let's not just think of T-shirts and uniforms; let's think of suits as well. The Montreal police use Canadian-made stuff, and the RCMP. We should make this, where possible, more commonplace.

Finally, and this is something that comes from a lot of people in industry, the Canadian dollar has hurt significantly the ability to compete, since most of our product—I'd say over 80%—goes to the United States. If we were able to relax the interest rate policy to reduce upward pressure on the Canadian dollar, that also would be helpful.

To give you a brief statistic on the impact China is having on the apparel industry, in men's suits, from 2004-05, there's been an increase of imports from China of 134%, whereas there's been a drop of 1% from every other country in the world put together.

We can't say it's just a trade problem; it is, right now, a China problem. There is an ability to limit this, and I think we should put it in place.

That's going to be it for now, and I'll take your questions.

[The Chair, Conservative, James Rajotte]

Thank you very much, Ms. Aristeo.

I'll just caution members, if they have a longer discussion, that we should cut it down.

We'll go to Monsieur Lapierre, and secondly to Monsieur Vaudreuil, pour dix minutes.

[François Vaudreuil, President, Centrale des syndicats du Québec]

Thank you, Mr. Chair.

I represent the Centrale des syndicats démocratiques, which is a Quebec labour federation with nearly 70,000 members, most of which are SMEs and manufacturing sector businesses from all regions of Quebec. Today's subject is a great concern for us and we are very pleased to be invited to appear before this committee.

Before the Free Trade Area of the Americas was adopted, in fact from 1993 to 2000, the Quebec manufacturing sector created 108,000 jobs. The sector reached a peak of 667,000 jobs in 2002. In 2006, four years later, the number of jobs in the industry had fallen to 488,000.

Some sectors have obviously been harder hit than others. Those exposed to international competition, in particular the clothing industry, have suffered more. It is important to bear in mind, when we talk about job losses in the Quebec manufacturing sector, that more than 200 municipalities are single-industry towns. Consequently, a plant closing in those municipalities has a negative impact not only on the workers of the business, but on the community as a whole.

The present situation is very disturbing. In addition, the crisis that the Quebec lumber and logging industry is going through affects more than half of those single-industry towns. Asian competition, the stronger dollar and the slowdown in the U.S. economy are other factors that have a major impact on jobs.

The overall analysis of the manufacturing sector reveals certain dangers, because the realities are many. This is a complex and multidimensional issue, and the problems differ greatly from sector to sector.

A large business employing several thousands of workers lives in a different world than that of a small or medium-size enterprise with 15 to 20 employees. Similarly, the geographic and demographic situations are other factors that must be taken into account in our analysis of the manufacturing sector.

What is for certain, however, is that the manufacturing sector creates a lot of direct and indirect jobs. The indirect job coefficient in this sector is very high. So this sector must be taken into consideration, particularly since, traditionally, it has always created high quality, well paid jobs. I use the word “traditionally” because this trend appears to be changing.

Despite the various characteristics that I have just outlined, we'll nevertheless try today to provide you with certain potential solutions which we think are universal. I draw these facts from an experience we had in Quebec. A number of you are no doubt aware that the Charest government organized the Forum des générations in the fall of 2004, to which he invited various civil society organizations to take part.

Two Quebec labour federations attended the Forum: the CSD and the Fédération des travailleurs du Québec, the FTQ. At the Forum des générations, we requested that a working committee be established to look into the future of the manufacturing sector, because we were concerned about the situation.

The committee was created and chaired by Gaétan Lussier. The committee's work was spread over a number of months. A report was prepared and was the subject of a consensus by the four union federations — CSD, CSN, CSQ and FTQ — and management organizations of Quebec. I'll send a copy of the report to the committee secretariat. The report proposes 70 economic and social measures that take into account the jurisdictions of Quebec and Ottawa for the purpose of supporting the manufacturing sector in its efforts.

I'd like to talk to you about that study by addressing two aspects. First of all, if we want to keep high-quality jobs in the manufacturing sector, we must ensure that our businesses are competitive. To do that, we must make efforts. The problem is that a lot is said about productivity; in fact, a lot of nonsense is said. And yet there is an academic literature on the subject, from the Université Laval, the HEC and elsewhere. Mr. Anthony Giles, who is Director General, International and Intergovernmental Labour Affairs at Human Resources and Social Development Canada, made excellent presentations on productivity.

According to Mr. Giles, there are three main ways of increasing productivity. The first is to intensify work, which is the worst solution. The second is to invest massively in technology; our businesses have scarcely invested in this area in recent years. The third is work reorganization; this is the way that produces the most significant productivity gains. However, work reorganization must be done in partnership with the union and employees.

First finding: promote as much as possible the introduction of participatory management in the work place and support these social innovations in order to permit a genuine increase in productivity.

The second point I would like to address concerns a study conducted by Laval University. That study showed that the best performing businesses from an economic and social standpoint are those that use a participatory management model developed on the basis of the partnership between the union and the employer, as well as on employee participation.

This participatory management model needs help in order to spread. Better practices, particularly in human resources, are necessary in order to ensure business productivity. An SME with 10 to 15 employees, as well as most developing businesses, unfortunately does not have the necessary resources to develop the best human resource management practices. Innovative efforts in this direction must therefore be supported through policies. We must innovate in order to support businesses.

The issue of corporate governance must also be addressed, more particularly the abolition of the capital tax. If you decide to abolish that tax, business leaders must be required, in exchange, to make massive investments in their businesses. Otherwise, everyone will lose out.

In the wake of the Forum des générations, the CSD and the FTQ examined the phased retirement issue and filed a brief with the federal government, which is now with the Department of Finance. It is important to review that brief because a good phased retirement program, given our demographic issues, would enable people to work an average of one, two or three years more. Such a program is important in the context of the aging population and labour force.

We must also step up our investments in manpower training in order to develop greater employability.

I apologize for going beyond my time.

[The Chair, Conservative, James Rajotte]

Merci beaucoup.

We will now go to Mr. Garcia-Orgales, for ten minutes, please.

[Jorge Garcia-Orgales, Researcher, United Steelworkers]

Thank you for this opportunity.

I will divide my presentation into two parts: one, general context; two, the challenges we see as a union facing manufacturing and the solutions and ideas we have about how to deal with these challenges.

Let me start by sharing what Lina said. We think there is a crisis in the manufacturing sector. It's not simply some problems and some challenges. This crisis is affecting the economy in general and is also affecting the lives of people. Since 2004, almost a quarter of a million workers lost their jobs in manufacturing. If you look at the same period, 10% of the those declines were in Ontario and 14% in Quebec. Those are staggering numbers when you think that manufacturing employs almost two million workers in Canada.

The manufacturers association of Canada says it's not the union. It says that wages in the manufacturing sector are 28% higher than the average wage. That means we're not only losing jobs, but we are losing good jobs that pay taxes and help development in the communities. The manufacturers association of Canada said that for each dollar that is invested in manufacturing, it reproduces $3 in economic movement. That means we are losing a lot of money every time a plant closes, not only us, the workers in the community, but also the country.

The recent crisis is reflected, as has been mentioned, in loss of jobs, but it's also affecting the economy in general. And 2006 will be the first year in the history of Canada that the GDP of Ontario, the manufacturing heart of this country, will be lower than the GDP of the country. That is a clear example of how the loss of manufacturing is affecting the economy in Canada.

There is what I like to call a bunch of myths around manufacturing. Some people like to say that manufacturing is over for countries like Canada, that we have to move into the knowledge society, we have to start developing these new industries that are highly technological.

I want to share a bit of personal experience. I probably call Canada my home these days, but I grew up in another country. My accent has already probably told you that. The country where I grew up is Argentina, a country that for many, many years mirrored Canada in the type of country it was--the natural resources, the immigration flow, and the industrial development.

It started in the seventies, a very important movement started with the military taking shape and moving into democracy, with an economic policy quite similar to the one we see applied in Canada today. The government decided to move the economy from an industrial base to a resource base.

I won't spend a lot of time on what the resources were. I'm sure that all of you remember December of 2001, the people on the streets, and five presidents in less than a month. People were looking for jobs; they were looking for stability. People were looking for the country they used to have, but it was not there any more.

I'm here because I'm afraid that if we don't pay attention to manufacturing in Canada, we could see a similar kind of reaction, perhaps not in the whole country but in areas where people have grown used to having good jobs and good opportunities for their kids.

I live in Toronto, and for me, it's not magic that violence on the streets is growing and that gangs are forming. That is completely related to a lack of opportunities and a lack of hope. I want you to pay attention to that word, because people go through life with the hope of making something better of themselves and of making something better for their families.

When you are destroying good-paying jobs, jobs that give opportunity, when you see plants close and you see that your kids won't be able to get those good jobs, when you see communities like those in northern Ontario turning into ghost towns every day because pulp and paper mills are closing, then that hope slowly disappears and all other kinds of social diseases start to appear.

I want to move quickly into what we see as the challenges for the manufacturing sector. I want to mention five.

I will mention the high Canadian dollar. I want to talk about energy prices and opportunities. I want to talk about the lack of an industrial policy on the part of the government. I want to mention trade agreements and the lack of representation of workers in the communities in that area. Finally, as Mr. Vaudreuil mentioned, I want to talk about skills development and adjustments for workers in the manufacturing sector.

Very briefly, about the Canadian dollar, I don't need to tell you that the increase in the value of the Canadian dollar is hurting the manufacturing sector. When the dollar goes up, the products that are sold internationally go up in price, but those prices that are going up don't reflect in new profit or opportunities for the employers in the manufacturing sector.

Right now, we have the dollar almost at 90¢ or past 90¢, and there are a bunch of reasons why that has happened. Very important is the low value of the U.S. dollar. There are some things about which we can do nothing, but there are ways by which we can influence our dollar. One of them is the interest rate set by the Bank of Canada. The Bank of Canada is keeping interest rates at a rate considered to be effective to fight inflation, but that rate is keeping the Canadian dollar too high, and that is hurting manufacturing.

In our opinion, fighting inflation at this time, and gaining that fight, is fighting the wrong fight and gaining the wrong fight. At this point, we don't see a concern about inflation coming and affecting the economy of Canada, but, yes, we see a strong effect in manufacturing because of the value of the Canadian dollar. We think the Canadian government should influence the Bank of Canada as much as possible to ensure that the interest rate is possibly reduced or at least maintained, to at least support and sustain the maintenance and development of manufacturing in Canada.

The second area I want to mention is energy. The energy prices are hurting manufacturing, but also new technologies. Energy could be a great opportunity for manufacturing. We believe that a green industrial strategy is the way to go to resolve the energy crisis and resolve the price of energy, but also to improve development of manufacturing in Canada.

I don't know if you know that production of windmills in Germany is the second consumer of steel, after automobiles. Just that could give you an idea of what a green industrial strategy can do for Canada's manufacturing. Making windmills consumes almost as much steel in Germany as automobiles.

We are greatly displeased with the new policy put forward by the federal government, so we ask for the possibility of looking at energy and new energy technologies as an opportunity for manufacturing.

Lina already talked about skills development, and if there are any questions, I will go there later.

Finally I will mention the need for an industrial strategy. We believe that sectoral industrial strategies are the way to go. We don't believe that just general tax cuts are helping the economy. We believe tax cuts should be directed to research and development, investment in new plants, and investment in equipment, sector by sector. To serve as an example, there's the Canadian automobile partnership sector and the new Canadian steel partnership sector.

I will probably use my answers to questions to continue.

[The Chair, Conservative, James Rajotte]

Thank you very much.

We'll now go to Mr. Georgetti for ten minutes, please.

[Ken Georgetti, President, Canadian Labour Congress]

Thank you for inviting me here today. I can't think of anything more appropriate than a poster of “Humanity First”, from the NDP, sitting over my left shoulder as I make my presentation.

I want to start out by saying that I've been watching question period lately. It's usually a good way to find out what the members of Parliament think are the most important issues of the day. Quite frankly, I'm disgusted. Working people must be wondering what is in the water on Parliament Hill these days, and who can blame them.

Less than a year after an election campaign where everyone was talking about making life better for working people and the families they support with the wages they earn, less than a week after returning home from listening to your constituents, the best thing the House can come up with is a brawl about name calling. The only thing the press gallery can write about is the hurt feelings, the insults, and schemes of a party without even a single seat. Working people deserve better than this. With so many people out there worried about their jobs or about to lose them, I think members of Parliament would do well not to take their own employment for granted.

Canadian manufacturing and the sector are in a deep crisis. Over the last four years, we've lost one in seven, or about 15%, of the two million jobs we used to have in this sector. Almost 300,000 jobs have disappeared, gone, and I'll tell you right now that many more layoffs and plant closures are on the way.

There are 300,000 jobs gone--good jobs. Many of them were highly skilled jobs. Close to half of them were union jobs. They paid an average of $21 an hour. They were the kinds of jobs that supported a decent standard of living for ordinary working people and their families, and the kinds that built the communities that all of us came from.

Just to remind you, the last time we saw job losses on this scale was between 1989 and 1992, when our economy was declared to have been in full recession. But if you believe the banks and the right-wing think tanks or those millionaire wizards of the Canadian Council of Chief Executives, our economy is robust.

I suppose if you're a capitalist, someone who makes their money from investing or the spillage of moving so much of other people's money around, you might think things are pretty good today. But if you're someone who works for wages, the odds are your future isn't as bright as it was a few years ago, because it doesn't stop there.

Manufacturing jobs are the wellspring for jobs in other sectors. When we lose them, we lose good jobs in the sectors that supply manufacturing companies with specialized inputs—sectors like transportation and business services, to name just two. It's a domino effect that cuts across the rest of the economy.

We hear a lot today about the need to build a highly productive, innovative, and so-called knowledge-based economy. The impression is often left that the good jobs of the future have nothing to do with the old business of making things. The fact of the matter is that fully two-thirds of the research and development in Canada are undertaken in our manufacturing sector.

It's true that the energy boom is creating jobs, and they're good jobs, I might add, particularly in western Canada. But in terms of direct jobs, the oil and gas industry has replaced only one in six of the jobs we've lost in manufacturing since 2002.

We also hear a lot today about the need to improve Canada's productivity performance. One of the worst ways to do that is to shift jobs from the high-wage, high-productivity industries to low-productivity, low-wage industries, but that's precisely what we're doing in our country today.

The proportion of all jobs held by adult workers that pay less than the poverty line wage of $10 an hour has been increasing to one in eight adult jobs in 2005. Most manufacturing workers who lose their jobs take a big pay cut, and when they are lucky enough to find a new job, they end up earning much lower wages.

My key point is that we need to maintain and build up our manufacturing sector as a major source of good jobs for the future. The bottom line is that Canada needs a long-term job strategy. Fundamental to that strategy is building an innovative and highly productive manufacturing base, a base that can support well-paid jobs with decent working conditions. Other countries have done it. Their economies are strong. Communities are prospering there, and their citizens are reaping the benefits.

Canada's role in the world must be as a supplier of goods and services that sell on the basis of being unique and of high quality. This requires investment in research and development, investment in skills, and investment in leading-edge new plants, new machinery, and equipment. It requires a plan, an agenda, because quite frankly, much of the Canadian manufacturing sector as it exists today is not up to the challenge.

The constant mantra of the corporate elites, repeated by most politicians, I regrettably add, has been that the free trade deals and low corporate taxes, plus a tax on the living standards of workers, will lead to increased international competitiveness. I've heard it all of my working life. That strategy has clearly failed. Free trade agreements modelled on the Canada-U.S. deal have led to job losses. They've led to unbalanced trade outcomes and relentless downward pressure on wages, benefits, and working conditions as well. Even unionized manufacturing workers have seen few increases in wages and benefits, even as work demands and productivity have increased. As a country, we have become more rather than less dependent on raw resource exports. It's a shame. High corporate profits have not been ploughed back into major new investments, and our companies are sitting on piles of cash, I might add.

The CLC has put forward the beginnings of such a plan for good jobs and wealth creation. It's a combination of better monetary policies, balanced trade, protection of labour rights, support for investment in new manufacturing, equipment and tools, training and skills development for workers--working Canadians--and an actual industrial strategy to knit everything together. The market is not going to provide us with prosperity that can come from a productive value-added green and sustainable economy unless we make investment first.

The plan was sent to you last week, so I won't go into details. However, I do look forward to your questions, and thank you for your time.

[The Chair, Conservative, James Rajotte]

Thank you very much, Mr. Georgetti.

We'll now go to Mrs. Kadis, for six minutes.

[Susan Kadis, Liberal, Thornhill, ON]

Thank you, Mr. Chairman, and welcome, everyone.

Actually, I found it to be extremely insightful. I think today's presentation, for me, has been very eye-opening. Maybe it was not as much for others, but certainly it was for me.

Along that line, I'm quite interested to know what the industry, the sector, is investing in. You talked about investing in technology--which was very heartening--and investing in terms of skills training and upgrading. What collaboration do you feel there has been with the federal government, and what more can there be along those lines, in terms of skills shortages and skills training?

[Lina Aristeo]

Were you asking me specifically?

I didn't address this too much. However, in terms of skills training, if we look at the type of people working in the manufacturing sector today, they're people with almost no education, no training, no specific or higher training. A lot of them don't even have a high school diploma. Many of them can't speak English or French. I'm talking about core manufacturing, about people who've come from other countries and who depend on this. Are you going to tell the 55- or 56-year-old woman, who is single, most likely, and who has three children at home, to go back to school to recycle herself so that she can work in the service sector because that's the industry we're saying we're going to focus on?

I'm sure there's a lot we can do, and some is being done in the various industries, on skills development. However, it's not the only solution. It is, probably, for some specific industries, but it's not for apparel. It is the case a little bit in the textile industry. That's one thing I would like people here to understand: the distinction between apparel and textile manufacturing. They're not at all the same thing, and I'll take a little bit of time just because every time I say this people's eyes open up.

Textile production is the weaving of thread to make the tissue, and apparel production begins with the cutting of the textile. As soon as it touches scissors, it becomes apparel. So there's a clear difference between the apparel industry and the textile industry. In the textile industry there is more training. The workers are most likely men. I'm still looking in Quebec, because a lot of the jobs are in Quebec, so they're Québécois, and they are living in the regions. In the apparel industry, we're talking about women. We're talking about immigrants. We're talking about Montreal. It's completely different.

I'm not sure, but I'm probably not responding to your question directly. Maybe somebody here can give you what you're looking for.

[The Chair, Conservative, James Rajotte]

Mr. Garcia-Orgales.

[Jorge Garcia-Orgales]

Thank you.

I'm looking at my own union and the experience twenty years ago during the previous crisis in the steel sector. At that point, the union and the industry created the CSTEC bipartite organization to discuss the need for retraining for unemployed and employed workers. At that point, we had the support of the federal government, and it was a very successful experience.

Today the federal government has devolved to the provinces a lot of their training, and then people say the federal government cannot do much on the issue of training and retraining.

We think that first the federal government has to re-engage in training. This is too important to just say, “It's not my responsibility.” Secondly we have a few ideas about how this could be done.

First, we think the EI system could be revamped and used for training, allowing employed and unemployed workers to collect benefits during training. This is important. We have experience doing this, as in the apprenticeship model, where people collect their wages through EI while attending school. We are suggesting to you the same model for training and retraining.

Secondly, we think that Quebec's model of a training levy of 1% on corporations that don't do training is an excellent model to study and repeat nationally. Again, this is not a punishment; it is making sure you do proper training. And it is not that much money; it is 1%.

Finally, we support the sector council's agenda that the federal government is doing. But at the same time, we think that without some monetary support through EI or some tax levy, the sector councils that are in place cannot do much, because there is no lever mechanism. You can research, you can study, and you can talk about it, but until you get some dollars to really do it on the ground, there is not much you can do.

[The Chair, Conservative, James Rajotte]

I have Mr. Vaudreuil and Mr. Georgetti as well.

Is that okay, Ms. Kadis?

Okay.

[François Vaudreuil]

The CSD has millions of people working in the clothing and textile industries. So we're very familiar with those two situations. Earlier Lina explained to you the differences between the two industries, and I agree with her.

The federal government must increase funding granted out of the employment insurance account, under the Canada-Quebec agreement, for manpower training. In Quebec, the labour market partners commission currently manages $600 million a year. Quebec has made giant steps on this issue in the past decade.

The other item we want to examine — Jorge spoke about it earlier — is the sectoral committees. They produce very concrete results through highly pragmatic and controlled approaches by people in the community.

Lina told you about immigrant workers in Montreal. This is a reality, but there are also workers from the regions. For example, in central Quebec, in the Beauce, these people are highly vulnerable when they lose their jobs following a plant closing. As president of a federation of nearly 400 affiliated unions, I sometimes witness moments of union truth at general meetings and see the suffering of these women.

Social policies are part of the problem. As president of a labour federation, how can I respond to a 60-year-old woman who gets up and explains that, as the eldest in her family, she had to go to work when her father died and hand her pay cheque over to her mother every week and that, today, some 40 years later, she has to apply for welfare? She can no longer live with dignity. Why? Because the federal government has shirked its responsibility for establishing an income support program for older workers since May 1997. That's one example, but I could cite others.

Training is important, and the income support program for older workers is equally so.

[The Chair, Conservative, James Rajotte]

Before I go to Mr. Georgetti, I should have probably explained this at the beginning. Members of this committee are only given a very short period of time to ask some questions. Ms. Kadis only had time for one question, and we're already three minutes over her time. It's my fault because I'm supposed to keep people within the time. So I'm asking all of you to be very brief, because if we go on and on, members will not be able to ask questions, as we'll have to go on to the next member.

So we will finish with Mr. Georgetti, but please be mindful. The first round is six minutes; the second round is five minutes. It goes very quickly.

Mr. Georgetti, you can finish off here.

[Ken Georgetti]

Thank you. I have three quick points.

A huge proportion of our productivity gap between us and the United States, for example--I think 40%--could be solved through basic literacy and numeracy training for Canadians. The federal government needs to do a lot more on the issue of national standards on training for labour mobility and issues like that. And I would recommend the members of this committee take a look at the employment insurance program as it pertains to maternity leave, the incentive they put in place for corporations and unions to bargain adequate maternity benefits, and the rebate system that works there. We have a program and a suggestion that we put to the last government and this government to do the same thing, to use the EI system to incent training by manufacturers and employers.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Georgetti.

Thank you, Ms. Kadis.

We're going now to Monsieur Crête.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you, Mr. Chair.

I'd like to remind you that, last Monday, the Bloc québécois introduced a motion that was adopted by all the opposition parties, to create an assistance program for older workers. Only the government has not agreed to that motion.

I'm very pleased that you're here today. I'm going to ask you a brief question, which is central to the government's decision whether to act on this motion.

In three years, what will be the impact of the governments' refusal to change market rules and the decision to maintain an economic laisser-faire approach on the various sectors that you represent?

[François Vaudreuil]

To give a brief answer, I'd say it would be disastrous.

[Lina Aristeo]

I entirely agree with Mr. Vaudreuil. He made a brief reference to that situation in response to the previous question.

The impact would be devastating. The people we represent in the clothing industry and in the manufacturing industry in general are middle class people. They are people who pay taxes. However, as I said earlier, these people are unable to retrain in other industries, because of their age, their training and a host of other reasons. Whatever the case may be, those reasons exist. If these people lose their jobs, our country, our provinces and our regions, more particularly, will suffer as a result.

I don't mean that the clothing industry must grow, but we have to protect what we have and protect people who are going to lose their jobs.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

You don't think the market will regulate that?

[Lina Aristeo]

No, not at all. I believe there's a complete imbalance. The market will never regulate itself.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

I'd like to have the opinions of Mr. Georgetti and Mr. Garcia-Orgales on this question.

In terms of jobs, what would be the impact on the workers and communities that you represent if, for example, if there were no industrial policy choices, or if we let the market act?

[Jorge Garcia-Orgales]

I have a couple of examples. The softwood lumber deal was presented. One of the characteristics of that deal is an incentive to export logs out of Canada, instead of manufacturing, making paper, furniture. The softwood lumber had not yet been implemented. Northern Quebec and Ontario were seeing mills closing one after another. Complete communities have been destroyed. Close to 200,000 jobs have already been lost. If nothing changes, you can count on another 250,000 jobs gone in the next couple of years.

The economy of Ontario is suffering. We organize workers from hotels, health care, and manufacturing. While some jobs have been created in health care at $11 or $12 an hour, others have been lost in manufacturing at $28 or $30 an hour. Two hundred and ten thousand jobs have been created. If you look at the numbers, it seems that everything is fine. But at the same time, another 200,000 jobs were lost. There is a big difference between having a good job and just having a job. If we leave it to the hand of the market, we don't see any solution coming. It will be the other way around. I support my friend. Catastrophe is what is coming.