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Evidence of meeting #4 for Industry, Science and Technology in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was services.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Tom Wright  Assistant Deputy Minister, Industry Sector, Department of Industry
Colleen Barnes  Acting Director, Financial Institutions, Financial Sector Policy Branch, Department of Finance
Janet King  Director General, Service Industries and Consumer Products Branch, Department of Industry

10:05 a.m.

Conservative

Bruce Stanton Conservative Simcoe North, ON

We have the lowest taxes in the G-8.

10:05 a.m.

Conservative

Dave Van Kesteren Conservative Chatham-Kent—Essex, ON

Is that something we can grow as a country? Will the result be net good jobs in this country? For instance, when we visited China, we found out that the Chinese are very interested in life insurance. Do most of the jobs stay in China or is there a net benefit here in this nation?

10:05 a.m.

Acting Director, Financial Institutions, Financial Sector Policy Branch, Department of Finance

Colleen Barnes

On the first point, as these companies acquire entities abroad and establish operations in China, it's conceivable that the proportion of their income that's coming from abroad will grow.

Insurance, especially the large guys, has always had a really healthy and strong international component. It's coming for the banks, Scotiabank being certainly the most aggressive in terms of going all over the place in the world, and the others focusing more on the United States. We've seen the bank proportion of income actually go up and then come back down because of, as I was mentioning, in 2002, the commercial loan trouble they had in the U.S. They retrenched the retail market in Canada. So depending on conditions and what makes sense for each corporate entity, you could indeed see that level of income coming from abroad increasing.

In terms of what they do abroad in a country like China, yes, you have job growth there, but the nice thing is that the headquarter, high value-added activity stays in Canada. That's part of the reason we try to encourage these companies to go abroad and to have success abroad, because it strengthens the headquarter functions here in Canada. Too, the mind and management stays in Canada, and that's important.

10:05 a.m.

Conservative

Dave Van Kesteren Conservative Chatham-Kent—Essex, ON

Bringing it a step further to foreign investment in banking, I found it interesting that you said our free trade agreements seem to....

Is there a good net benefit there for Canadians as well? For instance, with the Bank of Nova Scotia, are we creating more jobs? It seems to me that those are high-value jobs.

10:05 a.m.

Acting Director, Financial Institutions, Financial Sector Policy Branch, Department of Finance

Colleen Barnes

Yes. You want to talk to Scotiabank, or Manulife. I work on the trade files myself, so I hear from them all the time. They find these pieces of infrastructure really helpful when they're going abroad.

10:05 a.m.

Conservative

Dave Van Kesteren Conservative Chatham-Kent—Essex, ON

Thank you.

10:05 a.m.

Conservative

The Chair Conservative James Rajotte

Mr. Van Kesteren, we just want to clarify, when you said “bankers”, were you talking about Scottish or Dutch bankers?

10:05 a.m.

Voices

Oh, oh!

10:05 a.m.

Conservative

Dave Van Kesteren Conservative Chatham-Kent—Essex, ON

Well, actually, ING, so Scottish, Dutch...same thing, isn't it?

10:05 a.m.

Conservative

The Chair Conservative James Rajotte

I just wanted to clarify that for the record.

Monsieur Vincent.

November 22nd, 2007 / 10:05 a.m.

Bloc

Robert Vincent Bloc Shefford, QC

Thank you, Mr. Chairman.

In an article I read in yesterday's La Presse, Mr. Stéphane Tessier, Vice-President, Industry, Cushman & Wakefield LePage, said that he expects:

[...] an impact of the strong dollar on manufacturers, particularly as they are already in difficulty. Particularly because of Chinese imports, manufacturers already have to manage negative growth and switch to the service sector. We are therefore very troubled by the vacancies in industrial sites.

In his opinion, it is clear that industrial workers are turning to jobs in the service sector. I was therefore surprised to find, on page 6 of your document, that the increase in the number of people working in the service sector was not more significant. Where did the jobs go that were lost in the manufacturing sector and that do not reappear in the service sector? For the 14 categories mentioned, including retail, it is an even 7 to 7: seven saw a slight increase, seven have seen a decrease and one has not changed. I did consider this increase as such but it is not significant. For example, in the last categories, that is arts, entertainment and recreation and real estate, rental and leasing, the figure is 0, and in the information and culture category there was a decrease.

Where are those jobs?

10:05 a.m.

Assistant Deputy Minister, Industry Sector, Department of Industry

Tom Wright

What slide are you referring to? Is it on page 6?

10:05 a.m.

Bloc

Robert Vincent Bloc Shefford, QC

Yes, page 6 of your document.

10:10 a.m.

Assistant Deputy Minister, Industry Sector, Department of Industry

Tom Wright

On page 6, we are talking about composition of employment, whereas on page 7, we're talking about changes in employment. Therefore, if you want to know about the rate of growth in employment, you would have to look at page 7.

10:10 a.m.

Bloc

Robert Vincent Bloc Shefford, QC

On page 6, you are talking about the composition of services employment.

10:10 a.m.

Assistant Deputy Minister, Industry Sector, Department of Industry

Tom Wright

Precisely.

10:10 a.m.

Bloc

Robert Vincent Bloc Shefford, QC

In 2002, you see a grey line and a blue line above it, which means that in retail trade, employment increased by a certain percentage.

10:10 a.m.

Assistant Deputy Minister, Industry Sector, Department of Industry

Tom Wright

Exactly.

10:10 a.m.

Bloc

Robert Vincent Bloc Shefford, QC

That is what I am telling you.

10:10 a.m.

Assistant Deputy Minister, Industry Sector, Department of Industry

Tom Wright

The details are on page 7.

10:10 a.m.

Bloc

Robert Vincent Bloc Shefford, QC

If I understand correctly, there were 175,000 new jobs in the retail trade sector.

10:10 a.m.

Assistant Deputy Minister, Industry Sector, Department of Industry

Tom Wright

Precisely.

10:10 a.m.

Bloc

Robert Vincent Bloc Shefford, QC

You make reference to the hourly wage in the service sector, which was $20.59 in 2006, compared to $23.38 in manufacturing. My question concerns workers in the manufacturing industry. I am not talking about those in management. In order to come up with this figure of $20.59, I presume that notaries, lawyers and engineers were taken into account on the payroll. Regular workers, factory workers, their salary loss... If you are earning $23.38 and you go down to $20.59, for example at Bombardier, as a welder earning $23.38...

Do you believe that a worker with only a grade 9 education would be able to find a job paying $20.59 an hour in the service sector?

10:10 a.m.

Assistant Deputy Minister, Industry Sector, Department of Industry

Tom Wright

I do not have any statistics to that effect. We brought this point up earlier. We wanted to know what the changes were exactly.

10:10 a.m.

Bloc

Robert Vincent Bloc Shefford, QC

You understand what I am getting at. The $3-an-hour difference is so slim that it is almost unimaginable. I know that you crunched the numbers, but I would like to know exactly what the situation is. If I am a factory worker, I lose my job, and I find myself working in the services sector where as I am not a lawyer nor an engineer, what kind of salary could I earn, in your opinion? Have you not done a study on that? Have you not checked on that?