Industry Committee on Nov. 29th, 2007

[Diane Brisebois]

I would support that.

It started a couple of years ago with Alberta being in a crisis situation, but we're hearing from local members from coast to coast and national chains that they're starting to feel the pressure, that it's more and more difficult to attract and keep employees, and that it has nothing to do with wages. It simply has to do with a greater demand for people.

So I would support Joyce in encouraging this committee to work with the federal government and provincial governments in looking at ways of bringing in workers—new immigrants with skills—right across the country.

[Raymond Simard, Liberal, Saint Boniface, MB]

So the witness we had yesterday who was promoting relocation may not have the answer, because if you have a need everywhere across the country...and you're talking about Atlantic Canada having a problem as well.

You talked about Saskatchewan. Is there a strategy for the aboriginal community? You said the situation was pretty well flatlined in terms of new Canadians, but in Manitoba and Saskatchewan, for instance, within the next four or five years, 25% of the workforce will be aboriginal youth. So is there a strategy in your organizations to accommodate that?

[Joyce Reynolds]

Yes, we are working with aboriginal groups. In fact, at our next labour shortage task force meeting, we will have representatives from the aboriginal community participating, and we are looking at ways we can work together. With the individual provincial governments, we are looking at ways we can link their aboriginal programs with the needs of our industry.

So yes, we definitely are looking at that.

[Diane Brisebois]

We have already developed a program in cooperation with Alberta, and it's our first test program. We are looking at the educational material and the training material we've developed, and we are now sitting with the aboriginal community to see what changes need to be made.

We have the advantage of having a member called the North West Company, the old Hudson's Bay Company. They consider all of us to be living in the south; they see themselves as living in the north. They've brought some great learning, and we'll be pleased to share it with the committee, because we're seeing some great progress there.

[Raymond Simard, Liberal, Saint Boniface, MB]

That would be very important.

Thank you very much.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Simard.

Members, we have about 20 minutes left. On the list, I have Mr. Stanton briefly, I have Madame Brunelle, and then I will ask few questions. But if anyone else wants to ask some more questions, please indicate that to me.

So we'll go now to Mr. Stanton.

[Bruce Stanton, Conservative, Simcoe North, ON]

Thank you, Mr. Chair, for this extra opportunity.

Madame Brisebois, one of the other issues we talked about is the notion that the demand for retail products only exists because there is other primary employment in the communities in which you operate. In other words, it's secondary. The people who are otherwise employed have the wealth from that that they need to purchase your products.

Could you comment on the context of that notion, as it relates to your industry? I'm more or less asking, who are your customers, and where do they come from, and where do they get the money they need to buy your products?

[Diane Brisebois]

We look at the retail sector as part and parcel of the supply chain. If you look at the sixties and seventies, manufacturers controlled what we all chose to buy—or what we thought we'd chosen to buy. Then eventually in the late eighties and early nineties, retailers became stronger and dictated what products would be in the stores and what consumers would buy. This has changed completely. If you want to know who's in control of the supply chain, it's the consumer, it's the community. It is quite fascinating that all of the research is done there, looking at how they're doing economically; and secondly, it looks at what age group they're in and how their lifestyles have changed. That information goes to the retailer and then to the manufacturer. So in fact it's very difficult to separate.

So yes, it has gone from top to bottom. Now it's bottom to top. As you know, there's no question that the health and well-being of a retail business mirrors the health and well-being of the community; if the community is employed and has that support, there's no question those are grounds for growth and prosperity for our retail sector.

[Bruce Stanton, Conservative, Simcoe North, ON]

Thank you, Mr. Chair.

[The Chair, Conservative, James Rajotte]

We'll go to Madame Brunelle.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Thank you, Mr. Chairman.

I have a preliminary comment to make concerning temporary foreign workers. I found my colleague Mr. Simard's comments very interesting. Still, we must be careful when we adopt measures. I don't think we can pass legislation that is the same for every Canadian province. We have other concerns, particularly in Quebec where we must keep our workers. That was just a preliminary comment.

I am obviously very concerned by the job losses in the manufacturing sector. We can see that our economy is destructuring. In Quebec, we have lost 135,000 jobs since 2002. There is also the issue of gas prices, which clearly has an effect on the transportation of goods, including your markets. There is also the issue of the rising dollar. I think that will indeed have an effect on tourism. You can be certain that there will be an impact on your sectors of activity.

In Trois-Rivières, for example, there were big companies—paper mills among others—offering average salaries of $70,000 a year. Those jobs were replaced by call centre jobs at minimum wage. The level of employment is unchanged, but the fact remains that we clearly do not have the same consumers of goods and services.

Are you planning any particular steps to help retailers, shopkeepers, to face the coming crisis, particularly if there is a recession next year?

[Diane Brisebois]

Thank you for your question.

Often, we make a distinction between retailers and manufacturers, whereas in fact, they co-exist. If there are no workers in the manufacturing sector earning $60,000 to $70,000 per year, there are no new businesses; there are even retailers who are going out of business. It is important to have a healthy society where there are a lot of jobs, a lot of good jobs. There is no doubt about that.

The Retail Council of Canada and our partner in Quebec, the Retail Council of Quebec are sending the following message: governments are separating the sectors, whereas they should be considered to be joined at the hip. One cannot live without the other. Many of our retailers across the country are asking us if we did not see this coming, because they did, and they are also asking us if we have any solutions.

The sector is not in a state of shock; it seems that everyone is in a state of shock. Nevertheless, most people were expecting this. It is very sad that there is no plan B.

We must work together to ensure that we keep these jobs in the community. I worry about the fact that it may be too late, but as the representative of retailers, I remain optimistic nevertheless.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Thank you.

[The Chair, Conservative, James Rajotte]

Merci.

We'll now go to Ms. Nash, please.

[Peggy Nash, NDP, Parkdale—High Park, ON]

I'd like to go back to the discussion about the very small businesses, whether they're restaurants or other retailers. In my community, they're really the heart of the community; they're what gives the community its life. People move there so they can walk to a restaurant or walk to a store; they don't have to get in a car and drive someplace. I agree that these smaller businesses are particularly vulnerable during a downturn, or even now with the high dollar.

What's your prognosis for these smaller businesses, and what would you recommend this committee do to help alleviate some of the pressure on these very small businesses? We certainly don't want to see them go out of businesses and lose their tremendous contribution, because they really are in so many ways community builders. They add so much to our local neighbourhoods.

I don't know who would like to go first.

[Joyce Reynolds]

I'll go first this time.

Thank you for recognizing that.

We've done some projections, and between 2007 and 2010, food service sales are projected to grow by an average of 0.5% after inflation and population growth. This is a sharp drop from the average per capita growth of 3.5% between 1997 and 2000. Our projections show there will be a decline in individual food service establishments, particularly those small independents that are so important to communities.

You have to look at how a food service operation is structured. Food and labour are our biggest input costs. Those costs continue to increase; so these small operators are continually being squeezed. So if there's anything we can do to alleviate those labour and food costs from increasing further, it would make a difference to those independent operators.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Earlier one of you also mentioned energy costs. Is there a role for the federal government to assist, perhaps in partnership with small businesses, to provide small grants to increase energy efficiency? For example, right now, the City of Toronto provides façade improvements for small businesses. They have matching investment on the part of the company.

Is the energy efficiency piece something that might help, given that energy costs are going up?

[Joyce Reynolds]

They are obviously already motivated to increase their energy efficiency. They see it as important for the environment and they see it as important to their bottom line. They would always welcome any kind of assistance to be able to do that, but they are already highly motivated to do that.

[Diane Brisebois]

Can I add something? I think our advice to this committee, if we want to help small business, regardless of where they are, would be that we look at the red tape. If we're going to provide programs to small merchants, for example, on energy conservation, those programs would have to be easy to manage and they'd have to be accessible. We find that's the biggest barrier for a lot of our small businesses. They don't have the time. They're doing way too much paperwork, and they're dealing with regulations or programs that don't make sense. That's certainly the feedback we get from a lot of our small businesses.

They unlock the door in the morning, and they lock the door at night. They're in the backroom getting the merchandise and installing it. They are small business, and they are 80% of all our establishments in this country. So we have to keep the programs easy, simple to understand, and accessible.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Do you think something around helping with energy efficiency might make sense?

I agree with you. I see retailers there from early in the morning until late at night. They truly are our mom-and-pop organizations.

Do you think there is a need around energy efficiency, or is that really not a big cost?

[Diane Brisebois]

I think there is a need. Is it top-of-mind for small business? Probably not. Often a small business does not have control over its environment. They don't always own the building they're in. They're often in malls, and they don't really control those costs.

I think if we're looking at helping small business, we look at the things they do control, the costs they do control. It can be merchandise, import tariffs, so eliminate those; and also, training incentives are extremely important for small business.

[The Chair, Conservative, James Rajotte]

Thank you.

Mr. Simard, you wanted to ask one brief question.

[Raymond Simard, Liberal, Saint Boniface, MB]

It's actually a comment, Mr. Chair.

I believe Madame Brisebois mentioned the training tax credit and that Quebec was already offering something similar to that. I wonder if our analysts could provide the committee with that information. That might be helpful.

[The Chair, Conservative, James Rajotte]

Thank you.

Members, I want to take a few minutes and ask some final questions and perhaps drill down into some of the specific recommendations. I'm glad Mr. Simard mentioned that, because that was one of the things I was going to ask.

We did recommend a tax credit in the manufacturing report—for manufacturers, obviously. We could look at it beyond that, but the answer some of us get back is that it's difficult in the way you actually measure that, particularly when people move from company to company or industry to industry. It's difficult to measure how much a company actually invests in training, in terms of measuring it from a government point of view, and then how to credit that. You don't have to answer that now, but any information you can provide on that would be very helpful to us.

I do appreciate very much, as a western Canadian and as an Albertan, the fact that you've highlighted the labour shortage issue. It's something we try to tell our fellow members of Parliament. You can walk into a restaurant that's one-tenth full and the manager comes to you and says, “I'm sorry, we can't serve you. I don't have enough people today. You'll have to go somewhere else.” That happens daily in Edmonton. It's a message we try to pass along to our colleagues.

Along those lines, then, I did want to make sure we have the specific recommendations.

Ms. Reynolds, in your presentation you talk about revising the point system for citizenship and immigration to better match labour market needs, the CIC criteria. Then you talk about temporary foreign worker programs and bridging, so that if someone comes here on a two-year program and works for two years and perhaps their employer says they are a very good worker, they can then stay within Canada and apply for permanent residency from within Canada as they're finishing that program. Is that what you're recommending?

Also, in terms of the temporary foreign worker program, that's the biggest issue I am approached on by businesses out west. The number of applications has gone up dramatically. So do you have any specific recommendations in terms of how to streamline that—labour market opinions, perhaps?

[Joyce Reynolds]

We do appreciate the steps that have been taken by this government in the last year to try to streamline the program. Certainly the labour market opinion process has been streamlined. But there's still a backlog of actual temporary foreign worker applications at foreign embassies. So we've been able to kind of relieve the backlog a bit here, but there's still a backlog in terms of processing the actual temporary foreign worker applications.