Industry Committee on May 10th, 2016

[Lloyd Longfield, Liberal, Guelph, ON]

It's great to be able to continue the conversation.

I'm going to stay on the theme of our creative and entrepreneurial citizens and how to get the skills that we need in the workforce. A few years ago, the Canadian Chamber ranked that as the number one issue facing Canadian business, that a barrier to growth was access to labour. The retirement wave was mentioned at the time as a major threat to business. We're probably well into that threat by now.

How good is our information on the labour market? Is there anything the government can do to improve the labour market information, to be more specific for kids looking for careers?

[Scott Smith]

You are alluding to one of the points I made in my opening statement. There's definitely a challenge with an aging workforce in this country. I'll put a placeholder here on the ranking of skills. Many of you have probably seen that we don't rank our top 10 products in any particular order. That said, it has been in the top 10 since its inception four years ago. Access to a skilled workforce continues to remain a problem.

In terms of your point about how we deal with labour market information, there is definitely a role for government in the collection and distribution of those statistics We need to find ways to generate that labour market information, first of all. On a very localized basis there's a connection—the manufacturing GPS initiative or something like that type of program. From a mapping perspective, the businesses available, the skill sets they need, versus who's in that area, is an important thing to do.

[Lloyd Longfield, Liberal, Guelph, ON]

Do the Chamber's networks have any information that you can provide for our study on what might be done in the Canadian workforce? There's a report I haven't been able to find online that the Canadian Chamber published in May 2015, “How good is Canada’s labour market information?” The library at the House of Commons indicated that it was available. The other report is on Canada's “Top 10 Barriers to Competitiveness”, 2016. It is online, but for the purposes of our study, I'd like to make sure that we have access to that so we can include it in the study.

Mr. Burt, the productivity of Canadian businesses has been sliding. There's a myth out there that there are no jobs left in manufacturing. We've lost so many jobs. You commented that the dollars out the door are about the same as they were pre-recession or that we had recovered in terms of volumes. It would seem to me that there are still good jobs in manufacturing. I'd like to include a statement on that if you have something to say about it.

[Michael Burt]

I don't have the exact number in front of me. I think it's 1.7 million people who work in manufacturing in Canada. It's not a small number.

We have seen a decline in employment, but what's happening also is that the job mix, what we do, is changing. We are seeing, as I said, more things like technologists and technicians. You look at industries like textiles and apparel in Canada, and it's much smaller today than it was, say, 15 years ago. What's left here is very high value. It's marketing and design and those sorts of things. So there are definitely still good jobs in manufacturing, but the type of work that we're doing is changing.

[Lloyd Longfield, Liberal, Guelph, ON]

My career was in machine automation, and I know there's always a shortage of technicians, technologists, and engineers in support of that part of the industry. I just wanted to try to bookmark that and make sure that we catch it.

Industry-academic collaborations, either one, if we've got—

[The Chair, Liberal, Dan Ruimy]

You have 30 seconds.

[Lloyd Longfield, Liberal, Guelph, ON]

Could you talk about how that could maybe stimulate both jobs and technology.

[Michael Burt]

We talked a little about this a couple of times earlier. I don't know if I have a silver bullet for you. I do believe we can do a better job of preparing young Canadians for the workforce. It's a key problem really getting them into their first job, and we aren't necessarily training the right mix of people. We're doing too much of one thing and not enough of another. In terms of the research side of it, I really do think it's that pull versus push analogy I gave, where you're going to businesses and saying, what can we help you do?

[Lloyd Longfield, Liberal, Guelph, ON]

Solving problems. Thank you.

[The Chair, Liberal, Dan Ruimy]

Mr. Lobb, you have five minutes.

[Ben Lobb, Conservative, Huron—Bruce, ON]

I want to go back and talk about small to medium-sized companies—call it the high-tech industry—specifically around SR and ED and reports on that, and so forth. Is there any way we can simplify the reporting? To one of the groups that we had in last week, I asked a question about simplification. Of course, it's government money and you have to account for all of this, but my guess is that most small and medium-sized companies with smallish finance departments have to hire companies like Deloitte and KPMG to fill out their SR and ED reports to be audited. Does that really make sense? It seems ridiculous to me that this is the situation in the country right now.

[Scott Smith]

There's a lot of back and forth within the chamber community about the value of SR and ED, and whether that's the appropriate tool for research and development funding. I'm going to leave that part of it alone, and just speak to the criteria and the application of the criteria.

The feedback that I have from most businesses is that they've moved away from using SR and ED credits, because there is no guarantee they will actually be able to realize the credits that they're applying for, because it's applied differently by CRA depending on which agent is reviewing their material.

It's less a question of about how complicated it is and more a question of about we can't rely on it.

[Ben Lobb, Conservative, Huron—Bruce, ON]

Okay. I think that's a pretty fair analysis.

It's been many years since a large new auto assembler has put a greenfield plant in this country. We really have no Canadian fund to be able to match what would be offered by Mexico or the United States. Is this something that Canada should look at doing, to establish a greenfield auto assembler in this country?

[Scott Smith]

That's a really tough question to answer. We have excess capacity right now within our current plants, so the idea of creating a fund to build a new plant—

[Ben Lobb, Conservative, Huron—Bruce, ON]

To be honest, though, Volkswagen and Hyundai aren't going to build their cars in a General Motors plant. We know that, so that's more my point.

[Scott Smith]

That's a fair assessment, although my understanding is that there is some crossover between certain companies, depending on what they're looking for. I can't say that a Volkswagen is going to be built in a GM plant, for instance, but I know there is some crossover in terms of capacity.

[Ben Lobb, Conservative, Huron—Bruce, ON]

So I take it that you're leaning towards a no, and I'm not saying that you're right or you're wrong but that you're leaning towards no.

Does it make sense then for Canadians, and Canadians wanting well-paying jobs, to sit back idly and watch the U.S. and Mexico consistently get these huge employers? We know that the economic spinoffs are five to one or six to one, whatever it is. Does that make sense? The small business people get the benefit down the chain.

[Scott Smith]

Yes, you certainly have a point.

[Ben Lobb, Conservative, Huron—Bruce, ON]

The other question I have is on our good friend China and currency manipulation, on and on and on. One of the former companies I worked for competed with them on auto parts manufacturing. Obviously, their currency manipulation, their low labour rates, and on and on, played a part.

What are we going to do? We want trade, we want free trade, but oftentimes it's not even close to fair trade. What do we do with countries like China that we're competing with, that we're making investments with, yet there's still currency manipulation going on many years after the fact?

[Scott Smith]

I would say two things in answer to that question.

First is around the trans-Pacific partnership. The fact that China is not a partner in that trade agreement gives us, if it's ratified, some leverage with China, with a larger number of trading partners.

Second is that we really do need a strategy on China, and I think that's going to be one of the reports coming out from the Chamber of Commerce over the next couple of months.

[Ben Lobb, Conservative, Huron—Bruce, ON]

Okay, and not to critique anybody's degree at all, but I think to some degree in some fields of education we've reached what you would maybe call “peak degrees” in certain fields. I won't list them, but we can all think of a few we may have reached peak degrees in.

At our university and college levels, do we need to start to decrease the number of openings that are available and increase openings in other areas, to encourage kids to get into technology, to consider getting degrees where there's actually a job, instead of some of these other ones? Is that something we need to do, to start directing the kids into some of these areas now?

[The Chair, Liberal, Dan Ruimy]

Very quickly, please.

[Michael Burt]

Obviously, you want people to be able to pursue their interests, whatever they are, but I think there's definitely a role in educating students around where opportunities are. If they want to go and take a degree or diploma in X and they don't have opportunities when they come out, that's certainly part of it.

Yes, and I've said this to somebody earlier, I think we have a misalignment between where our education resources are being devoted and maybe where we have the skills needed. It's probably a worthwhile exercise to try to assess whether or not we should devote more resources to X, or whatever it is.

[The Chair, Liberal, Dan Ruimy]

Monsieur Boulerice, for five minutes.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Thank you, Mr. Chair.

I'd like to stay on the same topic I brought up earlier.

In this era of globalization, when every country is trying to come out ahead, play certain cards, and promote certain assets, it's clear to everyone that declining, or very low, wages are not necessarily an issue Canada has put much energy into. Some Asian countries will keep coming out on top of us on that front.

In order to increase exports and be competitive in the international arena, what strengths do you think Canada should leverage to achieve comparably favourable benefits in terms of creating and keeping jobs here, in Canada?