Thank you so much, Chair, and thank you to all the committee members. Good afternoon.
I'd like to convey my appreciation on behalf of the CLC president, Hassan Yussuff, for the opportunity to appear before you today and present the views of the Canadian Labour Congress.
The CLC is the voice on national issues for 3.3 million working men and women in Canada. The Congress brings together Canada's national and international unions, along with the provincial and territorial federations of labour and 130 district labour councils across the country. The members of CLC affiliated unions work in virtually all occupations, industries, and sectors of the Canadian economy, including over 400,000 employed in manufacturing.
I don't believe I need to spend a lot of time explaining to this committee about why the state of manufacturing is of importance to all Canadians. I'm going to quickly get to some of the challenges facing manufacturing in Canada as we see them.
Manufacturing jobs historically have been an important source of relatively well-paid jobs and decent incomes for working class Canadians, including newcomers to Canada.
Today, relatively well-paid working class jobs in manufacturing are at risk. The manufacturing sector has lost half a million jobs since the sustained appreciation of the Canadian dollar, beginning in 2002, and 25% of total manufacturing employment. Job levels have remained depressed since the recession. From its recent 1999 peak of more than 15% of total employment, manufacturing's share of all employment has fallen to below 10%. Unionization rates have also fallen in manufacturing, and the wage premium that manufacturing jobs historically enjoyed has narrowed. Until 2008, hourly employees in manufacturing were paid about 10% more per hour on average than in the economy as a whole. Since the recession, that gap has largely disappeared, and manufacturing wages risk falling below the average for the total economy. In the United States, manufacturing jobs have already fallen below the median wages for the economy as a whole.
With respect to manufacturing strategy, between 2002 and 2014, the manufacturing sector broadly suffered from the combined consequences of the over-valued dollar, associated with the commodity price boom in Canada, and intensified competition from Chinese and other exports in the U.S. market.
With the commodity boom now over, economists expect that the lower dollar and rising U.S. demand for homes and cars will revive Canadian manufacturing, but most indicators of manufacturing's performance have not yet reached pre-recession levels, or have only recently begun to do so.
In our view, manufacturing, innovation, and productivity-generating growth will not occur spontaneously, but rather require encouragement and nurturing by coordinated policy measures.
We urge the federal government to work with provincial governments, industry, labour, universities, and colleges to establish manufacturing sector development councils. These councils would identify opportunities to promote investment and employment in Canada, adopt technologies developed in educational institutions like community colleges, invest in sustainable products and practices and technologies, and expand value-added exports. The suite of measures available could include such policies as domestic procurement policies, active industrial strategies to foster high-tech industry, targeted subsidies, and even public ownership in strategic industries.
In our view, the federal government should begin by convening stakeholders to develop a national automotive strategy for attracting and retaining automotive investment and product allocation in Canada. Aerospace and telecommunications are also logical candidates for sector strategies.
Manufacturing strategy also has an important role to play in helping meet Canada's ambitious greenhouse gas reduction targets agreed to in Paris in December. The federal government should actively develop Canada's manufacturing capacity to support an expansion of low and zero emission transportation, such as a national program of public transit expansion. There are also opportunities to foster the green manufacturing necessary to supply energy efficient equipment and materials used in the construction of high efficiency homes and offices.
Shifting to trade agreements, the international rules governing trade and foreign investment in Canada are critically important for manufacturing. Trade and investment deals that remove policy space necessary to develop sector strategies will constrain the revitalization of manufacturing, in our view. International trade and investment agreements that Canada enters into must preserve the right to implement performance requirements for foreign investors, negotiate community benefit agreements, foster local procurement, and include training requirements and other so-called offsets to stimulate local manufacturing.
We urge the government to replace the Investment Canada Act and its current opaque and seemingly ineffective “net benefit” test for foreign investments in Canada and create a more transparent and clear cost-benefit test. This would require a foreign investor to make binding commitments to production and job levels, commit to new investments in fixed capital and technology, and pledge to expand Canadian content in supply contracts and other inputs.
Finally, finishing with the issue of labour adjustment, higher rates of productivity growth entail that even when manufacturing output is growing, workers will need to be protected in the process of ongoing restructuring. Companies have responsibilities when laying off workers. Reasonable advance notice must be given, adjustment committees should be required in the workplace, and minimum levels of severance pay entitlement must be increased. Employment insurance regular benefits should also be improved, in our view. Governments must find ways to guarantee the pension benefits of workers against windup in the event of solvency deficiencies in the plan, so that the sorts of tragedies we've seen all too frequently in recent years cease. More federal support is needed for labour adjustment programs, especially for older workers, and EI funds should support retraining prior to layoff.
I want to end with an example of the sort of labour adjustment initiative that the CLC believes the federal government can promote and encourage. That is a joint initiative undertaken by the CLC and the Canadian Manufacturers & Exporters. It's entitled CertWORK+, and it's a workplace training and certification program in the manufacturing sector. It's been successful in assisting displaced production workers in manufacturing with adjustment. The program has already allowed assemblers, material handlers, and machine operators to have their skills recognized and certified according to national standards in order to help with mobility and job opportunities. There have been several instances of plant closures in which CertWORK+ has already come into play as one useful tool available to displaced workers in the adjustment process.
I'd be happy to answer any questions the committee might have in that regard.
Thank you very much.