Industry Committee on June 21st, 2022

[David Macdonald]

Well, low-income wage growth in the Canadian context, or in the American context, for that matter, is largely driven by minimum wage policy. That's often what drives up low wages in Canada. With respect to that, most provincial minimum wages are at this point indexed to inflation. Workers at the bottom end of the spectrum should see, at year's end or when the indexation kicks in, an increase in those wages at roughly the rate of inflation.

Minimum wages in the U.S. tend to be much lower to begin with. I haven't done a direct comparison to the U.S., but in terms of Canada, we will likely see at the low end, at some point, probably in 2023, a rough indexation whereby low-wage workers are made whole, in a sense, versus rising inflation.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

It will eventually catch up where it's indexed. That makes sense.

With respect to the TFW program, if not using the TFW program to address labour shortage issues, what would be your answer to labour shortage issues that doesn't have that impact on suppressing wage growth?

[David Macdonald]

It's higher wages for workers. This is a labour market. Sometimes employers are the ones on the winning side and sometimes workers are the ones on the winning side. Right now workers are the ones on the winning side. The unemployment rate is low. That provides more bargaining power to workers. At present, they frankly haven't used it. Wage rates have not grown at the rate of inflation, so real wages for workers are down for the majority of Canadians. They have not kept pace with inflation. Therefore, they have less purchasing power now than they did at this point last year.

In terms of—

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Sorry. The premise that makes a great deal of sense to me is that workers have to compete for jobs in a labour market where there aren't so very many opportunities, and where we see a situation as we do today, then it's companies that should be competing for workers.

[David Macdonald]

That's exactly right. If they compete for workers, then this is a way we would see workers' wages rise and corporate profits fall. The higher expense for labour requires lower profits and more money towards the labour line, as it were, on the income statement, and—

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

On that issue of corporate profits, it's confusing for my constituents, certainly—and I have to admit that I don't have a great answer for them—when we see increased prices in grocery stores and increased prices at the gas pump, and then Canadians see record profits from grocery stores and from oil companies. In terms of how to square the impact of inflation on Canadians who are struggling to get by while we see record profits from companies that seem to be profiting from this inflationary environment, how would you answer my constituents?

[David Macdonald]

I think that's exactly what this study says.

We're in a unique circumstance whereby corporate profits have very much benefited from inflation, whereas workers' wages are far behind inflation in this initial inflationary drive that we've seen in the last year and a half. Companies are capable of increasing prices, not only to make up for higher input costs, which they are absolutely facing, but then some, and using that additional amount, which would result in profits. Workers are, I think, now realizing how much higher the costs of goods are and, hopefully, over time will bargain up their wages, but it hasn't happened yet. It's certainly nowhere near the rate of inflation.

Workers aren't driving inflation. Corporate profits are playing a role in inflation.

The bigger role, frankly, is that of input prices. This has everything to do with the war in Ukraine, the price of oil and the gasoline refining shortfalls in the U.S., in addition to other key inputs like fertilizer, for instance, and wheat. This is what's driving inflation. Corporate profits are playing a role in that. Particularly in concentrated industries, we're seeing pricing power. Workers are not playing a role. They're way behind when it comes to inflation.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Thanks very much.

[The Chair, Liberal, Joël Lightbound]

Thank you.

Mr. Lemire, you have the floor for six minutes.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Mr. Chair, do you not want to end the previous round?

[The Chair, Liberal, Joël Lightbound]

Certainly. My apologies.

Mr. Couilllard, the technical problem seems to be resolved.

Would you like to answer Mr. Deltell's question? I'd ask that you answer it briefly.

[Jean-Guy Couillard]

Yes, Mr. Chair.

It's only about the work that the retiree does after retiring. The taxes collected before retirement remain the same.

To attract retirees, they wouldn't be required to pay income tax on the income earned when they return to the labour market.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Couillard.

Mr. Deltell says that your common sense does you credit.

[Jean-Guy Couillard]

Thank you very much.

[The Chair, Liberal, Joël Lightbound]

Mr. Lemire, you have the floor.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Mr. Chair.

I thank all the witnesses here with us today.

First, I'd like to speak to Mr. Rousson, rector of the Université du Québec en Abitibi-Témiscamingue.

Mr. Rousson, I must admit that I'm guilty of plagiarism, and I'd like to apologize. I used some of your statistical data last week when we heard from officials from the Department of Citizenship and Immigration.

I asked them a question based on your statistics and received the following answer: [O]ur department is always reviewing ways to address Quebec's concerns about approval rates for international students. In 2021, of all students who declared English or French as an official language, 50% of those destined to Quebec declared French. When comparing the approval rates for students with French as a declared language, they're very similar: 41% to Quebec and 40% to the rest of Canada. This also holds true for the approval rate between the declared language for French and English students destined to Quebec. The overall approval rate for students destined to Quebec is 41%, and it's about 62% for the rest of Canada.

My question is simple. How do you react to that response, to those statistics, which clearly show a major difference between Quebec and Canada, between francophones and anglophones?

In particular, what are the consequences for UQAT in terms of attendance rates, planning and profitability?

[Dr. Vincent Rousson]

I'll begin by answering the last element of your question.

As for profitability, it's not necessarily foreign students that allow us to make ends meet at our universities. We're not motivated by the lure of money. Those students play an important role not only in the development of knowledge and research, but also for businesses in our communities.

However, the difference in approval rates has major consequences on our student population. That doesn't only affect UQAT. It's also happening for my colleagues, whether in Rimouski or Chicoutimi, where several hundred foreign students are admitted to our programs each year. Those potential students have letters. They obtain bursaries from our professors and required authorizations from the Government of Quebec, but IRCC refuses their applications for a study permit. This problem has enormous repercussions.

The processing times for applications are extremely long. These students have plans in life. They plan to be educated by the best universities in the world. They come to Canada for that, and their applications are often refused because an immigration officer isn't certain the students will return home or have the necessary funds for their education. That happens even though we submit all the necessary documents and indicate that they have full-time bursaries for the duration of their education that will cover tuition and living expenses. There's a real gap in understanding between reality, what's happening on the ground at our universities, and what's perceived in the backrooms of government, if I can use that expression.

I'm not particularly surprised by the statistics presented by the government. We're currently in a bit of a numbers war between what we're seeing on the ground and what the government is telling us. However, the real data that we're obtaining show that we're right. There really is a major gap between acceptance rates for francophone and anglophone students in this country. There's also a gap that's growing from year to year between francophone and anglophone universities in Quebec.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Other data show that UQAT and its campus in Rouyn-Noranda are third in Canada in terms of quality of university life and third in Quebec in terms of graduation rates.

Your institution also has an appeal strategy based on a workforce that integrates into the community. That's part of the strategy for addressing the labour shortage. However, according to the criteria currently used at Immigration, Refugees and Citizenship Canada, that integration factor could hinder the acceptance of foreign students, as is the case for the language issue.

In your opinion, are there elements of the law that we should change to promote the foreign student program?

[Dr. Vincent Rousson]

Changes should indeed be made to the law. These students are the best ambassadors we could have. They're also the best for integrating into the Canadian community. You listed some wonderful statistics for our university. I'd like to highlight two more.

Among all universities in Canada, we're first in seeking businesses to invest in basic and applied research at UQAT. We're therefore first in Canada. We're also second in Canada for research intensity. Our professors are among the best at obtaining funds from granting agencies in Canada so they can carry out research, which provides considerable support to Canadian businesses. To do that, we specifically need graduate students at the master's and doctoral levels. We have many who are from Quebec and Canada, but we could do better with foreign students.

I'd like to share one final statistic, Mr. Lemire, if I may. Quebec receives half the number of foreign students compared with Ontario and three times fewer foreign students than British Columbia.

There's a growing gap between provinces in Canada. Unfortunately, this is currently hurting the development of knowledge, the development of research and Canada's international competitiveness.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Mr. Rousson.

Mr. Chair, do I have time to ask a short question to the representatives from the Fédération des chambres de commerce du Québec?

[The Chair, Liberal, Joël Lightbound]

Yes, Mr. Lemire.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Mr. Lavigne or Ms. Langlois, in terms of labour market impact assessments, or LMIAs, we agree that there's redundancy with what's being done in Quebec.

Do you think we should withdraw or maybe suspend these assessments, since they are only adding more red tape?

[Audrey Langlois]

Thank you for the question.

We do in fact recommend that the assessments be suspended. We know that the labour shortage is currently affecting all occupational sectors in Quebec. LMIAs are certainly red tape that hinders the situation and currently serves no purpose given the shortage.

I'd like to note one thing. The unemployment rate is 4.2%. There are about 260,000 job vacancies. We estimate that we'll have 1.4 million job vacancies by 2030. That needs to be considered. The labour shortage will continue to grow until 2030 and then plateau. We'll still need labour, however.

It would be appropriate to remove everything that constitutes red tape and that's not needed at this time.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you very much.

[The Chair, Liberal, Joël Lightbound]

Thank you.

Mr. Bachrach, you have the floor for six minutes.