Natural Resources Committee on March 9th, 2020

[The Chair, Liberal, James Maloney]

Thank you both very much for getting us off to a good start. We are very grateful.

We will suspend for two minutes and then we'll get going with the next witnesses.

Thanks.

[The Chair, Liberal, James Maloney]

Welcome back, everybody.

I'm going to dispense with long introductions and just welcome our next set of witnesses.

We're very short on time this afternoon. Let's just jump right into the presentation, and then we can to to the questions, right off the bat.

Thank you.

[Elisha Ram, Associate Assistant Deputy Minister, Skills and Employment Branch, Department of Employment and Social Development]

Good afternoon everybody.

Thank you very much for giving me the opportunity to participate in this study.

My name is Elisha Ram, I'm an associate assistant deputy minister in the Department of Employment and Social Development Canada, and I work in skills and employment programming.

I have with me colleagues Alan Bulley, from our employment program and policy shop, as well as Katie Alexander from our programs operations branch.

We're here today to discuss the forest sector. You heard in the earlier part of the session that the sector is a pillar of the Canadian economy and it plays an important role in creating jobs and supporting local labour markets across the country. You've also heard that the sector is facing a number of challenges, which have resulted in some closures, production curtailment and some layoffs as well. As a result, workers and communities that depend on the sector for their livelihood are feeling the effects.

In situations such as this, our department—ESDC—stands ready to provide essential services to workers, communities and employers. These include supports such as local rapid response efforts through Service Canada; layoff prevention through the work-sharing program; immediate assistance to displaced workers who are eligible for employment insurance part I income benefits; training and re-employment transition supports that are offered by provinces and territories through the labour market transfer agreements with federal financial support; and other skills training and labour market resources available through our department.

With your permission, I will provide additional details on some of these initiatives.

As many of you are aware and as we've heard already, there was a 2017 softwood lumber action plan, which included several measures from our department to support workers and employers affected by the U.S. duties on our softwood lumber products. These included additional investment in skills training and employment supports, as well as job loss mitigation through work-sharing flexibilities.

ESDC has a number of programs and services that are currently available and can be deployed quickly to all sectors of the economy, including forestry. Service Canada actively monitors labour market conditions across the country, assesses potential local and regional unemployment effects and engages in proactive outreach to stakeholders, including employers, labour organizations and affected communities, to ensure that they are aware of the supports that are available to them.

As an example, once we learn of publicly announced layoffs, Service Canada contacts affected employers within 48 hours to assess their needs and offer information sessions. These sessions are commonly delivered in partnership with provincial or territorial representatives, which allows affected employees to learn about both federal and provincial or territorial programs and services that they might qualify for.

I've also already mentioned the work-sharing program. Work-sharing helps employers and workers avoid layoffs when there is a temporary reduction in the normal level of business activity that is beyond the employer's control. Under work-sharing, the Government of Canada provides income support to employees who are eligible for EI and who work a temporarily reduced work week while their employer recovers. This allows employers to retain skilled workers and avoid the process of recruiting and retraining. It also provides workers the opportunity to continue to be employed, retain those skills and receive employment insurance during the days they are not working.

In terms of income support, employment insurance regular benefits provide temporary income support to Canadians who have lost their jobs through no fault of their own, while they look for new work or upgrade their skills. The number of weeks of EI benefits that a person can receive is based on the unemployment rate in the region and the number of insurable hours they have accumulated, up to a maximum of 45 weeks.

To support skills training and employment for Canadians, the Government of Canada provides the provinces and territories with approximately $3 billion every year under the labour market transfer agreements, which include the labour market development agreements and the workforce development agreements. This funding enables provincial and territorial governments to offer a range of skills training and employment supports to help Canadians improve their skills, search for work and keep good jobs.

Provinces and territories have the flexibility to design and deliver employment programming that meets the needs of the local labour markets. In addition to the base funding of almost $3 billion a year, through budget 2017, the Government of Canada made significant additional investments of $2.7 billion over six years to enhance the labour market transfer agreements, starting in 2017-18. This included expanding eligibility for programs and services under the labour market development agreements to allow more individuals to receive employment insurance-funded skills training and employment assistance. Under the workforce development agreements, provinces and territories have added flexibility to provide skills training and employment programming that meet the diverse needs of the clients, with a focus on those who are further removed from the labour market and those who want to upscale.

I mentioned the softwood lumber action plan. The following ESDC measures were included in the plan to support affected workers and employers in forest sector: $50 million over two years in additional targeted funding for jurisdictions under the labour market development agreements to enhance skills training and employment supports for affected forest workers, and $30 million over two years was made available for provinces and territories to undertake research projects on targeted earnings supplements with complementary employment supports to ease employment transition for affected workers. In addition, temporary special measures were introduced under the standard work-sharing program to support longer term business viability and mitigate job loss. This included extending the duration of work-sharing agreements, waiving the mandatory cooling off period between agreements, and providing employers with flexibility regarding the mandatory recovery plan that they must enter into under work-sharing. These special work-sharing measures remain available until the end of this month.

These initiatives were designed to support workers in a sector that was forecast to be facing significant job losses and closures as a result of U.S. duties imposed at the time. However, we saw that lumber prices remained quite high during the period and the sector remained profitable. This meant that the demand for the additional resources that were made available under the softwood lumber action plan was limited. Only some provinces chose to take up the additional resources that were made available for training and employment supports, and there was limited take-up of work-sharing opportunities.

Later on, given the integrated nature of the forest sector, eligibility for the workforce adjustment measures under the softwood lumber action plan was broadened to include workers affected by any trade dispute in the forest sector, not only softwood lumber. This meant that, in the second year of the funding, it was available to all jurisdictions. Five provinces accessed the funding in the second year. These included B.C., Saskatchewan, Ontario, Quebec and Prince Edward Island. This meant that provinces accessed nearly $40 million in additional targeted funding, enabling them to provide skills training and employment supports to affected workers in forestry.

In addition to these programs, our department engages regularly with colleagues in other federal departments, including NRCan, who have responsibilities for the forestry sector. We are in regular contact with the provinces and territories to understand the local labour market needs and consider how the supports that we're providing can be used to meet those needs, and we engage regularly with other stakeholders including labour, business and communities that have an interest in the forest sector. This allows us to understand their needs and consider how our programs can best support them.

Thank you for your attention. My colleagues and I will be happy to take your questions.

[The Chair, Liberal, James Maloney]

Thank you very much.

Ms. McLeod, you're first.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Thank you.

You alluded to this in your comments, but I find a little absurd the funding provided by the labour market development agreement that was supposed to be for workers affected in the ongoing softwood lumber dispute, but which I understand went to all of the provinces, including P.E.I., which was not impacted, and Nunavut, which was not impacted. So a lot of provinces that were not impacted by this particular trade issue or the forestry sector were receiving dollars. How is that consistent with the mandate of the program?

[Alan Bulley, Director General, Employment Programs and Partnerships Directorate, Department of Employment and Social Development]

Thank you for your question.

The money was made available; it wasn't actually allocated. In other words, it wasn't automatically downloaded to provinces and territories. The money was made available. There are a number of provinces and territories that chose not to do that. The reason it's done like that—because I'm trying to anticipate what I think might be your next question, why we do it like that—

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Well, why would P.E.I. have the right to apply to a program—not that I don't love Prince Edward Island—when clearly they were not impacted? How could they apply and get money for that program when that wasn't the purpose of the program?

[Alan Bulley]

It has to do with the connection between the program and the labour market development agreements. The two large agreements that my colleague spoke to you about both contain a clause called the “equality of treatment” clause. What it means is that, as money is flowed to provinces and territories, should any other jurisdiction see something that might be advantageous to them, they have the opportunity to apply for it.

As we design allocation models for anything connected with the workforce development agreement or with the labour market development agreement, we design the allocation in such a way that, should a province or territory see that as being advantageous, they could apply for it.

At the same time, however, the allocations were designed in such a way that those provinces and territories—provinces largely—that were most immediately affected had the lion's share of the allocation. There was a floor made available for smaller jurisdictions.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Thank you.

Of course, I think that for anyone on the outside seeing that there's special money for provinces impacted by the softwood lumber dispute and that this money went to other provinces, it really wouldn't sit all that well. It's a bit of an unusual system.

I'll go on to my next question. Within this crisis we're having in the forestry industry—and certainly, I would consider myself to be representing a riding that is impacted—Kamloops is a major centre. If you go one and a half hours up one highway, you will see a mill that closed, and if you go one and a half hours up the other highway you will see another mill that closed, both leaving a couple of hundred people out of work. These just happened. There's nothing really that different about these two communities. They're rural communities. Their closest centre is Kamloops, and they're in different regions, so there are different hours that are available and different hours that you need to have worked to be eligible for the EI program.

Did your department look at these issues during this current crisis in British Columbia? I ask because if one happens to draw a line in one place on the map and excludes some communities, a really different playing field really results for those in equivalent circumstances.

[Elisha Ram]

The EI program is a national program provides temporary income support for people when they lose their jobs. The program is operated nationally through a system of 62 regions, and the member asked specifically about two of those regions.

The regions are selected to ensure that the people who live in them face roughly similar labour market conditions. So, because EI is a legislated program and is statutorily determined, it's very, very difficult to change those parameters on the fly. The EI region system allows the labour market conditions to affect the eligibility of people who live in those regions.

I totally understand and accept that this can lead to situations such as are described by the member: where people living in relatively close proximity to each other face different treatment. The same situation would apply no matter where you chose to draw the line. I can tell you that the EI regions are reviewed every five years to ensure that they continue to represent relatively homogeneous labour market conditions. The current study is expected to be concluded by the end of this year.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Thank you.

I think one has Kamloops in and one has Kamloops out, so they are very unfair circumstances.

I'll go on to my next question. With the early retirement option that was made available, was that money transferred directly to the provinces for them to determine the criteria around early retirement, or is that something that your department does?

[Elisha Ram]

That particular initiative was implemented by the provinces. It did not involve any federal funding. Generally speaking, the federal government has not chosen to introduce any kind of early retirement programs.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Okay.

I understand that EI is taken off of severance. However, although EI is taken off, your work during the four, five or six months—whatever your severance period is—is not considered work hours for the purposes of EI. Is that correct?

[Elisha Ram]

I'm not sure of that, but I will endeavour to get the answer to that question.

[The Chair, Liberal, James Maloney]

I'm going to have to stop you there. You're right on time. Perfect.

Mr. May.

[Bryan May, Liberal, Cambridge, ON]

Thank you very much, Mr. Chair.

First of all, thank you all for being here to help us kick off this study.

We've heard a lot today about threats and opportunities for the forestry industry specifically, but not as much on the human resources side, so I'm going to focus my questions there, if that's okay.

I may have misheard you in your introduction, but specifically with regard to the program around work-sharing, I think you used the words, “it had limited uptake.” Did I hear you correctly?

[Katie Alexander, Executive Director, Temporary Foreign Worker Program and Work-Sharing Program, Department of Employment and Social Development]

Yes. We did have two employers benefit from the special measures under forestry—one in B.C. and one in Alberta—representing a total of 83 employees and averting 32 layoffs. The cost of work-sharing was approximately $464,000 and the cost of layoffs was $719,000.

[Bryan May, Liberal, Cambridge, ON]

I guess it begs the question why there was such a limited response to what clearly is a very good program for at least those two companies that applied. Were there companies that wanted to participate in the program and, for whatever reason or whatever barrier was in place, couldn't? Are there some issues that we need to address to maybe get that number up?

[Katie Alexander]

I can start, and then maybe my colleague can add on.

Overall, there's been quite a bit of support to the forestry sector as it relates to work-sharing; it's the specific sort of access to the special measures that has been limited.

Since April 2016 up until March 2020, a total of 31 agreements have been signed nationally, representing the diversion of about 1,700 layoffs. The way the special measures are built is that an employer applies for their 26-week agreement and then has to apply for a 12-week extension. Then, the 38 weeks is where the special measures kick in. We have many employers who are benefiting from work-sharing in the forestry sector, but only a few that have actually needed to access that second 38-week extension.

[Bryan May, Liberal, Cambridge, ON]

I see. How many companies are participating, then?

[Katie Alexander]

We have funded a total of 31 nationally since April 2016.

[Bryan May, Liberal, Cambridge, ON]

You mentioned a dollar figure. Do you know what that would equate to in terms of the number of hours that were shared?

[Katie Alexander]

I don't have that available. We can endeavour to get that, for sure.

[Bryan May, Liberal, Cambridge, ON]

Excellent. Okay.

I want to ask quickly about the sector itself in terms of the demographics within the sector. We see this in a number of different industries with an aging workforce. Do you know what the average age is right now for the workers in the forestry industry?

[Elisha Ram]

I don't have that information, unfortunately, but we can try to get that for you.