Transport Committee on Nov. 2nd, 2022

[Louise Yako]

What we envision is greater collaboration between government and the private sector and between levels of government and the private sector. It's that collaboration that would allow for greater reliability and efficiency of the supply chain, not government intervention necessarily. The government has an important role to play, obviously, but government is not going to solve this problem.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Ms. Yako.

Thank you, Mr. Bachrach.

Next we have Mr. Jeneroux.

Mr. Jeneroux, the floor is yours. You have five minutes.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Thanks, Mr. Chair.

Under principle two in the report, you state, “Canada’s transportation supply chain is made up of a network of companies...that are publicly traded, privately held and independently operated—often working in silos rather than as a cohesive system.” You also state that “the transportation supply chain must begin to operate as a seamless, single entity.”

What recommendations can you point to that ensure seamless operations?

[Jean Gattuso]

Before you go to seamless operations, when we're talking about the industry, the supply chain works in silos, and what's key is digitalization. Digitalization is key in order to share information. Even though there are publicly traded companies like that, we have to find a way for them to share information in order that everyone performs better, that the total supply chain performs better, rather than the need for each silo. That is also the thinking in the report. That's why collaboration is key.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Do you have anything to add, Ms. Yako?

By the same principle, the report states, “Without these, intervention may be required to ensure the transportation supply chain operates smoothly.” This is on top of the supply chain office.

Can you confirm that you're not suggesting the nationalization of Canada's supply chain?

[Louise Yako]

We are not suggesting nationalization.

We said there should be voluntary co-operation and collaboration between the various parties—private sector entities and government. In the event that private sector entities do not want to share information that is necessary to understand how the supply chain is operating, that's when government may need to require that certain pieces of information be shared.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

It didn't come up in the transcript, but I note, for those that are following along the transcripts, that you both shook your head vehemently “no” to the nationalization of the supply chain.

You talk about empowering the CTA to beef up its mandate and resources, but then you also talk about the supply chain office. Again, I have to highlight that the supply chain office has been, at least in my meetings, the point of contention from a number of stakeholders. Some think they like it, but I'd say quite a few are nervous about it.

You just have to look at other government agencies. CMHC comes to mind. It's kind of hit or miss if it's been successful or not, depending on what side of the table you're on at any given moment.

If that's the case, if you're beefing this up and then you're also creating this, just try to square with me how that helps to make things more streamlined and seamless.

[Jean Gattuso]

I'll go back to the supply chain office.

The supply chain office will pay for itself just to get back our trade share worldwide, especially with the U.S. I think you can look at gaining back three share points of our U.S. trade, which is a tremendous amount of money, and it won't cost billions of dollars.

Right now, not only is the supply chain office working in silo, but within the government, the different departments are sometimes not talking to each other, and each of them is involved in the supply chain.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Can I just interrupt you for a second, Mr. Gattuso?

I worry that with that logic, all departments will say, “Okay, the supply chain office has got it.”

Is that your perception of what's going to happen? With my experience of the government, that's not what necessarily happens. Everybody fights for their piece of real estate.

[Jean Gattuso]

Everybody will continue to fight for their piece of real estate. The trick is to put KPIs that are oriented to supply chain in each department and report those KPIs. The supply chain office would be following them and making sure each department is also keeping track.

At the end of the day, it's only Canada's trade performance that will be key. If we want to have more programs to facilitate the lives of Canadians, we cannot permit more share of our trade business to be lost. It's as simple as that.

We are a country of 38 million in population. We need to grow. We're capable. If the Netherlands, with a population of 15 million, is capable of being an important player in world trade, we can do the same with Canada, but we need someone that is keeping track and making sure each department is also keeping track of their KPI in the supply chain.

[The Chair, Liberal, Peter Schiefke]

Thank you, Mr. Gattuso.

Thank you very much, Mr. Jeneroux.

Finally, for our first panel, we have Mr. Badawey.

The floor is yours.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Mr. Chair.

Mr. Chairman, this is from the Emerson report from 2015. It says:

By 2060, an expected 350 percent increase in world trade will tilt in favour of the emerging economies, and their exports will become more specialized, entailing higher value-added activities. It will be important to anticipate the demands on our transportation sector and develop policies and infrastructure to support these trends.

With that, as part of the Emerson report, and taking into consideration the many reports we've completed that were identified earlier on, I have a question for the supply chain task force members. Do you feel we should be moving forward with a multimodal transportation labour strategy, including all methods of transportation, with a goal of strengthening our international trade performance? This would take into consideration the recommendations contained within the following studies: the Canadian Transportation Act review; the Emerson report; the “Interim Report on Establishing a Canadian Transportation and Logistics Strategy”, which this committee completed in the past; the ports modernization review; the St. Lawrence Seaway review; the blue economy strategy; the supply chain study most recently completed by this committee; and the most recent final report of the national supply chain task force, 2022.

To get a bit more granular, I will give you an example. In Niagara we're embarking on a capital project—a Great Lakes innovation and training facility. The focus of this facility is going to be a campus that will be preparing and training the next generation of transportation specialists; integrating distribution and logistics and working hand in hand with the up-to-date movement of goods along strategic trade corridors, such as that on the Great Lakes; integrating with road, rail and air; and aligning with up-to-date data analysis leading to integrated management.

Therefore, is it fair to state that yesterday's drivers, engineers, captains and pilots, while moving goods, are tomorrow's transportation specialists— operators and data and logistics managers—trained to offer additional corporate and customer value through fluidity, and recognized as a skilled trade?

I pose that question to the two individuals specifically because it's 2022. With that said, and all of what I just mentioned, we're looking at the movement of goods, and those who are moving our goods, as being more than just drivers. They are, in fact, transportation specialists. They should be trained in that manner and recognized through a skilled trade. Would you agree?

Jean or Louise, go ahead.

[Louise Yako]

Yes. All those reports that you mentioned had very salient recommendations. Many of them still should be considered, because they're still in play.

[Jean Gattuso]

I'll add to that. In the report, when we put that we need also to have a supply chain labour strategy, that's exactly what we were thinking about. It's actually not only truck drivers, but everybody who is touched by logistics, because we need to push even further to recognize the logistics jobs in this country. It's part of the equation to become a better world trader.

[Vance Badawey, Liberal, Niagara Centre, ON]

On the next steps in your recommendation with respect to a supply chain office or an organization, can you give us some advice on how that can actually fit into what I just mentioned, with respect to facilitating not only the movement of trade but the folks who will actually be moving that trade, not just domestically but internationally?

[Jean Gattuso]

The key individuals you'll be choosing should also be very focused business people. You're going to need leaders who will also be capable of managing each department and pushing those trade objectives, because it's so depending on the future of Canada. At the end of the day, when you look at the importance that trade has on our GDP, besides the fact that we have plants and growers that are producing widgets, or grain or oil, you see that the key things are to serve the customer and to be competitive worldwide. If we're not competitive.... We're going to need strong leaders in the supply chain office to get this thing moving and to make sure that the supply chain office also has a group of business leaders who are looking at its performance.

[The Chair, Liberal, Peter Schiefke]

Thank you very much.

Colleagues, this concludes the questioning for the first panel.

On behalf of members of this committee, I would like to thank our witnesses, Ms. Louise Yako and Monsieur Jean Gattuso, for their time and testimony today.

We will now suspend for five minutes as we prepare for the second panel.

This meeting is suspended.

[The Chair, Liberal, Peter Schiefke]

I call this meeting back to order.

We will begin this second round with the opening remarks.

We will start with the Department of Citizenship and Immigration.

The floor is now yours. You have five minutes.

[Dr. Ian Gillespie, Director, Temporary Resident Policy and Programs, Department of Citizenship and Immigration]

Thanks so much, Mr. Chair and committee members. My name is Ian Gillespie, and I'm director of temporary worker policy at IRCC.

I would like to begin by acknowledging that I am joining you from the traditional unceded territory of the Algonquin Anishinabe people.

As you know, Canada is facing labour shortages across the country and across sectors, including transportation. Immigration complements efforts to build domestic labour capacity and is an increasingly important contributor to Canada's prosperity and economic growth. Both temporary and permanent residents bring skills that our economy needs and help fill gaps in our labour force.

Economic immigration programs support a strong Canadian economy by attracting talent from around the world. Typically, economic immigrants are educated, able to integrate into the Canadian labour market with ease, and contribute to workplace diversity.

A range of programs ensure that all regions across Canada can realise the benefits of economic immigration. Selecting new permanent residents is a shared responsibility between the federal and provincial and territorial governments.

Through the provincial nominee program in particular, jurisdictions are able to prioritize the attraction and retention of newcomers with the skills most needed in each region.

A number of recent immigration measures are helping to meet Canada's labour market needs.

Last year IRCC introduced a time-limited temporary resident to permanent resident pathway to help retain the talent of over 90,000 essential workers and international graduates already living and working in Canada. They included workers in a range of transportation occupations, such as courier drivers, longshore workers and ramp attendants.

Changes to the national occupational classification that are coming into effect on November 16 will also enable foreign nationals working as truck drivers to now qualify for permanent residence through the skilled economic programs managed through IRCC's express entry system.

Canada welcomed over 405,000 permanent residents in 2021, a record number. The target for 2022 is just under 432,000, but as announced the other day, it will rise to 465,000 in 2023. In this way, permanent immigration helps address demographic and economic challenges over the long term.

Over the shorter term, Canada's temporary worker and international student programs play a significant role. They are demand-driven, with no caps or limits, so they can be flexible and responsive to the changing labour market landscape. They address the immediate workforce needs of diverse employers, provide a wide range of skill levels and educational attainment, and facilitate business productivity, growth and innovation.

For example, a new measure starting on November 15 will allow the more than 500,000 international students already in Canada to work more hours off campus, which will help to address labour shortages and allow them to earn more income to support their studies. IRCC also recently announced that international graduates with expiring post-graduation work permits will have the opportunity to work in Canada for an additional 18 months.

Last year, over 5,000 temporary foreign workers received work permits to fill specific job vacancies in transportation.

Almost two thirds came through the temporary foreign worker program, which is led by Employment and Social Development Canada.

Meanwhile, transportation jobs can also be filled through the international mobility program, which exempts employers from the requirements of the temporary foreign worker program when hiring foreign nationals whose work will create broader economic benefits for Canadians. This program facilitates access, for example, to foreign airline personnel and to railway maintenance workers. It also enables faster hiring of international technicians and professionals from countries with which Canada has trade agreements, including for occupations such as engineers, pilots and highly skilled mariners.

The IRCC processes work permits for foreign workers applying through both temporary worker programs. Since the beginning of the pandemic and to support the recovery of global supply chains, the IRCC has been prioritizing work permit applications for foreign truck drivers to fill critical needs in Canada's trucking industry.

While the initiatives I have mentioned will help over the longer term, employers face immediate needs for skilled foreign labour, which can be solved only by its timely entry.

As you're likely aware, demand for work permits has been rising, and this has contributed to a growing backlog and lengthening processing times. The IRCC is introducing a number of measures to address this issue, including hiring additional processing staff and exploring technology-based solutions, which are expected to move IRCC closer to meeting its service standards by the spring of 2023.

At the end of the day, immigration is only part of the solution, and a complement to domestic measures that my colleagues have mentioned to alleviate labour shortages in the transportation sector and elsewhere in Canada's economy.

Thank you for the opportunity to speak with you.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Gillespie.

Next we have the Department of Employment and Social Development.

The floor is yours. You have five minutes for your opening remarks.

[Andrew Brown, Senior Assistant Deputy Minister, Skills and Employment Branch, Department of Employment and Social Development]

Thank you, Mr. Chair and committee members.

My name is Andrew Brown, and I am the senior assistant deputy minister for the skills and development branch at Employment and Social Development Canada.

I would like to note that I am joining you today from the traditional unceded territory of the Algonquin Anishinabe people.

I am pleased to be here to discuss labour shortages.

Labour market pressures are affecting practically all sectors of the economy in most regions of the country. As of July 2022 there were nearly a million job vacancies across Canada, which means twice as many occupations are now showing strong labour shortages compared to back in 2019.

For example, the trucking industry is a significant contributor to the national economy, with a GDP of $20 billion in 2021, or about one-third of that for the entire transportation sector. The industry employs roughly 278,000 employees and has a vacancy rate of 9.4%, which is significantly higher than that of the labour market as a whole, at roughly 5.9%.

For truck drivers, this means roughly 28,000 unfilled positions, and this figure is in line with what we're hearing from the Canadian Trucking Alliance, which forecasts that the trucking industry will have a shortage of 55,000 workers at the end of 2023.

Demographic shifts that are rooted in aging populations and retirement are adding pressures by limiting available workers. As of August, occupations related to transportation had, on average, some of the highest-aged workers in the economy.

As the government looks to address labour shortages in Canada, we recognize that there are four potential avenues for increasing labour supply. One is supporting the transition of new entrants into the labour market, principally youth. The second is welcoming talent from around the world, more specifically immigrants and temporary foreign workers. The third is increasing the participation of groups that are under-represented in the labour market, and fourth is helping individuals already working who need some upskilling or re-skilling to adapt and stay in the labour force for longer, though to address labour shortages in the Canadian economy, it's going to be necessary to maximize all sources of labour in the short and longer term.

Youth are Canada's largest source of new entrants to labour markets. About 4.9 million young jobseekers are expected to enter the labour force between 2019 and 2028. To help youth and students build job skills and connect with employers, budget 2021 offered over $720 million in additional funding for the youth employment and skills strategy, the student work placement program, and the Canada summer jobs program.

As you would have heard from my colleague, immigration is a source of new labour supply, and as a complement to permanent immigration, approximately 100,000 temporary foreign workers enter Canada every year. Recent changes allow employers to hire up to 30% of their workforce through the temporary foreign worker program for low-wage positions, for one year, in sectors that are experiencing significant shortages. Other employers are allowed to hire up to 20% of their workforce for low-wage positions until further notice, an increase from the former 10% cap for many employers.

Another source of labour supply is under-represented groups. Increasing the participation rate of women, indigenous people, persons with disabilities and Black and racialized Canadians in the workplace would significantly help to boost labour supply.

Equally as important to our labour market initiatives, the government's recent and ambitious investments in childcare, affordable housing, transportation, and broadband create the systems and supports needed to help increase Canadians' participation in the labour market.

Reducing skills mismatches and a better utilization of available talent will be critical to meet employment needs and shortages. To this end, the Government of Canada has taken concrete measures to help reduce shortages across the economy.

The sectoral workforce solutions program is one noteworthy example of recent investments through Budget 2021. That program, which provides $960 million over three years, assists key sectors by funding industry-driven activities. That will assist workers through training and reskilling, and help employers attract and retain a skilled workforce.

Budget 2021 also made significant investments to...

[The Chair, Liberal, Peter Schiefke]

Excuse me, Mr. Brown. I'm sorry to cut you off. Could you wrap it up?

[Andrew Brown]

Right.

These were significant investments to establish a new apprenticeship service. The government also prioritized funding for foundational skills programs.

To conclude, I will simply say that we will continue working collaboratively with our federal partners and counterparts in provincial and territorial governments to help alleviate current and future labour market pressures.

Thank you.

[The Chair, Liberal, Peter Schiefke]

Thank you, Mr. Brown.

I will now give the floor to Ms. Vanstone for five minutes.

[Melanie Vanstone, Director General, Multi-Modal and Road Safety Programs, Department of Transport]

Thank you.

Good evening, Mr. Chair and committee members.

I would like to begin by acknowledging that I'm joining you today from the traditional unceded territory of the Algonquin Anishinabe people.

I'm Melanie Vanstone, director general of multimodal and road safety programs at Transport Canada. Thank you for having me here today to share Transport Canada's perspectives on the acute labour and skills shortages facing the transportation sector, including in occupations such as truckers, mariners, pilots and rail workers.

A robust, diverse and future skilled transportation workforce is an enabler of Canada's economic recovery and an efficient supply chain, while also supporting the safety and security of our transportation system. The transportation labour force supports the movement of goods and people for transportation-reliant sectors, including manufacturing, natural resources and agriculture across the country.

As other witnesses have expressed to this committee, there are a number of structural pressures that are contributing to labour and skill shortages in transportation. These include the high cost of education and training for some professions. It can cost up to $90,000 to become a commercial pilot and more than $15,000 to become a truck driver, coupled with low initial pay. Also, there is some lack of awareness of jobs and careers in the industry. As well, changing demographics and a lack of diversity in the industry are barriers. For example, transportation ranks below other regulated sectors in terms of diversity. Finally, in some cases, there's a poor image of the work culture across the industry due to work-life balance challenges, inadequate infrastructure and concerns about the sector's working culture.

Automation and other technologies will continue to change the industry going forward, meaning the nature of jobs in the industry will continue to evolve, emphasizing the need for increasingly advanced skills.

Recognizing the importance of labour to the functioning of the system, Transport Canada has developed a strategy to contribute to addressing labour and skills shortages. The strategy has four pillars, with an emphasis on the recruitment and retention of under-represented groups.

These pillars are, first, developing targeted research data and analysis; second, promoting awareness and outreach; third, addressing the high cost of training and other barriers by leveraging programs across government; and finally, modernizing approaches to regulations so these do not create unnecessary barriers.

The department continues to work closely with other federal departments and agencies, including those represented with me today, industry representatives and other levels of government.

Transport Canada has also been taking some direct actions in many areas.

For example, the marine training program was recently renewed in budget 2022 as part of the government's oceans protection plan to reduce barriers to marine training to under-represented groups in the marine labour force, such as women, northerners, Inuit and indigenous peoples.

The department has negotiated a number of reciprocal agreements to recognized certain foreign-issued certificates for seafarers in Canada. Currently, we have five agreements in place, with an additional three in ongoing negotiation.

TC is leveraging technology to modernize our certification processes and digitize our aviation pilot licensing system to better support the need for the industry to recruit and retain talent.

TC has engaged the Conference Board of Canada to produce a two-phased report to examine the economic impacts of transportation labour shortages on the Canadian economy.

We've also engaged Employment and Social Development Canada in several key programming areas. In particular, the sectoral workforce solutions program will invest $960 million over three years to advance skills and training in seven different key economic sectors, including transportation.

Finally, I would note that in collaboration with the ESDC job bank, Transport Canada launched the transportation job and career pathway website to help promote careers in this sector.

Transport Canada and other departments are reviewing the specific recommendations in the national supply chain task force's final report. This includes those relating to labour and skill shortages. The task force's report will help inform the national supply chain strategy currently under development.

We recognize that continued collaboration is required with our federal partners, provinces and territories and industry to address labour and skill shortages in the transportation sector, including looking at the relevant recommendations from the task force.

Thank you for the time you have allowed us today.

I'd be happy to address any questions you may have relating to Transport Canada's role with labour and skill shortages in the sector.