HUMA Committee Report

The aging of Canada’s population is an important development for many reasons, not least of which is its impact on the labour market. Between 1946 and 1965, the Canadian population experienced rapid growth during the post-war “baby boom.” Although the influence of the baby-boom generation on the Canadian labour market has been undeniable, many observers believe that the greatest impact is still to come, particularly after 2011, the year in which the first “boomers” will reach the age of 65. Combined with a significant decline in the fertility rate since the early 1960s, this demographic event underlies the rapid aging of Canada’s workplace.

The baby-boomers, born between 1946 and 1965, were concentrated at the base of the pyramid in 1971. At the time, it was already clear that they were a very large group of individuals. In 1986, they were aged between 20 and 40, and in 2001, between 35 and 55 […] In 2007, the baby-boomers — who will be between 50 and 70 — will remain the largest group of individuals in the Canadian population. [1]

Ms. Maryanne Webber
Statistics Canada

According to Statistics Canada, the working-age population (i.e., individuals aged 15 to 64) as a proportion of the total population is projected to decline during the 2010s and 2020s, reaching about 62% of the total population by the early 2030s, as compared to 70% in 2005.[2] Although we do not know what proportion of this population will be in the labour force in the future, we do know that labour force participation will change as the labour force ages. In this context, Statistics Canada presented two projections to the Committee; these are reflected in the labour force growth projections depicted in Chart 1.1.[3] The average annual labour force growth projections for the five year intervals presented in Chart 1.1 illustrate two main points. First, while labour supply is expected to continue to grow between now and the middle of the next decade, the annual rate of growth in Canada’s labour force by the middle of the next decade is projected to be a fraction of that experienced during the first half of this decade. Second, even if older workers are persuaded to stay in the labour market for a longer period of time, slower labour force growth and, ultimately, a contraction in labour supply, appear inevitable.

With ongoing technological change and growth in Canada’s knowledge-based economy, the skill content of labour demand will also continue its upward trend. However, given that relatively fewer skilled workers are expected to enter the labour market in years to come, many believe that employers will become increasingly reliant on workers already in the labour market to meet future skill requirements. In this likely event, the capacity of these workers to quickly acquire those skills that are in short supply will have a significant influence on future workplace productivity and living standards.

[O]n the reality of an aging population, while it brings forth a number of challenges in the Canadian context, its most pronounced effect is likely to be that of its impact on our future labour supply. Slower labour force growth will make it difficult to sustain past growth rates and improvements in our standards of living.[4]

Ms. Karen Jackson
Department of Human Resources and Social Development

Over the years, Canada’s labour market has demonstrated a capacity to adjust, and we expect it will continue to do so in the future. Members of the Committee also recognize that labour market adjustments take time. As a result, labour market imbalances (in terms of both shortages and surpluses) occur from time to time, as the market for particular skills takes some time to adjust. For example, if a skills shortage emerges, more workers will invest in the skills in demand as the level of remuneration and job openings rise. The speed at which the labour market adjusts to this situation depends on a number of factors, including wage flexibility, the availability of labour market information and the cost of obtaining needed skills.

Many witnesses addressed the issue of growing skills shortages. Although most suggested that Canada will not face a general labour shortage, the Committee was told that some small- and medium-sized business owners have expressed concern about a general shortage of workers. In fact, we were told that some businesses have delayed their expansion plans because they are unable find the workers they need.

[F]or a number of years now we have been watching the concern over the shortage of qualified labour gradually increase. In fact, in some provinces, like Alberta, the concern over the shortage of qualified labour has become so serious that it has actually surpassed the total tax burden. That's something we have never seen before in all our surveying, and we've been tracking these issues for a very long time […] We don't expect the problem to get better. We actually expect the problem to continue growing. A good example is that in December, 31% of our members indicated that they expect to increase full-time employment within their firm. These are relatively healthy levels, and we expect these levels to stay healthy. But what this means is that it will become harder and harder to hire more people […] For example, the long-term job vacancy rate, which highlights the number of positions that have been available for four months or longer, has steadily been increasing since 2004. This is problematic because it's having a serious impact on the economy, in the sense that it is forcing businesses to forgo new opportunities or expansion opportunities simply because they do not have the resources to pursue these new opportunities. Although the problem is more acute in some provinces, like Alberta, it is a problem that we have identified across the country, in every province.[5]

Ms. Lucie Charron
Canadian Federation of Independent Business

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Many witnesses anticipate skills shortages to become more commonplace and problematic. Witnesses representing a variety of goods- and services-producing sectors of the economy highlighted existing and impending skills shortages. Appendix A provides an overview of some of these predictions, although it should be noted that these and other projections of skills shortages are typically formulated outside the context of labour market adjustments, including the substitution of capital for labour, and without adequate regard for changes on the supply side of the labour market.

My third point is about the chimera of massive impending labour shortages. We hear all the time about projections of massive labour shortages in the future — certain occupations will need 80,000 jobs [...] It's very important to beware of those types of predicted situations, because they are not going to take place. Labour markets adjust  over time, wages rise, demand falls, and the supply of workers increases: people coming in from other countries, other occupations, from education institutions, and from upskilling of workers. In that sense, these adjustments take place over time.[6]

Dr. Andrew Sharpe
Centre for the Study of Living Standards

Every two years, Human Resources and Social Development Canada (HRSDC) formulates labour market projections for the coming decade. When HRSDC officials appeared before the Committee in June 2006, they indicated that two out of every three job openings that will arise in the next ten years will be attributed to labour force aging (replacement demand) rather than new job creation (expansion demand).[7] According to the Department’s most recent forecast, many occupations are expected to face excess demand pressures during the period, 2006-2015, including health-related occupations (e.g., doctors, nurses, medical radiation technologists and a variety of aides and assistants in support of health services); management occupations (e.g., managers in public administration, human resource managers and supervisors in processing occupations); professional occupations (e.g., civil engineers, industrial engineering, and manufacturing technologists and technicians); occupations specific to primary industries (e.g., oil and gas well drillers, servicers, testers and related workers); and a number of trade-related occupations (e.g., residential home builders and renovators, pipefitters and carpenters).[8]

[B]y our forecast, two out of three of the job openings that will take place in the next ten years will arise not because a new job was created but because somebody retired from an existing job. That means that because of population aging, you start to see the pressures across a wider spectrum of the occupations […] As to the implications of these pressures, clearly one of the implications is going to be upward pressure on earnings to encourage people to stay in the workforce, to entice people to move into the areas where the demand is the greatest. If you're a worker, I don't think you would think this is a terrible problem. You would probably think it is a good problem. I think clearly firms are going to have to learn to adapt to these pressures. They are going to have to start to invest in new technology, start to invest in new efficiencies to make more effective use of Canadian workers.[9]

Mr. Cliff Halliwell
Human Resources and Social Development Canada

Although this forecast is largely silent in terms of regional labour market pressures, the Committee was told that labour market imbalances exist across the country and, according to our testimony, appear to be most acute in Western Canada.

The skills shortages and adjustment problems currently facing Alberta and British Columbia may be harbingers of the problems Canada could face nationally in the years to come. As outlined in the introduction of our report, we encourage both levels of government to work together to develop a pan-Canadian employability strategy that expedites labour market adjustments, increases investments in human capital, removes barriers to employment among under-represented groups in the labour market and uses the skills of workers who reside beyond our borders.

Chapter 1 of our report focuses on three key issues that would help facilitate faster labour market adjustments across the country: human resources planning and labour market information, labour mobility, and the recognition of domestic and foreign credentials and prior learning.

FACILITATING NATIONAL HUMAN RESOURCES PLANNING AND PROVIDING BETTER LABOUR MARKET INFORMATION

A. Human Resources Planning

The Committee was told that Canada needs to adopt a pan-Canadian perspective to address the aging of the labour force and the labour market imbalances that may result. No single level of government can adequately address this issue, and an effective strategy cannot be developed if governments act independently of one another. All stakeholders need to know what is being done in each province and territory in order to minimize the duplication of effort and the ineffective use of resources. Federal/provincial/territorial co-operation is essential to plan for and meet our future skill requirements.

The call for a pan-Canadian perspective regarding human resources planning was most intensely expressed by groups representing the health care sector. Given the prospect, evidenced above, of continued and growing labour market imbalances in many health care-related occupations, the urgency for better planning is easily understood.

[A]s you all know, there have been a number of labour sector studies for various health disciplines or health professions. There was a nursing one, a physician one, a pharmacist one, a home care one. The Canadian Healthcare Association was involved in all of these, sometimes on the steering committee, sometimes on the management committee. They were sometimes concerned that they were working in silos, and while we were all trying to plan for the future, the assumptions on which we were planning were different and really needed to be more integrated than not. Frankly, that's why we kept meeting throughout this process, doing various sector studies, seeing how we could get together so we weren't operating in silos. So what we're really seeing is some kind of mechanism to bring together all of the various information gathering, research processes, planning processes, and what not, not in a way that steps on anyone's jurisdiction, but in a way that understands that people are mobile and can move from province to province, region to region. We need to address those issues as well as needs across the country.[10]

Sharon Sholzberg-Gray
Canadian Healthcare Association

The issue, of course, lies in the fact that each province does its own planning related to education and employment. Each independently projects future health needs. The value of uncoordinated efforts in the area of employability is diminishing. Canada needs to pull together to recognize the growing mobility of health professionals and others. We were pleased to read the recent announcement by governments identifying interprovincial mobility as a policy priority. [11]

Mrs. Lisa Little
Canadian Nurses Association

[I]deally what we'd want to see is the creation of a health sector table much like what  exists in other areas, like engineering, forestry, and mining. We've generally run into a brick wall with respect to applications for that, largely having to do with federal-provincial-territorial responsibilities.[12]

Dr. William Tholl
Canadian Medical Association

Representatives from other sectors of the economy also expressed the need for a national approach to deal with human resources planning.

No one level of government has the capacity to address Canada's skilled labour shortages. As well, little progress can be achieved with governments acting independently of one another and participating in an inchoate array of activities that have a life of their own, consume resources, and don't produce results on the ground. There is a need for a comprehensive and cohesive national strategy to address Canada's skills requirements, including national training standards.[13]

Mr. David Wassmansdorf
Canadian Home Builders’ Association

We're beginning to appreciate the importance of pan-Canadian coordination efforts in order to avoid duplication. There already has been some duplication and we have no time to lose on this score. One very important component of the national strategy is identifying the role sector councils could play in the information sharing process. They could act as information centres for groups such as education networks, associations, colleges or universities.[14]

Mr. Paul Hébert
Mining Industry Human Resources Council

Although Canada does not have a fully developed pan-Canadian capacity for human resources planning, it is important to note that the federal government has been supporting this policy direction since the late 1980s through the creation of national sector councils. These sector councils are permanent national organizations that address a wide range of sector-specific human resources issues, including identifying and supplying skills required today and those anticipated in the future.[15] We were told that sector councils are broadly represented by employers, employees, educators, government and other interested stakeholders. Currently, there are roughly 30 sector councils (excluding associate members and other partners and organizations), representing just under 50% of the labour market.[16]

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Although educators are typically represented on sector councils, the Committee was told that there needs to be a stronger connection between the skills required by employers and those inherent in new labour force entrants leaving the educational and training system.

In both continuing education and in post-secondary institutions, there are challenges. Employers, the market, industry, need workers not only with technical skills but with interpersonal and business skills. Too many of our post-secondary schools still offer adequate or advanced technical training, but nowhere do they give business strategy, marketing, and general liberal arts mixed in with the technology. However, there is real demand for such rounded workers.[17]

Mr. Paul Swinwood
Software Human Resource Council Inc.

I think the other thing that is out there that is huge and that people really haven't come to appreciate is that there is a huge lack of credibility in the education system today. I've talked to a lot of human resources people across the country, and one of their common concerns is that people they hire or would like to hire just don't have the essential skills to do the job.[18]

Ms. Leslie Childs
Association of Workplace Educators of Nova Scotia

Although they have a central body nationally for apprenticeship, it is not getting to the detail of what's happening in the field and the needs of the industry. The industry has to get better at defining the needs to the education system, but the education system has to get together cohesively and decide how best to get the people trained, and where and how many.[19]

Mr. Ken McKinlay
Saskatchewan Home Builders' Association

Members of the Committee believe that sector councils are making a valuable contribution to human resources planning by building vital partnerships within industry to identify and supply our current and future skills needs. It is our view that this model should continue to be developed and expanded in order to be better prepared for the human resources challenges that lie ahead.

Recommendation 1.1

The Committee recommends that federal and provincial/territorial governments contribute funding and work together with business, labour, educators and other key stakeholders to further the development of a national human resources planning capability by expanding the sector council model. As a first priority, efforts should focus on establishing a sector council on health care services.

Recommendation 1.2

The Committee recommends that the federal government support the establishment of stronger links between the skills needs identified by sector councils and those provided through the educational system to ensure that curricula reflects, and continues to develop in concert with, Canada’s socio-economic needs.

B. Labour Market Information

In the absence of timely and adequate information on the demand for and supply of skills, the labour market is slow to adjust. Lengthy labour force adjustments are costly to both workers and the economy, and should be minimized to the greatest extent possible. The sooner workers identify the skills they need to become productive in the workplace, the sooner they can enroll in education and training (usually a lengthy process in itself). The sooner firms match their skills needs with workers possessing those skills, the lower will be the costs associated with this matching process.

During our hearings, a number of witnesses expressed the view that we need more and better labour market information, especially at the regional and local levels. Although Human Resources and Social Development Canada provides a great deal of information on current job openings and occupational skill requirements, some witnesses indicated that labour market participants need more detailed information on future demand for and supply of specific occupational skills in specific regions.

[T]here is a great need for more and better labour market information [LMI]. LMI is essential for students, parents, employers, and educators. Those making learning and labour market decisions to enhance their employability cannot do it in an information vacuum. Labour market information must be more accessible and organized in a user-friendly way. Understanding the evolving character of Canada's workforce is perhaps the real starting point for constructive decision-making, and given the very real regional differences in our labour force, this challenge is all the more difficult. Clearly the federal government can play a vital role in the collection and sharing of labour market information.[20]

Ms. Shirley Seward
Canadian Labour and Business Centre

Labour market information is a complex amalgam of a number of different statistics and polls that are done. It's a matter of getting these to be more sophisticated, and thus being able to get more granulated, more specific information for particular sectors of the economy in particular regions and even in particular cities in the country.[21]

Mr. Andrew Cardozo
The Alliance of Sector Councils

[M]eeting the skill needs of Nova Scotia's labour force means having a finger on the pulse of Nova Scotia's immediate, emerging, and future labour market needs. Timely and accurate labour market information underlies the development of responsive policies and programs and supports labour market decision-making.[22]

Mr. Keith Messenger
Nova Scotia Department of Education

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According to a recent report on the state of labour market information in Canada and four other OECD countries (Australia, Germany, the United Kingdom and the United States), the organization of labour market information in this country is not coordinated or easily accessible. In comparison with that of other OECD countries, the delivery of labour market information in Canada’s education system is weak. Among other things, the report calls for strategies to broaden access to labour market information and better tailor this information to the needs of users, to develop more skills-based labour market information (including measures of shortages and surpluses), and to enhance the quality of labour market information.[23]

At the federal level, Human Resources and Social Development Canada (HRSDC) is a main provider of labour market information. In 2005-2006, it spent $27.2 million on the Labour Market Information program,[24] an activity that provides a range of labour market information products and services to, among others, job seekers, employers and people choosing a career. The Committee encourages HRSDC to continue to work with its labour market partners to provide more detailed and timely labour market information, especially in terms of helping employers plan for their training and recruiting needs. We believe that this type of information will grow in importance in the years ahead.

Recommendation 1.3

The Committee recommends that Human Resources and Social Development Canada improve the quality and timeliness of labour market information and provide more detailed skills-based demand and supply forecasts for regional and local labour markets.

ENHANCING LABOUR MOBILITY

Labour mobility, both occupational and geographical, is a critical component of an efficiently operating labour market. Impediments to employing skills in their most valued uses can impart significant effects on earnings, productivity and, in the aggregate, national output.

There are many barriers to occupational and geographical mobility. In some cases, the skills of unemployed workers are mismatched with those sought by employers. In other cases, workers possess the skills required by employers, but remain geographically separated from job openings due to personal, financial or institutional factors. Some workers, for family and other personal reasons, choose not to relocate. Moving entails expenses (e.g., housing and moving costs) that can also impede the decision to move. Portability of employment benefits, particularly in terms of pensions, may also impede decisions to move to another job. Credential recognition practices, discordant skill certification processes and requirements, and hiring restrictions also serve to inhibit the interprovincial/territorial movement of workers.

According to data published by Statistics Canada, interprovincial migration flows among individuals aged 15 to 64 have declined over the past 30 years. This trend is displayed in Chart 1.2, which shows a 16% decline in average annual interprovincial migration among individuals in this age group between the periods 1976-1980 and 2001-2005. This downward trend is somewhat surprising given that the labour force grew by some 65% between 1976 and 2005. Another finding, not captured in Chart 1.2, is that Alberta and British Columbia experienced a net inflow throughout most of this period, while net outflows were characteristic of Atlantic Canada and Quebec.

Although most witnesses supported measures that would increase worker mobility in Canada, not everyone shared this view. We were told that, as labour market imbalances intensify and become more commonplace throughout the country, increased labour mobility would exacerbate shortages in those regions experiencing out-migration. The negative impact of worker mobility was also raised in the context of workers in seasonal employment; encouraging these workers to find non-seasonal jobs could present new staffing challenges for seasonal employers.

The experience we've had in our industry is that mobility has in fact had a negative impact on our industry. While there may be jobs in Alberta, the problem is that we're taking talented people from Quebec, from Ontario, from Nova Scotia and bringing them to Alberta, because there's a shortage of workers. That means those provinces then literally experience a drain and there are simply not enough workers to be able to train and replace the ones who have left. In fact, the problem we're having in the retail sector is that retailers are stealing employees from other retailers, from one part of the country to another. So the whole issue of mobility has a negative impact on the growth of our sector across Canada.[25]

Ms. Diane Brisebois
Retail Council of Canada

Over the years, the federal government has been trying to address many of the impediments to labour mobility, but progress has been slow. This section of our report discusses institutional measures and financial incentives to facilitate labour mobility within and across the regions of Canada.

A. Interprovincial Standards Red Seal Program

Although apprenticeship programs are administered and regulated by provincial and territorial governments, the federal government has, for many years, encouraged standardization of apprenticeship training and certification through the Interprovincial Standards Red Seal Program to facilitate labour mobility among tradespersons. Today, there are more than 300 apprenticeship programs across the country, of which 47 have a Red Seal designation.[26] Approximately 85% of all registered apprentices are working within these 47 designated Red Seal trades.[27]

By successfully completing an Interprovincial Standards Examination, certified journeypersons are able to practise their trade in any province or territory, provided it is designated as a Red Seal trade, without having to write additional examinations. It should be noted that only about 40% of designated Red Seal trades are recognized in all provinces and territories. Of the Red Seal trades that are not designated in every jurisdiction, in most instances only two or three jurisdictions do not participate as there is no comparable apprenticeship program available.

The Red Seal program is a national program and is internationally recognized. It means that anybody who has a Red Seal certificate in a skilled trade can go anywhere in Canada and around the world. One would think we would be striving for this as a country. Instead, that's not happening, and because it is in provincial jurisdiction, there are fragmentations taking place. I think reinvesting in and reinvigorating the Red Seal Program would be extremely important.[28]

Ms. Pam Frache
Ontario Federation of Labour

I'd like to see more support for the existing Red Seal. The federal government has the responsibility for overseeing how you achieve Red Seal status. Unfortunately, I find from province to province to province there isn't quite the same level of commitment from each province to getting people through and getting to their red seal and completing their apprenticeships.[29]

Mr. Pat Byrne, District Council 38
International Union of Painters and Allied Trades

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In 2005, 17,701 Red Seals were issued, compared with 10,912 in 1996.[30] Although members of the Committee are encouraged by the recent upward trend in the number of Red Seals issued, we are mindful of the growing need to encourage more Red Seal certifications and to facilitate greater mobility among those who work in non-Red Seal trades.

Recommendation 1.4

The Committee recommends that Human Resources and Social Development Canada continue to work with the Canadian Council of Directors of Apprenticeship to standardize apprenticeship training and certification programs across the country, to increase the number of Red Seal certifications and to extend Red Seal designations to trades that require compulsory certification.

B. The Agreement on Internal Trade

It is estimated that between 15% and 20% of workers in Canada are employed in a regulated occupation or trade. Although most regulated occupations are governed by self-regulating non-governmental bodies, trades, as indicated above, are regulated by provincial and territorial governments. Workers in these occupations are accredited and licensed by a vast number of delegated authorities, whose disparate practices constrain the movement of workers across the country.

There is a remarkable degree of private sector labour market mobility, but there are still many government-imposed roadblocks to labour market mobility in Canada. If you spend some time in this province, you'll see that employers are finding new and creative ways of filling their labour market needs. The oil sands in Alberta, for example, are pulling people in who continue to live in Atlantic Canada but come for the week to work in Alberta. There are planes from the interior of B.C. that are flying into Alberta to work for a short period of time and then going home, so the private sector is finding ways of accommodating that. At the same time, recognition of credentials between provinces remains a massive problem for employers.[31]

Mr. Dan Kelly
Canadian Federation of Independent Business

In an effort to address this problem, the federal, provincial and territorial governments signed the Agreement on Internal Trade (AIT) in 1994. This agreement, which came into effect in July 1995, is intended to “eliminate barriers to trade, investment and mobility within Canada.”[32] Chapter 7 of the AIT is intended “to enable any worker qualified for an occupation in one part of Canada to have access to employment opportunities within that occupation in any other province or territory.”[33] Pursuant to Chapter 7, regulating authorities are required to conduct a thorough analysis of their respective occupations to determine the extent to which occupational requirements, including licensing, certification or registration, are shared across jurisdictions. Where significant similarities in standards exist, organizations are supposed to recognize workers who meet these standards. In instances where standards are dissimilar, the additional training and/or certification required to attain the accepted standard must be identified. A Mutual Recognition Agreement (MRA) or similar formality is supposed to be used to document what constitutes an acceptable standard and what is required to reconcile differences between occupational standards. Mobility in trade-related occupations, as discussed above, is facilitated under the Red Seal Program.

Progress to fully implement Chapter 7 of this agreement on trade has been unduly slow. For many occupations, licensing requirements vary significantly between provinces. Regulators of many professions are still grappling with issues such as legislative change, scope of practice, educational requirements, and assessment mechanisms. The chamber recommends that Chapter 7 of the AIT be fully implemented.[34]

Mr. Michael Murphy,
Canadian Chamber of Commerce

In 2004-2005, the Forum of Labour Market Ministers, the group responsible for implementing Chapter 7 of the AIT, sought to evaluate compliance under this part of the agreement by conducting a national survey. A total of 425 questionnaires were sent to regulatory bodies governing 50 occupations covered under the agreement, of which 92% responded. According to the results of this survey, regulators reported registering between 86% and 100% of applicants from other provinces in eight of the covered occupations. Regulators reported registering between 59% and 85% of the applicants in 23 occupations, while a registration rate of 50% or less was found for the remaining occupations. In total, only 65% of the 12,953 workers who applied for registration between October 1, 2003 and September 30, 2004 had their qualifications recognized under a MRA or some other mobility agreement, and were issued a document enabling them to practise in their occupation. An even smaller proportion of internationally trained workers whose qualifications were recognized in one jurisdiction had their qualifications recognized under an MRA or some other mobility agreement in another jurisdiction.[35] In short, the survey results showed that, while some barriers to labour mobility have been removed, further efforts are necessary to secure greater compliance.

Under the Framework to Improve the Social Union of Canada, signed in February 1999, all governments, save the Government of Quebec, agreed to be in full compliance with Chapter 7 of the AIT by July 1, 2001. Unfortunately, this commitment has not been realized, and the deadline for full compliance under Chapter 7 of the AIT has been further extended. On September 7, 2006, the Committee of Federal-Provincial-Territorial Ministers responsible for Internal Trade announced that the deadline for full compliance under Chapter 7 of the AIT was extended to April 1, 2009.[36]

In March 2007, the federal government announced that it was committed to working with interested provinces and territories to examine how the recent Alberta-British Columbia Trade, Investment and Labour Mobility Agreement (TILMA) could be applied more broadly to build on Canada’s economic union and promote labour mobility within the country. Although TILMA and other bilateral arrangements can be effective instruments for broadening interprovincial labour mobility, Canada’s goal should be to achieve a pan-Canadian labour market that will allow individuals to move freely and work anywhere in Canada. The Committee was told that Canada should pursue the approach taken by the European Union (e.g., the Lisbon Convention on the Recognition of Qualifications concerning Higher Education in the European Region) to facilitate greater labour mobility. In reality, labour mobility between Member States in the European Union has been relatively low.[37]

Recommendation 1.5

The Committee recommends that all signatories to Chapter 7 of the Agreement on Internal Trade (AIT) continue to work toward full compliance, particularly in terms of workers with foreign training who are fully licensed in one jurisdiction, and that the Forum of Labour Market Ministers continue to examine avenues for improving the AIT’s mobility provisions as well as beginning discussions to expand the number of occupations covered under Chapter 7 and ensure the protection of technical and professional occupational standards.

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C. Tax Incentives

Some mobility assistance is provided through the Income Tax Act. According to section 62 of this Act, taxpayers who move to start a business or a job (or to attend school full-time) are entitled to claim eligible moving expenses. To be eligible, the move must involve a relocation of at least 40 kilometres closer to the new work or business site. In addition, the new residence must be the place at which the taxpayer normally resides. Obviously, the costs incurred when a worker moves temporarily do not qualify for this tax treatment. As a result, some consider the absence of tax assistance supporting temporary relocations to constitute a barrier to mobility.

The tax system provides support if people move, but I don't think it will work in the case you're describing. You won't benefit if you're not changing your primary residence […] The answer to your question is yes, moving costs are an important factor. I believe there was a question last time: if people are going to move temporarily and if they cannot benefit from this tax measure, will that inhibit mobility? I believe the answer is yes […][38]

Mrs. Barbara Glover
Department of Human Resources and Social Development

The Construction Sector Council found that “Canadian mobile workers feel unfairly treated by the tax system. Many estimated that upwards of $10,000 and $20,000 per annum costs were required from their after-tax income to pay for travel expenses to and from their mobile projects and for a second residence.”[39] As labour market imbalances intensify in the years to come, some employers may become more reliant on a temporary or mobile workforce. The labour demands associated with large scale projects, projects in remote areas of the country or projects that extend or complement longer periods of seasonal employment, discussed later in our report, may require a more mobile workforce. In this event, the tax system should encourage, not discourage, workers to accept employment involving a temporary relocation.

Recommendation 1.6

The Committee recommends that the federal government examine the moving expenses provision of the Income Tax Act with a view to extending this provision to individuals who must leave their principal residence to work on a temporary basis, provided their principal residence is retained.

D. Mobility Assistance and Employment Insurance

The Committee received contradictory evidence regarding the impact of Employment Insurance (EI) on labour mobility in Canada. Some witnesses observed that the program’s regionally differentiated qualification and benefit structures discourage strong labour force attachments and labour mobility. In this context, for example, we were informed about a study comparing workers in New Brunswick and Northern Maine, which concluded that the 1971 reforms to unemployment insurance contributed to the observed gap between the proportion of workers in New Brunswick who work a relatively small number of weeks per year compared to their counterparts in Maine, who presumably are exposed to the same seasonal employment.[40]

The Committee was also told that labour mobility decisions are complex. EI is undoubtedly one of the many factors influencing mobility decisions, but it does not appear to play a major role. According to the Employment Insurance Monitoring and Assessment Report 2005, EI “does not appear to be an important factor in labour mobility decisions.”[41]

Irrespective of the uncertainty regarding EI’s impact on labour mobility, some witnesses suggested that this program should be used as a means of encouraging unemployed individuals to move to find employment, a program feature that once existed under Unemployment Insurance Developmental Uses, although it was used in a very limited context. According to information provided to the Committee by Human Resources and Social Development Canada, federal mobility support for travel and relocation costs was available under a variety of labour market initiatives throughout the period 1965-1995. Mobility assistance was terminated in 1996 with the implementation of the Employment Insurance Act.

There is considerable cost involved in moving temporarily to a new location to seek employment. There are the costs of travel and accommodation, as well as general living costs just to go and look for work in a new location. There are also the other costs of maintaining a second home, as most workers will not want to disrupt family situations to move to temporary employment. We believe these costs could be reduced by assisting unemployed workers to relocate to new employment. This could be accomplished through the reintroduction of the exploratory component of the federal government worker mobility program that was in place in the mid-1970s. Under this program, an exploratory grant was available to workers to help them defray the travel and accommodation costs incurred in seeking employment in another location of the country.[42]

Mr. Alfonso Argento
Canadian Construction Association

Although members of the Committee recognize that past initiatives to support the relocation decisions of unemployed individuals may have had limited success, a better program can be developed. Since many workers are not covered under EI, a majority of Committee members believe that mobility assistance should be funded outside of the EI Account. With the prospect of skills shortages intensifying in the future, we must pursue policies that facilitate rapid labour market adjustments and, where appropriate, facilitate the mobility of unemployed workers who have limited job opportunities and need financial assistance to move to locations where employers are experiencing difficulties hiring workers.

Recommendation 1.7

The Committee recommends that the federal government provide funding to assist individuals who agree to relocate to enter employment in occupations experiencing skills shortages.

DEVELOPING A PAN-CANADIAN FRAMEWORK FOR ASSESSING AND RECOGNIZING LEARNING AND CREDENTIALS

Because provincial and territorial governments are primarily responsible for matters dealing with education, training and occupational accreditation and licensing, there is no national system for the assessment of learning and employment credentials in this country. Instead, as partly illustrated in the previous section of our report, our multi-jurisdictional system has been slow to recognize the occupational credentials of a relatively small proportion of the national workforce. Given the problems that continue to exist with respect to credential recognition practices in regulated occupations, we fear that the shortcomings associated with credential recognition practices in non-regulated occupations may be even more pronounced.

Despite efforts to improve learning and credential recognition across the country, the absence of a national system for assessing these human capital characteristics contributes significantly to labour market inefficiency. The costs associated with this institutional shortcoming are significant, particularly in terms of Canada’s under-utilization of workers’ skills acquired beyond our borders. According to the Conference Board of Canada, Canada is forgoing significant economic benefits as a consequence of this learning recognition gap, which includes insufficient recognition of experiential or prior learning. In 2001, there were an estimated 550,000 unrecognized learners in Canada. Of these, 13% had unrecognized Canadian credentials, 24% had unrecognized experiential learning and 63% had unrecognized foreign credentials.[43] The Conference Board of Canada estimates that the potential economic benefits (i.e., reduced unemployment and underemployment) of recognizing this learning would amount to between $4 and $6 billion annually.[44] This estimate may be conservative; the Standing Committee on Citizenship and Immigration was told during its 2005 study on Canada’s foreign credential recognition problem that the cost of unrecognized foreign credentials may be as high as $15 billion.[45] Whatever the costs, suffice it to say they are non-trivial. It is in our best interest to eliminate this serious learning recognition gap as quickly as possible.

Credential recognition in regulated occupations in Canada involves more than 400 occupational regulatory bodies (i.e., regulatory bodies with delegated authority, professional associations, trade unions, industrial associations, and education and training institutions), representing millions of workers in more than 50 occupations. With respect to trades, as previously noted, provincial and territorial governments regulate more than 300 apprenticeship programs across the country, of which slightly more than one-quarter are subject to some form of compulsory certification.[46] In non-regulated occupations, which represent by far the vast majority of Canada’s workers, it would appear that the authority for credential recognition rests with employers.

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A. Recognizing Foreign Credentials

As discussed in more detail in the last chapter of our report, when individuals apply to immigrate to Canada as skilled workers they are assessed according to a number of factors, including years of education and training. These characteristics are meant to predict how well skilled workers will adapt to the Canadian labour market. The biggest drawback to this approach, however, is that the Canadian labour market values the human capital characteristics of skilled workers differently than our immigration selection system. This disconnect is evidenced, in part, by the initial findings of the first wave of Statistics Canada’s Longitudinal Survey of Immigrants to Canada. Of the 164,200 immigrants who landed in Canada between October 2000 and September 2001, it is estimated that 124,700 (76%) had some sort of foreign credentials (i.e., any formal education higher than a high school diploma acquired outside of Canada). Of those with credentials, 32,300 (26%) had at least one of their credentials verified by an employer, educational institution or assessment agency within six months of landing. Of these, 17,400 (54%) reported having at least one accreditation agency fully accept their credentials, while another 7,106 (22%) had an agency accept at least one of their credentials.[47] In other words, less than one-fifth of immigrants who landed in Canada between October 2000 and September 2001 who had some sort of foreign credentials had those credentials fully or partly accepted by an accreditation agency within six months of landing. As indicated above, the absence of a national process for quickly assessing and recognizing foreign credentials is costly to immigrants and the country as a whole.

Notwithstanding the institutional complexities associated with credential recognition in Canada generally, the number of authorities involved in foreign credential recognition (FCR) is staggering: 13 provincial and territorial governments, 55 ministries, 400 regulatory bodies, 240 post-secondary institutions, 250 service agencies dedicated to immigrant integration, hundreds of thousand of employers and five assessment agencies.[48] In terms of the latter, Alberta, British Columbia, Manitoba, Ontario and Quebec have provincially mandated credential assessment agencies. Saskatchewan has an agreement with Alberta to use its credential assessment service. After the ratification, in 1990, of the UNESCO Convention on the Recognition of Studies, Diplomas and Degrees concerning Higher Education in the States belonging to the Europe Region, the Council of Ministers of Education Canada established the Canadian Information Centre for International Credentials (CICIC). The CICIC provides information on Canadian post-secondary studies, diplomas and degrees, but does not assess credentials or grant equivalencies.[49]

Despite the federal government’s limited role in FCR, several witnesses commented on the need to establish national standards and to find ways to fast-track the process. Several witnesses also expressed the need to ensure that all potential immigrants are fully apprised of Canada’s credential assessment and licensing practices, and to encourage them to have their credentials assessed before departing for Canada.

[T]he second recommendation […] is to facilitate the setting of national skill and occupational standards, which will assist with integration and help coordinate the needs of employers, as well as the development of a national qualification framework, including Canadian credentialing and certification systems, which will assist with foreign credential recognition.[50]

Ms. Colette Rivet
Biotechnology Human Resource Council

While we all agree that it is important to maintain high Canadian occupational standards, it was suggested that the standards applied to individuals with foreign credentials are sometimes more rigorous than those applied to Canadian-born workers. Some witnesses expressed concern that the credential recognition processes for some occupations may be intentionally restrictive. In order to practise in Canada, some workers are essentially required to return to school and obtain the Canadian equivalent of a qualification already acquired beyond our borders. As well, concern was expressed about restrictive Canadian licensing practices. A similar concern was identified by the Canadian Labour and Business Centre, which consulted employers on the issue of FCR on behalf of Citizenship and Immigration Canada and Human Resources and Social Development Canada. Some employers interviewed expressed a strong belief that licensing processes were too restrictive in several professions within health care and engineering.[51]

I have shared my opinions with most of the Canadians here, even the licensed pharmacies, and they have told me that even they would not be able to pass the equivalency exam. That's what I've heard from them. It's a requirement, so I have to go through it.[52]

Ms. Florence Javier
As an Individual

Some of the professional associations, the medical associations, act as gatekeepers. The accountants have been better […] some of them have really good programs to recognize prior credentials […] We bring in people and ask them what their professions are and then they can't work. It's not only the professional associations, it's the whole system of  before you choose to come to Canada, en route to Canada, what happens to you when you get to Canada, and then who we choose to recognize and who we don't. We choose to recognize certain professions. Tradespeople who come in also can't work.[53]

Ms. Karen Lior, Toronto Training Board,
Ontario Institute for Studies in Education, University of Toronto

Members of the Committee invite all licensing bodies to review their education and training requirements, along with licensing practices that are designed to reflect Canadian equivalencies.

Over the years, the federal government has tried to facilitate and encourage the development of institutional arrangements that broaden the acceptance of skills and learning across the country. In view of the growing threat of skills shortages, the focus has shifted recently on addressing what most of us believe is the biggest failing of our credential recognition system: the non-recognition of foreign credentials. As a top priority, the federal government is working with provincial governments and other stakeholders to improve recognition procedures for internationally trained doctors, nurses and other health care workers, as well as internationally trained engineers. The Committee was told that in the past two years, three projects were launched with the help of the Medical Council of Canada. One project allows foreign doctors to conduct an online assessment of their credentials before arriving in Canada. Another initiative offers foreign-trained physicians an opportunity to write an evaluation exam outside of Canada, previously this was offered once a year in Toronto. The third project involves the creation of a national credential verification agency, which allows foreign-trained doctors to send only one set of documents to verify the legitimacy of their credentials and work experience.[54]

Budget 2006 set aside $18 million over two years to facilitate a consultation process with the provinces, territories and other stakeholders, and to take the first steps toward establishing a Canadian agency for the assessment and recognition of credentials. We encourage the federal government to continue discussions with the provinces and territories to quickly establish mechanisms to effectively address this longstanding and costly problem. Although we applaud the announcement in Budget 2007 of the intention to establish a Foreign Credential Referral Office in Citizenship and Immigration Canada, this important measure is not a substitute for a pan-Canadian approach to the assessment and recognition of credentials.

[I] want to use this opportunity to say that the fact that you've set up a coordinating agency to look at equivalencies is a great step in the right direction. One of the incredible pitfalls in foreign credential recognition is the fact that there are so many different agencies and such unevenness about the standards of those recognitions, so just that coordination role is a fantastic first step that this government has taken.[55]

Ms. Shyla Dutt
Pacific Foundation for Diversity

This [proposed] agency should become one of Immigration Canada's partners, and recognition for foreign credentials and experience could be a pre-condition for immigrating in the skilled worker category. That would enable Immigration Canada to select candidates whose qualifications will be recognized quickly upon their arrival in Canada. In addition, it would help potential immigrants make an informed decision in choosing to come to the country.[56]

Mr. Renaud Arnaud
Groupe de réflexion et d'initiative des immigrants diplômés à l'étranger

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B. Prior Learning Assessment and Recognition

Although there has been some progress in recognizing educational credits obtained in universities and colleges across the country,[57] many individuals face significant hurdles in obtaining recognition for learning that is acquired informally and outside the educational system. All workers acquire skills and knowledge in the workplace that are not easily identified and formally credentialed. This learning has value, but there is no widely developed system for assessing and recognizing it. Several witnesses spoke of the need to develop a Prior Learning Assessment and Recognition (PLAR) process. We were told that without a widely recognized process for identifying, documenting and evaluating informal learning, human capital will be wasted. Without PLAR, some individuals may decide to forgo opportunities to participate in formal learning and skills upgrading.

Prior learning assessment services will enhance employability for the individual for the paid and unpaid labour force, and for Canada as a whole. Without it, we will be wasting our most valuable natural resources: the skills and knowledge of our citizens.[58]

Ms. Bonnie Kennedy
Canadian Association for Prior Learning

According to an analysis of eight years of data involving more than 7,200 PLAR learners across the country, the most common benefit of PLAR is the value it gives to adults’ prior learning by: strengthening learners’ confidence in pursuing further education; reducing course loads and costs; and shortening the completion time for educational programs. As a consequence of these benefits, PLAR is an important factor in learners’ decisions to return to school and graduate.[59]

According to the findings of the 2004 Canadian Survey on Work and Lifelong Learning, “more than half of all Canadian adults and over 60% of those employed would be more interested in enrolling in further education if their prior informal learning and work experiences were recognized.”[60] Given the benefits of PLAR and the growing importance of developing a continuous learning system to help individuals acquire the skills needed in the Canadian labour market, PLAR must continue to be developed and promoted nationally.

Recognition of prior learning is the key to the successful transition of any student as he builds a lifelong learning plan. Right now the ability to have prior learning and skills training recognized at another school is at the discretion of the receiving institution. While some private career colleges have established articulation agreements with other public and private institutions, there remains a significant gap. In too many cases the decision on credit recognition and transfer is not made on the basis of demonstrated learning outcomes; instead it is based solely on whether the training was received at a public or private institution, with little or no attention being paid to the quality of that training. NACC supports the use of demonstrated learning outcomes and established national standards as the basis upon which credit transfer is granted.[61]

Mr. James Loder
National Association of Career Colleges

With respect to prior learning assessment and the utility of turning it over to professional associations that may be provincially based, we may be impairing the mobility of people to move across the provinces. Again, we've seen this issue significantly because most of these professional credentials are held on a provincial basis. If those standards, credits, or prior learning assessments with respect to how an individual worker is assessed are not consistent across the country, we end up impairing their mobility across provinces.[62]

Ms. Sharon Manson Singer
Canadian Policy Research Networks

We believe that access to effective learning recognition processes will become increasingly important for employers in the years to come as they become more reliant on experienced Canadian- and foreign-born workers. Learning is not without cost, and there is nothing to be gained from reinvesting in previously acquired, but unrecognized learning. Although we all seem to agree that it is important to improve learning recognition in this country, progress has been too slow.

Recommendation 1.8

The Committee recommends that skilled workers — as defined in Part 6, Division 1 of the Immigration and Refugee Protection Regulations — applying to immigrate to Canada, especially those whose designated occupation is regulated, be fully informed by Immigration Officers and other stakeholders abroad as to the education, training and licensing requirements to practise in the province or territory in which they intend to reside. Applicants should be fully informed of credentials assessment services in Canada and should be strongly encouraged to have their credentials assessed by an approved agency prior to immigrating to Canada.

Recommendation 1.9

The Committee recommends that the federal government continue to pursue, in cooperation with provincial and territorial governments and other stakeholders, a national agency for the assessment and recognition of credentials, especially foreign credentials. The Committee proposes that this agency adopt a broad mandate to: (1) promote national standards for the certification and licensing of workers; (2) develop and provide avenues for the assessment of credentials and the licensing of internationally trained individuals who immigrate to Canada; (3) ensure that equivalency exams are fair and accurately reflect the knowledge requirements expected of individuals educated in Canada; (4) promote international awareness about our education and certification requirements for various occupations; and (5) promote the development and adoption of a system for recognizing prior learning and work experience to facilitate access to the formal education system.

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