The Canadian population is aging, which — all other factors remaining the same — will create labour shortages in specific occupations and regions of the country. Ensuring that jobseekers are aware of vacant positions, that vacant positions are filled, and that people have the skills and abilities needed by employers will be important to Canada’s future economic growth. In this context, the Committee invited selected witnesses to share their views about the federal actions that should be taken to maximize employment opportunities for Canadians.

A. Background

1. Labour Force Participation

According to Employment and Social Development Canada, expanding the number of job seekers to meet projected job openings in many regions and occupations will be challenging in future years. Some of the anticipated labour shortages could be addressed by increasing labour force participation rates, perhaps especially among groups that are underrepresented in the labour force. Furthermore, workers with higher-level skills and more credentials tend to be more productive and competitive, earn higher wages and remain in the labour force longer. Table 4 shows the labour force participation rate for various groups; the data reflect 2011, except for the disability figures, which reflect 2006.

Table 4 – Labour Force Participation Rate, by Group, Canada, 2011 (%)

Note: The rates for people with or without disabilities are for 2006, for those aged 15 to 64. The labour market participation rate is the number of people in the labour force, including both those who are employed and those who are unemployed but looking for work, divided by the population, including those people who are out of the labour force, such as retirees, full-time students and discouraged unemployed people who have ceased looking for work. The unemployment rate is the number of unemployed people divided by the number of people in the labour force.

Sources: Table prepared using information obtained from: Statistics Canada, Participation and Activity Limitation Survey of 2006: Labour Force Experience of People with Disabilities in Canada, Catalogue No. 89-628-X, No. 7; and Statistics Canada, 2011 National Household Survey, Data Tables.

Most federal spending on skills training occurs through three programs for which Employment and Social Development Canada is responsible: Labour Market Development Agreements, Labour Market Agreements (LMAs) and Labour Market Agreements for Persons with Disabilities.

2. Labour Market Agreements and the Proposed Canada Job Grant

LMAs, which are in place with all of the provinces and territories and which will expire on 31 March 2014, provide assistance for individuals who do not qualify for programs under Part II of the Employment Insurance Act. In the 2013 federal budget, the government announced that it would negotiate with the provinces and territories to create the Canada Job Grant under the renewed LMAs. Table 5 shows the number and types of interventions that occurred under LMA programs and services in 2009–2010.

Table 5 – Number of Interventions Related to Labour Market Agreements Programs and Services, by Type of Program or Service, Canada, 2009–2010

Source: Table prepared using information obtained from: Employment and Social Development Canada, Canada’s Labour Market Agreements: A National Report for 2008/09 and 2009/10.

B. Changes Proposed by Witnesses Invited to Address “Maximizing Employment Opportunities for Canadians”

In speaking to the Committee about maximizing employment opportunities for Canadians, the witnesses invited to address this topic made proposals relating to labour shortages, labour mobility and labour market information, as well as LMAs, the proposed Canada Job Grant and employee training.

1. Labour Shortages, Labour Mobility and Labour Market Information

Recognizing that Canada’s population is aging and that labour shortages may be a result, the Canadian Labour Congress requested that the federal government develop a national, tripartite skills development strategy to prepare for the consequences of the aging workforce, and to meet the needs of specific groups, such as Aboriginal people, recent immigrants and youth. The Canadian Restaurant and Foodservices Association advocated a federal/provincial/private-sector strategy to address future labour shortages.

In the view of the Canadian Labour Congress, the government should — before intervening in labour markets through, for example, the Temporary Foreign Worker Program or subsidization of employers’ training costs — ensure that employers “put more skin in the game" by paying higher wages to their employees.

Regarding the upstream oil and gas sector, the Canadian Association of Petroleum Producers suggested that the government should strengthen programs to develop the domestic labour pool; in particular, it proposed “tightening the link” between post-secondary education and needed workforce skills, and ensuring the availability of foreign workers through two measures: strengthened programs for permanent immigration and an efficient Temporary Foreign Worker Program. Unifor urged the government to develop a strategy for the development of Canada’s resource sectors, with an emphasis on sustainable, long-run job creation.

In speaking about labour mobility and in an effort to reduce the cost of temporary relocation for employment purposes, the Canadian Construction Association requested the creation of a mobility tax credit for construction workers that would assist tradespeople seeking work in labour markets outside of their home jurisdiction. More generally, the Canadian Association of Petroleum Producers called for the government to reduce barriers to labour mobility.

Recognizing the need for additional data and information about the Canadian labour market, the Canadian Restaurant and Foodservices Association suggested that — in assessing the LMAs — informal training should be “tracked” and perhaps incorporated into the LMAs. Regarding the measure that should be used to assess the state of Canada’s labour market, Unifor proposed that the employment — rather than the unemployment — rate be the appropriate measure, as it recognizes the population growth rate.

2. Labour Market Agreements, the Proposed Canada Job Grant and Employee Training

Regarding the proposed Canada Job Grant, the Regroupement des jeunes chambres de commerce du Québec requested that the proposed measure have clear objectives and guidelines, as well as effective implementation in collaboration with the provinces and territories. The Canadian Labour Congress stated that LMAs are critical, and would only support the proposed Canada Job Grant if funds were not reallocated from the LMAs to finance the proposed measure. The Canadian Restaurant and Foodservices Association also commented on the proposed Canada Job Grant, arguing that the federal government should ensure that the number of job placements achieved as a result of the proposed measure is “tracked,” rather than just the manner in which funds are used by the service providers.

In commenting on employee training, the Canadian Labour Congress urged the government to invest in “second chance” retraining programs for older workers affected by changes in the job market and indicated its opposition to government support for employer’s training costs unless employers first provide more training opportunities for their employees. The Quebec Employers’ Council asked for a reduction in the employer portion of EI premiums for employers that provide structured training to their employees.

C. Changes Proposed by Witnesses Invited to Address Issues Other Than “Maximizing Employment Opportunities for Canadians”

The Committee’s witnesses were invited to speak about a particular topic. When they appeared, they often made comments about one of the other five topics selected by the Committee, as indicated below.

1. Fiscal Sustainability and Economic Growth Witnesses

The Conference Board of Canada suggested that — as labour force growth is expected to slow in the next several years — the federal government should invest in developing the skills of the workforce to improve Canada’s human capital, while the Canadian Council of Chief Executives argued that the government should address specific skill shortages in certain sectors, regions and occupations.

2. Vulnerable Canadians Witnesses

The Fédération Étudiante Universitaire du Québec proposed the creation of a tax credit for new graduates working in regions where economic development is limited.

3. Research and Innovation Witnesses

Polytechnics Canada advocated the establishment of two Statistics Canada surveys — youth in transition from academic institutions to the labour force and workers voluntarily leaving the labour force — that would allow policy discussions on skills training to be based on evidence, and enable students, educational institutions and employers to access reliable information on future employment conditions. As well, Polytechnics Canada supported linking federal support for R&D with federal support for apprentices, and it argued that apprentices should be treated as learners, with support provided outside of the EI system. According to it, the government should also support tradespersons, technicians and technologists as a way to promote demand-driven technology from people who use it on a daily basis.

The Greater Kitchener Waterloo Chamber of Commerce expressed support for the proposed Canada Job Grant to the extent that the proposed measure would provide assistance to workers who want to move into areas where labour shortages exist.

4. Government Efficiency Witnesses

The Canadian Taxpayers Federation requested the transformation of the current EI program, which subsidizes unemployment in regions of the country where it is easier to collect EI benefits at the cost of lower benefits for other regions, into individual employment insurance accounts.

The Canadian Union of Public Employees argued that the recent changes to the eligibility criteria for the EI program should be eliminated in order to protect unemployed Canadians better.

In arguing that increases in the CPP contribution rate have a direct impact on job creation by smaller firms, the Canadian Federation of Independent Business urged the government not to raise the rate.

D. The Committee’s Recommendations

The Committee recommends:

45. That the federal government, in collaboration with the provinces and territories, continue its strong support and promotion of the skilled trades, such as working to implement the Canada Jobs Grant or exploring the feasibility and cost of tax incentives to help both skilled workers enhance their mobility and employers of skilled workers. These efforts should include continued support for Skills Canada to ensure the continued promotion of trades in all educational formats, and to address youth unemployment and underemployment. Key educational stakeholders within the trades, like Polytechnics Canada and the Association of Canadian Community Colleges, should be provided with support.

46. That the federal government explore options to reform and reorient Labour Market Agreements with the provinces and territories to better promote skills training and more effectively respond to labour market needs, such as in the construction sector. Consideration should be given to the recommendations of the Advisory Panel on Labour Market Information, as timely and accurate access to labour market information will be important moving forward.

47. That the federal government continue its modernization of Canada’s immigration system to a “fast and flexible” system better focused on labour market needs, thus supporting economic prosperity for all Canadians. This modernization should include examining the processes for visas, continuing to improve foreign credential recognition for immigrants, and reviewing the minimum language thresholds of the Federal Skilled Worker Program.

48. That the federal government review the Temporary Foreign Worker Program to ensure that it better and more accurately responds to Canada’s labour market needs, including the needs of regions where there are key skills shortages.