New Approaches and Partnerships to Meet the Labour Market Challenges of Today and Tomorrow

November 16, 2007



New Approaches and Partnerships to Meet the Labour Market Challenges of Today and Tomorrow



THE HONOURABLE MONTE SOLBERG

Minister of Human Resources and Social Development, Government of Canada



Chairman: Catherine S. Swift

President, The Empire Club of Canada



Head Table Guests:



Lisa A. Baiton: Vice-President, Government Relations, Environics Communications Inc., and Second Vice-President, The Empire Club of Canada

Akim Burke: Senior Student, Westview Centennial Secondary School

Reverend Vic Reigel: Honorary Assistant, Christ Church, Brampton

Howard Shen: President, Chinese Professionals Association of Canada

Heather Carrey: Division Human Resources Manager, John Deere Limited

Rick Byers: Managing Director, BMO Capital Markets

Heather C. Devine: Associate, Gowling Lafleur Henderson LLP, and Director, The Empire Club of Canada

Jeff Graham: President and Chair, Biotechnology Education Resource Centre

Linda Shales: Vice-President Human Resources, Nycomed Canada Inc.

Patrick Sullivan: President, Workopolis.



Introduction by Catherine Swift:



Back in the mid-to-late 1990s, many pundits were predicting a looming period of massive unemployment, problems finding jobs for the next generation of workers, and we heard dire warnings of how technology was replacing people.



You may recall a book called “The End of Work” by economist Jeremy Rifkin predicting a dire future of global joblessness. I remember a joke making the rounds at that time that stated the factory of the future would have only two employees, a man and a dog. The man would be there to feed the dog, and the dog would be there to prevent the man from touching the equipment.



Although Rifkin and his ilk undoubtedly sold a lot of books with their apocalyptic outlook, they couldn’t have been more wrong. Just over a decade later, how things have changed. Massive labour shortages are now the concern of virtually all developed countries around the world, and Canada is no exception. A lot of this has been driven by demographics as we baby boomers age and families are having fewer children. Many skills are also in short supply as professions such as the trades are not as attractive to young people as they were in the past. And although Canada continues to attract a relatively high number of immigrants, those immigrants do not seem to be adapting to our labour market as readily as did earlier waves of immigration. This is a complex problem, and one that is not going to have easy solutions.



Our speaker today will discuss our current federal government’s approach to labour and skills shortages. As Minister of Human Resources and Social Development, Monte Solberg has the challenge of dealing with this issue at the federal government level.



He was first elected to Parliament over 14 years ago and has represented the riding of Medicine Hat, Alberta, for five terms. In the last federal election, he won the Medicine Hat riding with 80 per cent of the votes cast. From his early days in politics on the opposition benches, Monte established himself as a tireless worker and well-informed advocate, notably as Finance Critic. Following the Conservative Party’s victory in the 2006 election, the Prime Minister called on Monte Solberg to serve in cabinet as Minister of Citizenship and Immigration. In January of this year, Monte was asked by the Prime Minister to take on the Human Resources and Social Development portfolio. More recently, he has been appointed to the Cabinet Committee on Economic Growth and Prosperity.



The focus for this committee is the sustainability of Canada’s vibrant economy. A critical component within that is the strength of Canada’s skilled labour force. All of the minister’s many responsibilities are made easier as a result of the enduring support of his wife Deb and two sons Matthew and Michael.



Please join me in welcoming the Honourable Monte Solberg.



MONTE SOLBERG:



Ladies and gentlemen, thank you for your warm welcome. I appreciate this opportunity to meet with your members who play a key role in Canada’s business world. I see many friendly familiar faces in this room, people I’ve known for years. And now that we’re in government, it’s amazing how many of you have told me that you want to take our relationship to that next level.



In a year and a half our government has made great progress on some big commitments, and it has paid off. As you have heard Prime Minister Harper say, our government is clean, our economy is strong and our country is united. And that’s a very firm foundation upon which to consider our future. But before we do that, let me begin with our past.



My family came to Canada at the turn of the last century. My great grandfather Nils left Norway in the 1880s, coming first to North Dakota. Then, he followed the lure of cheap land north to what would become Alberta. Apparently North Dakota was just too balmy for his Nordic blood. At any rate, he and his family built their home near the little town of Riley—not far from Edmonton. He was there, before the gas engine, before electricity and before running water. He was there before Alberta was a province. He cleared the land, built a house, planted crops and he and his neighbours even set up a school so his children could get an education. I don’t know about you, but I can hardly fathom the hardships that he and his family went through to carve out a life, and leave a legacy. But I’m so grateful that he did. Even more amazing to me is that this is such a common Canadian story. It’s about grit, vision, dawn-to-dusk physical labour and courage on a scale that I find almost unimaginable. These are stories of hard hands and strong backs.



In fact, the story goes that for years, potential immigrants to Canada had to first show their hands to the immigration officer to prove they had the hard hands necessary to settle in one of the last frontiers. In those days so much of how you were rewarded had to do with what those hard hands could produce from the raw land.



But today we know it’s different. Today, it’s a lot less about hard hands and raw land and a lot more about sharp minds and raw talent. Back then, our barriers to success were weather, disease, and the vagaries of nature.



Today, our barriers are ferocious global competition and the stunning pace of change. That’s why the key to addressing virtually all our problems as a nation begins with talented people. All things being equal, the greatest competitive advantage a country can have today is a wealth of well-educated people with relevant skills.



Today, Canada’s economy is roaring ahead. Our unemployment rate—at 5.8 per cent— is at the lowest rate in 33 years. Half a million jobs have been created in the past two years alone and almost 80 per cent of working-age Canadians are in the labour force today—a record level. In many ways, we are enjoying some sunny days right now. Canada has enjoyed strong and sustained economic growth and low unemployment.



But let’s not turn away from the real challenges on the horizon. Challenges, like our “mediocre-at-best” productivity performance. Our productivity simply must improve if we ever hope to offset the impact of our aging population. To do that, we need to develop, retrain and attract hundreds of thousands of highly skilled and innovative workers. And if we are successful, the rewards will be great. A simple 1-per-cent improvement in our productivity performance would increase our standard of living by $14,000 per person. But as I said before our demographics are working against us.



Baby boomers are set to retire and our low birth rate means demand for workers will soon outstrip the supply. Consider that for the last 50 years it was our labour force that was the single greatest contributor to our country’s economic expansion. Between 1956 and 2006 our labour force increased nearly 200 per cent. But those heady days are long behind us.



Going forward, over the next 50 years, including immigration, the labour force is projected to increase by just 11 per cent. Nearly 200 per cent over the last 50 years; 11 per cent over the next 50. But ladies and gentlemen, we won’t have to wait 50 years to see the impact of that trend. It is here today. A recent PricewaterhouseCoopers survey found more than 60 per cent of companies believe a shortage of qualified workers is slowing their growth. As the B.C. Ministry of Economic Development reports, well over $100 billion worth of new infrastructure projects are planned or are underway in British Columbia. But many are delayed due to a lack of workers.



In fact, the opening of the Cloverdale Trades and Technology Centre at Kwantlen University in Surrey, B.C. was delayed because they just couldn’t find enough trades people to finish the job. A trade school that couldn’t find enough trades people to finish building the trade school. I’m sure the irony of that is not lost on you.



We’re facing a significant shortage of workers across the country. Labour shortages in the West are occurring alongside unemployment challenges in the East. For example, within the next decade, Alberta faces a potential shortfall of 100,000 workers. Estimates are that British Columbia will be short 350,000 workers and that Ontario will face a shortage of 560,000 workers by 2030. I hear about shortages in every city I visit from coast to coast.



Ladies and gentlemen, our economy is very strong—and very hungry. But as we face these shortfalls, we have to ask the question, “Who is going to be doing all the work?” Our challenge yesterday was finding enough jobs for people. But today it’s different.



Today it is about finding enough skilled people for the jobs. Business wrestles with this problem every day. But in the years to come, if we don’t act, we’ll all feel it. Consider that in Newfoundland, seniors make up approximately 13.5 per cent of the total population. In 25 years that will increase to over 30 per cent. The numbers are almost as high in New Brunswick and they will be a challenge in every part of the country. Where will we get the doctors and nurses to serve this population? What about engineers, computer scientists and other people we rely on to make our society work? Seventy per cent of the jobs of the future will be high-skilled. Who will fill those jobs? Without those people, who will pay the taxes to support the social safety net? Having too few skilled workers drives up costs, making it impossible for some people to buy homes.



In many places in the West, labour shortages are helping to drive inflation far above the national average—making it very hard for seniors on a fixed income. This lack of labour is compounded by the fact that 42 per cent of Canadians in the labour force lack the literacy and numeracy skills to cope with new knowledge requirements on the job. They may want to work, but they don’t yet have the right skills. Or, they may already be working, but a lack of basic literacy skills makes it hard for them to get the training they need to contribute to their potential. That’s not just an immense loss to our economy; it’s also a tragic loss of the potential of thousands of individual Canadians.



According to a recent Statistics Canada study, a 1-per-cent increase in literacy in Canada relative to other countries would produce a $32-billion boost to our Gross Domestic Product (GDP). The crux of our problem is that we have too few workers and too few skills to meet demand. I have set out the numbers. I have given you examples, but ladies and gentlemen, I know that it is still difficult for many Canadians to accept that we have a labour shortage.



For so long we have talked about unemployment, and that there just wasn’t enough work to go around. But the fact is, right now, even in areas of high unemployment, we lack enough skilled workers for the jobs. This is our challenge, but it is also a glorious opportunity to make things better. It’s an opportunity because today, hundreds of thousands of underemployed and unemployed people could develop those skills and fill those jobs.



Which brings me to Advantage Canada—the long-term economic plan introduced by Finance Minister Jim Flaherty last fall. In that document we have set a bold, but achievable, goal: to have the best-educated, most-skilled, and most-flexible work force in the world. That means that our labour market policies and programs need to focus on giving all Canadians the right training and skills to meet employers’ demands. The strength of our economy depends on it. And our social safety net, our tax system, our education system all have to be in harmony with that goal.



In some ways we are doing well. We rank first in post-secondary education graduates among Organization of Economic Cooperation and Development (OECD) countries. But we shouldn’t be complacent. We need more graduates in the maths and sciences, and we need them to go on to graduate school. That’s why we also have enhanced support for students. Starting next year, we’ll invest $800 million more per year for our post-secondary education system. That’s a 40-per-cent increase in a single year—an important signal of our belief in the power of education. But education takes many forms. We need skilled workers of all kinds, and potential workers need skills. That’s why our government has doubled the size of the Aboriginal Skills and Employment Partnership—a program that really has produced results.



Here’s a wonderful success story of a workplace training partnership between government, Aboriginal Peoples and business. (Video clip text)



[Tim—My name is Tim Willder. I’m working with Simplex-Grennell as a first-year apprentice in sprinkler fitting. Previous to this, I was an equipment operator. That was too hard on my back so I needed to get into something else. This particular job I got through the Trade Winds to Success program. It’s an opportunity for Native people to get into the trades. What it gave me was my “foot in the door” into the union, into the company; it gave me my start.



Employer—We hired Tim as a first-year apprentice, after he completed the Trade Winds program. He’s worked on a couple of different sites now, and ... we’re hoping he’ll advance through his apprenticeship. And I’ll definitely give some other people a chance to come though the program.



Tim—My cousin found out I was going through it, so she decided to try it as well and today she’s in her trade of choice which is carpentry. She seems to be doing quite well. I’ve got to go through my four years of apprenticeship and once I’ve completed my four years, I can become a Journeyman.]



I know that many companies are helping Aboriginal people not only get jobs, but also build better lives. Suncor, for example, is investing in Aboriginal people through scholarships, work placement and training with a strong focus on literacy and career preparation. Syncrude and other companies are doing the same. Ladies and gentlemen, that reflects enlightened management and I applaud their efforts. Meanwhile, our new Apprenticeship Incentive Grant is helping more people enter the trades. Take the example of Gary Knox in Saint John, New Brunswick. (Video clip text)



[Gary—I’m Gary Knox, I work at the Hilton St-John. Before working here, I worked 18 years changing truck tires. I quit the job I was working at with a grade nine education, because I quit in grade ten. I decided to go back to school, get my GED (General Education Development) and advance myself in the cooking trade.



Employer—In the past 12 months, Gary has gone back to school, then he entered the apprenticeship program, and then he got his first and second block. He is a role model for those people to say: “You know what? It’s not too late!”



Gary—The government helped me with my block two that year. They implemented a thousand-dollar grant. Basically, I filled out the application, mailed it in, and that was it! I got hired in the kitchen and I’ve been here ever since. It doesn’t matter if you’re old or young, you can still learn. At 53, I basically passed grade 12 with a B average! Anybody can do it!]



Ladies and gentlemen, these investments will help us build a competitive advantage and improve our productivity but we’ll never get there if we leave some of our most-skilled and experienced workers on the sidelines. Our government recognizes that many single-industry towns across Canada have been hit by lay-offs. Our $70-million Targeted Initiative for Older Workers program means we can give older workers in those communities the training they need so they can find new jobs and support their families and our economic growth.



Earlier this year, I also announced the Expert Panel on Older Workers headed by former Senator Erminie Cohen. That panel is looking at ways to give older workers the option of staying in the work force because as Erminie pointed out to me, age 70 really is the new 50. I find that quite encouraging, because that would mean that 50 is the new 30. And I’m looking forward to turning 30 next year. I look forward to her report.



Now, we can’t just cherry pick those who aspire to be doctors and technicians. I think we are obliged to help everyone contribute in their way. Here’s how the government’s Youth Employment Strategy helped a young woman with a disability do just that so that both she and her employer could benefit. (Video clip text)



[Cindy—I’m Cindy Doucet. I was 27 when I started working. Before, I’d be on the couch watching TV or sleeping. One day I woke up and said to myself: “I want to work!” So I went down to the DDPC (Digby Disabilities Partnership Committee). I was really afraid.



DDPC staff—The program that we deliver here is called the Youth Skills Link Employability Program. It’s a program we provide for youth, ages 15 to 30, who have barriers or disabilities to employment... And we also partner with employers in our area.



Cindy—So I did the program and look where I am. I’m at Walmart, Digby county!



Employer—Cindy’s been here for the last year and a half. She helps greet at the front of the store and honestly, Cindy’s willing to do anything in any area we need her; she’s fantastic.



Cindy—I’ve got a nice boss, nice friends to work with. I’ve got a car now; I’ve got a job now; actually, I’ve got everything I want now!]



Ladies and gentlemen, too often people with great potential can’t get jobs because training programs aren’t flexible enough to help them—and we’re changing that. Cindy’s story is an example of the inspiring journey from dependence to independence and the great dignity that goes with a job. Still, we must do more, and we are. One of the most exciting measures taken by our government is a $500-million-a-year investment in training—$3 billion over the next six years!



This is an enormous opportunity to help tens of thousands of people get the skills and a helping hand they need to step into their first quality job. This includes recent immigrants looking for their first Canadian job, the disabled who just want the chance to prove themselves, and people on social assistance who want nothing more than to better themselves and to support their families. Our government has also committed an additional $1.3 billion over five years in settlement funding to help newcomers get the language, literacy and essential skills they need to more quickly join the mainstream of Canadian life. And we have introduced the Foreign Credential Referral Office to fast-track our best-skilled internationally trained immigrants into our workplace. Ladies and gentlemen, we’re facing long-term challenges that require long-term solutions. That’s why we’re spending more money in training than any government in history.



But, we’re also aware that businesses need help now to fill thousands of vacant jobs. Let me give you the example of Alberta where there was a staggering 200-per-cent increase in demand for temporary foreign workers in the first half of 2007 compared to the same period last year. But it is not enough to just have a program. The program has to work, and it has to work well. So, we continue to improve it. Just last month I announced a pilot project that will slash red-tape in the construction, tourism, hospitality and health-care sectors in British Columbia and Alberta. Before, it took five months to get permission to hire a foreign worker. Now it will take just five days. Ladies and gentlemen, that’s progress and I think it’s a pretty clear sign that the federal government is listening to the concerns of employers.



As proud as I am of these initiatives, all of this is only the beginning. Our government can’t fix these problems by ourselves, and many of you are pitching in. I love the example of Homeward Bound, a Toronto-based program funded by TD Canada Trust, helping women at risk of being homeless get the skills they need to step into a job.



That said, the private sector must do more than it’s doing today. We need more partnerships like the ones I’ve mentioned if we want to reach our goal of building the best-educated, most-skilled and most-flexible work force. Our prosperity as a nation depends on it. In the next few months I intend to meet with business and labour leaders, workers and academics across the country to better understand how we can build skills and fill jobs.



Ladies and gentlemen, I feel pretty strongly about this issue. First, as an Albertan, I see the impact of worker and skills shortages every day and I am concerned. Business owners who are retired must come out of retirement to run their businesses. Restaurants must close down early because they can’t find workers. Construction projects are shelved. A shortage of health-care professionals means longer wait times for important medical services.



But, as Minister of Human Resources, I’m also excited. I’m excited at the potential and opportunity for people who have been left behind to get the confidence, opportunity and hope that go hand in hand with good skills and a red-hot job market.



The problem is here; it’s affecting hundreds of thousands of people, and the time to fix it is now. Prime Minister Harper and this government are tackling it head on. We understand it’s about people. It’s about the right skills. It’s about making Canada a magnet for talent.



As I said at the beginning, 100 years ago people with hard hands and strong backs opened up our frontier and carved a life for themselves and their families. Today’s new frontiers require sharp minds and relevant skills. But government cannot meet this challenge alone. We need the support of others. This has to be a partnership and you, ladies and gentlemen, are our partners. I look forward to working with you as we seize this great opportunity together. Thank you.



The appreciation of the meeting was expressed by Heather C. Devine, Associate, Gowling Lafleur Henderson LLP, and Director, The Empire Club of Canada.