DATE/DATE: October 21, 2013, 11:40 a.m.
LOCATION/ENDROIT: Château Laurier, Ballroom, 1 Rideau Street, Ottawa, Ontario
SUBJECT/SUJET: Minister for Employment and Social Development Jason Kenney speaks at the Association of Canadian Community Colleges Summit.
Hon. Jason Kenney: Thank you very much. I don’t know who that was who ran against me but we take all comers. Thank you very much. It’s a great pleasure to be here. I really want to commend the ACCC for this initiative, the National Skills Summit. I would like to acknowledge your important efforts, those of the colleges that are part of the Association, of course, but also the fact that every day at your colleges, you carry out the work required to train Canadians for today’s jobs and for the jobs of tomorrow, but I believe that you have focused on the most important element of Canada’s economic future, namely, the shortage of skills and indeed, the shortage of manpower in the future.
I really want to thank each and every one of you, the colleges who make up the ACCC for the brilliant work you do every single day to prepare Canadians for participating in the prosperity of our economy now. This conference really shows, I think, the tremendous forward-looking vision as you address what I believe is and will be the single largest challenge of our economy—that of the skills gap, the skills shortage.
I see the program indicates this is a conversation with Jason Kenney. To avoid this being a monologue rather than a conversation, I’ll try to be very brief. I think it’s more important that we have an exchange. I really want to hear from you—your ideas and your suggestions about how we can do better. I’m going to truncate uncharacteristically my remarks. Some people who have heard me speak before, they find that hard to believe. I am going to try to limit this to just an overview to really take your comments and suggestions.
First of all, you heard from Don Drummond, I think, earlier in the conference and so many of you know that there is this peculiar debate we are having right now about whether or not there actually is a skill or labour shortage. The peculiar thing is that as Don and other academic economists and some from the labour union movement and others will point out to you, the aggregate data indicates that there isn’t actually a skill or labour shortage in Canada, that the help wanted index is actually quite low for this stage in an economic cycle, that the ratio of the help wanted index to the number of unemployed Canadians to every 1.4 million is actually very high, that the wage rates have not risen in a way that would indicate tightness in the national labour market and therefore all of these businesses and others who talk about the labour and skills shortages are just making it all up.
That’s one narrative and there is of course data to support it. But the problem is that, when we see the situation on the ground, the challenges that businesses and employers face in all parts of the country in a number of industries, it is a completely, radically different reality. This is the peculiar thing is that narrative based on aggregate data is radically different than what I hear multiple times every day, every week and have now for several years from employers, industry associations, some unions, community leaders and others across the country.
It’s funny. The help wanted index indicates what are we at…about 220 000 positions available in the economy right now? Then if you go to each of the different industry associations, many of whom have actually paid for serious empirical research, collectively they’re indicating hundreds of thousands of unfilled positions in the economy now and just a very steep growth in job vacancies, particularly in various skilled occupations in the balance of this decade.
There is a gap between the aggregate data and the lived experience of employers and others on the ground. I see it. Believe me, I see it every single day. I was just in Atlantic Canada last week, in Fredericton, where the fish processing plant operators and owners wanted to meet with me to talk about acute skill shortages, labour shortages in their industry.
I said, well, how does this exactly work because you are coming to me from communities with 12 percent, 14 percent, 16 percent unemployment and you’re telling me you desperately need more facilitated access to the Temporary Foreign Worker Program so that people can fly from Thailand and Russia and the Philippines to New Brunswick and PEI to process fish when there are people down the street who are unemployed. How does this work?
They say, well, we advertise. We’ve raised wages. We’re offering $18 an hour with incentives and people won’t do the work. I’m in southern Alberta meeting with greenhouse operators, same story. Of course it’s not just low skilled. It’s right up the skills spectrum. Last week I met with the Information Technology Association of Canada, which estimates, I think, currently something in the range of 120 000 unfilled IT positions with a projection to grow to closer to a quarter of a million by the end of 2016.
You know that there is this gap. First of all, let me say we must do a better job of creating and providing accurate, robust labour market information that breaks down the complexity of this problem by region and by industry. It is a matter of national urgency because right now on this fundamental question we just don’t have enough data to persuade Canadians that this is actually a challenge. That must change.
Let me say I know that we appreciate that Don Drummond did a report for my Ministry a few years ago on the skills gap, on labour market information, which indicated a number of productive suggestions. And we are actually acting on about three quarters of those—either have been completed or are in the process of implementing about three-quarters of the recommendations from his report—but more can and must be done.
Having said that, we cannot deny the existence of a skills shortage in certain sectors. That is clear. You know something else? This is just intuitive. We are at the front end of the demographic time bomb that we’ve all been talking about for so long. The baby boomers are retiring and that will have a huge and cascading effect across the country and in every industry. As the experienced ticketed journeymen begin to retire who’s going to be there to train the apprentices of the future?
We’re going to face this not just by the way in skilled trades and in technical occupations. We’re going to face this challenge of succession for example in the small- and medium-sized businesses. Hundreds of thousands of owners who are in the baby boom generation will be retiring whose kids don’t want to buy dad’s or mum’s business and who are going to be facing a succession challenge. This really we shouldn’t be sitting around waiting for perfect or comprehensive labour market information to begin acting.
That’s what we all have to do, which is why I commend the ACCC for your conference and your focus. In that respect, let me say so much more needs to be done. First of all, as you know I was Minister of Immigration for five years and we have gone through a period of comprehensive reform to Canada’s immigration program so that instead of bringing people to Canada to face unemployment and underemployment in an economy with skill and labour shortages, we will, in the future immigration system, be attracting people who have the precise skills to fill specific jobs and so they can work at their skill level upon arrival, fully contributing to the productivity of our economy and realizing their potential.
We’re well on the way to achieving that, but so much more needs to be done domestically. It is bizarre when I see that Canada has one of the highest levels of public spending on skills development in the OECD but one of the lowest levels of private spending on skills development in the OECD. There is a critique that businesses are not doing enough to invest in the training of prospective employees and that they have helped to create the skills gap that we are now struggling with.
We have to find ways to prime the pump. We’ve done so, for example, through our apprenticeship programs. We have the Apprenticeship Incentive Grant, the Apprenticeship Completion Grant. We’re now proposing the Canada Job Grant, which instead of just spending hundreds of millions of dollars on the regular conventional churn of training for the sake of training, where basically provinces take welfare clients, refer them to organizations that get funding on a quasi-permanent basis to teach them basic life and employment skills.
We’ll actually invite employers…it’s a radical idea—that we involve the folks who actually create jobs to have a direct voice in skills development and job training—because it just so happens that employers know better than passive government programs who has the aptitude to work in the labour market, what incremental training they need and it’s only employers who can—as was being said on the panel—who can actually guarantee someone a job at the end of that training.
That’s why we’re proposing the Canada Job Grant and we’ve indicated a great deal of flexibility in the model for that as we negotiate its potential implementation with the provincial governments. Of course, much more needs to be done in the area of apprenticeships because while we have hundreds of thousands of Canadians enrolled in apprenticeship programs, you know that a very small fraction of them actually complete their apprenticeships.
As I’ve mentioned, that’s why we have brought in the Apprenticeship Incentive Grant and the Apprenticeship Completion Grant, but we’re looking at policy options now to do more to help some of these apprentices finance their formal training period because there’s a huge opportunity cost for many of them to actually do and complete the cycles of formal training. Let me say on a meta level that I think we have to step back and fundamentally rethink the investments that governments—particularly at the provincial level—make in our education system.
Those of you in the college sector are providing young Canadians, not just young Canadians, many adult learners with relevant skills for the labour market of today and the future but I’m not the first to suggest that, for some reason, our secondary school system by and large stopped doing so in the last couple of generations. For some reason and I think it has something to do with the implicit bias that policy makers and politicians have—all of them with their academic post-secondary degrees.
There has been a bias in the allocation of scarce public resources in education perhaps because certain interest groups wanted to insist that everyone teaching in a high school have certification from a teacher’s college. We ended up massively diminishing the vocational educational opportunities in the secondary school system. How many mechanics were going to go to teachers’ college so they could teach shop?
We ended up massively degrading the vocational training system at our secondary schools just when we were going to need them the most. When I look at this in an international context, I see Canada with 13 percent youth unemployment and Germany with 5 percent youth unemployment. Interestingly, half as many young Germans are enrolled in academic post-secondary degree programs as young Canadians.
They have half as many people enrolled in degree-granting universities, but one-third as much unemployment amongst young people. Now that indicates to me that perhaps we do need a rethink about how we do education and training. Perhaps we need to look at some of the successes abroad like in Germany and Australia. Perhaps we need to emulate what they do in terms of introducing vocational opportunities to young people at a much earlier age, at incentivizing that, at demonstrating to them the career opportunities, the fulfillment, the incomes that can come from a much wider range of educational programs.
Perhaps we need a closer collaboration between unions and employers, provinces, the federal government, in supporting those choices that young people make. One thing we definitely need is to provide better labour market information to young people in a format that’s relevant to them, which is why our budget this year, the Economic Action Plan, announced that we will be providing, doing just that and we’ll be announcing shortly an interesting program to provide relevant labour market information through social media to young Canadians.
For example, they could learn that if they become a welder they’re likely to earn three times as much as if they get a bachelor’s degree in political science. There’s a glut of those here in Ottawa by the way. We see the ACCC as an essential partner in all of this because you are where the rubber hits the road. The programs that you deliver are market responsive. You are leading young Canadians…I know the employment rate for your graduates is phenomenally high.
What’s particular is increasingly many of your colleges are seeing kids coming and taking technical programs after they’ve done their undergraduate post-secondary academic university degree. I want to thank and commend you for really being on the cutting edge of addressing this challenge, but so much more needs to be done. One thing I hope to do in my new role as Minister of Employment is to work very closely with my provincial counterparts on an ambitious agenda, because believe it or not, the so-called Forum of Labour Ministers have not met for four years, what everyone says is perhaps the most important challenge in our economy today.
Happily we’ll finally be meeting at least for a few hours on November 7th and I hope that will be the beginning of a serious dialogue. We need everyone rowing in the same direction—unions, employers, the educational sector, federal and provincial governments—because we cannot afford to get this wrong. If we don’t begin to correct some of the incentives and the misallocation of resources now, we are going to be facing a very real paradox in the future.
I’ll just close with this. The opportunities for Canada are enormous. You saw the signing of the comprehensive economic and trade agreement with Europe last week. We believe this is an opportunity to create at least 80 000 new jobs in the Canadian economy and to add $15 billion to Canada’s gross domestic product. That is a minimum estimate. This means that we now are the only country with open access to the market of the United States and will soon be with the European Union.
We have a diverse highly educated population. We have one of the only countries in the developed world with a functional immigration system. We have the huge benefit of our natural resources at a time when we see a commodities boom in Canada. We have so many huge advantages and the only thing that can keep us back from seizing them is a lack of an adequate number of skilled Canadians. This is up to all of us to correct and I want you to know that we are, in the Government of Canada, very keen to work on the solutions with you. I hope I can take some questions. Thank you.
