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Proceedings of the Standing Senate Committee on
National Finance

Issue 14 - Evidence - June 3, 2008 (Afternoon meeting)

OTTAWA, Tuesday, June 3, 2008

The Standing Senate Committee on National Finance, to which was referred the subject matter of Bill C-50, An Act to implement certain provisions of the budget tabled in Parliament on February 26, 2008, and to enact provisions to preserve the fiscal plan set out in that budget, met this day at 2:40 p.m. to consider the subject matter of the bill.

Senator Joseph A. Day (Chair) in the chair.


The Chair: Welcome to the meeting of the Standing Senate Committee on National Finance on the subject matter of Bill C-50. We are pleased to have with us this afternoon Mr. Robert Blakely, Director of Building and Trades Department, (A.F.L.—C.I.O.) Each member of the committee will have received a copy of a publication that might prompt further questions following Mr. Blakely's opening remarks.

Robert Blakely, Director, Building and Construction Trades Department (A.F.L.—C.I.O.): Thank you for the opportunity to be here. With me today is Mr. Christopher Smillie, Policy Analyst for Government Relations. We appreciate the opportunity on short notice to speak to Bill C-50. Bill C-50, the budget implementation bill, does not really concern itself entirely with matters of the budget. The bill not only seeks consequential changes to legislation in order to enable the budget but also in some cases, deals with significant pieces of legislation. I could say that it is legislation by stealth because many people do not see what is going on. However, amendments in the bill in respect of employment insurance and the Immigration and Refugee Protection Act are important to our industry.

I represent the construction industry, which is one of the largest industries in the country. About 1.6 million workers work in the construction industry. It is the largest or second-largest, depending how you count the industries in Canada. It represents 14 per cent of Canada's gross domestic product and accounts for 8 per cent of all direct employment. One person in 16 works in the construction industry.

The construction industry is found in every province, territory, town and city in Canada where people need things built. We work on everything from the outhouse on Uncle Charlie's farm to places like Syncrude Canada Ltd., where hundreds of millions of man-hours and tens of billions of dollars are spent constructing things.

The issues in Bill C-50 affect our membership. Our industry requires large numbers of skilled people and those that we represent — the pipe fitters, plumbers, boilermakers, electricians and iron workers, are highly skilled. They work in a job that is transitory. They do not have a regular place of work but go to where someone wants something built.

There are only two ways to get the skills that people need in our industry. One is to receive training directly, most of which is funded by the federal government; and the other is through immigration. For us, what is in Bill C-50 is an interrelationship between immigration, employment insurance, training, mobility and the securities regulator.

The training that is given in our industry comes through Canada's apprenticeship system, which is second to none and a vital portion of what we need. Over the last couple of days, the Construction Sector Council talked about 250,000 new jobs in the construction industry over the next five years. There will be even more if you factor in the number of retirements that will take place, given that in our industry the average age is around 50 years.

Slowly but surely, the baby boom generation that we have counted on for our construction needs over the last 30 years will leave the scene. We do not have enough people to build everything that we are trying to build now. The industry has always been one of immigrants — permanent immigration and temporary foreign workers.

Part VI of Bill C-50 raises a number of policy concerns. In some cases, it might be easier to argue over the minutiae because the issues are too big or too difficult to grapple with. However, the vision for immigration in this country needs to be a system that is predictable, responsive, timely and manageable.

With respect, the provisions in Bill C-50 seem to be driven almost by whim. It represents a concentration of legislative power in the hands of the minister, which is both significant and, I would argue, potentially dangerous. You do not get a predictable set of outcomes cast into the future when the priorities of the Government of Canada change on a regular basis.

There is a very large investment in our industry in immigration. The investment is substantial to bring people to this country, either on a permanent or part-time basis, to undertake work in the industry. The system cannot change with regularity and should not allow government to choose winners and losers.

So that I am not accused of sucking and blowing on some of these issues, there are a number of things in the bill that we can support. If you look at proposed section 87.3(3), it is clear that there is an ability to create a number of classes of persons for immigration. One of the committees — and, I am not sure whether it is your committee or the House of Commons committee — heard some testimony recently from the government that talked about the Canadian experience class. That is a way to allow those people who come to Canada to work for a couple of years, get Canadian qualifications and who have a functional ability to work in the English or in the French language, to apply to become permanent residents of Canada. It is sort of a provincial nominee program run by the federal government. We support that program. It is a program that makes sense to us. Unfortunately, it is a work-around over the points system.

A person who has completed high school, gone on to become a journeyperson tradesperson in one or more trades and has some experience and wants to apply to come to Canada can never get in as a regular immigrant. They do not get to 16 on the so-called skills and education grid. If they took a degree in the meta-physical poetry of John Donne and barely passed, they can come to Canada and drive a taxi in Toronto. The plumber, the welder, the boilermaker — the people we need to help build this country — cannot get here. The Canadian experience class provincial nominee programs give us some work-arounds of the system, but it is not a system that values the skilled trades. We think there needs to be a broader discussion on the issue of immigration into this country.

The concentration of the power in the minister, to some degree, has the net effect of limiting the impact that both the House of Commons and the Senate can have in respect to immigration policies. It diminishes the ability of Parliament to be able to act. If there is to be a balance struck between family reunification and bringing trades people into the country, we would like to have a say in the debate. We think our elected representatives, not merely the minister, ought to do that. Any discretionary system with discretion to the minister and the minister alone, is hard to see. We are not left being able to clearly understand what the priorities of the minister of the day will be. In terms of a vision, predictability is gone.

I talked about temporary foreign workers. Our industry cannot survive the next couple of years without a significant number of skilled people who come here to help fill out the peaks. For the whole temporary foreign worker issue, there needs to be a system of checks and balances that will enforce how they are treated and what they are entitled to, which will determine their rights and entitlements. This is an incredibly important system, and nowhere is there a debate or a comprehensive review being undertaken.

In a transitory industry like construction, temporary foreign workers can be a short-term fix, but the real fix for this country comes through training and immigration. Training and immigration are the lifeblood of the 1.6 million person construction industry.

If you look at the issue of training, the Government of Canada reaffirmed its support for the apprenticeship and industry grant program in this budget. We agree with that; that is a positive step. It helps and assists apprentices in their first and second year and encourages their employers by a cash payment for having people in their first and second years.

If you look at the material that I circulated, pages 9 and 10, you will see the statistics that talk about a large number of people going into the trades but completions being flat. We need people to go into the trade, but we need them to complete it and get to journeyman status. A journeyperson is exactly that: Someone who has mobility and can undertake work anywhere in the country. We would like to see the apprenticeship industry grant program expanded. It costs about another $100 million, but it is a good investment for Canada.

If you look at the issues around enrolment and who supports apprentices, the Canadian apprenticeship forum has done a study which says that 80 per cent of all apprentices are produced by 20 per cent of employers in this country. The Government of Canada employs thousands of trades people, but only has apprentices on Her Majesty's dockyards in the East Coast and in the West Coast. Thousands of trades people but we are not producing any journeymen or apprentices from those trades people. The issue on immigration is not a real or sustainable fix.

Part 7 deals with employment insurance. Insurance is a contract of indemnity against a specified event. You pay money because you might become unemployed and, in the event of that situation occurring, you get a benefit.

In principle, we have no difficulty with the separation of the employment insurance fund from general revenue, but there are two major themes in employment insurance: the regular EI benefits and the Part 2 training benefits. That is, the support to apprenticeship, buying apprenticeship seats in the provinces and the apprenticeship industry grant. Whatever happens out of the implementation of Bill C-50, we want to be certain that the Part II money for training does not go away. It is absolutely vital not only to our industry but also to a number of them.

I will not bore you with, "Where did the $52 billion go," because everyone who is capable of conscious thought knows that the money is gone; the money has been spent. As a realist, we have to deal with that. There are two issues on EI: First, will Part II support be there; and, second, will the Government of Canada backstop employment insurance when the recession finally hits? The Chief Actuary of the commission, the Auditor General of Canada and the Chief Actuary of the Canadian Institute of Actuaries say that you need $10 billion to $15 billion in the fund to weather a significant recession. Two billion dollars does not cut it. We would be content with a couple of easy amendments to the legislation.

Clause 131 of Bill C-50, which amends section 80 of the Employment Insurance Act, is a discretionary clause. It reads "may". If that became "shall", doubtless we would be content. The governance of EI shifts to a board of seven people from the insurance or financial industries.

Labour and business are the people who pay the money in. If you pay, you should have a say in what will happen.

Not in the budget but important to our industry is the issue of mobility. Construction workers from New Brunswick work in Fort McMurray. They keep their home in New Brunswick — they send their wages home. It is the same in Newfoundland and British Columbia. The same situation prevails in Ontario where people who live in Toronto go up to the Bruce Peninsula to work on the nuclear plant. They may get some money from their employer to help tide them over, but in essence they subsidize their employment by keeping two homes.

If they were travelling salesmen, they could deduct the expense. If they were engineers, they could deduct the expense. If they incorporated themselves as Bob's Plumbing and Steam Fitting, they could deduct the expense, but as a worker, they cannot take the deduction. The tax treatment of Canadians who are forced to travel in this country should be the same for everyone. A truck driver gets the deduction as of the last budget, but our workers do not.

Studies have been done that I can provide to you if you are interested that show that this is a money maker for the Government of Canada and not a money loser.

My last point is on a common securities regulator. Capital markets drive capital projects. With 14 different security regulators in this country, it is hard to get construction projects off the ground and it is harder to develop policy. We are supportive of one system for Canada. We would also support one regulator for every pension plan rather than 15 pension regimes in Canada. We are supportive of that portion of the budget.

I would be pleased to answer any questions you have.

The Chair: On your final point, this is the first discussion we have had about the security regulation side of things. Where is that found?

Mr. Blakely: I believe it is Part 8.

The Chair: There are so many parts to this bill, as you pointed out, that things can be hard to find.

Mr. Blakely: Suffice it to say that we would like to have one common securities regulator.

Senator Di Nino: I agree with you.

The Chair: That would be an interesting debate, which we have not yet had, but I think we have got enough to debate now.

Mr. Blakely: That is fair.

The Chair: You mentioned workers from New Brunswick being in the West, and our first questioner will be Senator Ringuette from New Brunswick.

Mr. Blakely: Most of them will be going home. Irving is going to get on with the Saint John Energy Hub. Pointe Lepreau is going to go ahead. I understand from the New Brunswick building trades that they are having a tough time finding people there now, too.

Senator Ringuette: That is because they are all in Alberta. The situation is the same in Newfoundland. In 2004, I made a dissenting report to the Prime Minister. My recommendation 14 dealt with tax deductible travel expenses for workers. I certainly agree with your comments with regard to discrimination against various workers in this country. It is not right.

I have quite a few questions for you; some that you will be happy with and some that you will not.

Mr. Blakely: That is only fair.

Senator Ringuette: My first question is with regard to apprenticeship programs and opening by different unions to apprentice members. I do not know what the situation is across the country, but I have been told similar things, except in Alberta and B.C. I have been told that it is practically impossible, if you do not have ties through family or friends, to get an apprenticeship seat in a union. Is that correct?

Mr. Blakely: Yes, it is. Part of my job is to tell people across the country that we need people, that it is time we took people in. We need 20 per cent apprentices on every job in Canada simply to make up for the number of baby boomers who will retire in the next few years.

Senator Ringuette: Why are the unions in this country not adhering to that principle and giving apprenticeship opportunities to people who want them?

Mr. Blakely: In New Brunswick, Local 213 of the plumbers and pipe fitters union took in nearly 100 people on the King of Cats project in Saint John. Everyone got two years of work there. Once that job was over, there was nothing else and the workers never got to finish their apprenticeship.

There was no consistent work at that time. There is consistent work now, and we must take in apprentices, and I will do my best to ensure that happens.

Senator Ringuette: I know that in the Ottawa region all shops in all trades are closed, which is an awful situation.

Mr. Blakely: I agree.

Senator Ringuette: On one hand, we have Canadians who are willing and wanting to get skills training and to work in a trade, and they cannot. On the other hand, this morning the Department of Immigration said that the only way to get skilled people is via immigration. We have Canadians who can do those jobs.

Mr. Blakely: I agree. We have unemployed and underemployed Canadian youth who should be in those jobs. They are good jobs and good careers and they pay good money. However, we need immigration as well.

Senator Ringuette: I do not mind immigration. I agree that we need some immigration, but before we deal with the issue of immigrants, we should deal with the issues concerning Canadians.

Mr. Blakely: I agree with you, and we need to fix it.

Senator Ringuette: Can you not talk to your union people?

Mr. Blakely: I do all the time, and this is one of my favourite topics. I say, "No more country club. We cannot do this anymore. We need to get people."

As the work increases, as it is in New Brunswick, many more people will be taken into the trades, and they will not just be cousins and brothers.

Senator Ringuette: I fully understand the union situation, and you are a business union. The more members, the more money, et cetera. You need to understand that if immigrant tradespeople come into this country, it will not necessarily be for a unionized contractor. The best thing for you people is to get your hands on as many trades people as you can.

Mr. Blakely: You could be writing my speeches, because I use similar lines.

The Chair: Senator Stratton, from Manitoba, has a supplementary question on the issue.

Senator Ringuette: We are at odds on this. You were not here when he agreed with me, Senator Stratton.

Senator Stratton: I knew his position, because there is a tremendous shortage of skilled labour in the construction trades in particular. You cannot find drywallers and various other skilled trades people, and we need immigration.

I also agree with Senator Ringuette with respect to training.

For example, in Thompson, Manitoba, the Inco mine cannot find skilled miners; they have to go offshore. The trucking industry in southern Manitoba has to go offshore because they cannot find truckers. I think you recognize that.

What they are doing in Inco, through Western Economic Diversification, is developing a training program for Aboriginal youth so they can be trained to work in the mine, as miners, and still live in the region. I think we could push for that kind of thing, especially with the Aboriginal youth. That, to me, is critical.

Do you see any other opportunities that we could recommend to train youth, particularly in rural and remote areas? For example, in the diamond mine in the Arctic Circle, there are Aboriginals working there who have been trained in mining. They are earning really good salaries. Can you provide other examples?

Mr. Blakely: We have a number of diversification strategies. At Voisey's Bay in Newfoundland, 40 per cent of the jobs were Aboriginal people. We trained them on the site. The ones who went into the trades became the maintenance trades for the mine that is now going and for the future expansion. Others went into the operation side.

On a number of pipeline jobs, we have had a significant number of people who are going into the trades — becoming welders, fitters, whatever — and that will stay on the maintenance. In Fort McMurray, through Syncrude, we have had a very successful Aboriginal apprenticeship program, which has taken a number of people in, as well as a number of initiatives in the Wood Buffalo area with the Metis.

In British Columbia, there is the Aboriginal iron worker program. If you go across the country, we have been engaging with a number of people.

It has been hit or miss, I have to say. We did not understand something when we started. We thought we could say: You can be an apprentice and we will take you into the system. That means you leave Thompson; you go to Winnipeg, and five years later, if you want to move back there, you can. That was a mistake.

Senator Stratton: It does not work.

Mr. Blakely: No. There has to be a way to have the work, the training and the support systems that come from the community and the elders engaged. It is starting to come. If you believe the statisticians, for Saskatchewan and Manitoba, over 50 per cent of the available youth for the workforce in the year 2025 will be Aboriginal people, so we better get on the ball here.

Senator Stratton: I appreciate that, because you are thinking exactly the way I would like to think things are moving. The problem we have is that it is not moving fast enough with these kids.

Mr. Blakely: No, and there are missteps, I have to say.

Senator Stratton: I appreciate that, but it is nice to hear governments of both stripes have made real progress in this area.

Senator Ringuette: I am happy with Senator Stratton's question and your answer because it justified exactly what I was saying, that we have Canadians that have skills or have the potential to have skills and we should invest in them before crying out that we are in a dire crunch for skilled workers. We do have a need for skilled workers, but it is not a dire crunch, especially if you look at the current economic situation where, for instance, yesterday, another 1,000 auto workers in Ontario said they will not be working for probably quite a long time.

We have to have the vision and the policy to retrain those Canadians, if they want to and if they have to be trained. It is not an issue with the current government; it is an issue of short vision.

Mr. Blakely: If I could interject, what you are talking about is something near and dear to my heart, which is a national workforce development strategy, where we talk about how we will train Canadians, how we will use immigrants — I use that in the sense of come with your family and come to Canada — and how we fill the peaks in with temporary foreign workers.

Part of our problem, for my industry, is we need a big mass of people. We need them now. We need them fully booted and spurred, and the day they tighten the last bolt, we want to say goodbye and see them go. Problematically, unless we have a big-picture strategy to make that all work, our chances of being able to do this in nickels and dimes is zero.

Senator Ringuette: That is right. I guess we are on the same page here. We do not have a national strategy. We are doing these policies for 12 or 8 months at a time, which is bogus in terms of how we invest and how we see the future of Canada.

That was my downside question in regard to training and apprenticeship. Please tell your members to open these doors.

Mr. Blakely: We are on the same page, senator.

Senator Ringuette: What is your policy in regard to foreign credentials? How do you recognize them? Have you made some movement toward the recognition of foreign credentials?

Mr. Blakely: We are not the credential recognizer. There are a couple of ways of credentials being recognized. One is through the HRSDC. They set up the foreign credential recognition shop. It was in the last budget; it is just getting off the ground. The other is the provincial regulators.

For example, in New Brunswick, there is the apprenticeship board. I am trying to remember the name of the person; it has gone out of my head, but he is a bricklayer. They will do an assessment for free and will determine where someone fits. If there is a practical exam, they will do the exam. In Alberta, you have a credential review done. You pay $450 plus GST and they will say where you fit into the system.

We are basically getting there. The current system for temporary foreign workers and for immigrants is: if they are coming here, they have a year to get Canadian qualifications. Assuming they have a valid qualification from somewhere else, it is a year to write the red seal exam and you are in. That seems to be working.

Most of the unions have a program where they actually teach people — a program to Canadianize them. If you are an electrician who comes from Europe, you work in 220 voltage, not 110, and it is direct, not alternating current, so you have to relearn Ohm's law.

Senator Ringuette: Is that being done within your organization?

Mr. Blakely: Yes.

Senator Ringuette: I do agree with the need for predictability in regard to immigrants.

I mentioned that the people from the department in charge of the EI program came before us. I asked who would be on this new board, because on the current board, labour —

Mr. Blakely: Labour and business are represented.

Senator Ringuette: Yes, but it is not the situation in this new board, which will be totally —

Mr. Blakely: Insurance and financial is what it says in Bill C-50.

Senator Ringuette: Yes, which concerns me greatly in regard to the future, not only in regard to the investment that these people will be making, and the quantity of money they will have to invest, that is, the $2-billion safeguard that is not enough. If we bring people from the insurance industry, down the road we will probably see risk premiums to EI, if nothing has changed. I would like to have your comments on that.

Mr. Blakely: To some degree, we have risk premiums now. It is done with the denominator and numerator rule — or the devisor rule, although we do not call it that.

The difficulty I see with a board coming from the risk management industry is that there is not the same understanding that, at the same time as it is insurance, it is a social policy or social safety net network whereby we are really hedging Canadians against bad consequences.

Any time you take a program and say, "Operate this within the $2-billion cushion" — because they are required to work at break-even — the only way to do so, if you are at break-even and you do not have money coming in, is to cut benefits. You wither a program by doing that.

If you look at a number of similar programs in the United States, by cutting off contributions, you wither the program. Once the program withers, you can say, "This does not deliver what it is supposed to; let us get rid of it."

The Chair: Senator Ringuette, could I ask you to hold the rest of your questioning on this important point and let Senator Di Nino interject? He has to leave at 3:30 p.m. and he would like to get his questions on the record, if possible.

Senator Ringuette: Yes.

Senator Di Nino: I have another committee at 3:30 p.m. First, I want to thank you, Mr. Blakely, for your balanced presentation. You have expressed some concerns, and we appreciate and respect that. I think you have also made it very clear that this legislation will achieve some of the objectives that your organization is looking for.

Let me start with the EI. You made a comment that the governance of the Employment Insurance will shift. The creation of the Canada Employment Insurance Financing Board does not give it the responsibility to govern the program. I just wanted to make sure we put that on the record.

Mr. Blakely: I agree with that.

Senator Di Nino: Their only responsibility is to manage, in effect, to set the premiums and —

Mr. Blakely: Yes, set the premiums —

Senator Di Nino: — invest and so on. We agree with that particular point, then.

Mr. Blakely: Yes.

Senator Di Nino: That was just a clarification.

You spoke about back-stopping the Canadian Employment Insurance Financing Board. I wish we could find an acronym. We will call it "the board." This is a government policy which is the law of the country which, in effect means that, at the end of the day, if there is not enough money in that kitty, the General Revenue Fund will be used to pay that. We have had testimony on that basis from officials. I suspect that the minister, when we have him before us to look at the bill, will make the same comment.

Are you not of the same opinion there?

Mr. Blakely: I am a pipe-fitter by trade and a lawyer by profession.

Senator Di Nino: That is smart.

Mr. Blakely: Yes. I always regret that I gave up my good-paying job to become a lawyer.

I read the legislation. The legislation is discretionary. It says "may." I think it is Clause 131 which amends EI. If it said "shall," I would be happy and I would say we are done.

I appreciate that, politically, it may be difficult for someone to say, "We will not backstop the EI fund," but I would prefer a guarantee. The money that was contributed into EI reduced the deficit, it has helped balance the budget and it has become discretionary spending. I do not want someone to later say: "No more money for this." If it said "shall," I would be happy.

Senator Di Nino: We will get a clarification from the minister when he appears before us.

Mr. Blakely: I would be happy about that.

The Chair: What clause are you referring to?

Mr. Blakely: Clause 131.

The Chair: Clause 131 of the Employment Insurance Act?

Mr. Blakely: No, clause 131 of Bill C-50. There is a consequential amendment to section 80 of the Employment Insurance Act.

The Chair: Thank you.

Senator Di Nino: Let me switch for a moment to the other issue which you talked about: Immigration. This particular provision, if I read it correctly, is trying to accomplish a balance between the needs of Canada with the needs of new Canadians — those who we welcome as Canadians and as citizens of this country.

I think you made a strong statement. I am trying to remember the words exactly. You said that the industry could not survive the next couple of years unless we bring in some people.

Mr. Blakely: Yes, sir, I did.

Senator Di Nino: Am I quoting you relatively correctly?

Mr. Blakely: Yes.

Senator Di Nino: The changes that we are contemplating with this clause in Bill C-50 really address that issue. The minister is looking for an opportunity to be able to respond to the needs of Canada in a way that it can fill those needs, whatever they are across the country, with the skills, talent and the people who are needed. I want to know if you agree with that.

Let me make this other quick point. It is not only skills, talent and degrees. There are cases in some areas where just manual labour is required, as it has been in this country for years and years. It is important to understand that it is not only related to doctors, engineers, drywallers, bricklayers, electricians, carpenters and pipe-fitters who become lawyers. Lawyers we have too many of; we do not need any more.

It is also saying: In those parts of the country, we will need labourers. There are jobs that Canadians will not do, such as picking fruit or working as manual labourers.

Do you see it the same way I do? Am I seeing it right? Would you agree with that?

Mr. Blakely: When you are talking about vision, we are on the same page. Do we need people who are manual labourers, for lack of a better term? The short answer is "yes." Do we need people who are skilled tradespeople? The answer is "yes." However, those people do not get into Canada under the immigration system.

Senator Di Nino: I am suggesting they do not now, but if there is a need in some province or in some region, the minister — under the discretion that he or she would have — would be able to request that that kind of —

Mr. Blakely: No, sir, I would not agree with that. The minister has discretion to create certain classes. However, the points system, which is a regulatory system, has not changed. The point system remains the point system. If you do not fit, the minister has to go back to the Governor-in-Council and have the point system changed before she can do that.

Senator Di Nino: I will clarify that with the minister when she comes.

Mr. Blakely: The one thing the minister can do under her discretionary system is admit temporary foreign workers.

Senator Di Nino: She does so.

Mr. Blakely: Yes, she does. My vision here, or my want, is a long-term, predictable vision so that, if someone were to build a nuclear energy plant at Point Lepreau in New Brunswick, there is a guarantee that the workforce will be there today and five years down the road when it is in operation. If immigration is one of the components of that, there has to be more to it than simply the discretion of the minister of the day.

Senator Di Nino: Do you think Bill C-50 will be of some benefit to the needs of your organization?

Mr. Blakely: The Canadian experience class, which will be created by this bill, will be a benefit. It is a "work- around" of the point system. I would prefer that the point system to be changed, but will there be some benefit from it?

The short answer is yes.

The Chair: Can you explain how it is a "work-around" of the point system which you say continues?

Mr. Blakely: The point system is basically a grid that allows someone to mechanically determine the number of points you get. To get into Canada, you need 16 points on the skills and education grid. Twelve years of high school plus 4 years of university and you are in. Twelve years of high school plus two journeyman certificates, you have 12 points and do not get in.

The Chair: How is what you have been discussing with Senator Di Nino a work-around of that?

Mr. Blakely: The person comes in as a temporary foreign worker. If they get Canadian credentials, have two years work experience in Canada, are functional in English or French, then they can apply.

Do you remember the number Mr. Smillie? Was it 10,000 people they were going to permit?

Christopher Smillie, Policy Analyst, Government and Regulatory Affairs, Building and Construction Trades Department (A.F.L.—C.I.O.): I think Les Linklater indicated once fully operational, it would be 28,000.

Mr. Blakely: Does that include everyone, including university students?

Mr. Smillie: That is correct.

The Chair: Is this a proposal or something that exists now?

Mr. Blakely: It is a proposal.

The Chair: Is it in the legislation?

Mr. Blakely: Yes, it is. One of the sections speaks to the establishment of classes of immigrants and the Canadian experience class is one of those.

Mr. Smillie: It is section 118.

The Chair: Is this of the immigration act?

Mr. Smillie: It is Bill C-50. Section 118 amends the Immigration and Refugee Protection Act by adding to it a section 87.3(3):

For the purposes of subsection (2), the Minister may give instructions with respect to the processing of applications and requests, including instructions

(a) establishing categories of applications or requests to which the instructions apply;

(b) establishing an order, by category or otherwise, for the processing of applications or requests;

(c) setting the number of applications or requests, by category or otherwise, to be processed in any year. . . .

The Chair: That is certainly broad enough to do what you have described, but it does not describe what you had talked about earlier.

Where did you learn about the temporary worker program where if you are here for two years, get a certificate, et cetera?

Mr. Smillie: This past January, Citizenship and Immigration Canada had a consultation on a new class of immigration called the Canadian experience class. When the minister was speaking to the House of Commons Citizenship and Immigration Committee on May 13, she indicated that it will be rolling out this summer.

The Chair: Section 87.3(3)(a) is the broad power to establish categories?

Mr. Blakely: That is right.

The Chair: You are speaking of a specific category. I was asking you where you got that information and you now tell me that in January the minister indicated she would be creating this presumably under the power of this bill once it becomes law.

Mr. Blakely: Yes, sir. That is why we were supportive of this.

The provincial nominee programs will take some temporary foreign workers and turn them into Canadian workers. However, this is a federal program that we think is required.

The Chair: This is something the minister says she will be doing with this broad power. That is the point I want to make.

Mr. Blakely: Yes, sir.

The Chair: There is nothing in this legislation or any regulation that says it will be created.

Mr. Blakely: No.

The Chair: It is only the minister's promise that this is what she intends to do.

Mr. Blakely: If you ask me where some of the holes are in the bill, I do not want only to see discretion created. I would like someone to say to me, "here is what we are going to do," and actually set it out. That is part of this idea of having a broad, brush national strategy.

Senator Ringuette: It is a part of democracy.

Mr. Blakely: I think so.

The Chair: We as parliamentarians always get nervous about delegating power without some objective standards. That is why I am asking these questions specifically.

I apologize for interjecting, but I wanted to clarify that. You were talking as if this was in the act and it is not.

Mr. Blakely: No, it is a proposal that comes out of it.

The Chair: Senator Ringuette has the floor.

Senator Stratton: How long can she continue?

The Chair: There were many interjections. She has had about three minutes thus far because of all the interjections.

Senator Stratton: Okay.

The Chair: Senator Ringuette, you have the floor.

Senator Ringuette: In regards to your comments on the point system, Mr. James Bissett appeared before us as a witness on May 28. He has 36 years of experience as a Canadian ambassador and he said exactly the same thing. We do not need to change the current system. We only need to change the points system.

Mr. Blakely: That is a regulatory fix.

Senator Ringuette: The allocation of points in the system would be a regulatory change. Therefore, Parliament would have to look into this situation. There is an easy fix, but as you said, it is all about democracy.

You expressed concern with reason regarding the $2-billion reserve, suggesting that is not sufficient. You are not the only one to suggest this.

In your document, you state that $10 billion to $15 billion is needed as the Auditor General has indicated.

Mr. Blakely: There was that range between the chief actuary and the Auditor General. Therefore, rather than try to determine which one was correct, we simply included the range.

Senator Ringuette: Has the content of your document been discussed with your membership?

Mr. Blakely: Yes.

Senator Ringuette: All of these issues?

Mr. Blakely: Yes, it was part of our policy and legislative conference held in May. It is circulated widely throughout our memberships.

Senator Ringuette: Were there any resolutions coming out of those discussions?

Mr. Blakely: The report is all based on resolutions that we had at the conference the year before. We normally do the resolutions one year, and then we act on them over the next two years. Then, we repeat the cycle.

Senator Stratton: If I may, I will go back to the power of the minister. You wanted specifics defined. Could you give me an example?

My concern is that once you specify, you put a fence around the issue and that does not allow changes in the future by any minister or by any government.

Mr. Blakely: There are a couple ways in which you can enable discretion without concentrating it. Regulations can be changed by the government of the day going to the Governor-in-Council. That at least is examined by Parliament and parliamentarians. Regulations are relatively easy to change, but they are changed in the open where people must see it. They are transparent.

Discretionary changes are too internal to the department or to the minister. I would be content if Bill C-50 limited the minister's discretion and made the Government of Canada responsible for the changes with the Governor-in- Council.

Perhaps I am not putting this effectively but a concentration of power in the hands of one person or one entity can lead to capricious or absurd results. The risk is much less if more people must look at it and say, "I will put my chop on this or vote for it."

Senator Stratton: Did she not say that any changes would be vetted through the system, including you people, as well as gazetted.

Mr. Blakely: I am sure they will be gazetted because that is what the legislation says. Whatever vetting will occur through us and whatever consultative meetings take place do not cut it for me.

Senator Stratton: I can appreciate that. However, there is the gazetting. I am sure you will monitor so if there is a problem or concern and the minister has not approached you, you will do what is necessary, as I would do.

Mr. Blakely: Chances are pretty good that we will do that.

Senator Stratton: We will see what happens. I can see your point. If the issue is significant or important, I do not think it will be signed off arbitrarily and not properly vetted.

Mr. Blakely: Sir, some issues are important to the body politic.

Senator Stratton: Yes.

Mr. Blakely: Clearly, those issue are aired. However, some issues that are important to a narrow sliver of the population have a much tougher time of ever seeing the light of day.

Senator Stratton: We will have to watch that.

Mr. Blakely: Yes, sir.

Senator Stratton: I appreciate that.

Something bothers me in the sense of what we face in the short-term with job layoffs of large scale in the auto workers sector in Ontario and in the forestry industry. In my province of Manitoba, up in The Pas timber is not selling but pulp and paper are doing very well.

Mr. Blakely: That is after they closed one third of the mills in Ontario and one quarter of the mills in Manitoba.

Senator Stratton: I realize that, and all of a sudden Manitoba's pulp and paper industry is doing well.

If we are to deal with the job shortages, then we need to do something to retrain those people. Representatives from the Canadian Federation of Independent Business came before the committee and brought along many interesting charts and graphs. They send out a questionnaire to be filled in and dutifully sent back, and that is how they obtain their statistical results, which I found to be fairly accurate.

One chart is on the estimated number of long-term vacancies in small- and medium-enterprises by province. Manitoba had 13,000 and Ontario had 97,000 long-term vacancies. It was rather astounding when you think of that many jobs, in particular when you realize the pressures of the layoffs in the auto industry. Even New Brunswick had 17,000 long-term vacancies. It is rather astounding.

We can understand that this part of the bill because they cannot fill these vacancies. What will your role be to push government to have these individuals who are out of work, including in New Brunswick, retrained so they can fill some of these long-term jobs and vacancies.

Mr. Blakely: We have taken a significant number of people who were in the pulp mills in Northern New Brunswick and other areas such as Thunder Bay and Hearst. They are working in Fort McMurray. In some cases, these people already had skills and in others, we did a skill assessment. Part of our problem in retraining is that there are two competing governments. Provincial governments have one set of priorities and the federal government has another set of priorities. A kind of labour market meeting of ministers to try to bring some rationale to the situation is long overdue.

Senator Stratton: I believe, Mr. Chair, that the officials who appeared this morning spoke to that focus.

Mr. Blakely: It needs to happen in this country.

Senator Stratton: From what we heard this morning, we would agree that it needs to take place.

Mr. Blakely: Qualifications are part of property and civil rights, which defaults to the province. We have been trying for 60 years through the Canadian Council of Directors of Apprenticeship to rationalize the curriculum for the trades across the country but we cannot even rationalize the curriculum for the trades in the province of Ontario.

Senator Stratton: You are human after all.

The Chair: You are quite right: It is a provincial jurisdiction. The only thing the federal government can do is when they are transferring some money and to use that as a negotiating tool.

Mr. Blakely: There are the three different kinds of labour market transfers. Some are with no strings and if that is the case, you will not meet with success.

The Chair: If I may, I will confirm the discussion you had with Senator Stratton regarding the Canada Gazette.

As a lawyer, you understand the process with respect to regulations and that regulations under statutory instruments must be published in draft form so that people can read them in the Canada Gazette to have an opportunity to react and to make any proposed changes. They are published in final form after any changes made by the ministry, following which they are effective and in force.

Mr. Blakely: That applies to subordinate legislation.

The Chair: In this case, we have —

Mr. Blakely: — instructions.

The Chair: Yes, they are instructions, which is a strange process. Proposed section 87.3 (6) states: "Instructions shall be published in the Canada Gazette." It does mention draft form or say "before they come into effect." We have to look at worse-case scenarios, such that these will be published after the rules are in effect.

In this case, someone could make an application to come to Canada and the minister could reject them because she decides that she does not want this person in Canada. She rejects them and then publishes the rules and the categories in the Canada Gazette.

Mr. Blakely: I asked that particular question to someone in the department, to which I received a shoulder shrug in response. I understood the process for subordinate legislation, whereby it is published in draft form. I do not know what the answer is in this case. My fear is that the instruction will simply be published and that will be it.

The Chair: That is all it says in proposed section 87.3(6). We do not know if it will be published before or after it comes into effect.

Mr. Blakely: That is what a plain reading says. I am trying to remember if it is called the regulations act federally, but there is no process that I could find for instructions.

The Chair: There is the Statutory Instruments Act, but we also have a joint committee for regulations. Parliament is set up to review regulations and ensure that they do flow from the legislation and that they are all proper.

However, that is only if they fall under the Statutory Instruments Act, and this instruction is not one of those things. It is not following the same process. It is something new.

Mr. Blakely: That is the way I see it and it worries me.

The Chair: It worries me, as well.

Let me confirm that this new Canada Employment Insurance Financing Board that has been created will have no labour representation on the board.

Mr. Blakely: I cannot confirm that. All I can say is the act is specific. It says the people who will be appointed will have extensive experience in the financial and insurance industries. That cuts out most people who are —

The Chair: The act does not say there shall be representatives of organized labour on this.

Senator Ringuette: Nor of business.

The Chair: Yes. All of those programs we were talking about here — about training and how important training is and how that has been done in the past as part of the employment insurance scheme — are all gone, as I understand it.

This board has a very restrictive role, which is setting EI premiums, with a mandate to keep those premiums such that the premiums are enough to cover benefits and not to run any other programs.

Mr. Blakely: To break even.

Senator Ringuette: With a maximum of 13 per cent.

The Chair: The legislation provides that the board shall set the premium rate for each year in order to generate just enough premium revenue during the year to cover expected payments.

Mr. Blakely: Yes, Mr. Chair.

The Chair: There is no provision and there is no authority for that board to get involved in any training programs. We do not know what will happen to those training programs, but presumably, if there are any, it will be a government decision under HRDSC or some other government department. Is that the way you read this?

Mr. Blakely: Unfortunately, yes.

Senator Stratton: Those programs are already in existence. This board is to monitor and maintain the $2 billion. That is its sole purpose.

Mr. Blakely: Part 2 is funded out of EI. There is one pot of EI money; it is part 1 and part 2. There are a few other things, but leave those aside for a minute. On the two big pots, if it said somewhere in there that there would be enough dough to keep the training, part 2, and the regular benefits going, I would probably be a lot less nervous.

The Chair: It cannot. Under this legislation, there can only be enough money in premiums to cover the benefits needed.

Mr. Blakely: That is what it says.

The Chair: It is very clear.

The Chair: Whatever is in part 2 now will have to be picked up by the government somewhere else.

Mr. Blakely: That is the way I see it. Some of them will be under the labour market devolution.

Mr. Smillie: The market development agreements.

Mr. Blakely: Right.

The Chair: This will no longer be part of the employment insurance scheme.

Senator Stratton: To defend the government, that was very deliberate.

The Chair: Yes, as long as we understand it.

I am not saying whether it is a good policy decision or not; I just want to make it clear what it is. I am neutral on this, but I want us all to clearly understand the legislation the way it exists.

Do you agree with me on those points?

Mr. Blakely: I do, Mr. Chair.

Senator Ringuette: I have two short questions and perhaps a longer one.

First, the independent business community, small- and medium-sized businesses, can say there is a 17,000 long-term employee shortage in New Brunswick, but if you are looking to pay people $7 an hour, you will be looking a long time. I have worked for the Chamber of Commerce and I know how the retail sector, specifically, works.

My second question is at the beginning, you said you had 1.6 million members.

Mr. Blakely: No, I said there are that many workers in the construction industry.

Senator Ringuette: How many of them are members?

Mr. Blakely: If you look at the industry, you can take 400,000 out of there. They are the engineers, architects and technologists. Out of the 1.2 million that are left — people that work on the tools — we represent about 500,000. There are another 100,000 in the Province of Quebec that are organized workers that are represented under their system.

The Chair: Are they affiliated with you in any way?

Mr. Blakely: A portion of them are. The Conseil provincial, yes, the FDQ and the Syndicat québécois de la construction; the north shore and the south shore, no. We are about 45,000 in Quebec.

Senator Ringuette: For my last question, but not the least, in the last few weeks in regards to legislation — whether we are talking about training or about tax credits for Canadian workers travelling from one end of the country to the other — the central issue has been mobility.

In the late 1980s, the federal government removed itself from at least two incentive programs dealing with labour mobility. The first thing was the centralized data system matching available employees and wanting employers. That was central to the issue and should be part of the new strategic labour vision for Canada, if we want to work as one country and not as ten.

Mr. Blakely: I agree.

Senator Ringuette: Good. The other was the travel incentive to go outside the province. I cannot remember if there was —

Mr. Blakely: There were two. There is the one that they would pay your fare to go from New Brunswick to Fort McMurray, if you had a job. Then there was the other, which would help you with a temporary relocation.

Senator Ringuette: That is right. They were very successful programs in helping achieve the mobility that we want in this country for workers.

Mr. Blakely: Yes, and we lost that program because of half a dozen guys who got T-shirts made that said "UIC ski team."

Senator Ringuette: It all should be part of a new global national strategy in regard to labour.

Coming back to the issue of mobility, how does the AFLCIO deal with mobility of their union members from one local to another?

Mr. Blakely: Most of the unions, 90 per cent, have a system called a travel card system. If I am a member of the Bathurst local in New Brunswick and there is no work in New Brunswick, I take my travel card and go to Winnipeg local 254, which needs people to go to work up at Conawapa Rapids where they are building the hydro plant. I come there, deposit my travel card and go to work.

I work at Conawapa Rapids until I quit because I eventually get tired of being there or the job runs down. While I am there, my benefits accrue under the Manitoba agreement, and the Manitoba local sends them back to Bathurst, where they are credited to me. My family stays in benefit, my pension accrues and I am able to support my family at home in Bathurst.

Senator Ringuette: Have you ever put forth your organization's system, in how you deal with labour mobility in addressing labour shortages, to the department?

Mr. Blakely: Oh, yes. For the last five or six years, we have basically met the shortages anywhere by moving people from place to place. We cannot meet them now. We have sort of run off the rails in terms of that.

I was at the sector council's launch for their labour market information. The peak of what is happening and being built now will hit in 2010 and 2011. So we have a large gap between what we need and what we have.

Senator Ringuette: It is a temporary peak probably for four or five years at the most.

Mr. Blakely: Yes.

Senator Ringuette: It can be easily ascertained with good policy and good programs.

Mr. Blakely: Yes. One of the things we are doing now in New Brunswick is having a young man, Andrew Dawson, go to Maine and Vermont to try and recruit people. We will end up with temporary foreign workers from the U.S.

Senator Ringuette: We have many Canadians where I live who are living in Canada and paying income tax in Canada, but working in the State of Maine.

I want to thank you for your presentation and for your upfront comments on these issues.

Senator Stratton: Regarding the board itself, will you have input on who will serve on that board?

Mr. Blakely: To which board?

Senator Stratton: The Canadian Employment Insurance Financing Board.

Mr. Blakely: Apparently not.

Senator Stratton: My note says concerning EI financing that the EI Commissioner for Workers and the EI Commissioner for Employers will be given additional responsibilities as members of the nominating committee responsible for identifying and recommending qualified candidates for appointment to the CEIF Board of Directors.

Mr. Blakely: I am surprised if that is in the bill.

Senator Ringuette: It is not. It was in answer to a question I asked of the officials.

Senator Stratton: Yes, it was from the officials.

Senator Ringuette: They said they would consult.

Mr. Blakely: The problem is that Trish Blackstaffe who is the Commissioner for Workers is a great lady. However, in terms of having power to effect change, I suppose it would be like me recommending you for the Order of Canada. It would be a great thing for me to do, but no one has to do it.

Senator Stratton: This woman you are talking about would have input. In other words, she could recommend a name.

Mr. Blakely: She certainly could make a recommendation.

Senator Stratton: How else would they develop a list of potential nominees for the board without consulting?

Mr. Blakely: The act suggests that once they have a chair, the chair is responsible for coming up with the list of names and submitting them to the minister.

Senator Stratton: That is fairly normal. In most instances, whether it is a university board or a business, the chair usually consults and then picks.

Mr. Blakely: Yes.

The Chair: This may be of help to you. Clause 121(10)(1) on page 101 of Bill C-50, would be a new section of the act. It states that:

The minister shall establish a nominating committee to establish a list of candidates for proposed appointments as directors. The committee shall consist of a chairperson appointed by the Minister and of the commissioners referred to in paragraphs 20(2)(c) and (d) of the Department of Human Resources and Skills Development Act.

We do not have those paragraphs here. And,

121(10)(4) The Minister may remove the chairperson of the nominating committee at any time.

Mr. Blakely: Commissioners is a term of art in respect of the statute. It refers to the Commissioner for Workers and the Commissioner for Employers. That is in the act.

The Chair: That is the nominating committee.

Mr. Blakely: Yes.

The Chair: The nominating committee appoints the board members and the board members must be people experienced in insurance.

Mr. Blakely: Finance and insurance.

The Chair: I would think that is a restricted lot of people.

Mr. Blakely: We all buy insurance.

The Chair: I thought that may be of help.

Thank you, Mr. Blakely and Mr. Smillie. We appreciate your being here and having this free-flowing discussion. Unfortunately, a number of our colleagues had other committees to go to. However, before we finish dealing with this bill, it was important for us to have you here. I want to thank you for coming on such short notice and dealing with this so ably. The information that you have given us will be given good consideration and will be helpful for us in our deliberations.

Mr. Blakely: Thank you. We appreciate it.

The committee adjourned.

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