Proceedings of the Standing Senate Committee on
Social Affairs, Science and Technology

Issue 13 - Evidence - May 8, 2014


OTTAWA, Thursday, May 8, 2014

The Standing Senate Committee on Social Affairs, Science and Technology met this day, at 10:28 a.m., to continue its study on prescription pharmaceuticals in Canada.

Senator Kelvin Kenneth Ogilvie (Chair) in the chair.

[Translation]

The Chair: Welcome to the Standing Senate Committee on Social Affairs, Science and Technology.

[English]

I am Kelvin Ogilvie, a senator from Nova Scotia, chair of the committee. I will invite my colleagues to introduce themselves.

Senator Seidman: I am Judith Seidman from Montreal, Quebec.

Senator Stewart Olsen: Carolyn Stewart Olsen, New Brunswick.

Senator Eaton: Nicky Eaton, Ontario.

Senator Enverga: Tobias Enverga, Ontario.

[Translation]

Senator Chaput: Maria Chaput from Manitoba.

[English]

Senator Cordy: I'm Jane Cordy, from Nova Scotia.

Senator Eggleton: Art Eggleton senator from Toronto and deputy chair of the committee.

The Chair: I want to remind us all that we are meeting today on the subject matter of Division 20, Part 6 of Bill C- 31. We have two witnesses with us this morning, one of whom is here in the room with us, and that is Corinne Pohlmann, Senior Vice President, National Affairs with the Canadian Federation of Independent Business. By video conference, we are pleased to have, representing himself as an individual, Professor Arthur Sweetman, Department of Economics, McMaster University. By agreement, we are going to invite Professor Sweetman to present to us first.

Arthur Sweetman, Professor, Department of Economics, McMaster University, as an individual: Good morning. Thank you all for inviting me today. I appreciate it.

As a preliminary, it's necessary to understand that these proposed changes are a midpoint of an ongoing process. It's not possible to interpret them without both looking backwards in order to understand the motivation underlying the program of changes and how the current changes fit into the existing system, and also looking forward to speculate regarding how these changes might combine with subsequent elements of the program of reform.

In my view, which is clearly from an economic perspective, the program of reform that Canada's immigration system is currently undergoing is necessary. The system in place throughout the 1990s and the early 2000s was serving neither potential immigrants, new immigrants nor the Canadian population well. Over time, it became clear that the reforms of 2002, while useful in some dimensions, were not sufficient to address many long-standing concerns regarding the Canadian immigration system.

Focusing on the substantive changes of this division of Bill C-31, as I see it, they fall into three broad categories. They expand and clarify the operations of so-called ministerial instructions; they introduce provisions allowing for administrative monetary penalties for employers; and they bring to an end the federal investor and entrepreneur classes of the permanent immigration system.

With respect to the ministerial instructions, to date, I believe that ministerial instructions have been a useful tool in that they permit rapid changes, including responses to what I take to be unanticipated consequences from previous ministerial instructions. Such unanticipated consequences have, of course, been the norm historically in response to much legislation and regulation. What's new is the speed of response.

With respect to monetary penalties, although hopefully these need not be used very often, the current set of reforms to the immigration system substantially increases the influence of employers in both the permanent and temporary migration systems, and with power needs to come responsibility. Of course, the current proposal does not identify the nature of the system of penalties to be implemented but, assuming that the system is reasonable, the introduction of such a system seems appropriate as a counter-balance to the increased role of employers in immigration.

With respect to the federal investor and entrepreneur classes, in my mind, it's a reasonably clear move. Based on the research evidence I have seen, these classes have not served Canadian society particularly well. Bringing them to an end seems appropriate. Of course, it remains to be seen whether these will be replaced. My suspicion is that they will be replaced. Of course, there are questions about the quality of the system that will replace them, but this is speculative and looks beyond what is in the bill.

More broadly, it's useful to consider exactly what the problems are to which these proposed solutions are indeed solutions. One broad comment regarding the entire program of reform is that I sometimes fear we are pursuing a slightly mistargeted economic goal. While it is true that the economic outcomes of immigrants have declined appreciably over the past few decades, with a concurrent and very unfortunate increase in poverty rates, and that this is an important issue that needs remediation, it's not clear to me that we have the balance right in achieving the objectives set out in section 3 of this act that sets out the act's objectives.

At the risk of causing the eyes of those not interested in economic issues to glaze over, I believe there is sometimes confusion between maximizing the size of Canada's economic pie and concerns about the size and distribution of the pieces of that economic pie. Most economists would argue that an economic immigrant program should seek immigrants who are complements to the existing Canadian workforce, as opposed to substitutes for that workforce. I wonder if we do not sometimes lose track of this principle. This is a principle that I believe will be important for the ministerial instructions authorized under this bill, the system of penalties that will follow under this bill, and the design and replacement for the replacement of the federal investor and entrepreneur classes that are being cancelled here.

Thank you very much.

The Chair: Thank you very much, Professor Sweetman.

Corinne Pohlmann, Senior Vice President, National Affairs, Canadian Federation of Independent Business: Thank you for the opportunity to be here and share with you the perspective of small- and medium-sized companies. Specifically, I will speak to the expression of interest system that is sort of talked about in Part 6 of Bill C-31, and Division 20 of that. You should have a slide deck in front of you that I want to walk you through over the next few minutes.

First, CFIB is a non-partisan, not-for-profit organization that represents the interests of more than 109,000 independently owned and operated small- and medium-sized businesses across Canada. They represent all sectors of the economy and are located in every region of the country. Our positions at CFIB are actually based on feedback from our members gathered through a variety of surveys. I will be sharing data from a number of different surveys to help illustrate a little bit the importance of what we believe the expression of interest system will bring.

Let me start by saying that the expression of interest, or EOI, system is of great interest to small business. It has the potential to help address some of the challenges they face by better linking available jobs to potential new immigrants, which should help in dealing with the skilled labour shortages, but also ideally it will help to reduce processing times, assist with assessing language skills and foreign credential recognition, as well as provide new immigrants with more certainty that they will be work in their chosen field once they get to Canada. I would like to address each of these a little bit in the next few minutes.

First, I want to talk a little bit about labour shortages, which is actually a real and growing issue for many small firms in Canada. On slide 3, you can see CFIB's business barometer, which is produced monthly to track the business expectations of Canada's smaller business community. The latest barometer is from April 2014 and shows some improvement, with the index rising to 65.7 in April. Now, an index level between 65 and 70 usually means the economy is growing at its potential, but the recovery has been uneven, as you will see on the next slide. Clearly you can see here that some regions are feeling that things are going much better than other regions. Optimism among smaller businesses in the three most western provinces and, to some extent, in Newfoundland and Labrador, is quite a bit higher than in some of the more central and eastern parts of the country.

However, on slide 5, you can see hiring plans are getting stronger and have reached their highest point since before the recession, as 28 per cent plan to increase the number of full-time employees in the next three months, while just 6 per cent plan to decrease their staff in that time. In fact, plans to hire more full-time staff in the next three months are as high as 37 per cent in places like Alberta and Saskatchewan.

However, as hiring expectations get stronger, so does the concern with skills and labour shortages. When asked about what might be limiting their sales or production growth, almost one third cited shortage of skilled labour, which was second only to insufficient domestic demand, with another 16 per cent citing a shortage in lower skilled labour.

In fact, the vast majority of small business owners, as you can see on slide 7, in a survey that we conducted last fall, said they had experienced difficulties at hiring in the last three years, with about half of that group saying that hiring new employees had been very difficult for them.

My point in sharing this data is to illustrate that the shortage of labour is a real issue among many small firms in parts of this country. Recently there's been much debate about whether Canada even has a skills or labour shortage. I can tell you that, at the micro level, for many small firms in a variety of places across Canada, it is a very real issue.

So what are they doing about it? Smaller employers are trying a variety of methods to help address this issue, as you will see on slide 8. Many are expanding their recruitment efforts beyond their traditional regions, meaning going to other provinces or beyond their cities, and they are increasing wages, while almost half are adding flexibility in their hours and employee benefits before they even start to look at other options like recruiting outside of Canada. In fact, recruiting outside of Canada is so expensive and complicated that it is often a last resort of those that even attempt it.

What percentage actually tries to recruit outside of Canada? As you can see on the next slide, which is slide 9, it is very few. About 10 per cent have had experience with the temporary foreign worker program and only 5 per cent have attempted to recruit through the permanent immigration system.

That's why programs like the expression of interest program, which is meant to match the potential new immigrant with available jobs, is an important step forward. One of the biggest limitations of Canada's immigration system is that job offers traditionally did not carry much weight in the immigration selection process. Instead, there's been a much greater emphasis on education levels, resulting in many highly educated people coming to Canada, only to find that they were not able to get a job in their chosen field once they arrived, leaving many questioning why they even came.

From the small employer's perspective, it's been very difficult to find the needed labour overseas and, once they do, the process is lengthy, expensive and complicated, as you can see on slide 10.

Of those that did use this process, by far the biggest problem they faced was the delays in processing. When you need someone with specific skills, you cannot wait years for their arrival. You need them to help grow your business today. Another promising aspect of the expression of interest system is that the processing of a preapproved potential immigrant is sped up once there is an agreed job offer, hopefully reducing the processing times from many months or even years to weeks. This is another important aspect of the system that would greatly improve the process for small business.

Complexity is also an issue that keeps many employers from even attempting to try to recruit overseas. Part of that complexity is trying to find that person and assess their language skills and credentials to work in Canada, so it would be ideal if the expression of interest process helped to assess some of those factors as these can sometimes be complicated or difficult for small businesses to do themselves.

Why do they do it? Why does a small percentage try to even tackle the complexity and high cost of trying to hire someone from outside of Canada? In other words, why should a system like the expression of interest move forward? As you can see on slide 11, it not only fills a specific skilled or unskilled labour need at times, but also, more importantly, it allows those who do try to go through the process to keep their business open and employ Canadian workers, or even expand their business, which, in turn, helps to grow the Canadian economy, which benefits all Canadians.

We did test a number of concepts for the permanent immigration system with our members, as you can see on slide 12. We found that a system that would allow employers to choose from a national job bank of potential immigrants is viewed as having the most positive impact on small business. That is essentially the concept or idea behind the expression of interest system, though we understand that it may be slightly different, ultimately, in practice.

Ultimately, we will have to see what the final product will look like. From what we know so far, we believe that the expression of interest is a step in the right direction. In order for it to be effective, it has to be workable for smaller firms, so it must be easy to use and allow them to easily identify potential immigrants that have been already been preapproved. It would also be very helpful if preapproved potential immigrants would have their language and foreign credentials assessed to some degree. This would assist small firms in making their hiring decisions. For these reasons, we would like to see the EOI system quickly implemented. Thank you for this opportunity to present. I'll be glad to answer any questions.

The Chair: Thank you very much. I will now open the floor up to questions from my colleagues.

Senator Eggleton: Thank you very much to both of you. Let me start off by asking about the electronic system now being called ``express entry.'' The government official here yesterday used that phrase. It's the first time I've seen that. I take it that is what the branding will be for that system.

Let me ask Ms. Pohlmann about the dropping of programs. In this new system, we're also seeing a change in the programs. We are seeing the investor program being dropped. The entrepreneur investor immigration application is being dropped. Are you concerned about that? Is there a vacuum here? They are talking about a new program on venture capital coming somewhere down the road, but we don't know much about that yet. Are you concerned that there is a gap here in terms of people with dollars to invest and people who are entrepreneurs coming into the country?

Ms. Pohlmann: Yes. I'm not sure the current program that they are getting rid of was working the way it was intended to, so we have no issues with them looking for some new ways, because I don't think it was working as we had hoped it would.

Some of the other ideas that are being floated are interesting. We will see where the venture capital one goes. That's the start-up idea where, if you are a company from somewhere else and get support from an incubator or something in Canada, you can come in to invest a certain amount of money into some sort of high-tech type of venture. I think that we would be open to some other ideas.

We will see a lot of succession and turnover of businesses in the next several years as many business owners want to move out of their business and retire, and we'd love to see an opportunity to allow people who are willing to invest in a Canadian business that wants to move forward and can't find a Canadian investor to come in. That is another idea that we have floated as a potential other way to do the investment piece of the Canadian immigration system.

I'm not sure if that answers your question, but that's some of the direction we're going in.

Senator Eggleton: You are saying that, yes, there is a bit of a vacuum there that needs to be filled soon.

Ms. Pohlmann: Yes.

Senator Eggleton: Is your organization being consulted about all of this?

Ms. Pohlmann: Yes, we sit on a variety of different committees.

Senator Eggleton: About the new electronic system, express entry, as well as about other programs that will come under this system?

Ms. Pohlmann: Yes, as a result of sitting on some of these committees.

Senator Eggleton: What is your understanding, at this point in time, of this express entry program? As I understand it, people will apply electronically, and the programming on the system, not a human, will determine whether they qualify or how many points they have, as I understand it.

How will that work in terms of education, for example? There could be education requirements, but, on the other hand, they talk about equivalency. How does that machine, program, a computer program, determine that? Whether or not a person gets to even the next stage will determine how many points they get in that system. Does that cause some concern for you?

Ms. Pohlmann: I don't know how well I can answer that question because we don't know what it will look like ultimately.

Recognition of foreign credentials and assessment of language skills are things that are challenges in the system and for a small business owner to do themselves, so I don't know how it will be built. I think it would be an interesting question to see how it works in practice.

Senator Eggleton: Let me ask both of you about the LMOs, labour market opinions. It's become quite a controversy, particularly with respect of the temporary foreign workers and the abuse of the system. Not only is this key for temporary foreign workers, but it will also be key in this system here in terms of the skilled worker program, the permanent folks. How can we improve this system and make it better than what it is today?

The Chair: I'm going to go to Professor Sweetman first, and then to Ms. Pohlmann.

Mr. Sweetman: The LMO has been in place for quite a number of years, for both the permanent and the temporary migration streams, and there have been a number of changes, as you undoubtedly know, in the past year, making the LMO slightly what I would think of as tougher than it used to be. I think that those are, in some senses, very good changes. Historically, the LMO has probably, in my view, lacked sufficient teeth.

In my presentation, one of the key words I used near the end is ``balance,'' and I think the LMO is a crucial tool in obtaining the balance between the needs of existing Canadians and the needs of future temporary and permanent migrants. I think the LMO has, in the past, simply not been sufficient. It hasn't been up to the task. There have been some changes, and I think those changes have been good for the most part. We need to think even more about how we can make that LMO effective.

Think about the principle I raised at the end of my presentation. We need to think not only about the size of the economic pie, but also about the distribution of the pieces of that pie. That's where the LMO is absolutely essential. It is the main piece that, in some sense, balances the needs of the Canadian workforce against the needs of Canadian employers.

Maybe if I could come to some of your earlier questions about electronic, you know that the so-called express entry is only the latest in a series of steps where the CIC has introduced a new global management system. I think this global management system has overall been successful. There have been some issues, as there are with any computer system, but overall it has been quite good and has served new immigrants and the Canadian labour force quite well.

It still needs some tweaking: it's far from perfect at the moment and is clearly still under development, but I think we're moving CIC into the 20th century. I don't think we've quite made the 21st century yet, but at least we are not in the 19th century anymore.

In terms of people looking at things, even in the old system it was paper screening for 80 percent of applicants: only 20 per cent of applicants under the old system actually saw a person. Whether you have a person sitting down reading a piece of paper or a computer going through the tick boxes on a piece of paper doesn't make very much difference. Don't forget that things like credential recognition are not actually going to be done by the federal government. The federal government has subcontracted that to a series of agencies they have approved, and those agencies will be seeing people, many of the times, face to face, but will be going through the files carefully. Don't forget this is a multi-tiered system with many elements of that system sub-contracted and not being undertaken by the federal government.

Ms. Pohlmann: The labour market opinions were recently, as you know, tightened up quite a bit. I think also one of the factors in the controversy that has been happening recently that needs to be expressed is that we need to do more enforcement of the rules already out there, and I think that's part of the issue that's happening.

But there are regions in this country where there is virtually no unemployment, and there are pockets. Sometimes we have to think about what we're going to put an employer through where it's clearly an issue that they can't find individuals in their particular region because the unemployment rate is less than 2 or 3 per cent.

As part of the LMO you have to advertise across the country and for a certain amount of time. They've done that practice. That's sometimes the only solution in order to keep a company running within that particular region is to get the LMO, and this is for the Temporary Foreign Worker Program, of course.

Looking at things like unemployment rates is important as well, as part of the LMO process, but to further tighten it up will cause, I think, quite a bit of concern among many small business owners who are coming to rely on it.

Senator Eggleton: The idea and policy around temporary foreign workers have been around for a long time, and that's fine. It has gone through both Liberal and Conservative governments and that's fine, but lately it's gotten out of control. It's gone through the roof.

The kind of people you're talking about, fine, but when the number one occupation that these LMOs are approving for entry is food counter attendants, something is wrong here.

I'll leave it at that for now.

Senator Seidman: Professor Sweetman, if I might just go back to that moment you were describing about our eyes glazing over, and I think you were putting forward economic theory. You mentioned it in response to Senator Eggleton, the ``balance'' word. You said you feared we had lost sight of some things. I took it that you were referring to unintended consequences of some sort. Could you elaborate, please, on what you might have been alluding to?

Mr. Sweetman: I think the LMO is at the centre of this issue. I was thinking about contrasting a system designed to maximize the economic outcomes of new immigrants versus a system that's designed in accord with the objectives of the act set out in section 3 that talks about maximizing the benefit to all of Canada. Those two things are not necessarily the same. They can be, but they need not be.

The LMO is the tool that's meant to balance those objectives. What we want are immigrants who are successful, but not successful at the cost of the existing Canadian population.

The one thing we need to be aware of is that the component of the Canadian population who are most affected by both temporary foreign workers and new immigrants are the people who are, in some sense, substitutes for them in production. Those are the people who are most similar, and they tend to be recent immigrants. The people who suffer the most from the excesses of the Temporary Foreign Worker Program are recent immigrants. The tool that we have to protect those people is the LMO. I'm not sure that that tool has sufficient teeth to do its job properly.

Does that answer your question?

Senator Seidman: It really goes a long way to helping me understand an important issue. You've kind of left that hanging a bit. You've left a question mark at the end. Could you continue elaborating, please?

Mr. Sweetman: The LMO basically needs to ascertain that there's no Canadian eligible or no Canadian willing and with appropriate skills to undertake a particular job.

To give you some examples, according to the LMO process in 2012 — and I don't have these numbers in front of me so this is from memory — I believe something around 1,440 temporary foreign workers were admitted to the Atlantic provinces to work in fish plants because there was an insufficient number of people without a job who had skills to work in fish plants in Atlantic Canada.

Similarly in Newfoundland, we let in over 100 people to work as deckhands because there were no unemployed people in Newfoundland with skills appropriate to work on ships. That is the outcome of the LMO process at the moment. I find it hard to believe there is an insufficient number of people with skills appropriate to work in fish plants in the Atlantic provinces or to work as deckhands in Newfoundland, yet the LMO process says at the present that there are dramatic shortages of both of those types of people in those regions.

I take that as evidence that the LMO process is not working appropriately, is not protecting, in some sense, existing Canadians and giving them priority in looking for jobs. This is not to keep out immigrants; we certainly want lots of immigrants, but we want ones who are going into appropriate sectors that complement the Canadian workforce, not substitute for the Canadian workforce.

Senator Seidman: Is there something you would recommend that would ameliorate this potential unintended consequence?

Mr. Sweetman: Some of the changes made recently, I think, are moves in the right direction: to increase the length of time that employers need to advertise for Canadians; to strengthen the Canadian job bank; and to in some sense improve the quality of the matching between Canadian employers and workers and, in particular, those Canadian workers who are most similar to temporary foreign workers. I think we're moving in the right direction, but we still have a ways to go.

Senator Seidman: Thank you. I really appreciate that testimony. Thank you very much.

Senator Eaton: Thank you, professor. I was in Newfoundland a couple of years ago, and they said to me one of the great things was when they made high school mandatory kids weren't sent off on the fishing boats anymore at the ages of 10 and 11, and therefore they were going to higher skilled jobs. When you talk about fish cleaning in the Atlantic Provinces, are there some jobs that Canadians simply don't want to do?

Mr. Sweetman: There undoubtedly are. The question is getting the match right to maximize labour market outcomes for Canada as a whole. There are undoubtedly things that Canadians don't want to do. There are many things I don't want to do, and there are some things I have to do. We have to think that, as a society, not everyone can get exactly what they want, but we try to get everyone getting as much as they can of what they want.

In this case what we're thinking about is whether there are unemployed people with appropriate skills. Those unemployed people should find the best job they can possibly find. We should train people to find the best job they can possibly find and if that best job, for a short period of time, is working as a deckhand, then that's not a bad thing.

One of the things we seem to sometimes think in the background is that you have to be unemployed to search for a job. In fact, the economic evidence says that's not true. The best way to search for a job in many situations is while you are employed. I'm not saying that people should take menial jobs and stay there forever; I am not saying that a deckhand is a menial job, far from it; and I'm not saying that working at a fish plant is menial job, far from it. However, I'm saying that looking for a better job while you have a job that is less desirable for you is not necessarily a bad thing. In fact, taking a first job can be a very good step toward an improved, better job later on.

Ms. Pohlmann: I would like to comment on some of this discussion, because I think it is an important element to bring in the employer's perspective a bit.

I do believe there are jobs that Canadians just don't want, but those jobs still have to get done. We have many, many anecdotes of business owners who say, ``I would love to hire a Canadian. I will get five or six applications and bring them all in for interviews. One will show up and I will hire that person. They are there for either a week or two and then they move on to something else.''

It is very difficult for some sectors of our economy to retain people. For example, the quick service restaurant, which is the one that is controversial, has to be open during the daytime. They hire a lot of students, but students are in school during the day. They need full-time staff and sometimes it is difficult to find Canadians who are willing to do that type of work, or to take the shifts that are late at night, or do that kind of thing. That is where we are losing some of the debate that is happening there.

LMOs are there for a purpose. We believe in them. They should be upheld and be properly scrutinized, but the fact remains that there are a lot of Canadians who don't want do the jobs that are currently out there.

A public opinion survey was done recently by the Canadian Employee Relocation Council where they asked Canadians, ``Would you be willing to relocate in another part of the country for a job?'' Most said ``No,'' but of the 30 or 40 per cent that said ``Yes,'' only a quarter of them would do it for a substantial increase in rates and have everything paid for. Those are the types of challenges employers face. You will not get someone who is a former manufacturing person in southern Ontario to move to make pizzas in Estevan, Saskatchewan. That will not happen. These are some of the challenges employers face when it comes to this whole immigration system and the temporary foreign worker process.

Senator Eaton: Following along on what Professor Sweetman was talking about, namely linking jobs to employers and this pool that we heard about yesterday from our ministry officials, do you feel comfortable with that pool of invited people that will be put into the pool and then they will be matched to employers? Do you think that is a good idea?

Ms. Pohlmann: Yes. I think the employer has to make the selection. I think the government is making a pre-selection of who they should preapprove for potential immigrants. There are skills.

Senator Eaton: They do know what the jobs are out there?

Ms. Pohlmann: Yes, and ultimately it is the employer who will make the decision about that is the individual they will hire through an interview process. As long as they know they have already been preapproved, that process becomes a lot easier. A lot of our members who are using these systems would prefer to see a path to permanent immigration and to use the permanent immigration as a means to fill some of the skilled positions that they have and even some of the unskilled positions although that is not on the agenda at the moment for CIC.

Senator Enverga: Thank you for your presentation. This question is more for Mr. Sweetman, but I would like your comment as well, Ms. Pohlmann.

In a paper that you coauthored, Mr. Sweetman, you mentioned there is a shift away from the point system which leads to a type of prediction. Can you explain this to the committee and tell us how this new proposed system would affect this?

Mr. Sweetman: Can you say the middle part of your question again? I couldn't hear you.

Senator Enverga: You coauthored a paper with Garnett Picot wherein you stated that there is still a shift away from the point system which leads to a type of prediction. Could you explain this to the committee and tell us how this new proposed system should affect us? Should we worry about it more for the short term than the long term? What is your comment and proposal on this?

Mr. Sweetman: The new expression of interest system or the new system, broadly speaking, in contrast to the historic skilled worker program, for the most part is a move in the right direction. We are moving from a system that had one main category for economic class immigrants, the skilled worker program; to a system which has a portfolio of entry programs and a system that gives employers a lot more power, if you want to think of it that way. I actually think giving employers more power and influence in a system is a good thing. It needs some balance, but I think giving employers that power is good.

One of the main things we are changing in moving from a skilled worker program to an expression of interest program is a move from a minimum threshold program. That historic skilled worker program had a threshold, say, of 67 points. Anyone who got over 67 points was admitted. The new program is a competitive program. There is no minimum. People apply and you take the requisite number of people from the top of the list. It is not that 67 becomes a magic threshold. Rather, you take the required number of people, which are set each year in the levels proposal tabled in Parliament. You take the people with the highest scores effectively, or the most desirable people, from out of the queue to fill your quota, rather than having a minimum threshold with a quota which implicitly implies enormous backlogs.

Earlier, Ms. Pohlmann mentioned backlogs being a big issue. The new system will, hopefully, eliminate or dramatically diminish backlogs. Canada had an intake in recent years, before the recent changes, of roughly 250,000 new immigrants a year, but we had 450,000 people applying for those 250,000 spots. Of the 450,000 people, roughly 100,000 did not meet the criteria, but that still meant you had in excess of 100,000 people applying each year beyond the number of spots available, so a backlog emerged.

In the new system say, for example, 450,000 people apply. We want 250,000. We will take the best 250,000, and then next year a whole new set of people can apply. It is a completely different approach.

How do we choose who is best, is the issue. In the new system, it is a two-stage process. In stage number one, the federal government says: Do you have minimum criteria in terms of language and characteristics? In stage number two, people select from the approved pool. The people who select can be employers, provinces or the federal government itself. You have a much broader range of people selecting from this preapproved pool. Does that answer your question?

Senator Enverga: Yes; sort of. I have another part of the question.

Ms. Pohlmann: We like the new process and the fact that, as Mr. Sweetman said, it contains a variety of different ways that new immigrants can come into Canada and it eliminates the backlog, which is important from a processing speed perspective — plus, employers are now playing a role. In the past, as I said in my presentation, job offers did not carry much weight in the immigration process. Now it will have an important piece of that puzzle which will be satisfying for those new immigrants that come into Canada. In the past we brought in a lot of highly educated people, but often they could not necessarily find the work in their chosen profession and ended up being dissatisfied with their immigration experience. I hope that will help to alleviate some of those issues that we have encountered.

Senator Enverga: Mr. Sweetman, you mentioned age as part of the success in the long-term immigration process. Do you think the job bank should have an age component to achieve success? I have the same question for you, Ms. Pohlmann.

Mr. Sweetman: Again, I cannot quite hear you with your microphone. It does not seem to be working properly.

Senator Enverga: You mentioned as age as part of the success in the long term.

Mr. Sweetman: Oh, ``age.'' There are certain characteristics that are important indicators of long-term labour market success. Age is certainly one of them. If you look at the recent changes to the point system, the points associated with age have changed to emphasize young immigrants. Young immigrants certainly have greater labour market success in Canada than do older immigrants. It is not entirely clear why that has happened — and that has changed a bit over time — but clearly age is a very important characteristic for future labour market success in Canada.

Ms. Pohlmann: I really have nothing further to add. I would agree with Professor Sweetman on that.

Senator Chaput: I have a few questions regarding labour shortages and small business. This question has been addressed by some senators, but I have a few more.

If I understood correctly, when we talk about the shortage, it is not necessarily only the skills that are needed. That is one issue, but the other is because some Canadians do not want to do the kind of work that is needed, right?

Ms. Pohlmann: Correct.

Senator Chaput: Does the Canadian Federation of Independent Business have data with regard that? Do you have an electronic bank? Do you know the skills that are needed to begin with that Canadians do not have and also the jobs that you need to fill but Canadians do not want to do? Do you have this?

Ms. Pohlmann: We do have some data on the types of skills in demand by small business employers; I don't have the other side of that. I did not bring it with me today. It is part of some research we are currently finalizing and putting out. We divided it by low, semi and high skilled. It is sort of the A, B, C and D coding that is already being used with other government entities.

The biggest group is that apprenticeship, skilled college level type of area. Not far behind that is what we call semi or lower skilled, elemental-type labour jobs. Those are also in high demand. Again, it is certain pockets. There are pockets of the country where it is not an issue and there are pockets of the country where it is a big issue. Sometimes it seems to be in those more remote areas of the country as well as in the western provinces, in particular.

Senator Chaput: In order to do the matching or the linking that the government wants to do with immigrants, do you share that data with the government or have they asked? How does it work?

Ms. Pohlmann: Ours is aggregate data so it would be difficult for me to say. We do share that information. Certainly, we provide information to our members who call us looking for information on how to find people. We will direct them to the various tools out there, whether it is the Job Bank, or matching through the EI system, or other types of initiatives that can help them, co-op programs, or whatever. We do know which of those businesses are telling us that they have shortages, but we don't necessarily work with government to match them.

Senator Chaput: One of your recommendations is to make it easy for business to identify eligible potential immigrants.

If you were the federal government, how would you make this happen?

Ms. Pohlmann: I don't know what the ultimate design of this thing will look like, but if you are a small employer and you are struggling to find a Canadian to fill the position, and if you have done all the work and there is somewhere you can go where it is easily identified that someone from overseas has already been preapproved by the government. For example, you can go to the Job Bank and there is a list of the potential immigrants that have already been preapproved that you, as an employer, can potentially interview for the position. Their resume is there and you can see it. There has to be some way that people can easily see that this person is preapproved, whether it is through the Job Bank or through other types of job searching capabilities of software. It has to be easy for them to understand that this person is preapproved and for them to understand what that means for them as a business. That is, if they go with that person, then that person will go more quickly through the system.

Senator Chaput: How do you see your role as a federation with regard to what government does and what small businesses need? How do you see that?

Ms. Pohlmann: On an expression of interest system like that, we would widely promote it. Once we understood what it would look like, we would make sure that small business owners who are struggling to find people in certain skilled areas — and it will be focused on skilled jobs first — know how to find them and what they need to do for that. We would be very proactive in ensuring that small business owners looking for that kind of information are aware of it.

We have a number of ways to do that. We have counsellors and district managers; we have a big team across Canada who talks to business owners every day. We would try to help them in that regard.

Senator Seth: Bill C-31 will create a pool of prospective skilled immigrants. Do you think the creation of this pool will make it easier for employers to find skilled foreign workers? If so, do you think the end result will be that Canadians will lose opportunities to get jobs because skilled workers are already in the pool and they will be able to take those jobs rather than Canadians because they may work for less wages?

Ms. Pohlmann: With most of the LMO processes — and I understand that this process will still have an LMO component to it — you have to show how much you are willing to pay and that has to be approved by the government. That is my understanding. I don't know if that would even be possible under this system.

I think it would be easier. As I showed in my presentation, fewer than 5 per cent of small business owners at this point are even using the current immigration system to try to recruit people because it is so complicated and difficult to do. Right now, about 95 per cent of our members, if not higher, would much prefer to hire someone locally in their local community. They are the local businesses. They are the ones that want to keep their local businesses going and hire the people in their local communities. For the vast majority of them, that is by far and away the process they want to use first. In order for them to start using the current immigration system, they have had no choice. They have pretty much done recruiting everywhere they can and that is the point they will move to that system.

Mr. Sweetman: I will turn back to the skills-versus-labour-shortages question. I think we have not appreciated or not admitted to ourselves what I view, and what I think most academics and civil servants would view, as a mugs game.

If we go back and look at previous predictions of skill and labour shortages, and then we look at what happens in an area where those are predicted, we find they are wrong more often than right. We are not very good at this. The federal government traditionally said it was a hard thing to do and devolved it to the provinces. They said one of the reasons for the predictions not working very well at the federal level was because of regional differences or regional needs. That is a purpose for the provincial nominee program. In fact, most provincial nominee programs are having terrible times trying to keep track of skill shortages and are moving away from that themselves. Skill shortages and labour shortages, but especially skill shortages, seem to fluctuate dramatically over time and across regions, and it is very hard for any immigration system, temporary or permanent, to serve skill shortages very well.

We are getting a bit better on the temporary side, but the problem with serving skill shortages — and this brings us directly to your most recent question — is that you can actually not only bring down wages but also, in the long term, you can stop wages from going up. In my mind, that is the more serious concern. We, relatively easily, can design a system to stop wages from going down but, over time, we want Canadian standards of living to go up. The concern is that a temporary foreign worker program, if it is unbalanced and if it goes too far, can prevent people from increasing their standard of living over time. That is a very important concern from an economic perspective, because what we want to see in Canada is increasing standards of living, not stable standards of living.

Senator Seth: Do you think that it is easier for employers here in Canada to find foreign workers than Canadians? If so, why is that?

Mr. Sweetman: I am not sure it is easier for them to find foreign workers than Canadians. Some employers use a fair number of foreign workers even in regions where the unemployment rate is reasonably high. It makes some sense in regions like Alberta, where the unemployment rate is quite low, for employers to be using temporary foreign workers because there are, arguably, labour shortages. It makes far less sense in other regions of Canada, where the unemployment rate is quite high, for us to make the argument that temporary foreign workers are as needed. Yet, the LMO seems to be operating in such a way that it seems to be accepting the argument that there are widespread large labour shortages in Canada. There may be widespread skill shortages for particular skills, but I find it hard to believe that there are widespread labour shortages.

Ms. Pohlmann: Our data shows that 95 per cent of our members are hiring Canadians. It is far easier for them to hire a Canadian than it is to hire anybody through the temporary foreign worker program or the permanent immigration system.

As for the skills versus the shortages of labour, I will use the temporary foreign worker program, and it could be the same with the permanent immigration system. Many times, it's one or two key positions in a business that they cannot fill and, if they cannot fill those key positions, then all of the Canadians they employ are in jeopardy too.

I will give you an example of a restaurant, which is the controversial piece. We have an example, in the Atlantic provinces, of a member who runs a Japanese sushi restaurant. There is high demand and people want him to open two more locations. He can't do it because he cannot find the sushi chef he needs for that particular location. The demand is there. He is employing Canadians in every other aspect of the business. He cannot grow his business because he cannot get that one key position. You need to keep that in mind when we are looking at some of these issues. That is a more common use of the immigration system, both the temporary foreign worker and the permanent immigration system, than flooding your entire business with temporary foreign workers. I think it's most often used to fill key positions so that the Canadians that also work in those businesses are able to continue to work.

Senator Cordy: Thank you both very much for being here. This is excellent testimony, and it goes back to the fact that the whole issue of temporary foreign workers is a very complex issue. I think we would all agree that the program is necessary, but, Mr. Sweetman, you keep coming back to the whole issue of balance. I think that is extremely important. I think you also said earlier ``complements instead of replacements,'' which I thought was a good way to phrase it.

When we look at the program, we know that, in 2009, we had 280,769 temporary workers and, in 2012, there were 338,189. This was during the recession, yet the number of temporary workers increased in Canada, which was surprising data for me to read.

We also look at the way in which the types of skills of people who are coming in have changed. In 2005, we had musicians, singers, producers actors, directors, specialist physicians and, in 2008, we had food counter attendants, kitchen helpers, trades helpers, labourers and light-duty cleaners. So the types of jobs certainly changed significantly within a period of time.

I certainly agree with you, Mr. Sweetman, being an Atlantic Canadian senator, that, when I see that 100 temporary foreign workers were brought into Newfoundland to serve as deck hands, I find it very surprising that we could not find deck hands in the province of Newfoundland and Labrador. The same with temporary foreign workers being brought into Nova Scotia to work in fish plants. I find that unusual because fishing for many, many years has been a way of life for many communities along the ocean in Nova Scotia.

I was interested, Mr. Sweetman, in your comment that temporary foreign workers can keep wages from going up and that that would be part of the balance, because we look at the numbers of who came in when the recession was on. Could you expand on that a little bit? I think that is something that we haven't heard a lot about.

Mr. Sweetman: At the risk, again, of causing people's eyes to glaze over, most economic theory would suggest that prices or wages are set at the margin. It is not the average person that sets the prices in an industry; it is the marginal person. It is that last person that you entice into the job that sets the wage for the entire industry. It does not need to be a large percentage of the industry that are, for example, temporary foreign workers to affect the prices or the wages being paid to every single person in the industry.

By keeping the flow of workers who are willing to accept the current wage high, we prevent wages from going up in the future because the wage of the marginal person is the wage of the temporary foreign worker. In the LMO process, all it needs to do is not cause wages to go down. At least, that's currently how it is. It used to be, in the past, that it did allow wages to go down a little bit. The current version doesn't allow wages to go down, but it does not help wages to go up. If we want to be increasing the standard of living for Canadians, we want to be thinking about wages increasing over time and standards of living increasing over time.

If the LMO process, just to build on Ms. Pohlmann's comment, is working properly, it should be able to distinguish between the sushi chef, which was her example and which really is an example, in some sense, of a skill shortage, and the generic counter clerk, which is not a skill shortage but, potentially, a labour shortage. Then we need to make an argument: In the region, is there really a labour shortage? Do we need temporary foreign workers for those generic jobs? The LMO process, if it's functioning properly, is meant to be able to distinguish between those different types of jobs, and I am not sure that, at the moment, it is doing that adequately.

Senator Cordy: That is a very clear distinction you have made between skill shortages and labour shortages. When we look at the groups of foreign workers coming in 2005 compared to 2008, we see that the first group were, for the most part, skilled workers, whereas, for the most part in 2008, the change was made that they would be what you classify as labour shortages, where many people would be able to fill that job. That, I think, is an excellent distinction that you have made.

Mr. Sweetman: On a small technical point, it is worth saying that there is no temporary foreign worker program. Rather, there are temporary foreign worker programs, with an ``s'', and there is a wide variety of them. Some of them are subject to an LMO; some of them are not subject to an LMO.

As to the numbers that you cited at the beginning, I think that the trend is correct, but I suspect that the numbers themselves are wrong because I do not think that the federal government actually counts all of the temporary foreign workers who come into Canada. There are a number of streams, for example, temporary foreign workers under NAFTA or temporary foreign workers under the Canada-Chile agreement, where we don't really have numbers. We don't know how many people enter, because it is at the discretion of the border agent whether or not to tick off the box indicating that the person is a temporary foreign worker.

What our numbers measure, they measure well, but there are a lot of things that they don't measure. They tell us a very good story about part of the picture, but they don't tell us the entire picture because the program is much more complicated.

As well, work visas, for example, for temporary foreign workers in a high-skilled category, if they are married, their spouse would be issued a work visa. It's not clear, always, how those visas are counted. For some situations, they are counted one way. For some situations, they are counted another. We have no data at all about whether the spouse of the high-skilled temporary foreign worker who was issued a work visa ever exercised that work visa. We sometimes have good counts of how many visas were issued and sometimes not, but we don't know if those visas are ever acted upon or not. I would be very careful about taking those numbers very seriously. They need to be read as telling part of a story.

Senator Cordy: Does anybody know the numbers, the true numbers? Does government know the true numbers?

Mr. Sweetman: I think the answer is no. We consciously don't count certain types of things.

Senator Cordy: So there is no way to determine how many temporary foreign workers would be in Canada at any one time?

Mr. Sweetman: I think that it is very difficult. No, there is no good way.

Senator Cordy: Okay. I didn't realize that. I will call it temporary worker programs. Thank you for that.

Some stakeholders are concerned that the expression of interest program will not provide transparency. Do either of you share that concern?

Ms. Pohlmann: Transparency in what way?

Senator Cordy: So that immigrants would know exactly how their file has been dealt with.

Ms. Pohlmann: It is hard to say. I think we are still waiting to see what the final product will look like. I think it is difficult to comment until we see how it will actually be designed in practice.

Senator Cordy: Richard Kurland, who has appeared before this committee in the past, has suggested that perhaps there should be reports to Parliament, I would assume through a committee. He said twice a year. Would that be helpful once the program is in place so that we would get a better sense of how effective the program is?

Ms. Pohlmann: I'll go first.

Periodic reviews of the program are needed. That should be done with pretty much every government program. Analyses and reviews of anything new are a good idea, and we can make improvements as necessary or even eliminate it if it's not found to be working correctly. So, I wouldn't disagree there should be an evaluation done. Whether it's once or twice a year, I'm more neutral about.

Mr. Sweetman: There are two issues here. The first is on transparency. It's a two-step process at the moment. I believe the federal government's first step of the process will indeed be transparent — as transparent as the current system, at least. The second step of the process is the employer side, and that's where, if anywhere, there will be issues of transparency for us to understand why employers choose worker 1 as opposed to worker 2.

In Australia and New Zealand, where there are similar systems in place already, one of the complaints has been that employers choose people from — I'm going to call it — ``more traditional backgrounds'' than does the federal government. There is some issue of transparency in step 2.

The second part of your question has to do with reporting. Right now, there is an annual report of statistics, trends and patterns. If that were more frequent, that would be a good thing. There is also an issue of what's in the report. For example, there is no reporting on LMOs right now — or maybe I shouldn't say ``no reporting,'' as in recent years there has been some. The most recent numbers are for 2012, which is quite a long delay. The reporting is, in my mind, insufficient in the rapidity and the scope.

For example, we don't know how many LMOs were approved and not taken up. We don't have good information on that type of thing. There are many issues that are quite important where we simply don't have enough information in what reporting there is. So there are issues of the frequency of reporting. Increasing the frequency, especially on the LMO side, would be positive.

Then there is what I'll call the depth or scope of reporting. Increasing the scope would also be positive.

The more transparency you have, the better the system is not only for the Canadian public, but it forces the people managing the program to be aware of the operation of their own program by virtue of the public reporting. I think it increases management competence and public policy confidence.

Senator Stewart Olsen: Just a brief comment, if I may, on the testimony so far: It's been very good and very informative.

What I'm learning from a lot of your testimony is that when you put a program in place and set it up, you better darned well put in your quality assurance or close your loop, so you know how to monitor and see how it's going.

I have just a couple of questions for Ms. Pohlmann. Do you or your organization assume any responsibility for what happens in small businesses when these foreign workers come in?

Ms. Pohlmann: Do we as an organization?

Senator Stewart Olsen: Yes.

Ms. Pohlmann: No, we do provide information about what the Temporary Foreign Worker Program is about, but we are not involved in the process at all. That's something between the business owner and the government, obviously.

We bring the messages from our members to the government to help them design the program in such a way. We have been very vocal with the recent changes and controversies that have been occurring to ensure we don't go to an extreme in terms of trying to correct this, because there are good people out there using it for the right reasons. We want to ensure they don't get punished because of what are, allegedly, a few bad apples.

Senator Stewart Olsen: Yes, that is a given.

The example you brought forward on the restaurant owner — would it not be a better thing — the term is ``temporary foreign worker'' because it's temporary; they come in on a temporary basis. When you base your whole business on ``can I get this skilled person?'' I think you're setting yourself up for a disaster, because that temporary foreign worker would have to stay forever.

Why couldn't it be put in place where there would be some recognition that if you bring in, say, someone to be your sushi chef, why can't there be an obligation on your part to train a local worker to step into that position once the term of the temporary foreign worker is complete? I think there has to be some recognition on the obligation of people who use these foreign workers, or the program will continue to grow in ways that we probably don't like.

Ms. Pohlmann: There are two responses to that. One of the aspects to the changes to the Temporary Foreign Worker Program announced last summer — the first of the tightening of the program — included something called a transition plan that is not yet announced. Part of that is to require the employer to come up with a plan on how they will transition to a Canadian workforce. We have some concerns with that, because there are some areas where that will be difficult to do. But that is something we are watching closely, and we have our own ideas on how that will work. We are concerned it will create a huge amount of paperwork and burden, on top of everything else, but it does get at what you're talking about.

Second, there needs to be a better link between a temporary foreign worker and permanent immigration. The permanent immigration system has not been very accessible where it's needed. Why can't we take some of these people who are temporary foreign workers, who have successfully integrated into communities, who are living there, and who are fulfilling a need, and bring them in through the permanent system?

Through some provincial nominee programs, as well as something called the Canadian Experience Class, there have been those opportunities to do that, but it is much more limited and not always the easiest thing to go through. The Canadian Experience Class, in particular, is difficult for a smaller company to use. Most who do that go through the provincial nominee programs.

Senator Stewart Olsen: Professor, I tend to agree with you that it would be a better idea for employers who are searching for workers — the labour market really should think about increasing wages or bettering working conditions before going for foreign workers. Canadians expect that, and I think we should be doing that.

Ms. Pohlmann: May I comment on that?

Senator Stewart Olsen: Yes, of course.

Ms. Pohlmann: As part of my presentation, when we ask our small-business owners who have gone through the Temporary Foreign Worker Program process or gone that far, almost all of them have told us they've tried increasing wages, improving benefits, flexibility of hours and looking outside of their regions to attract workers. I don't want the committee to think that there has not been an effort to do that in recruiting Canadians.

On the wage issue, when you go through an LMO process, especially for the lower-skilled wages, you are told how much you're to pay those workers. There is an industry average given to you as an employer. The employer has no choice really but to pay the amount the government has told them to pay, and that's what they do. In some instances, it's sometimes higher than what they're paying their own Canadian workers.

These are some of the other things that are happening around this that need to be looked at more closely before we make the assumption that this will depress wages and so forth, because some of that is out of the control of the employer.

Senator Stewart Olsen: I'm not saying there are not really good parts and no necessity; I'm just saying we have to be vigilant with this program and address these issues.

The Chair: On that point, this committee did review that program with regard to the new rules. Indeed, one of the issues was the definition of the salary or wage that could be accorded and where it fit within the standards. This committee went through those in great detail, making sure that the bottom was not the standard; in fact, the concern expressed by many witnesses was that the average was being set too high in those categories when we reviewed it at that time.

That's a very important point that you've brought back to our attention.

Senator Eggleton: I thought Senator Stewart Olsen raised some good points.

In terms of what Professor Sweetman said earlier about distinguishing between skills shortage and labour shortage is quite valid. There are some skills shortages in some areas — not as many as we think there are, because if you look at the labour situation, there isn't a shortage. There are six people available for every job available in this country. As for Canadians not wanting to do various jobs, I doubt that there are many in that category. I know in Toronto, for construction workers they traditionally get them from overseas and, yes, perhaps that's an example. But I think a key part of the problem is that a lot of these jobs just don't pay a living wage.

You may say that some people are trying to up the salary or whatever, but the indications are, from the studies done, that with precarious employment we are going in the opposite direction: fewer full-time jobs, more part-time jobs, more people on contract, fewer benefits. For some people they may say, ``Better to stay on the social assistance system. At least you get some benefits and medical assistance and such.'' I would like to hear your comments on how much a part of the problem you think that is.

Ms. Pohlmann: This is obviously the debate that's been raging and it's the undertone of everything that's been happening. Again, I'm talking from the small business owner's perspective and they are often working at very thin margins themselves, not making a lot of money. They are dealing in very competitive markets, especially in some of the service-oriented types of professions and so there are limits to what they can pay in that capacity and how much the market will bear in terms of increasing pricing. Those are some of the challenges they face, so it's difficult.

If we take the retail sector, if you are a small retailer competing with big-box stores, there is only so much you can increase the pricing to accommodate the salaries you're paying. Those are some of the challenges they face with these issues and they are doing their best.

We had many examples during the recession-era years where employers were not paying themselves, just their employees. It's a broad brush that you're painting with and I don't think this is necessarily the case everywhere. They're doing their best and, for many of them, hiring a temporary foreign worker or a permanent immigrant will allow them to keep their Canadian workers and keep them employed.

Ultimately, many of them will close if they have to pay a lot more because they will not be able to compete in their local markets. That takes away jobs from a lot of the other folks as well. In our consumer markets, we're looking for 24-7 quick service restaurants and coffee at all moments of the day.

Senator Eggleton: Why don't we bring in more landed immigrants rather than temporary foreign workers —

Ms. Pohlmann: I agree that, let's do that.

Senator Eggleton: — who could be easily abused. Not that I think you would advocate your members abusing them, but they are subject to more abuse.

Ms. Pohlmann: We totally agree. We believe we need to find an avenue to make those people more permanent. We have ideas about giving temporary foreign workers a bill of rights and making sure they are aware of that bill of rights when they come in. These are the ideas we are trying to push with the government to find ways to get through this so it can be more equitable. We don't condone any of what's happening out there. If those employers are found to be abusing workers, they should be prosecuted and never allowed to do those things again.

Mr. Sweetman: You made a number of interesting points. The interaction with social programs is particularly important. Clearly the current government thinks this is an important issue. If we think back to changes in the EI program of a year and a half ago, we see that's an initiative by the current government to try to address some of the issues that you're raising about whether social assistance programs — not only provincial social assistance or income assistance programs, but also the Employment Insurance program — are interacting with the Temporary Foreign Worker Program by encouraging Canadians, subsidizing Canadians, not to take jobs. Clearly the interpretation of the spin I'm giving is the spin the current government gave it in making the changes they made a couple of years ago to EI.

Let's change gears a little bit. A number of years ago we brought in, as a country, the Working Income Tax Benefit, which was essentially a copy of programs in other countries around the world, the EITC in the United States being the most well known. It was brought in as a small program to address exactly the issues you are raising. It was supposed to be expanded and then the recession hit and the expansion never happened.

To address the issues you're talking about — jobs not paying a living wage — combined with what Ms. Pohlmann talked about with what the market will bear, you need something that bridges the gap, and the Working Income Tax Benefit or something like it can bridge that gap. Maybe we need to turn our attention to the interaction of programs like that with immigration.

Turning to a slightly different point you raised about bringing in new immigrants, many economists have publicly stated that at the moment it's not a great idea because the labour market outcomes of recent new immigrants have been quite poor, poverty rates have been high, employment rates have been low, and wages have been low. Why do you want to bring in more people when the people we're bringing in right now are not having fantastic levels of success?

I think what we want to do is first fix the system so that arriving immigrants have high levels of success, and we have to define what we mean by success, of course. We need have a system working well and, once immigrants who are arriving are doing well, then we can have the discussion about increasing the size.

In terms of your opening comments about more part-time jobs and the like, I would be careful because the data is not quite as sensationalistic as the front pages of the newspaper. On the changes we say we see, something is there, but the newspapers seem to like add exclamation points and a lot of bold font to something that is maybe a smaller and quite not so substantial change.

Senator Eggleton: You should talk to Professor Lewchuk at your own university. He's done a lot of work on this matter.

Mr. Sweetman: I talk to him regularly. I understand there are some points of difference.

Senator Seidman: There are still a couple of outstanding issues in my mind — probably lots of them — but one I would like clarified and one that hasn't arisen yet.

Professor Sweetman, you talked about getting the match right and how that was so important. There is no question that the express entry system gives employers a larger role in the selection process. If you could please be clearer on what you meant about getting the match right, I would appreciate that.

Mr. Sweetman: I think one of the problems in Canada is that we have not always been very good about getting the right people into the right place. Let me give you an example. This is one of my favourites because my day job here is actually not immigration; it's working on health human resources. Let's focus on something I know about: physicians.

In Canada, right now physicians are on the list of occupations that are in shortage. It turns out that in Ontario we actually have an excess supply of immigrants attempting to attain licensure as physicians in Canada. In Ontario last year there were roughly 200 spots for which 4,000 people applied.

Simultaneously, there were serious shortages in Newfoundland and Saskatchewan. The surplus in Ontario is mostly in Toronto. There are maybe some shortages in Ontario, but they tend to be in the north. We have a lot of difficulties getting the right people to the right places with the right skills.

The provincial nominee program is a program that attempts to address that to a certain extent. My view is that all occupations that are primarily employed by the provincial governments — for example, teachers, social workers, physicians, nurses — should be taken out of federal responsibility and put into the provincial nominee program so that it's very clear that there is a shortage of physicians in Saskatchewan and Newfoundland, but there is not a shortage of physicians in Ontario, especially in southern Ontario. I think getting that geographic match right and getting the skill match right is very difficult. The way we can do that, in part, is by putting the right occupations and the right skills into the right programs.

So the provincial nominee programs should deal with certain types of occupations, and the federal program should deal with other types of occupations. We should design a system that is responsive nationally for issues that are national, but regionally for issues that are regional. Historically, almost everything has been handled at the national level, even though a lot of the problems and shortages have been regional. I think we're slowly moving to regionalizing the system. I view that as a good thing. I think we're half way there and we need to move a bit further.

Senator Seidman: What you are saying, then, is that right now the system doesn't distinguish in regional differences; is that correct?

Mr. Sweetman: That's correct for occupations listed under ``Ministerial Instructions'' in the federal system. There is no distinction there. The provincial nominee program obviously makes a distinction and the issue is which occupations should be in the federal program and which occupations should be in the provincial programs? We haven't quite got that balance right.

Senator Seidman: That is really helpful and it leads me into my second question, which has to do with the foreign credential recognition and how it's incorporated, or not; how it dovetails with the express entry system.

Mr. Sweetman: The government has, for quite a number of years, been making very substantial efforts to improve credential recognition. You can see it not only for high skills, but especially you can see it in the skilled trades program, where getting credential recognition from an appropriate credentialling body is part of the immigration process. You will see is it in the high-skill program where credential validation or verification has been introduced or is being introduced as part of the immigration program.

This is something that's being fixed as part of the expression of interest program, but also somewhat independently of it, in the sense we're fixing this a little bit before introducing the expression of interest; and the expression of interest should be able to make use of better credential-recognition processes being developed currently.

Again, I don't think these things are working perfectly, because the federal government is trying to do work around credential recognition. You'll notice that their office is called the ``credential recognition referral office,'' because at the end of the day the federal government has limited authority; it can only refer immigrants to provincial governments because the vast majority of regulated professions are regulated by provincial governments, and that is a complicated hodgepodge of systems that is slowly coming together, but it's a slow process to get coordination across provinces.

Senator Eggleton: There is a lot of controversy about things that go on with respect to immigration, whether it's the Temporary Foreign Worker Program, Skilled Worker Program and the LMOs. Some things have been done well; some things have not. We've got a lot of things coming ahead, like the electronic express entry system, that give us some hope about things being better; there are still a lot of unanswered questions about how that will work.

Is there anything that you would suggest to help there be better parliamentary oversight, transparency and accountability — transparency and accountability by this committee, too, in terms of dealing with these issues — that would help us get a better handle on that? A lot of it is left up to the minister, regardless of who the minister is or what party is in power. I keep seeing a lot of things left up to the minister.

We need that accountability, transparency and oversight. Do you have any suggestions on how we can improve it in regard to these immigration issues?

Mr. Sweetman: I think we have, in some sense, addressed this a little bit already. The central key to oversight, in my mind, is reporting; and if we have more frequent reporting and broader scope of reporting, that would be crucial.

There is a second step that we haven't talked about related to reporting and that is almost all the reporting we get right now is very short term. The truth is immigration is a long-term issue. When firms nominate an employee, they can lay that employee off. Canada cannot lay off its citizens. When Canada looks at the immigration system, it is looking at a long-term relationship with individuals.

When an employer looks at an individual, a potential worker, it might be a long-term relationship, but it might be a short-term relationship. We need to think about reporting that's not only short term but very long term. How are people who are arriving today doing six months after they arrive and five years after they arrive?

It turns out that some of the programs with good short-term outcomes have less good five- and eight-year outcomes. We need to think about frequent reporting, broad scope of reporting, but also reporting not just on what happened last week, but what we can learn from what we did five and ten years ago.

Ms. Pohlmann: I agree. Reporting and measurement will be the key to oversight going forward. There have been a lot of changes, not just the express entry system that is coming, but there have been new classifications such as the Canadian experience class, the skilled worker, the skilled trades class, and the removal of the investor program and perhaps new programs going forward. All of these should be measured and reported on regularly to ensure they are working, so we don't have these programs 20 years from now and suddenly say, ``Oh, they don't work.''

That's the key to all of this, that going in and developing all of these new elements, which we support because we think you need to experiment and try new things, but part of that is making sure you are reporting and monitoring it closely and making public those activities so that people not only within the CIC are aware of it, but people outside of CIC are aware of it and can keep them accountable.

The Chair: I would like to make a couple of overall observations, and one of them you both touched on, but, Professor Sweetman, you mentioned it explicitly twice during your comments today, and that is the issue of the challenge to anyone — and you were referring to governments — predicting skills shortages with considerable accuracy.

Having spent my career in an academic environment, I can point to the challenge of provinces predicting teacher numbers and demands, and we both know the incredible accuracy they have achieved in that area — I'm speaking facetiously, of course — and the many changes they brought in that invariably led to more complications rather than improvements.

Your comment that transferring some of these calculations of needs to the provinces and put them in that category is, in principle, on paper at least, a better solution closer to the source of the actual issue. I hope your optimism is correct that they are going to be better at predicting those numbers.

I take the doctors' issues, for example. We have examined the health care system in the country in a number of ways before this committee, and one knows if one simply takes the total number of licensed physicians in this country and divides it by the population, there is no reason for anyone not to have easy access to a general practitioner. The reality is, of course, that is not the case. It comes down to what you both indicated — distribution. Therein lies the real rub: How do we distribute talent across the country?

We have seen, in the part of the country I come from, the two issues that have been raised this morning: The shortage of deckhands and the shortage of fish plant workers.

We know that changes in the EI system were designed, as you pointed out, to try to address some of these issues where it is required for an individual to actually show that they have been looking for employment in the region and to deal with some of these issues.

Finally, I would urge each senator on this committee to speak to a local SME. My guess is that they will hear things very different than they will hear from the bland analysis of statistics with regard to who is available and who isn't at any given time. I can tell you that from my own experience in my own community, real life is quite a remarkable situation in comparison to what we see from a generalized point of view.

As Senator Stewart Olsen has indicated, you both brought very important dimensions to the issue we have before us. Very clearly, everyone seems to be working towards a common objective; but it's a very complex set of dynamics.

The simple example of the sushi chef is one. It is not impossible to train sushi chefs in Canada, or anywhere in the world, but to have them available at the moment that the company is expanding is not necessarily something that there is a supply there. The transition from that expansion into the ongoing permanent situation in the Canadian labour market is an important part of the dimension, but it is part of the real world in terms of how one can deal with that.

On behalf of the committee, I want to thank you both for your contributions to our deliberations on this matter.

I declare the meeting adjourned.

(The committee adjourned.)