Proceedings of the Standing Senate Committee on
Social Affairs, Science and Technology
Issue 14 - Evidence - May 15, 2014
OTTAWA, Thursday, May 15, 2014
The Standing Senate Committee on Social Affairs, Science and Technology met this day, at 10:28 a.m., to study the subject-matter of those elements contained in Divisions 11, 17, 20, 27 and 30 of Part 6 of Bill C-31, An Act to implement certain provisions of the budget tabled in Parliament on February 11, 2014 and other measures (topic: Divisions 17 and 30 of Part 6).
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'm Kelvin Ogilvie, senator from Nova Scotia and chair of the committee, and I'm going to invite my colleagues to introduce themselves, starting on my right.
Senator Seidman: Judith Seidman from Montreal, Quebec.
Senator Stewart Olsen: Carolyn Stewart Olsen, New Brunswick.
Senator Eaton: Nicky Eaton, Ontario.
Senator Enverga: Tobias Enverga, Ontario.
Senator Nancy Ruth: Nancy Ruth, Ontario.
[Translation]
Senator Chaput: Senator Maria Chaput from Manitoba.
[English]
Senator Cordy: Jane Cordy from Nova Scotia.
The Chair: I will remind colleagues that we have two sessions this morning, each session lasting one hour. We begin this session dealing with the subject matter of Part 6 of Bill C-31, and specifically, today, we will be looking at Divisions 11, 17, 20, 27 and 30. That's what we have left to consider. If we're very efficient, maybe we could do them all today.
The committee this morning in this session will be examining Divisions 17 and 30. Division 17, the first one that we will look at, is unpaid leave under the Canada Labour Code and sick benefits under the Employment Insurance Act.
In that regard, we have two panels. First, from Employment and Social Development Canada, Annette Ryan, Director General, Employment Insurance Policy; Jean-François Roussy, Director, Employment Insurance Policy; and Laurent Quintal, Assistant Director, Strategic Policy. From Federally Regulated Employers - Transportation and Communications, we have John Farrell, who is Executive Director.
By agreement, I will invite Ms. Ryan to present first.
[Translation]
Annette Ryan, Director General, Employment Insurance Policy, Employment and Social Development Canada: Good afternoon, Mr. Chair and distinguished members of this committee. I am pleased to appear here today to speak to you about Division 17 of Bill C-31, which provides enhanced flexibility for Canadians taking care of ill family members to access employment insurance sickness benefits.
[English]
For providing you context on the amendments in the proposed Bill C-31, I will briefly review the Helping Families in Need Act tabled in September 2012, which did three important things to improve the suite of special benefits under the Employment Insurance program in terms of supporting families.
First, that act established a new benefit for parents of critically ill children, whom I will refer to as PCIC. That benefit provided up to 35 weeks to support parents who take time away from work to provide care or support to a critically ill child less than 18 years of age.
Second, that bill provided a new flexibility for Canadians receiving parental benefits to suspend parental benefits and access sickness benefits if they become ill or injured while on parental benefits and subsequently return to parental benefits as applicable.
Third, that act amended the Canada Labour Code to protect the jobs of parents who take a leave of absence to care for a critically ill child, injured child, and the jobs of parents who are murdered or missing as the result of a suspected Criminal Code offence.
With the coming into force of the provisions of the Helping Families in Need Act on March 24, 2013, the government essentially changed the rules for Canadians receiving EI parental benefits so that they can now access sickness benefits. The objective behind this amendment was essentially to bring greater flexibility and responsiveness to the EI program for Canadians caring for these young children.
What the new measures before you today in Division 17 of Bill C-31 intend to do is further extend this flexibility for parental benefits to other types of special benefits we offer under the Employment Insurance program, in particular to allow parents who receive PCIC benefits or compassionate care benefits to similarly suspend their benefits, access sickness for the time they need it and subsequently return to their original benefit. The objective for this is to allow temporary income support to take care of vulnerable family members, essentially.
I will add again that the sickness benefits have an applicability of up to 15 weeks.
Based on our estimates, this change is expected to benefit approximately 300 claimants per year, with estimated program costs of up to $1.2 million annually. There are moderate administrative costs that would be absorbed within existing reference levels to the order of $109,000 per year on an ongoing basis.
Essentially, the proposed legislative amendments would not cost a lot of money but are intended to provide additional income support and flexibility during very difficult periods in family life.
I will also note that for women receiving EI maternity benefits, they are not eligible to suspend their benefits in a similar way, and I will pause on that for a moment.
Maternity benefits provide income support for a 15-week period surrounding child birth to allow recovery from the physical or emotional effects of pregnancy and child birth. Because sickness and maternity benefits both share this element of supporting physical and emotional recovery with income support, the logic isn't the same as providing sickness benefits for parental claimants.
That said, what was done with the Helping Families in Need Act was structure benefits so that in a case where a new mother has an illness that continues beyond the 15 weeks of her maternity benefits, she can now, with the new legislation, switch to sickness benefits once she would otherwise be in receipt of parental benefits, which results in the possibility that she may collect up to a maximum of 65 weeks of special benefits. That amounts to 15 weeks of her maternity benefits, plus 15 weeks of sickness benefits, plus the maximum of 35 weeks of parental benefits. The ability to combine these benefits in this way was not available prior to March 2013.
I'll also add — and my colleague is here from Labour Canada — that we are bringing changes to Part 3 of the Canada Labour Code in order to fully align existing leave provisions, particularly those regarding compassionate care leave and leave related to critical illness with the associated EI special benefits.
More specifically, these amendments would clarify that compassionate care leave and leave related to the critical illness of a child can be interrupted in order to allow employees to take sick leave, work-related illness and injury leave or return to work.
I will also mention that if these legislative amendments are approved, changes to the Employment Insurance Regulations and Employment Insurance (Fishing) Regulations will be required to ensure equal treatment among claimants. All legislative and regulatory amendments would come into force on the same day, which we are targeting for the fall of 2014.
Finally, I'll flag that a very limited technical amendment is also proposed to the Employment Insurance Act in Division 17. This amendment adds a reference to the PCIC benefit in one instance, which was inadvertently overlooked when the EI legislation was amended to introduce this benefit.
I will conclude by thanking you for the opportunity to contribute to your study this morning and close with the assessment that this enhanced flexibility to access EI sickness is intended to enhance fairness in the way that the EI program supports Canadians who are away from work to care for a gravely or critically ill family member.
The Chair: Thank you very much, Ms. Ryan. I will now turn to Mr. Farrell.
John Farrell, Executive Director, Federally Regulated Employers — Transportation and Communications: FETCO has reviewed the changes to the Employment Insurance Act and the Canada Labour Code. We do not have any concerns and are supportive of the changes.
The Chair: Thank you very much. I will now open the floor up for questions from my colleagues.
Senator Cordy: Thank you for coming in this morning and explaining the changes.
I think we're all pleased when families in need are being helped. I gather that after this was brought in, there were some changes you noted should be made to the legislation, and it's always good when the response is made.
I would like you to clarify something regarding the first 15 weeks of maternity, which are just for the mother. Within those first 15 weeks, she would be unable to claim the illness, because the 15 weeks is for her body to recover, which is what you explained. However, parental leave, which could be taken by the mother or the mother's partner, would be eligible for these changes.
Ms. Ryan: That's essentially the core of what we've brought forward. You've touched on the core defining difference between the two benefits in terms of how we see the policy intent. Inasmuch as the maternity benefits already provide for a recovery period for any range of illness, suspending those to allow specific types of recovery is what you would be doing by allowing sickness benefits there.
The difference with parental benefits is that the policy intent for the parental benefit is to provide care for the new child. Like regular benefits, that's your job. If you're unable to provide care for the infant because you have become ill or injured, then the intent is to allow you to access sickness benefit. Your partner could, in the interim, take those parental benefits; they are shareable.
Senator Cordy: That was my question: The partner could take the parental leave to care for not only the child but possibly the mother, as well?
Ms. Ryan: That's the structure.
Senator Seth: For Division 17, would you propose Canada Labour Code amendments to increase the employment responsibilities for managing leave without pay?
Laurent Quintal, Assistant Director, Strategic Policy, Employment and Social Development Canada: Could you repeat the question?
Senator Seth: Would the proposed labour code amendments increase the employer's responsibility for managing leave without pay?
[Translation]
Mr. Quintal: The Canada Labour Code provides for leave without pay to protect the employment of workers who must be absent.
I am not sure I understood your question.
[English]
The Chair: I'm afraid I didn't understand the question, either.
Senator Seth: Would the proposed Canada Labour Code amendments, which you are already doing, increase the employer's responsibility for managing leave without pay? Like, what happens later on?
[Translation]
Mr. Quintal: Now I understand. The employer is responsible for granting the employee leave without pay.
[English]
The Chair: This is a benefit, senator, not an imposition on employers. I'm not sure where we go with this.
Senator Seth: That's fine. If you don't know, that's fine.
Ms. Ryan: It might be helpful to say that it extends the job protection for the employee that parallels the income support we would be allowing the person under the Employment Insurance program.
In a sense, the core aspect of managing income to that person on leave rests with us in the EI program rather than the employer who has an onus with this measure to protect that job until that person is ready to come back to work. So the employer may be faced with a longer period of the employee being away from work because of this new flexibility, but essentially the core responsibility for managing that case, as it were, is with the government and not the employer.
Senator Seth: This very commonly happens. That's the reason I ask the question.
The Chair: Is that it, senator?
Senator Seth: Yes. I didn't get it, but that's fine.
[Translation]
Senator Chaput: I have a quick question. Do these amendments that provide new benefits also apply to independent workers?
Ms. Ryan: Yes, as long as these independent workers are registered for employment insurance. There are new rules that affect the registration process. However, if they are receiving special benefits, that flexibility is offered to them.
[English]
Senator Enverga: According to your notes, it says:
It established the new benefit for parents of critically ill children, of up to 35 weeks to support parents who take time away from work to provide care or support to a critically ill child of less than 18 years of age.
When you mention parents, does it include caregivers?
Jean-François Roussy, Director, Employment Policy, Employment and Social Development Canada: No. When we made the change through the Parents in Need Act, the definition of ``parents'' in the regulations is the parent, the person responsible legally for the child.
Senator Enverga: Is this a biological parent?
Mr. Roussy: It depends if the child was adopted. It depends on each province, because they have their own rules. But legally, it is the person responsible for the child. It would not be a caregiver.
Senator Enverga: So someone legally responsible — not necessarily the caregiver; it has to be parents.
Mr. Roussy: Yes.
Senator Enverga: It says ``child of less than 18 years of age.'' What if the child is a disabled child and is over 18 years old? Is there any coverage for that, or will this be a different story altogether?
Mr. Roussy: The parents would have to look for something else. The way the ``parents of critically ill children'' was designed is for parents of children under 18. Also, the child has to be critically ill, which means at risk of dying if there is no care, support or treatments. If it's a chronic or permanent disability, they wouldn't be able to get this benefit, even if the child is under 18 years of age.
Senator Enverga: If he is critically ill, he would not be allowed.
Ms. Ryan: I would flag that there is a separate benefit, the Compassionate Care Benefit. It is available for a much wider range of family circumstances, including for the spouse, adult child and siblings. It is available for the shorter period of time of six weeks, but there is that benefit available to family members above the age of 18.
Senator Enverga: With a disabled child or something like that.
Ms. Ryan: In the case of compassionate care, it has to have that element of ``gravely ill.''
Senator Enverga: If there is that option, that's great. Hopefully there is. You're sure about that, right?
Ms. Ryan: Yes.
Senator Nancy Ruth: I wanted to follow up on Senator Seth's questions about the employer's responsibility. Does the employer have to hold the job open beyond the 35 weeks, the 65 weeks or whatever terms of benefits the person is on if they don't come back at the end of that time?
[Translation]
Mr. Quintal: The purpose of the Canada Labour Code is to protect workers who are absent on leave. The job is absolutely protected; the employer cannot dismiss someone because he or she takes leave to care for a sick child or for other reasons.
Therefore, the purpose of the Canada Labour Code is to protect the jobs of workers who are absent for a certain number of days.
The employer is responsible for respecting the legislation. In other words, the employer must ensure that when employees return from leave, they return to their positions with all the employment conditions that applied before the leave.
The only circumstances where an employer might not offer the individual a position at the same level, as in this case, would be when an employee is absent for health reasons and, upon return, cannot carry out his or her former duties. The employer is then required to offer the employee a position that does not necessary have the same employment conditions.
That is the only case where an employer may question the employment conditions of a worker protected under the Canada Labour Code.
In all other situations, the job is completely protected and, when the leave ends, the employee returns to his or her position, if the position still exists, obviously.
[English]
Senator Nancy Ruth: Let me clarify. Using the example of the pregnant woman, if the person is away 65 weeks and she does not return by the sixty-sixth or seventieth week, the employer must still keep the job open for her?
[Translation]
Mr. Quintal: No. If the leave has ended and the person decides not to return, the position is not protected.
[English]
Senator Nancy Ruth: Thank you. What obligations does the employer have for wages or benefits during this absence period?
[Translation]
Mr. Quintal: During the absence, the employee and the employer must continue to contribute to the benefits. The salary is not paid, obviously, because the leave is unpaid, but all the employment conditions and all the benefits are maintained.
[English]
Senator Seth: I have a supplementary.
The Chair: No. You can ask another question at the end, after Senator Seidman.
Senator Seth: Thank you. It's always no.
The Chair: You can always ask a question, senator, but we don't do supplementary questions to get into debate. If the question is worth asking I will put you on the list and you can ask next.
Senator Seth: It's not debate.
Senator Seidman: Mr. Roussy, you brought up the issue of provincial jurisdiction in reference to definition of parents. Could you please elaborate a bit on what the jurisdictional issues are, if different provinces will carry this out in a different fashion? That's the essence of my question.
Mr. Roussy: I would say that's mostly in a case with adoption. The adoption rules can be different from province to province. That would be the main difference. From province to province, it will be mostly the same definition.
If I take the example of Quebec, it is larger than the rest of Canada as to what is considered a ``parent.''
Senator Seidman: Excuse me, if we could get beyond that, I used that as an example because you brought that issue up. I'd like to know about the jurisdictional issues as applied to this piece of legislation, or the changes in this piece of legislation, beyond the definition.
Ms. Ryan: If I may, the core of the measure is to allow us to provide benefits to people in these combinations of difficult situations. That's the core of it.
The changes to the Canada Labour Code are for federally regulated industries essentially to harmonize the job protection federally regulated industries with our suite of benefits. For our set of benefits, generally there is provincial variation in terms of how and the degree that provincial labour codes, which do cover a far larger number of employees, protect the jobs of people in these situations where we do extend benefits. I don't know if Laurent wants to elaborate on that.
Senator Seidman: I'm still trying to understand. I understand that it's federally regulated employment or industries that are covered by this. I would like to know if the provinces tend to harmonize so they are in line with federally regulated industries.
[Translation]
Mr. Quintal: Recently, when leave for caregivers and leave for critically ill children was adopted, the majority of provinces aligned and amended their own labour legislation as a result. As you can imagine, there is no requirement for the provinces to amend their legislation; it is up to them to decide, if they have full jurisdiction. However, based on the recent benefits programs, the provinces followed the federal government and amended their labour laws.
Senator Seidman: Thank you very much.
[English]
The Chair: Senator Seth, have you formulated a question?
Senator Seth: My question was asked by you, so that was okay.
The Chair: You have helped clarify the situation for us on this bill. I think these are generally well-received improvements and are additional benefits to employees, and bring a number of issues into a kind of harmony with regard to the overall situations here. We thank you very much for appearing before us this morning. I thank my colleagues for their questions.
Colleagues, for the next session, we are dealing with Division 30, the Apprentice Loans Act.
In this panel, we have Employment and Social Development Canada, represented by Atiq Rahman, Director, Operational Policy and Research; and we have the Canadian Apprenticeship Forum with Sarah Watts-Rynard, Executive Director.
By agreement, I will invite Mr. Rahman to present first.
[Translation]
Atiq Rahman, Director, Operational Policy and Research, Employment and Social Development Canada: Good morning, Mr. Chair and honourable senators. It is a pleasure to be here today to discuss the work that is under way with respect to the Canada Apprentice Loan.
[English]
In the 2013 Speech from the Throne, the Government of Canada committed to ensuring that Canadians are aware of the opportunities offered by the skilled trades and to assist apprentices with the cost of their training.
As part of this commitment, Economic Action Plan 2014 proposed the creation of the Canada Apprentice Loan as an expansion of the Canada Student Loans Program to provide apprentices registered in Red Seal trades with interest- free loans of up to $4,000 per period of technical training. These loans will remain interest-free until an apprentice completes or terminates their apprenticeship training, at which point interest will start accruing on their loans and the loan will go into repayment.
The Apprentice Loans Act establishes the legal framework for Canada Apprentice Loans. Specifically, it authorizes the making of regulations for the administration of the act; it provides authority for the Minister of Employment and Social Development to enter into loan agreements with eligible apprentices; and it provides for the establishment of a contract with a third-party service provider for the administration of Canada Apprentice Loans.
The new act also provides for the making of regulations pertaining to certain benefits similar to those available to Canada Student Loan borrowers.
In addition to these loans being interest-free, while apprentices continue their apprenticeship training, these benefits include assistance for borrowers who experience financial difficulty during repayment. Furthermore, Canada Apprentice Loans will be forgiven in their entirety if the borrower becomes severely and permanently disabled or in the case of a borrower's death.
In addition to the introduction of the Apprentice Loans Act, consequential amendments to the Bankruptcy and Insolvency Act and the Department of Employment and Social Development Act are also being introduced. The amendments to the Bankruptcy and Insolvency Act will ensure that apprentice loan borrowers are treated the same way as other student loan borrowers, while the amendments to the Department of Employment and Social Development Act will allow for electronic administration of the apprentice loan measure.
The new Canada Apprentice Loan will complement other Government of Canada initiatives, such as the Apprenticeship Incentive Grant and the Apprenticeship Completion Grant, which were introduced to encourage apprentices in Red Seal trades to complete their training.
Under the Apprenticeship Incentive Grant, apprentices can receive $1,000 after the successful completion of their first and second level of an apprenticeship program; while under the Apprenticeship Completion Grant, apprentices can receive $2,000 once they have obtained their journeyperson's certification.
As some of you may know, the Red Seal program is an interprovincial standard of excellence for the skilled trades, which aims to encourage harmonization of apprenticeship training and certification programs and to foster mobility across Canada and more rapidly connect skilled trade workers with available jobs in high-demand regions.
Today, Red Seal trades account for approximately 80 per cent of all registered apprentices in Canada.
Despite existing measures to support apprentices in the Red Seal trades, completion rates have been rather low, with only half of all apprentices completing their training. This represents a potential loss to the economy and individuals alike, as apprentices who obtain certification have greater job stability, are more likely to work in their trade, and earn on average 25 per cent more per hour.
A key factor that has been reported as contributing to low apprenticeship completion is the financial cost of attending block technical training. During these blocks, which typically last four to 12 weeks, apprentices face significant costs, including forgone wages, educational fees, tools, equipment and sometimes relocation and living expenses if they are required to attend an institution located far from their home. For some apprentices, particularly those with families, these costs could be quite onerous.
Furthermore, unlike other post-secondary students, apprentices are not eligible for student loans, as their training doesn't fall within existing parameters of student loan programs. Student loan programs usually require that the study program lead to a degree, diploma or certificate, and that the duration of the program be at least 12 weeks.
Over the past few months, the Canada Student Loans Program has held discussions with national apprenticeship stakeholders as well as provincial and territorial apprenticeship authorities to discuss program design and delivery issues. These discussions will serve as the basis for new regulations. Following the approval of new regulations, Canada Apprentice Loans will be available to apprentices in January 2015.
The Chair: Thank you very much. Ms. Watts-Rynard, please go ahead.
Sarah Watts-Rynard, Executive Director, Canadian Apprenticeship Forum: Thank you for your invitation to appear today to discuss elements of Bill C-31 related to enacting the Apprentice Loans Act. The Canadian Apprenticeship Forum has prepared and submitted a brief summarizing the financial barriers related to apprenticeship training and speaking to key challenges we anticipate will be associated with administering the loan program.
The Canadian Apprenticeship Forum is a national non-profit that looks at apprenticeship through a pan-Canadian lens. Though regulated by the jurisdictions, apprenticeship stakeholders assign value to connecting the dots across trades, sectors and Canada. Our organization provides a national voice, influencing apprenticeship strategies through research and collaboration. In addition to research insights, we connect stakeholders in order to share promising practices and promote apprenticeship as a valued post-secondary pathway.
At a national level, the levers associated with apprenticeship training are limited. However, I believe there is a significant role to play federally when it comes to supporting and encouraging apprenticeship training. More needs to be done to equalize the value associated with apprenticeship as a post-secondary pathway, particularly given the importance that tradespeople have to the Canadian economy. This means recognizing apprentices as learners and providing the institutional supports long associated with other forms of post-secondary training.
In terms of your inquiry, I will concentrate my remarks on supports currently available to apprentices in training, financial barriers associated with apprenticeship — and why these inhibit certification — and challenges that may be associated with administering student loans for apprentices.
Over the last decade or so, we have seen access to shop classes in high schools curtailed and equipment neglected, making hands-on occupations less accessible and, frankly, less attractive options. Meanwhile, the requirement to build, operate and maintain Canada's infrastructure continues to require people with hands-on problem-solving skills. As a country, we extract resources; rely on cars; and require roads, bridges and buildings. While university-educated people add value to the economy, so too do people with technical and mechanical skills which have, in my opinion, been undervalued.
It would be simplistic to say that the Canada Apprentice Loan solves this problem. However, it does send a strong message that apprentices are worthy of interest-free support similar to other forms of post-secondary education. The Canada Apprentice Loan reflects a rather profound change in policy, which has long treated apprentices as employees rather than learners. While student loans haven't been available, apprentices have benefited from Employment Insurance during periods of technical training. There are also taxable grants that Mr. Rahman mentioned available to apprentices in Red Seal trades. In many cases, provinces and territories also provide a variety of supports.
According to our research, these supports are critical. While apprentices are paid employees, they only make a percentage of a journeyperson's wage. In most cases, employers do not pay wages during technical training. While Employment Insurance provides income replacement at 55 per cent, many apprentices report significant delays in receiving their benefits. The service standard is generally 28 days, but the initial two-week waiting period and processing delays often mean that an apprentice has received no benefits until well into their training and, in some cases, only after returning to work.
Given that apprentices are, on average, in their mid-20s at the time of registration, they often have family and financial obligations beyond those of a new high-school graduate.
My brief goes into more detail about financial need, but I will say that apprentices tell us that financial hardship is among the key reasons that they delay returning to technical training. This keeps apprentices in the system longer and impedes certification.
I would be remiss if I didn't express some concern that the realities of apprenticeship training are likely to pose challenges to loan administration. Regulations have to consider the nonlinear nature of apprenticeship. As employees, apprentices are subject to employment gaps due to seasonal layoff and economic cycles. Depending on training volume, there's no guarantee that technical training blocks will be offered annually and, even when they are, apprentices may be otherwise prevented from attending by employment demands.
CAF would like to see a streamlined application process and timely delivery of funds. The degree to which the loan can offset disruption in wages, and delays receiving EI benefits, will be key. To the extent possible, apprentices should be encouraged to borrow only the amount necessary to cover costs, keeping student debt low. At the same time, the program must recognize that financial need varies considerably based on individual circumstances, trade, training location, number of periods of training and duration of block release. These are among the factors that call for a flexible loan program uniquely aligned with the realities of apprenticeship training.
Thank you very much.
The Chair: Thank you both. I will now open up the meeting to questions.
Senator Stewart Olsen: This has been a very interesting presentation. It is extremely important to the country.
Do you have any statistics on how many apprenticeship programs there would be in the country?
Ms. Watts-Rynard: There are about 300 trades, and the vast majority of them would include apprenticeship programs.
Senator Stewart Olsen: Is that regulated by the province? Also, do they work in conjunction with community colleges?
Ms. Watts-Rynard: It is regulated by the provinces and territories, and in many cases, the technical training does occur at community colleges. But there are also union training centres and private institutions, as well, that can provide technical training.
Generally, the province or territory would designate who was an authorized training provider in one of its trades.
Senator Stewart Olsen: Are the monies for these loans separate entities or is it in a pot that's provided to the province for educational purposes?
Mr. Rahman: It is outside of the pot provided to the provinces.
Senator Cordy: Thank you both for being here. Our committee did a study on post-secondary education and, in reading it, you would discover that we certainly place high value on the need for post-secondary, not just in what one would have thought years ago as being university, but also recognizing community colleges and trades training. I think your point was very well made.
You said you would be remiss, Miss Watts-Rynard, if you didn't express concern about the realities and the challenges that are going to be there for loan administration. Could you just expand on that for us?
Ms. Watts-Rynard: In thinking about the Canada Student Loan and the way that a student would normally enter into one of those post-secondary programs, you start it right after Labour Day and finish sometime in June several years later. The expectation is that you would actually be in school for eight months of the year and you would have a summer break. Some of the difficulty in thinking about how to follow an apprentice is that they are an employee first and they are subject to gaps in employment. Sometimes there's the end of a contract or we see that there are seasonal layoffs. They're not necessarily employed on a consistent basis, although given the demands and skill shortages we're seeing, apprentices do generally have employment.
There are economic factors in play as well. If they're not in technical training and not actively working toward their apprenticeship, the question becomes: Are they ready to go into repayment? That doesn't necessarily tell us they're not continuing apprentices. It might mean they're dealing with a delay or gaps, which are just realities of apprenticeship training.
Senator Cordy: This is quasi-related, if I could stretch this just a little bit because she's here.
You spoke earlier on the issue of federal-provincial jurisdiction. I know the new government in Nova Scotia is working to fix this because so many of our young people are actually working in Alberta but would like to have recognition of it in Nova Scotia. So the new premier has said, yes, indeed that will happen. Is this a problem across the country — a lot of people from Atlantic Canada are moving to Alberta — with the challenges of provincial-federal jurisdiction in terms of tradespeople?
Ms. Watts-Rynard: It is absolutely a challenge. The truth is that if you are unable to find your employment hours in one part of the country, there is a desire to go and get them where there is demand. The provincial and territorial systems don't always recognize each other's technical training or hours that are done outside of the province.
I know a number of the provinces right now are talking about harmonization and trying to make it easier to be able to go and take either the block release training in another part of the country where it is being offered, if it's not being offered within their jurisdiction, and also going and getting work hours in other provinces.
We see that Alberta is fairly liberal with this because they do want people to come in and be doing the work. Some of the other provinces do have regulations that haven't caught up yet with this concept of moving people around to fill shortages even while they're still apprentices. We see a lot of the agreement on internal trade, and the Red Seal Program allows for a lot of mobility once someone is certified. It is just the gap between registration and certification and trying to make sure somebody is in a position to be certified.
Senator Cordy: Mr. Rahman, you talked about the payback. You referred to the Bankruptcy Act aspect of it and said that it will follow the same rules as the student loans for university students. Could you refresh my memory on that? What is it currently for university students?
Mr. Rahman: The current rule around bankruptcy for student loans is that if a bankruptcy is declared within seven years of leaving school, of getting into repayment, then that loan survives. That's the rule that will also apply to apprentice loans.
Senator Cordy: I know there have been a number of private member bills brought in to reduce seven years to five years or three years. I am also wondering about the payback. Ms. Watts-Rynard spoke about university students, and it is so many months after you graduate from university, or immediately after you graduate. But the challenges with working can sometimes be seasonal when we're looking at the tradespeople. How is that going to work? I know you said it will be in regulations, but you must have a sense of where it will be.
Mr. Rahman: The intent is to replicate as many features of student loans as possible on apprentice loans. For example, for university and college students who get student loans, after they leave school and complete their degree, six months later they go into repayment. They tend to be the same here, too. After they complete their internship they will have a six-month period before they have to start repaying the loans.
During those six months, interest does accrue on student loans and the intent is the same here as well.
Senator Cordy: Six months later?
Mr. Rahman: Yes.
Senator Cordy: After they finish?
Mr. Rahman: Yes.
Senator Seidman: As Senator Cordy said, we have the benefit of a previous study, which helped us to understand the importance of the apprenticeship training programs and the skilled trades.
You may have heard that we all kind of gasped when you said that only half of all apprentices complete their training. Both Mr. Rahman and Ms. Watts-Rynard referred to a way to incorporate the specific financial problems involved, because you identified the financial problems as the main reason for apprentice students not completing or going forward with the program.
You both referred to upcoming regulations to be developed. I would like to know if you see any opportunity to build in some kind of awareness of this particular issue so that we can somehow alleviate it.
Ms. Watts-Rynard: I would start by saying that while financial issues are one factor in non-completion, they are not the only factor. Completion is actually a complex topic, and you really have to start looking at whether it is about continuous employment, whether there are essential skills gaps. There are so many other factors that come into play around completion, but financial issues are one of the factors.
It is a matter of ensuring that apprentices do have another way, if the obstacle to returning to technical training is financial. It may be that in some cases it is not a financial issue, it is just a matter of my employer being busy and I don't have time to go back to technical training. It could be that I don't want to go back on EI and go back to technical training, I'm fully employed exactly where I am now and I don't need to progress.
All of those factors come into play around completion. However, we do know that financial barriers exist. What we would be looking for is an opportunity to help those apprentices that do face the financial barrier and say that's the reason that they're not going back.
In many cases, fixing EI and making that available more quickly is an alternate solution, because we find that those delays are representing a significant challenge.
In terms of being able to provide the loan and the regulations, we would be looking for an opportunity to tell apprentices that if it's a financial issue stopping you from going back into technical training, let's address that issue and give you another source of income. The truth is I have heard from employers who are saying they're giving their apprentices loans and trying to help them financially. People say, ``I can't live like this; I need to come back to work.'' Not being able to complete that next level means they're not getting closer to certification, and quite frankly they're not getting to a point where they can make more money because apprentices make an increasing percentage of a journeyperson's wage as they progress through the system. Those block release training periods have a fundamental impact on their employment income as well.
Those are some of the reasons that we think it's important to provide the financial supports. It's a question of whether a student loan system can easily be applied to a very non-linear way of work-integrated learning.
Senator Seidman: Mr. Rahman, you said specifically a key factor that has been reported as contributing to low apprenticeship completion is the financial cost. If you could perhaps supplement what Ms. Watts-Rynard just told us, I would appreciate it.
Mr. Rahman: Yes, and I think we are referring to the same studies here where financial issues were found to be one of the main reasons why they don't complete. There are other ones, as Sarah has already elaborated on.
What I would like to add to what Sarah has already said is that raising awareness is going to definitely be very important. We have been in discussions with stakeholders, including Sarah — she has been very helpful on this initiative — as well as other stakeholders, such as the employer associations, for example. We have been very pleased with the feedback we have received so far.
Yes, for those of us who work in the student loans program, this is new territory, but we feel quite comfortable with the feedback and reaction we have received that we can work together in raising awareness about this new initiative among apprentices or potential apprentices.
Senator Seidman: Is there something that you see as important to be put into regulation that would help with this particular problem? The regulations have yet to be written.
Mr. Rahman: That is right. The regulations are intended to set parameters, the design of the program itself. I am not sure I can comment on whether or not raising awareness can be part of the regulations. I don't have that knowledge.
Ms. Watts-Rynard: I will mention that my brief, although I understand it hasn't been distributed yet, does have research. It refers to two or three different research studies around financial barriers, which I think will answer some of your questions about why we consider that to be a major barrier.
Senator Enverga: Thank you for the presentations. You mentioned that there is $4,000 for a period of technical training, which is a loan, and then later on you will provide $1,000 or $2,000 as soon as they complete the program. Is the $1,000 and $2,000 a loan or is it free money?
Mr. Rahman: Those are grants. They are free money. Those are already in place, actually. This new loan will be introduced in January, but the Apprentice Incentive Grants — $1,000 for first and second level — and the Apprentice Completion Grant of $2,000 have been in place for a few years now; apprentices currently receive those.
Senator Enverga: So it's separate and additional?
Mr. Rahman: That's right.
Senator Enverga: You must be talking to the provinces and other businesses that say we need this kind of apprenticeship program. Is there a limitation on how many people can apply to this kind of program? Is there a control on that? Sometimes there are too many jobs in a particular area and one must wait. Do you then say, ``We cannot give any further loan to you?'' Do you have any of those controls?
Mr. Rahman: With respect to the apprentice loan, any apprentice registered in a Red Seal trade can apply for it. As long as they meet the eligibility criteria, they will get it. There will be no limit on how many of them can get it.
Whether or not provincial apprenticeship authorities put a restriction on the number of apprentices are beyond the parameters of this loan program, but any apprentice who meets the eligibility criteria for this loan will be able to get it.
Senator Enverga: My fear is if we have an oversupply in a certain job description, it will not work. The overall apprenticeship work will backfire on us, so I want to make sure whether you think there should be a control for how many people can apply for these jobs.
Ms. Watts-Rynard: One of the important things about the apprenticeship system is that it is uniquely responsive to industry demand because to be an apprentice you need to have a job, which means somebody has decided that it is important for somebody to be doing that job for them.
Because it is industry-responsive, it's highly unlikely you would get into a situation where somebody was eligible for the loan but was going to be made redundant within that trade. It is possible that economic circumstances would change and the person would discontinue their apprenticeship or they would be laid off from their job, but because of the industry-responsive nature, there are generally very few limits on how many people can be hired within a particular trade at the provincial level.
There are sometimes difficulties with the educational infrastructure and whether or not it can support the number of apprentices. We see there are some parts of Canada — I know in Saskatchewan at the moment, the key technical training provider is providing technical training 24 hours a day because there is so much demand for the training, but they don't have the infrastructure in place to support doing that within regular work hours.
I think you would be hard-pressed to say that somebody who was pursuing their apprenticeship and being able to pull down on the loan was in a position where we have too many people in that trade because it is uniquely responsive to what employers are hiring.
Senator Enverga: Is there a limitation that the $4,000 has to go towards tuition? Do you have any limitations like that?
Mr. Rahman: No, there is no limitation on the grant of $4,000. It is to cover their costs and the costs would include tuition, living expenses and other things as well.
Senator Enverga: Do you plan on providing this information to high schools all over Canada?
Mr. Rahman: We will work on raising awareness of this program, yes.
Senator Chaput: Ms. Watts-Rynard, by your presentation, I gather you believe this is a good thing, but there needs to be a streamlined application process and timely delivery of funds such that it needs to be defined and regulated. Is that what you're saying?
Ms. Watts-Rynard: That is what I'm saying. Even the fact that the loan has been introduced I think is a positive thing. It tells apprentices that their post-secondary pathway is not less valuable than any other. That is an important message.
In terms of actually administering the loan program, they are not students the way we understand post-secondary students, and so I recognize that the loan is sending an important positive message. I think it's providing financial supports that are required.
By the same token, they just don't fit the mould the same way that you would expect other post-secondary students to. I'm suggesting that the loan program really needs to be uniquely aligned with their requirements and their reality.
Senator Chaput: Have you been part of the discussions that have taken place in regard to this?
Ms. Watts-Rynard: I have been part of the discussions with Atiq's group in thinking about how we are going to make it work. That's something that I'm providing ongoing support for.
I wasn't part of any discussion about whether or not the loan program was the solution to the financial barriers or if there were perhaps other solutions. Once the loan was announced, I was approached for some advice about how to align that appropriately with apprenticeship.
Senator Chaput: Thank you. Mr. Rahman, in the discussions that took place, you mentioned provinces and territories. How far did those discussions go with the provinces and territories? How did they react to this new program? Was there any negative reaction?
Mr. Rahman: Thank you. They have all reacted quite positively to this initiative. We have been having ongoing discussions with them on a bilateral basis to make sure that we can deliver it properly. We cannot deliver this because of some of the issues that Sarah has already mentioned, that it's not a typical student-university relationship.
There are a number of parties involved. They go to institutions for a few weeks, and then they're with the employers and they're registered with the provinces. We need to work with almost all the parties to make sure that this initiative can be delivered properly.
We have been talking to the provinces and territories with respect to how to ensure that an apprentice is still an apprentice. These loans are going to be interest-free for a period of time. How do we ensure that the apprentice is still an apprentice and should continue on interest-free status? We need the help of provinces and territories to do that. Those are the discussions we have been having. So far no province has raised any concerns about this.
Senator Chaput: How about the apprentice, the person, the man or the young woman? Did you discuss that with a group of them?
Mr. Rahman: We have not engaged with apprentices directly. Sarah, who represents apprentices, it's the Canadian Apprenticeship Forum, so those are the stakeholder associations we have engaged with, but not directly with apprentices.
Senator Chaput: This idea doesn't necessarily come from them, it comes from the government, and now we're trying to see how we can make it happen?
Mr. Rahman: The idea had been proposed by stakeholders before it was announced this year. Stakeholders usually do their pre-budget submissions to the government, and the idea of loans for apprentices has been part of those submissions for a couple of years; so it was coming from the stakeholders.
The Chair: Thank you both very much. I want to repeat what some of my colleagues have said.
I can tell you I have personally considered, for much of my career, that we have substantially undervalued technical and trade training in this country to our great disadvantage. That has been a problem with regard to many aspects of our economy. Contrary to the very good basis of Senator Enverga's question, the reality is that we suffer from a dearth of people available for apprenticeship programs, or in some cases we don't have employers in a position to provide apprenticeship programs. It's been difficult to build the expertise.
I was delighted to hear you both say that you believe this will give recognition to the recognized value of these programs. That's enormously important. I am delighted to hear from those of you who work in that area because I think enhancing recognition of the value in society of these programs is absolutely critical for us.
I certainly agree with you that once a loan is approved a program for this area will indeed give recognition, and in the same sense of loans to students in the traditional PSE routes. I was very pleased to hear what you were saying on those issues today, and to support and acknowledge what my colleagues have already said with regard to recognizing the value in these areas.
I thank my colleagues. I want to remind them that I'm only going to suspend the meeting because we have to give instructions following this.
(The committee continued in camera.)