STANDING COMMITTEE ON HUMAN RESOURCES DEVELOPMENT AND THE STATUS OF PERSONS WITH DISABILITIES

COMITÉ PERMANENT DU DÉVELOPPEMENT DES RESSOURCES HUMAINES ET DE LA CONDITION DES PERSONNES HANDICAPÉES

EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, April 21, 1999

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[English]

The Chairman (Ms. Albina Guarnieri (Mississauga East, Lib.)): We'll begin. May I ask everyone to sit down, please.

Before we begin with our witnesses, I have a couple of quick announcements to make. By popular demand, the Sims report will be discussed on Tuesday, rather than following this meeting. I see the disappointed faces around the table. I know this to be.

Also, Madame Girard-Bujold has a motion she'd like to very quickly present, with the indulgence of our witnesses.

[Translation]

Would you care to present it?

Ms. Jocelyne Girard-Bujold (Jonquière, BQ): Thank you, Madam Chair, for allowing me to present my two notices of motion. I move that the committee invite Doug Young to appear with reference to its study of POWA, and the Minister of Human Resources Development with reference to its broader study on older workers.

The Chair: You will be pleased to hear that Mr. Doug Young's name is already on our list.

Ms. Jocelyne Girard-Bujold: We agree on that.

The Chair: We've already invited the Minister to appear before the committee, and I think we were all in agreement on this.

Ms. Jocelyne Girard-Bujold: I'd like to know, Madam Chair, whether you could extend until Friday the deadline for submitting the names of witnesses. Before the Easter break, we were in touch with a number of individuals we would have liked to invite to appear, and they called us back last week to ask for a few more days before giving their final answer.

The Chair: Yes, we can wait until Friday. I would invite you to submit the names to the clerk, so that we can add them to the list.

Ms. Jocelyne Girard-Bujold: That is very kind. Thank you, Madam Chair.

The Chair: Mr. Coderre.

Mr. Denis Coderre (Bourassa, Lib): I do not have any ulterior motive here, but I would like to know what status former ministers have when they appear before committees. Are they not bound by some confidentiality requirements?

The Clerk of the Committee: I will check on that and let you know.

Mr. Denis Coderre: Fine, it was just for my own information.

The Chair: Thank you.

[English]

So without further ado—I don't want to delay our witnesses who have been sitting there very patiently—today we are going to begin our study of the growing crisis for millions of Canadian workers trapped in unskilled jobs that they know won't exist in a few years. These are usually older workers with families to support, with no prospect of dropping out of the workforce to go back to school.

The programs we have today pay a lot of attention to these workers when they finally do lose their jobs and are faced with months of unemployment, uncertainty and financial strain, while they are retrained in the hope of finding a new job. This committee is actually looking for ways to prevent this crisis from impacting on as many workers as it does.

We look to our witnesses today to help us find the most effective means to help workers upgrade their skills while they still have their jobs and incomes to support their families. So I'm sure you're going to give us a great many insights.

I would like to introduce Jean-Pierre Voyer, director general for the applied research branch, strategic policy; Glynnis French, director general, labour market policy, strategic policy; and Serge Bertrand, director, evaluation services, evaluation and data development, strategic policy. So welcome, and without further ado, please begin.

Ms. Glynnis French (Director General, Labour Market Policy, Strategic Policy, Department of Human Resources Development): Thank you, Madam Chair and members of the committee. We're very happy to be here today to discuss with the committee the situation of older workers.

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As you know, HRDC spends considerable time and effort reintegrating people into the labour market. We do this in a number of different ways: by disseminating labour market information, by active labour market programs, and through programs targeted to individuals with specific needs—for example, the youth employment strategy, which is aimed at young people, and programs for persons with disabilities.

We're here today to respond to a request for background information on older workers. We thought we would do the following. First, my colleague Jean-Pierre Voyer, who is with the applied research branch, will discuss the situation of older workers in the labour market as well as factors that have contributed to these outcomes for older workers. Serge Bertrand, of evaluation and data development, will discuss the lessons learned from past programming related to older workers, including programs in other countries based on existing evaluation literature. I'll then come back and wrap up with some conclusions.

Without further ado, I'll pass over the microphone to Jean-Pierre Voyer.

Mr. Jean-Pierre Voyer (Director General, Applied Research Branch, Strategic Policy, Department of Human Resources Development): Thank you, Glynnis.

I will try to provide you at the beginning of your deliberations with some of the basic facts so that you can work from a common set of information. I don't pretend to have figured out all the problems in this presentation, but I will at least show you some of the major trends.

The first observation to make is whether technology works or not. The first thing to realize is that older workers as a group continue to experience labour market outcomes that are comparable to, or even better than, other age groups. There's a bit of a myth in a way that we tend to think of older workers as workers who are not necessarily doing very well.

If you look at this chart strictly from an employment rate point of view, the red line is the unemployment rate of the 50-to-64 age group. You can see that it compares favourably to other primary age groups, and it's much lower than for younger workers.

However, the unemployment rate figures for older workers hide the fact that a lot of them tend to leave the labour market. They just get discouraged or voluntarily or involuntarily...but I'll come back to that later. There is a kind of non-participation behaviour. As you can see from the black line—and I'm talking about 55-year-olds-plus—their employment rate, the number of employed older workers as a proportion of the population, has been going down steadily for the last 20 years. And that has not happened in other groups.

In terms of your committee deliberations, I presume you're focusing on the 55-year-olds and over as being your population. A lot of literature uses the 45-year-old-plus as well as the older workers, but I think the consensus is around 55 years and older.

In terms of earnings, the situation we have for males is that they've caught up with other groups a lot. It's the blue line. As you can see, there was a gap where those 45 to 54 were doing better than all the other groups, and those 55 and over have been catching up.

[Translation]

This is not true in the case of women. We see some difference, although it is less significant than the chart shows. The point that emerges is that there is not a great difference in earnings among those who work full time, throughout the whole year. This chart does not include part-time workers.

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[English]

Another interesting statistic is the lay-off rate, the proportion of older workers who get laid off as compared to other groups. We have the impression that only older workers get laid off. As you can see, yes, there's a higher incidence of lay-offs for the 55-year-olds-plus as compared to other groups, but they're not that different from other groups.

As for the other groups, the outcomes for older workers vary very much with education; education is very important. As you can see, low education is associated with much higher unemployment rates, but the interesting thing here is that it's not as much as for the younger generation.

If you look at this chart, the red stack represents the older workers. You can see that the unemployment rate increases disproportionately with the level of education, but not as much. If you compare that to the youth, for instance, those with low skills, of course, have a very high unemployment rate...or even with the primary age worker there's a steeper increase of unemployment the less skilled they are. It is the case for older workers, but not to the same extent.

Again, the same phenomenon that I referred to before is happening, that is, unemployment figures are a bit misleading for older workers because a lot of them just simply pull out of the labour force, they just get out of there. They don't report themselves unemployed any more. Are they really employed or unemployed? Not through the definition that StatsCan uses but from the point of view of our community, it's difficult to label people as being unemployed or employed in this case.

So you can see here that for all males the participation rate has been going down, and even more so for the low skilled. There's a tendency to pull out of the labour force the lower skilled you are.

Interestingly enough, it's important to distinguish between women and men throughout this type of analysis, because again women have a very different situation. The participation rate for older woman has been increasing, or declining very slightly.

In terms of the relative situation of the lower-educated worker versus the higher-educated worker, this is an index of average earnings. It shows basically that the earnings of older workers have been increasing over the last 15 years, though marginally. They're barely above the 1981 level, five percentage points above. But in the case of the low-educated, low-skilled workers, they've been declining from what they were in 1981. So there's a gap opening up on the basis of education among older workers.

What's interesting too is that older, less-educated workers face a higher risk of being permanently off from a full-time job. So those who have less than a high-school education in fact assume 56% of the lay-offs among older workers here, although they represent only 33% of the older workers in the population in general.

Another interesting thing is that even though older workers don't tend to be laid off much more than others, when they are laid off they have much more difficulty finding jobs than younger age groups. You didn't need someone from HRDC to say that; it's common sense.

You'll be glad to know that it does show in the statistics that it's in fact the core of the issue. They're not worse off than any other group for being laid off, but when they're laid off the difficulties start. This is true irrespective of the education level. It's less true for people with university...but if you have low skills, of course it is even more true.

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There are many barriers to hiring older workers and they are fairly well known. One barrier is that the average level of education is less.

In the last few years we've been able to test Canadians and workers from other countries for their literacy skills. Education is not always a good proxy for what people know or the literacy skills they have, broadly defined. We've been able to measure directly through surveys the literacy level of workers.

As you can see from here, there's a huge proportion of workers 55 years and over who don't have the basic literacy level necessary to perform in entry-level jobs. It's been established that entry-level jobs need literacy skill level three. You can see on this chart that more than 60% of the 55-year-olds-plus don't have the necessary literacy skills.

[Translation]

We also see that employers offer less training for older workers and that these workers are less inclined to take training on their own, through night courses or otherwise.

[English]

There have been a few surveys about employers' perceptions of older workers. These are small-scale surveys. They are not national surveys, but they point to certain interesting facts.

This one, for instance, asks small and large firms what constitutes employment barriers. It is the vice-presidents of human resources in these companies who have answered those questions. It may represent the perception of the vice-president, not the perception of the company, but what they say is that being older is a barrier to being hired, and so is being a woman, being a visible minority, being disabled is a very high one, and being aboriginal. And it is less so for big companies; the yellow line is the big companies versus the small companies.

The problem with older workers according to employers is that they lack the education and training. That's the most popular answer we're getting. There are also high wage expectation issues and a series of other factors. But the one that comes out clearly is that older workers are perceived as lacking the necessary skills.

Another barrier for older workers is the issue of mobility. This chart shows the interprovincial mobility rate. You can see that the older you get the less mobile you become, and in fact the mobility rate of the 55-year-olds and over is very low. We found also that the mobility rate among sectors and occupations is much lower among older workers.

When we turn to the retirement decision, again, it's not a complete analysis, it's just a few facts. This is a part that is very difficult to understand, because we don't have a clear notion of what the real motivations are behind retirement. Is it the fact that people can afford it? Is it a matter of choices, quality of life, or is it because they lose a job and they cannot find another one? Many people who lose their job and cannot find another one would prefer to say that they made that choice. That's where it gets blurry in terms of the real reason why people are retiring at the age they are retiring, especially among the low-skilled.

On the following chart, in terms of the average age of retirement, by age group, we have observed both men and women falling quite dramatically through the last 20 years or so. You may not be able to see this chart very well, but it is in your package that we distributed. This is quite interesting. It gets me excited; I don't know whether it gets others excited.

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You can see on this chart that the period of retirement has increased tremendously in a very short period of time. This is 1960. In 35 years, the average period of retirement—that's between the time you leave the workforce and the time you die—went from something like a few years for a male—boy, it was tough—to about 12 or 15 years on average; I don't have the exact number. For a woman it went from about 10 years to almost double that. This is in a very short period of human life, due both to the fact that life expectations have increased and the retirement age is lower.

It is quite interesting to look at the issue of the aging of the population. I know it's not the topic of today, but it's related to the issue of the older worker.

It's worth mentioning that in a transition now to retirement there seem to be behaviours among older workers to use part-time work, non-standard types of work, to bridge the period between full-time work and retirement. So we see a slow increase in the incidence of part-time work among older workers.

We also see an increase in the incidence of self-employment.

[Translation]

Far more people aged 55 and over are turning to self-employment or part-time work.

[English]

In terms of the motivation for retirement, as I say, it's very difficult to sort out. We have some surveys that try to ask people, but the question is, are you to believe all the answers you're getting?

Retirement is still involuntary for many. Sometimes it's health, sometimes it's unemployment. There seems to be an increase in voluntary retirement. There are some early retirement incentives that have been very popular lately, as you know, which means more people were able financially to retire. But there's a bit of both here, and it's very difficult to tell you x% is voluntary and x% is involuntary. There is a big grey zone in trying to sort out those two causes.

I'll leave it at that for the basic facts.

Merci.

The Acting Chairman (Mr. Andy Scott (Fredericton, Lib.): Thank you, Mr. Voyer.

Ms. Glynnis French: Mr. Chair, shall we continue, or are there questions from the committee at this point?

The Acting Chairman (Mr. Andy Scott): No, I think we would probably receive the presentations and then do the questions.

Ms. Glynnis French: Okay, fine. Serge, you're up next. I guess we're going to turn the lights down again.

Mr. Serge Bertrand (Director, Evaluation Services, Evaluation and Data Development, Strategic Policy, Department of Human Resources Development): No, because I don't have detailed charts and graphs like Jean-Pierre, and you've received copies of the deck. I think I would rather speak to you about it. You have received English and French copies. So I will just talk about it, because I don't have detailed numbers to show.

This deck is entitled “Measures for Older Workers in OECD Countries”. The first point I would like to make is that at HRDC, we study and examine the effectiveness of programs and policies that have been put in place in Canada and in other countries to deal with specific clientele or policy issues. We constantly monitor these studies of their programs and studies that analyse the effectiveness of various kinds of policies and programs to deal with issues.

We've conducted such studies in the past on issues such as policy and programs for youth and disabled people. Right now we have a study underway on policies and programs to address older workers. In the time allocated to me I cannot review the detailed country-by-country results, but these results will be available later and can be discussed in more detail at future meetings if you're interested.

What I would like to do today is give you a fairly high-level overview of our findings to date on what other countries have done and where there seems to be a bigger impact or better effectiveness of these kinds of programs.

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The first observation we made after reviewing several countries, including our own—I think we've reviewed maybe 10 countries, and we're talking about countries of course such as the U.S., England, France, Germany, Sweden, and the Netherlands, so it's a fairly extensive review—is that in terms of active measures, there are a very limited number of programs, here and abroad, specifically designed or targeted to help older workers adjust to economic and structural changes, very few. The majority of programs that OECD countries have been using are not the active types of program.

The second important observation is that within the current mix of programs targeted and available to older workers, we found that participation of older workers in these programs has been extremely low, here and in other countries. So there is for some reason a lack of interest among the targeted clientele in participating in the active measures.

The third observation is that the success of the programs we've examined depends on the ability of the program to recognize and address the specific individual needs of the older worker. There are all kinds of programs, but we've grouped them into three major areas. One is what we call early retirement and, maybe in a more pejorative way, passive measures. The other kind of measure is what we call gradual withdrawal or transition measures from job to retirement—a bridging period. And of course, in the third area are the more active measures, which basically target full-time members who are fully active in the labour force.

I would now like to review briefly each one of these broad types of measures. What is referred to as passive income support, basically early retirement measures, are temporary measures that provide financial support to bridge the gap between job loss and re-employment. Basically these measures have the objective of providing sufficient income until a normal retirement age is reached. So it's a fairly straightforward kind of measure. This is the kind of measure that most OECD countries have responded with when faced with displaced worker or older worker issues. That's basically true in Europe. France in particular has responded with this kind of broad policy.

There are a couple of examples of more specific measures under this category. For example, UI or unemployment benefits have been extended for some period of time with some of the conditions for eligibility being waived, such as the condition of actively looking for a job. These measures have been used in France, Germany, the U.K., Denmark, and the Netherlands, for example.

Another kind of program—and these are only examples or variations along this theme, but they have been used in different ways—is a disability insurance scheme that basically broadens the eligibility criteria for disability programs, again with the objective of providing income support to fill the time between the job loss and the time a client is fully eligible for a pension. There are more variations on how they are used, but those are the broad measures.

Basically these measures work well. They're effective for ensuring financial security for those who have lost their jobs and they do what they're supposed to do: they provide income. On the other hand, they have the disadvantage of creating a disincentive for people to regain work or to train to get back into employment. Also, one of the things about the more passive program measures is that they are expensive to maintain and very difficult to modify—to reduce benefits or to eliminate the programs—and I think this is what they have experienced in France.

The second type of measure is transition from work to retirement. Again, this is designed to bridge work and retirement and it combines both active and passive measures. These measures have also been used in some countries. They have been used in Canada, among other countries. An example of that is phase-in retirement, which allows the worker to decrease the hours of work while supplementing their income with partial pension benefits. This has been used in Sweden, Denmark, Luxembourg, and Germany. In Canada we had a program of this nature that was an experimental program in New Brunswick—the Job Corps program.

Again, there are all kinds of variations on that theme. From what I've looked at in Japan, for example, they were very imaginative and creative in developing such a measure, but the cultural context is very different. For example, there are some programs that allow people at the more executive level to work in areas of less responsibility, which has the benefit of creating a mentoring process while opening jobs for younger workers. But this requires a cultural environment that may not be suitable everywhere.

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One of the disadvantages observed with this program is that for many older workers there seems to be a stigma associated with this kind of part-time employment with lower responsibility.

The third area is what we refer to as active employment measures, and of course these measures are designed to prolong labour market participation. As I was saying at the beginning, these kinds of programs that are targeted at the older worker are very limited in OECD countries we've reviewed. There aren't that many programs of this nature.

Active measures for the worker can include and consist basically of training, job placement, counselling, and providing remedial education background. These programs have been used in the U.S., Australia, Japan, Germany and most other OECD countries. They can also take the form of wage subsidies, where basically you provide the subsidy to the employer to hire older workers; and these programs have been used, for example, in France, Australia and Japan.

What we have observed with active measures in Canada, when you look at the most recent evaluation of the programs when they were managed by the department, is that basically again we found at first that in Canada it was the same thing: participation in this program was low. However, the latest evaluation shows that they were fairly successful. Older workers were doing as well as other clients who were under this kind of training program for additional skills, but one of the important determinants of success for the older worker is that they needed the basic educational background before they could go into these training programs. We were not so successful with older workers who were missing this basic educational background.

The message there is that to go with active measures in this sense we need very good targeting on the basic requirements of older workers and their educational background. Also, these programs need to be tailored specifically for the needs of older workers.

Basically, as I was saying, countries have responded with active measures, not with active measures targeted at the older worker but basically using mainstream programs and considering the needs of older workers in the mainstream programs. In a very high-level summary, these are the key findings that came out of our reviews from programs used in other countries, and there are advantages and disadvantages in effectiveness.

The Acting Chairman (Mr. Andy Scott): Merci beaucoup, Monsieur Bertrand.

Ms. Glynnis French: I'll wrap up the HRDC presentation with a few comments.

As you are likely aware, unemployment does remain the single most important concern of Canadians, and has been for the last three years. A Focus Canada survey in December 1998 found that Canadians are still very concerned about the issue of unemployment, and there's general sympathy for the situation of unemployed older workers since they normally have a long-standing attachment to the labour force and are considered to have paid their dues. And they're often displaced through labour market forces that are really beyond their control.

As you know, POWA was terminated in 1997, and it was ended because it was not fair or equitable to older workers. It was a cost-shared program that was only offered in some provinces and had so many restrictions that many older workers simply could not qualify. The program offered only passive income support and did nothing to help workers adapt to the changing economy. The Government of Canada is shifting its support to active employment assistance to help workers reintegrate into the workforce, and the provinces are also moving in the same direction.

An aging society, as we can see from our statistics, does point towards increasing the importance of older workers as an integral part of the labour force of the future.

Older workers are a joint responsibility of both the federal and provincial governments. Labour market development agreements recognize the joint federal-provincial responsibilities in the area of labour market programming. The Government of Canada is continuing to build on the framework of cooperation that has been established through labour market development agreements and also through the social union framework agreement, which commits the government to consultation and working in partnership with provinces on social issues of all kinds.

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An example of the federal-provincial partnerships specifically in the area of older workers is through the Forum of Labour Market Ministers, which Minister Pettigrew co-chairs with Julie Bettney of Newfoundland. The Forum of Labour Market Ministers identified older workers as a key research priority, and a working group on this issue of older workers has been established. The group has just been recently initiated; it's starting with developing a diagnostic of labour market issues faced by older workers and it will outline relevant policy issues. We're looking forward to the results that will come forward from that working group.

Thank you, Mr. Chair.

The Acting Chairman (Mr. Andy Scott): Thank you very much.

We'll begin a series of questions with Mrs. Ablonczy.

Mrs. Diane Ablonczy (Calgary—Nose Hill, Ref.): Thank you, Mr. Chair.

This was a good introductory presentation. We appreciate it.

My understanding, and perhaps you'll correct if you have better figures, is that we'll have 40% more seniors by the year 2030, as our population ages due to the aging of the baby boomers. I'm not one of those of course, but some of us here are.

My first question is, does this aging population mean the labour market problems of older workers will continue to be a growing concern to us? Is this an issue that's emerging or that's going to become of greater concern?

Mr. Jean-Pierre Voyer: One thing we have to take into consideration.... First, you mentioned 2010?

Mrs. Diane Ablonczy: By the year 2030, 40% by 2030.

Mr. Jean-Pierre Voyer: By 2030 about 22% to 23% of the whole Canadian population will be 65 and over. That compares to around 12% today.

Mrs. Diane Ablonczy: So it is at least 40% more?

Mr. Jean-Pierre Voyer: Yes, at least, if not a bit more.

On the aging of the population, the challenges it brings about is a shrinkage of the cohorts who are currently thought of as the primary workforce. So shrinkage of the 24 to 65 cohorts, fewer people in that bulk, more after 65, will increase of course the dependency ratio, the fact that the supporting burden, if you want, of the working to.... One thing that will happen in terms of the older workers, according to some, is that in 10 to 20 years from now the problem will be much smaller because we are now seeing a generation that is much more educated.

I didn't show that slide, but as we all age as a population, the proportion of people who have a high education will become much higher thanks to the investment we made 20 years ago in post-secondary education and the like. So there's this phenomenon that will temper the problem. People will get older, but in a way the new cohorts who are coming in have more skills.

There is a warning, though. There is a question to be concerned about, which is that research shows people tend to lose their skills as they grow older. This is not only technical skills with respect to a specific job; this is about literacy skills, general reading and writing. Of course, if you have a PhD in physics, you're likely to be able to keep some of those skills, but for those who have only a high school diploma or a few years more, they get into habits that don't encourage the preservation of those skills.

If we do some simple calculations, we can see that the depletion of skills is enough to wipe out the gains we're making through higher education if we're not careful. We suggest that there's a lot of prevention to be done right now in terms of collectively learning to keep up our skills as we age. The bulk of the loss of skills happens between the time you leave school and age 40. It keeps going down after 40, but less so.

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So I bring a few considerations to your questions. They're more contextual than precise, I realize that.

Mrs. Diane Ablonczy: No, that was very helpful. When you gave your report, you mentioned the studies on the potential problem the aging workforce is going to have as kind of a big grey zone—I think those were your words. Then Glynnis mentioned the working group that's been set up, so I guess we're in the process of having a better study of those things.

Glynnis, what is the reporting timeframe of this working group? When will we have a little more information in this area?

Ms. Glynnis French: That's a good question, because being a federal-provincial group in part, the timeframe will be jointly determined. The working group itself has just recently been established, so I'm not sure if they're really at the point of setting out exactly when there will be reports specifically on that issue.

In terms of the diagnostics, they will be building on the material you've heard today and then trying to move very quickly from that into the kinds of policy concerns we should think about in the federal-provincial context. I expect there will be some feedback from that group within the next six months.

Mrs. Diane Ablonczy: So really this committee's study is in a bit of a vacuum at this point.

Ms. Glynnis French: I think your study could feed into that process very valuably.

Mrs. Diane Ablonczy: In spite of our declining skills?

Some hon. members: Oh, oh!

Mrs. Diane Ablonczy: I just have one more quick question, if I have time. Serge mentioned that the programs targeting older workers were limited and that we're just kind of moving to decide what programs are needed.

I think we all have constituents aged 55 and over who have come to us with difficulties in this area. An example is a 60-year-old woman who had her own company, in partnership with someone, doing geological, technological analysis, but because of the downturn in the mining industry the company couldn't stay viable. This lady is 60, with good computer skills and a good scientific mind, but is simply unable to find work. I'm sure there are many such examples. What programs, if any, would be available to assist this woman in making the transition to other employment?

Ms. Glynnis French: Perhaps I can answer that. If she's self-employed, which means she has no previous work experience, she doesn't fall into the employment insurance category, so there definitely is a vacuum. That's certainly one of the areas we will be looking at from the policy perspective of what occurs for those people who, if you like, don't seem to fit into the normal programming.

Certainly labour market programming, supported by the federal government, has tended to deal with employment insurance clients as the primary client group. There are other programs for the self-employed, but I think what you're explaining is a situation where somebody is self-employed and then decides they need to move into the regular labour force.

Mrs. Diane Ablonczy: I really appreciate those answers. Thank you.

The Acting Chairman (Mr. Andy Scott): Thank you. Next is Madam Gagnon.

[Translation]

Ms. Christiane Gagnon (Québec, BQ): I would like to ask Mr. Voyer a question. You reported on the labour market situation of older workers, and I appreciate all your work.

Although you have compiled statistics on people who have decided to retire, you do not seem to know why they retired. Did they retire because they were having trouble finding a new job, or because they wanted to retire? I think this is a very important piece of information. If they were forced to retire because they couldn't find a new job, that may tell us that other workers without resources may also have trouble finding a job.

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This explains why, in some cases, only active and passive measures can help these workers meet their basic needs. Without this indicator, we will not have a good understanding of the problems faced by some workers when they try to get back in the labour market. We must be very aware of this aspect. People have been laid off for all sorts of reasons, because the natural resource of a region is no longer available, because new technologies have replaced manual work, and so on.

You spoke about years of education. Twenty years from now, we may realize that people's education was too narrow. There may be individuals who cannot work outside their specific field—they will be too specialized. They may have mastered the new technology, but in 20 or 40 years, we may have to think about building a society based more on people. We may be able to make good use of people's skills, but, on the other hand, we may have a hard time doing that. We may be missing some aspects here that it would be good to know about.

Mr. Jean-Pierre Voyer: Let me go back to the last chart, which I described a little quickly.

We already have this information, because it was collected in the course of Statistics Canada's national survey. Although it dates back a few years, I am assuming it is reliable.

The green section of the histogram shows that most of the people decided to retire voluntarily. Many of these individuals made a personal choice, although this section is a bit of a catch- all category. Of the people who did not retire voluntarily, some suffered from health problems, and some were forced into the situation.

Ms. Christiane Gagnon: Where do they appear exactly?

Mr. Jean-Pierre Voyer: They are the first ones here. There were also some others who were offered departure incentives.

Ms. Christiane Gagnon: I see.

Mr. Jean-Pierre Voyer: But there was another residual category, that does not appear on the graph. Although we distinguish between voluntary and involuntary choice, we should not deceive ourselves: we must realize that some people claimed they retired voluntarily, when in fact they had no choice. It is easier for them to say that they retired voluntarily than to say that they could not find a job. There is much less stigma attached to that. These people are therefore forced to live on a minimal income. Who knows whether they have enough income to survive? That is a different matter.

That is why I am saying that there is a grey area, and I would caution you. Although we have these data, we have to ask how useful they really are.

As to the issue of specialized education as opposed to a general education, there are some interesting things happening. Young people are often told to study science and to head into some very specific fields. However, we are starting to realize that the unemployment rate among people with degrees in science is higher than among people with degrees in humanities—the very generalists who were told they would not be able to find a job. We have to be careful about all these myths. What does the future hold? Most researchers agree that people with skills in the basics such as English, reading and understanding will be well equipped to deal with the future. People with these basic skills will be able to adapt well.

These days, a high school diploma is no longer enough. In the class, students were told that they should finish high school, that that was the minimum. We are reviewing these criteria, because that is no longer enough. Our institutions may have to consider extending education for a few more years to give people enough skills so that they do not end up becoming older, unskilled workers.

• 1615

Ms. Christiane Gagnon: I have one final question.

Are you recommending that we keep a program like POWA, in order to meet the needs of people living in regions where layoffs have occurred? During the winter, I was watching the program La Mine BC, which showed all the workers taking a basic algebra and mathematics course in order to get back into the labour market. These workers said they didn't think the courses would be that helpful, because they were older and almost on the point of retiring. However, they knew they needed to earn enough income to support themselves.

Do we need a program like POWA? Perhaps a wall-to-wall program is not the answer, but do we need to try to establish a program that produces better results for older people who cannot find a new job? They could get back into the labour market if they had training or an apprenticeship program in a company. We know, however, that some of these people will not be able to go back into the labour force, and that they will become the new poor, because they will not have any income.

Mr. Jean-Pierre Voyer: Governments must weigh a number of options. As my colleague pointed out, the government has decided to move away from strictly passive measures that have proven costly and often ineffective and guarantee only a minimum income to workers. These measures aren't able to restore conditions similar to ones that people enjoyed before their lives were disrupted and their community hit with massive layoffs.

Surely there are other options that can be considered, such as, as you mentioned, manpower training programs. However, as my colleague pointed out, these programs work is some cases, but don't when individuals haven't acquired basic skills.

We want to look at new options. For instance, we hear a lot said in Quebec about the social economy. Our department is currently looking at a number of pilot projects, including one where, in co-operation with the Nova Scotia government, unemployed workers would be given an opportunity to earn more than the minimum wage by doing community work for three years, instead of receiving EI benefits. This project is still in the experimental stage. This alternative approach would help to erase the stigma associated with the passive approach which consists of giving people a cheque and demanding nothing further of them. Persons involved in the project would be asked to do productive community work, but would not necessarily be included in the traditional economy. We are working with the Nova Scotia government to implement this program in Cape Breton. We have requested the support of local communities because of course such an initiative would not be possible without their backing. This is the type of approach we want to consider together with the provinces, and within the framework of the committee the minister spoke of.

[English]

The Acting Chairman (Mr. Andy Scott): Thank you very much.

[Translation]

Mr. Serge Bertrand: I'd just like to clarify a few things. In New Brunswick, we have already set up a program similar to the one Jean-Pierre described, the Job Corps Program. It's important to remember that programs like these are effective to the extent that reintegrating the labour market isn't viewed as the only measure of their success. A range of factors must be considered.

The New Brunswick program has been effective. For example, the program's impact on health care was measured and many factors were considered, not simply the employment figures. Some programs have truly proven to be effective.

[English]

The Acting Chairman (Mr. Andy Scott): Thank you very much.

Your presentation has prompted considerable enthusiasm on the Liberal side to ask questions, such that I'm having difficulty choosing. I'm going to give the floor to Mr. Coderre, but Mr. Alcock is going to get more time. Go ahead.

• 1620

Mr. Denis Coderre: It's Quebec bashing again, is it?

Mr. Reg Alcock (Winnipeg South, Lib.): It seems fair to me.

[Translation]

Mr. Denis Coderre: I'd like to talk about perceptions, since it's also your role to discuss strategic policy. We don't always deal with statistics, but rather with average people. POWA targeted workers 55 years of age and older and the average age of those involved in the production of the program La Mine BC was 52 years. There is a gap between workers who are 52 years old and those who are 55 years old.

My sense today is that everything is moving very fast, perhaps even too fast, and that people in a certain age group are having trouble adapting to change. I would say that we are dealing with two age groups: the baby-boomers, who are more highly educated, and those 55 years and older who tend more to be blue-collar workers.

Given the impact of technological change, I think we should adjust the program so that it applies to persons aged 50 and over. I sense that the generation gap is widening, and this affects the policies we adopt. I'd be interested in hearing your views on this subject.

Secondly, I'd like the provinces to initiate a dialogue among themselves. Sometimes, there are problems between rural and urban regions. Increasingly, our government is moving away from strictly passive measures. However, it will need to resort to both types of approaches - passive as well as active - to achieve its objective of reintegrating older workers into the labour market. We must also recognize that there will always be persons who unfortunately, will never find their way back into the market and who will need to be taken care of. When unemployment figures drop, it's partly because these individuals are no longer factored into the equation. The result is significant gaps in society. We mustn't lose sight of the fact that our job is to ensure that these individuals enjoy a decent standard of living.

My second, and final, question concerns the impact of the labour force agreement between the provinces. We talk about the Social Union Framework. Quebec, for reasons that are well known, did not sign this agreement. However, the truth of the matter is—and we're not the ones saying it, but rather certain experts and editorial writers like Claude Picher—that as far as Quebec is concerned, the labour force agreement is a disaster because of cutbacks, the gradual decline of the CFP and so forth. Have you analysed how the age of workers impacts new policies and what the effect of the labour agreement between Quebec and Ottawa has been?

Mr. Serge Bertrand: I can provide an answer to your second question because it relates to the work we have been doing assessing the impact of these agreements. When these labour market development agreements were signed, we agreed that their implementation should be evaluated during the first year and their impact on clients during the third year.

We are currently doing the first year evaluations in all of the provinces. We are primarily looking at how these agreements are being implementing and trying to determine, among other things, if certain client groups, as we call them, have either fallen through the cracks or been left out. The results aren't in yet, but you can rest assured that we have taken steps to address these questions.

Mr. Denis Coderre: I understand.

Mr. Jean-Pierre Voyer: As for your initial comments, many important factors come into play and I don't think I can shed any new light on this matter. How should we define baby-boomers? Are they persons 55 years of age and older? In that case, we're not talking about former hippies, but about former beatniks. That's going back quite a few years.

• 1625

As for the generation gap, a number of income-related studies have been done. These have revealed that problems are more prevalent among members of the same generation than among persons from different generations. Inequities are more striking within each generation. Young people may have been the exception recently, particularly during the decade of the 1990s. Therefore, I can't say that I agree with you.

However, as far the differences between urban and rural populations, we don't have enough information because statistics are hard to come by in rural areas and the statistical samples are small. In my view, it goes both ways. Is a low-skilled older worker better off living in a rural community than in an urban community? There's no obvious answer to that question. It's like asking poor people whether they're better off living in the country or in the city. Some argue that when you're poor, you can enjoy a better standard of living in the country than you can in the city. I really can't say, one way or the other.

Mr. Denis Coderre: That would help us understand better, because without that information, the statistics can be distorted.

Mr. Jean-Pierre Voyer: Absolutely. We do not have enough information. You are quite right.

[English]

The Acting Chairman (Mr. Andy Scott): Thank you very much. Mr. Alcock.

Mr. Reg Alcock: Thank you, Mr. Chairman.

Thank you. I found the presentations interesting.

I have an observation and a question about a specific policy I'm interested in. In some of the slides you talked about the declining age of retirement. I'm wondering if part of that could be a by-product of the fact that in the late 1950s and early 1960s we began a whole series of pension plans and such within the public sector and large companies that are only now beginning to pay out. I know a number of folks who have benefited from that. I know teachers who were able to retire at 55 and who were quite willing and happy to retire. In fact, the behaviour shown in a recent Disney commercial about saying goodbye to the kid and getting out of town is not that uncommon.

So I just wonder if there isn't some influence there, that it's not all the kind of gloomy, gee, I've been forced out.

In addition, there are military policemen and others who may start working very early, retire at a relatively early age, and start a new career. They would show up as retired at an early age, but they would go on to work in a different career.

I was just a little uncertain from your presentation as to whether that increase is a result of the success of a certain basket of programs introduced in the early 1960s or representative of something we should be more worried about.

I ask this next question in part because I see that all three of you are involved in strategic policy, applied research, labour market, and data development. As the workplace is evolving and the pace of change is increasing, it is often suggested that a worker today is going to have two, three, four careers throughout their life, and the need to step out of the labour force, to avail oneself of some retraining, and to step back into the labour force is something that gets commented on over and over again.

I've heard discussions at this committee about this whole issue of lifelong learning. Does the department have a position, a policy, or a perspective on lifelong learning? Are you working on something? Is there a proposal coming forward? Has there been some development of the department's thinking around this whole issue and how it might be implemented?

Mr. Jean-Pierre Voyer: We're going back a bit to the question Madame Gagnon asked. There are, no doubt, two factors in the trend.

One is an increase in involuntary retirement because of labour market conditions, people who go because they don't have any choice and they don't have the skills. But the other part is that people can afford it. Why can they afford it? In large part it's because of what you just said. The public and private pension schemes that were put together are now starting to kick in.

• 1630

Our public programs in this area have improved so much that, in fact, I think one thing that Canada has succeeded in eradicating is old age poverty. That is due in large part to the public programs. So that also helps people make a decision, because they have more security towards the future when they know those programs are in place.

Indeed, a good part of it is as you say. I cannot say how much. Is it half and half, or two-thirds and one-third? We all know these things are there.

On the training and retraining, the three or four careers, again we believe in lifelong learning, perhaps not in the notion that we were told a few years ago, that you are going to have five or six careers. This may be more true of politicians than public servants. A lot of people do change their occupation, but within a very narrow scope. We don't see the shift happening, the drastic kind, such as going from a lawyer to becoming a programmer; that's not what we see in the statistics.

We are big believers in lifelong learning, and I'll let my colleague talk about what we're up to.

Ms. Glynnis French: I'd like to underline what J.-P. Voyer has said, that we are very concerned about lifelong learning. We've done a lot of analysis of the issue of what the key points of intervention are and what could possibly be the most successful ways of intervening during the life cycle.

As you know, lifelong learning really starts as early as childhood. Some people are saying that in the first six years of life the neurological patterns are established that allow a person to learn throughout their life. That is certainly one of the issues that the federal government is concerned about.

Obviously when we talk about lifelong learning, the federal government is committed to the concept, but we do need to work through a federal-provincial context, because many of the levers to promote learning rest with provincial governments; they're within provincial jurisdictions. One of the best predictors of successful outcomes is success in the K-to-12 years.

Certainly the federal government has its emphasis in learning through, for example, the labour market development agreements, which have their focus on training and retraining. We're concerned, from a policy point of view, about the fact that Canada really measures in the middle of other countries in relation to the degree to which workplaces, companies themselves, participate in learning activities for their workers. The issue is, are there further incentives, further ways in which we could lever better workplace training than we have today? Certainly those kinds of issues are always under consideration.

Mr. Reg Alcock: Mr. Voyer had indicated a break point between the time the department handed off programs to the provinces. I wonder if in the active measures for older workers you have the data that allows you to look at variations in the success, given companion provincial programs or provincial programs picking up, whether you see any variability across the country, with some people being more successful than others?

I believe that in some of the lifelong learning proposals there was a suggestion I had heard discussed here about the possibility of using the UI entitlements as an opportunity to step out of the labour force while receiving some support and taking some training. I wonder if the department has a position on that.

Ms. Glynnis French: I wouldn't really want to speak to a policy initiative in place, but as to whether that is an issue the government is considering, the government considers all kinds of policy issues, including that one. Certainly work is being undertaken to look at the feasibility of potentially using EI or other mechanisms for promoting lifelong learning.

Before I pass on the issue of effectiveness to Serge, I'd like to remind everybody that the federal government has made tremendous investments in lifelong learning through the Canada opportunities strategy, with encouragement of post-secondary education, particularly. The results in Canada are very clearly that the government has been tremendously successful with those kinds of investments in terms of bringing up the general levels of education in this country significantly over the past 20 years, and those of course are strong predictors of success in the workplace.

• 1635

Mr. Serge Bertrand: On the LMDAs, again, as I indicated, the work is underway with provinces. We are starting to get results right now. So I cannot basically answer before we have the full results of all provinces. We should have that within the next year probably, and in a future report it will be mentioned.

The Acting Chairman (Mr. Andy Scott): Thank you.

I have both Mr. Wilfert and Mr. O'Reilly. We're going to go across and then come back over. We have quite a bit of time left.

Mr. Maurice Vellacott (Wanuskewin, Ref.): Back in the budget in February 1998 the government announced the possibility of withdrawing RRSPs for lifelong learning. You could use that to finance education in the future. I'm not sure who would be the appropriate person to respond, but do you think that's a helpful kind of thing in terms of individuals with low skills, lower-income workers? Is that an answer to a...?

Mr. Jean-Pierre Voyer: There is perhaps a place for more to be done in this area and there are different schemes being looked at. Your question is about whether or not we should complement that.

Mr. Maurice Vellacott: Yes. I'm asking you is it a kind of policy response coming out of HRDC that there be this? Is that at the instance of—

Mr. Jean-Pierre Voyer: We're looking at some schemes, but Glynnis could answer further.

Ms. Glynnis French: As you mentioned, in the 1998 budget there was a provision introduced where individuals could withdraw from their RRSP to undertake training and then repay it over a five-year period. We're probably not best placed, because we're in the policy world, to talk about the effectiveness and the degree to which Canadians have taken up that program, but there are certainly other people within the department who could tell you about the statistics and so on.

I think we are concerned about whether or not that would be the best mechanism for encouraging people to undertake lifelong learning from a policy point of view, and we're looking at how effective it has been and whether there are other mechanisms where you're not replacing one sort of incentive—in other words, to save for retirement—with another. So we need to have a look at that. I think we're not really at the end of that process of examining its effectiveness and even knowing to what extent people are taking up that offer.

Mr. Maurice Vellacott: Would you have any speculations in terms of how that would pertain to low-skilled, low-income people?

Mr. Jean-Pierre Voyer: The current measure is clearly not a target for the low skilled.

Mr. Maurice Vellacott: You mean withdrawing RRSPs?

Mr. Jean-Pierre Voyer: Yes. First you have to have an RRSP. We all know that the large majority of low-income people don't have RRSPs. So that's problematic. The concept of the measure I think is one that should perhaps...and we're looking at that transposed, whether it's EI or another source of funds.

Mr. Maurice Vellacott: Right.

Mr. Jean-Pierre Voyer: But clearly there is a problem now, there is a bit of a gap, because this measure will not get at the very low skilled. And if we want a lifelong learning policy for all, then we have to look into other schemes, complementary schemes, that are a bit on the same design.

Mr. Maurice Vellacott: This would be more to the advantage of those who have higher skills, RRSPs and so on, I take it.

Mr. Jean-Pierre Voyer: The current ones, you say?

Mr. Maurice Vellacott: The 1998 one.

Mr. Jean-Pierre Voyer: Not necessarily. The jury is out. The evaluation that the Department of Finance and HRDC will do of that scheme will show.... There is also reason to believe that highly skilled people will not use it either, because they may not be in a lifelong learning culture. A lot of us are not considering breaking off what we're doing now and going to university for two years. Maybe it's more the middle-income people, the lower-middle-income people. I think the jury is out. But it's clear that if you don't have any RRSPs it's not useful, and we know low-income people have a very low incidence of RRSPs.

Mr. Maurice Vellacott: Thank you.

The Acting Chairman (Mr. Andy Scott): Thank you.

Mrs. Ablonczy.

• 1640

Mrs. Diane Ablonczy: Thank you.

Along that line, Serge, you presented some interesting material about what's been done in other countries with the passing of the transitional income support and the active measures, and we talked a little bit earlier about the rate at which our population is aging. My question is on this study group that Glynnis mentioned. Is part of that study going to be arriving at some idea of the cost of different measures that are being used in other countries in the context of the Canadian statistics?

Ms. Glynnis French: I'm not sure they've come to that point, but it's an interesting twist on the issue. I think it certainly is one that bears looking at, and I would take it back as an issue they might want to think about.

I think the bottom line is that passive income support tends to be very expensive, and the issue from a policy perspective is really whether that is what you want to do with older workers, or whether you want to somehow reintegrate them and make them active and participating members of society. So there is a fundamental question there as well as a cost question.

Mrs. Diane Ablonczy: I understand that. There are also transitional measures and active measures, particularly in light of the fact that the workforce supporting the cost of these would be a younger workforce that is shrinking. There are going to be fewer people supporting these generous measures. I think we really do have to know before we come up with some compassionate and generous measures whether it's actually doable in terms of the guys who are going to have to earn and cough up the money.

The other question I have is this. We talked a little bit about people who, instead of seeking other employment, simply decide to retire, and there were some kind words about how well we are eradicating poverty among older Canadians and how generous the support is. But of course the fact of the matter is that I wouldn't want to retire on what I would get from the Canada Pension Plan, and I've paid in since I was 19 so I assume I'd have the maximum. I have no private pension, including the MP pension.

Mr. John O'Reilly (Haliburton—Victoria—Brock, Lib.): Ten years isn't that long.

Mrs. Diane Ablonczy: I know. It hasn't been that long. Thank you. You're just wonderful.

No private pension. The old age security is pretty well not available to anybody with some savings, which would be a lot of Canadians or some Canadians, and of course the guaranteed income supplement isn't high wages either.

So my question is, if you're 55-plus and you can't get a job, you can't get the skills or transfer the skills you already have, how realistic is it to say, well, we have a generous social benefit anyway so it doesn't really matter; just go ahead and retire. Is that really realistic? I question that, and I'd like to know whether you agree with me or whether you want to challenge that.

Mr. Jean-Pierre Voyer: I'll take this one because I want to make one observation.

I'll come back to the observation after, but I think it's important that, given your interest in the aging of the population, you seem to really look at the issue from that perspective. It's in everyone's judgment as to how much money you need for your retirement, and if the alternative is between—

Mrs. Diane Ablonczy: It's not just judgment. There are certain necessities of life you have to have.

Mr. Jean-Pierre Voyer: Absolutely, it's deciding whether to be working poor versus passive poor.

What I suggest is that the decision is easier because we have a safety net system than if we didn't have any. It depends on the alternatives. For someone who's had a good wage and probably has a good pension scheme anyway, this is not an alternative of course. And it's not the alternative. But for someone who has low skills and is working at a low wage, the step is not as large and it may provide a bit more.... I'm saying that in many cases the decision to work may be preferable, but given the difficulties, people may get discouraged and say, well, in the end I can cut on this or cut on that and I'll make out.

• 1645

Mrs. Diane Ablonczy: There may not be a real economic advantage to the struggle.

Mr. Jean-Pierre Voyer: Absolutely not. But then that's why I want to come back to your question.

We have some research going on about the aging of the population. There's been a lot of work done at the OECD. We've done a lot of work ourselves, perhaps more so on older workers precisely, on what are the implications. One of the conclusions that come up quite clearly is that Canada has a lot of time to turn the corner, that is, we're not going to get into a problem of aging as fast as Europe, Japan and other countries like that.

The real issue at this time is to find ways to keep people in the labour force longer. We cannot force people to work if they have a preference not to, in a sense, and they can afford it.

Many areas of public policy and programs remain that could be played with a bit to make sure there are no barriers. We've talked about partial retirement, partial work. The structure of the pension scheme may need to be looked at so that everyone who has a desire or a preference to work should be able to work. This is not only because of the principle of it, which is nice in itself, but also because the mechanics of it are important for the public finance of the country in 20 years. The incentive for people to stay in the workforce is something that comes out of all of our studies on aging.

Mrs. Diane Ablonczy: In other words, we may need their taxes.

Mr. Jean-Pierre Voyer: Absolutely.

Mr. Serge Bertrand: Can I just add another fact? When we discuss the problem economically we deal with it as a supply-type problem only. We talk about the workers. The debate also has to take into account what the labour market conditions and the economy will be like in 10 or 15 years. That is also very important. When we look at other countries and how they've dealt with the problem, we see that the state of their economy has to some extent dictated what they did. For instance, what they did in Japan was done in such a way because they had almost full employment and they went a certain way. In Europe, where there was perhaps higher unemployment, they went another way.

So I think it's also something to keep in the back of our minds: what the situation will be 10 or 15 years from now also has to be part of the equation.

Mrs. Diane Ablonczy: That's a very good point. We can't look at these things in isolation. Thank you.

The Acting Chairman (Mr. Andy Scott): Thank you very much.

Mr. Wilfert, please.

Mr. Bryon Wilfert (Oak Ridges, Lib.): Thank you, Mr. Chairman. I'm sorry I was late, but I was tabling a report in the House and unfortunately nothing ever goes as planned, so it was much longer than expected.

I'm sorry I missed most, if not all, of your presentation, because I am very interested in this issue.

When I read that there's a very limited number of programs designed specifically for older workers, I wonder to what degree we use demographics accurately or at all in the government, because there's no surprise that we are going to have older workers. Whether or not you read Dr. Foot's work on 2000 in Boom, Bust and Echo, you know there's going to be a bulge.

We know that one of the difficulties, of course, is the unskilled workers or those who don't have the necessary skills today because what they may have learned 30 or 40 years ago.... When you see people being laid off the assembly lines recently in St. Catharines, where General Motors decided to close down, these people may have been working for 20 or 30 years and they may not have those skills.

To divert for a second, one of the comments made across the way here was about the 1998 budget and the use of tax-free RRSPs. You commented quite accurately that a lot of these people don't have them. One of the things I don't understand is why we don't look at why the department has not promoted the idea of using the EI entitlement for lifelong learning. To me that would make ample sense, particularly since the gap is getting wider, as you say. We know that in fact the RRSP is not the option that many can use, so I would suggest that the EI entitlement would be a logical approach.

I'm obviously concerned that we as a society have not prepared ourselves to meet some of the demands, particularly with all the other complications now with this downsizing, rightsizing—and I hate these terms. People were not necessarily expecting to lose their jobs. They came into a particular company 30 years ago, and suddenly this happened.

• 1650

For a lot of people, though, it's not only the question of how much money they have at the end of the day, but also it's about their own dignity, their self-worth. We're talking to people who are 50 years of age who are suddenly out of a job. People are very productive.

My own mother is not at all happy that she retired 10 years ago. She voluntarily retired. I won't quote her age, because she'll kill me. She still plays tennis. In fact, until about four years ago she beat me all the time. It shows you what shape I'm in.

Mr. John O'Reilly: That wouldn't be hard.

Mr. Bryon Wilfert: The difficulty is that these people want to be active and contribute productively to society. So it's not always just the dollars, although obviously it's important to have the necessary dollars to be able to survive in the way we all would like.

We see the volunteers and the role of volunteer agencies in our society. Lifelong learning is also expensive. Some of these people may not have the dollars to be able...and I know that some of them don't, because I see them in my office all the time. The difficulty is that we need to respond in that way.

So my first question is about the use of demographics and why we didn't see this coming.

The second one is about the EI entitlement. If we haven't floated this option, then we should be doing more than floating it. We should really look seriously at that.

The third question is the issue of dignity and self-worth. How do you deal with a situation where people don't have those tools and they are much more concerned about being productive members, and dollars just aren't part of the equation?

Mr. Jean-Pierre Voyer: On the question of the demographics, we saw it coming. It's the bias against low skills that we saw coming less, in terms of the community of policymakers. It's only over the last five, six, or seven years that we've started talking about technological bias and the knowledge-based economy, and the fact that the economy was more and more discriminating towards the lower-skilled worker.

If you look at the mere demographics, in the beginning of my presentation I showed that the older workers as a group are not worse off than anybody else. The problem is mostly one of low-educated older workers, and even more so when they get laid off. This has to do not so much with the size, the demography, of the pool but very much more with the new context into which low-skilled workers have to...and there are a lot of low skills among older workers.

Mr. Bryon Wilfert: If in fact we saw it coming, then why do we have such limited programs that can respond effectively to the issue at hand? I read your first part, where it said they're not worse off than others. I'd like to look at what kind of analysis you did in terms of what you exactly examined to say they're similar to others.

We talk about younger workers being more disadvantaged. Then, of course, the issue is that it's more difficult as you get older to learn new skills, whether they're linguistic skills or technological skills. I learn by watching. Six or seven years ago I didn't know how to use a computer. If you handed me the manual, it was absolutely useless to me. So I watched somebody and they taught me. I'm fairly proficient now.

I still have some difficulty with those assumptions, particularly when you say we saw it coming.

Mr. Jean-Pierre Voyer: I'm sorry. We saw the demography coming. We didn't see the fact that the low skills were to be discriminated against so much by today's economic requirements. I think I'm trying to recast the problem you see. You are characterizing it as a demographic issue. I'm trying to say it's more of a skills issue.

• 1655

We have problems with the low skills of older workers. And low-skilled youth is a problem as well, as is a low-skilled main workforce. So with the problem we're looking at of older workers today, you quickly have to reduce it to low-skilled older workers. I would suggest that it's low-skilled workers all around. The government programs were not prepared for that. You're absolutely right, that's the technological shift we didn't see coming.

Mr. Bryon Wilfert: I apologize if I didn't see it in your papers. Did you actually describe what you characterize as low skills?

Mr. Jean-Pierre Voyer: In the definition I used, we were talking usually of less than high school...or other literacy skills. You talk about familiarization with the computer. Some people don't have an education level that is very high, but nevertheless they are very literate. They can learn by emulating or they can learn through reading. They're autodidacts. There's a lot of that.

Among older workers right now there's a lot of low literacy, which was not too much of an issue several years ago, where you didn't need to be very literate to work in the primary sector. You had to be good with your judgment and your hands. Today, with technology, even those sectors have been going down. And on top of it, the technology required to work with those sectors is going up; there's a skill bias upward. All the occupational requirements in terms of skills have increased rather than decreased.

I don't know if you remember that a few years ago there was a debate on whether technology was introducing a bias against or for technology. I think we've resolved that. Clearly, we see it in all of our data. Most occupations demand more now than they used to, and that's what we were not prepared for.

That's the answer. I've forgotten the other questions. I know there was a question about the entitlement of EI, but I think you mentioned the informal economy.

The Acting Chairman (Mr. Andy Scott): We're going to hit on that later.

Ms. Glynnis French: Would you like me to reply on—

The Acting Chairman (Mr. Andy Scott): I want to make sure Mr. O'Reilly gets his oar in here.

Ms. Glynnis French: On the issue of whether or not EI entitlement is used to deal with this issue, I think quite clearly it is, because there's been a tremendously great investment in active measures in training. By the time the program is fully phased in, there will be a $2.2 billion investment in the active measures of the labour market training aspect of employment insurance. So EI entitlement and retraining are very closely interlinked. That was intentional and that was a policy choice.

I'm not sure whether you were getting at the issue of whether there's a mid-career stepping out of the labour force in order to do retraining through EI. Policy choices of all kinds are being considered. That's not one that necessarily has been completely dismissed, but of course it is extremely expensive and it would have to be weighed against other policy choices.

The Acting Chairman (Mr. Andy Scott): Thank you.

On the point made that measurement is particularly difficult, some people asked about how you define “low skill”. Some people measure it according to how you do in school; others define “skill” as whether or not they can beat their mother.

You can go ahead.

Mr. Serge Bertrand: I would like to address your observation that there is a limited number of programs for older workers. I made that comment, and I would just like to put that into context.

We reviewed what the OECD countries are doing and what we're doing to address the issue of older workers. We observed that the OECD countries, not only Canada but the entire set, have not tended to use active measures to respond to the issue, especially in Europe. In Europe they went through this problem before us, in terms of the aging of their population. They have tended to address the issue with a policy response of more passive measures like income support.

In the past countries have not responded with active measures. That's the point I was trying to make. It was not that we didn't see it coming, but it was looking at how the countries have responded to the problem.

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Mr. Bryon Wilfert: Passive versus active.

The Acting Chairman (Mr. Andy Scott): Mr. O'Reilly.

Mr. John O'Reilly: Thank you very much, Mr. Chairman, and thank you very much, presenters, for your very thoughtful and very detailed analysis.

Most of my questions, by the way, have been answered, but the one on which I haven't heard an answer yet is, do your statistics take into account the trend of companies sending their employees off into retirement and then hiring them back under specific contracts? This happens in places like the OPP, where the person serves 25 or 30 years and then is retired, and then the next thing you know, you see them back in uniform doing specific duties, working under a personal contract. There are no benefits paid. That happens in the military; it happens to many drivers; it happens in retail stores, where a person is retired, they're collecting a pension, and they're shopping themselves out to maybe one or two different retail stores to work under contract.

Is that taken into account in the statistical analysis, and if not, why not? If it is, would that not give some answer as to why the gap between when you're retired and when you die has actually lengthened? A lot of the people in that age group are in fact still working. They're just double-dipping, or working at one or two other jobs and collecting a full pension, and I suppose dealing with the tax situation through incorporating themselves, that type of thing. I just wondered if that was taken into consideration, and if the statistics reflect it anywhere. I couldn't find it in the presentation.

Mr. Jean-Pierre Voyer: I think you're entirely right, there's a lot of contracting out and rehiring. There are two behaviours, and you've described them. Companies sometimes fire workers and rehire them, or let them go and then take them on through different means—and there's a series of ways in which this is being done—but there's also the situation where people retire from one place and go to work as self-employed at another one.

So these show in the statistics of self-employed that I have mentioned. I can't tell you how much, but we know that a good portion of the increase in self-employment that we see is due to the phenomenon you just described, part of it—again, 30%, 50%, 20%, I cannot tell.

In terms of the last part of your observation, this will not increase or affect the gap, though, between retirement and.... If they are self-employed, if they are working either as their own account or for another company, they would be considered still employed. Even though they've quit their company, they're still in the workforce; they're still showing as positive statistics, if you want. They still show as members of the workforce. They are employed. They're not considered unemployed—unless they do things under the table, but that's another story. So that phenomenon would not be responsible for the gap that is shown in terms of the increased period of retirement.

When we speak of retirement, we're speaking of inactivity. Let me rephrase that: we're speaking of non-activity in the formal economy. It could be tennis, it could be voluntary sector; these are all legitimate activities, but not paid work.

Mr. John O'Reilly: Okay. I just didn't know how that entered into the statistics. If they're not paying income tax or unemployment insurance and the only thing they do is file a tax return at the end of the year that shows they have other income, which they have to pay tax on, and they have their pension, where do they fit into your equation? That was basically my question. I don't know how you catch them.

Mr. Jean-Pierre Voyer: They're considered paid employed workers. They're considered part of the workforce. They're considered employed—in this case self-employed, but employed.

Mr. John O'Reilly: Thank you, Mr. Chairman.

The Acting Chairman (Mr. Andy Scott): We know, Mr. O'Reilly, that what you're trying to do is reassure the country that in fact Mr. Gretzsky is not retired.

Ms. Ablonczy.

Mrs. Diane Ablonczy: I just have a quick question.

There was an HRDC report a year or so ago that explored the issue of any possible bias against older workers in the manpower centres at that time—they have a different name now. I wonder if you could comment a little bit on that. I know you mentioned discrimination against older workers, and I'm not wanting any hostility toward the department, but I just want to know whether you could comment on that and on whether anything's been done to address it. If our internal operations can address that problem, then maybe we can extrapolate those solutions to private industry. That is what I'm thinking.

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Ms. Glynnis French: I'm not aware of the report you're referring to, so I feel at a bit of a disadvantage.

Mrs. Diane Ablonczy: I don't have the name, I'm sorry.

Ms. Glynnis French: I think I'd have to see the report before responding to it.

But there's nothing inherent in the program delivery itself that should lead to discriminatory behaviour against older workers. In fact, I would say that the focus now on a wider range of measures to reintegrate workers in the workforce should allow for better treatment and more targeted treatment of all groups, including those who fall in the older age group category.

Mrs. Diane Ablonczy: Yes, this is just a vague recollection, so if I get any more particulars I can always come back and see if you have any comment. Thanks.

The Acting Chairman (Mr. Andy Scott): Thank you. I'd like to ask the indulgence of the committee to let me touch on a couple of questions myself, if you don't mind. A couple are just information items.

First, there was a reference to the fact that the labour market agreements may not be working well with regard to older workers. I would be curious as to the nature of the evaluations that demonstrated that, and I suspect the committee would be very interested in finding that out. I would like to know how POWA was funded, through CRF or EI—I presume CRF funds. I see nodding, so I guess I already have my answer.

On the question of the use of EI—this is on lifelong learning—as a way of offering entitlement for someone pursuing lifelong learning, whether they step out of the labour market to do that or whether they leave the labour market and do it anyway, which would be active measures.... The point here is that since we've identified that it's as much a low skill problem as an older worker problem—I think that point's been made repeatedly—consequently the remedy is in skills enhancement; and in fact the natural course of things, at least in some of the cases, is the reverse. The point was made by someone that in fact just sustaining skill levels in some cases has been difficult.

Therefore we've identified low skills as the root source, which shows up as a demographic but is really related to skills as much as anything. In fact, as people get older, their skills set diminishes rather than holding its own, which comes as a revelation to some, certainly to me. Then we have, I think, an obligation to consider ways of remedying that phenomenon.

I would also add—and I'm open to challenge on this—that the EI program and CPP also end up offering the entitlement after you've lost your job. Consequently, could we not determine the costs that would be required to allow somebody to step out before being forced to do so, as against the cost that's going to be incurred when they're forced to do so because they haven't got the skills? In other words, when they leave the labour force, in many cases they are going to be on EI or CPP, disability usually, in that period we're talking about. Consequently, if you shifted that money forward in the system so that they could keep their skills set up, they wouldn't leave. You said a lot of this has to do with skills sets, so therefore we're paying for it either preventively or after the fact. Has any analysis been done on that cost?

I'd be curious as to the province-by-province inventory of programming. You've mentioned Job Corps in New Brunswick; I'm familiar with that. You also mentioned that they seem to be negotiating something very similar to Job Corps in Cape Breton; at least, the way it was described sounds familiar.

That's it.

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Ms. Glynnis French: On the issue of EI entitlement, you're perfectly correct that the design of EI is related to people losing their jobs and providing entitlement for people who have lost their jobs, with one clear exception, which is the issue with apprentices who in fact have not lost their jobs but are entitled to use EI during the period of training. Somehow that was designed into the program, but other kinds of training as a part of employment were not included in the program.

What it would cost would really depend on the take-up. We know that we have about 1.4 million people cycling through EI in a year. If you take your take-up at perhaps $100,000 a year, you can quickly come to $1 billion to $2 billion on cost. That's just back of the envelope. But there are many other ways in which, through the design of the program, you're going to make it either more or less attractive for people. We haven't done that detailed costing. We haven't been directed to do it as a policy initiative. That and all other kinds of issues related to EI are constantly under consideration.

Mr. Serge Bertrand: Maybe I can address your first question on LMDAs. The point that was mentioned on LMDAs was that there was a report in the newspaper, in La Presse in particular, that maybe there were some difficulties in the implementation of LMDAs in Quebec. We have not received that evaluation yet. But I don't recall that in the newspaper there were any specific references to older worker difficulties.

As for other provinces, as I indicated, we are in the process of evaluating the implementation of LMDAs in each province, and one of the issues we cover is whether or not there are clientele groups that are not served well. So we will have reports on that as these evaluations come on-stream, which is expected in the next several months.

The Acting Chairman (Mr. Andy Scott): I think it would helpful for the committee, given the nature of this study, to have a province-by-province inventory of the nature of programs, because they are different. I was exclusively exposed to Job Corps in New Brunswick, at the expense of anything else. Other people, when I got here, were talking about POWA and other things that were unfamiliar to me. Consequently, I'm assuming it's the other way around for some. So that we know the full menu of possibilities, I think that would be a helpful piece of information.

Ms. Glynnis French: Mr. Chair, I think we should come back to you with that inventory. We're not prepared with it at the moment.

The Acting Chairman (Mr. Andy Scott): That's understood.

Ms. Glynnis French: So that is something that could be put on the agenda down the way.

If I could also intervene for one moment from a personal basis, I have to leave the committee within the next five minutes because I'm due to be somewhere with the minister in fifteen minutes, if that's all right.

The Acting Chairman (Mr. Andy Scott): I understood that we were trying to accommodate your desire to be as illuminating as possible.

Mr. Wilfert has asked for the floor.

Mr. Bryon Wilfert: Very quickly, on the entitlement issue, it reminded me of the commercial, “You can pay me now or you can pay me later”. You may not remember it, talking of older workers.

The fact is that if we have this EI account—and that's what I was trying to get at—why would we not put the money into the social costs for people who lose their jobs and then have to go out and do these things? It's far more costly to Canadian society than if you back it up and allow them to either step out or have that window. That's what part of the money is there for, surely. I would think that if we haven't costed it, that's something we should be looking at. I think it's something we should get the department to move on. Otherwise, it is going to be like that commercial; it's going to cost us more down the road.

Mr. Jean-Pierre Voyer: I think the idea is starting to be—if I may, Mr. Chair—

The Acting Chairman (Mr. Andy Scott): Yes.

Mr. Jean-Pierre Voyer: —a bit powerful. We have to be careful here because the logic is perfect: prevention is better than remedial for everyone. But the cost could be unaffordable. We know of someone who becomes unemployed; we don't know of someone who will become unemployed. We may attach a risk of unemployment on someone on the basis of skills and so on, but we may be totally wrong. Attitudes count for a lot, and who knows? If the take-up is too high, there are people there who would never have been unemployed.

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So the cost evaluation may show something you won't like to see. But you're right, we should do it.

Mr. Bryon Wilfert: We have to see it in order to—

Mr. Jean-Pierre Voyer: Exactly. But the logic doesn't go the full extent to the fact that this would, no doubt, be less expensive. I would challenge that. I think it could be seriously more expensive.

The other thing is that the EI system was not created with that intention. It may evolve, but that was certainly not the purpose initially. This is the type of concept that is being looked at, though, as Glynnis mentioned.

The Acting Chairman (Mr. Andy Scott): Being a Canadian, I have to say it's remarkable how much EI does that it was never intended to do.

Mr. Vellacott.

Mr. Maurice Vellacott: My question to whoever remains of our witnesses here is on immobility. Is that a major contributor to long-term joblessness among older workers, not being willing to move or being unable to move? You get settled and rooted; you have grandkids there, and so on. Is that a major issue?

Mr. Jean-Pierre Voyer: Yes. I mentioned that as one of the key barriers. In a big country like Canada, it's particularly problematic. We are mobile by European standards, nevertheless it's almost financially impossible for many people, and that's a real barrier.

Mr. Maurice Vellacott: Can anything be done to address that?

Mr. Jean-Pierre Voyer: It's the old debate of bringing jobs to the people or bringing the people to the jobs. There have been periods in Canadian history when we've favoured economic development very highly. We put all of the dollars there, with poor results in some areas. Then we shift to the supply side, on the people and the individuals, and again, this may not be a satisfactory answer because of this problem of mobility. There are people who simply can't move.

Mr. Maurice Vellacott: But I suppose it's more of an issue with older people.

Mr. Jean-Pierre Voyer: Absolutely. My chart shows that mobility goes down as age increases, for all the reasons you know—family, mortgage being paid, houses, community entrenchment, and things like that.

Mr. Maurice Vellacott: Thank you.

The Acting Chairman (Mr. Andy Scott): Thank you very much.

I guess we've exhausted our questions for now. I suspect we'll have more in the future.

I want to thank, in her absence, Ms. French and the two who have been able to stay for what I think is a very informative session. This is a very important issue across the country and one that is going to seize this committee's agenda in the weeks ahead.

Thank you all.

The meeting is adjourned.