Thank you for the kind introduction and my heartiest congratulations to Allan and the Ontario Chamber for the initiative of this economic summit.

I am sorry to be late. I was stuck on my favourite—in my favourite parking lot, otherwise known as the Gardiner Expressway. There’s nothing express about it. And unfortunately, my friend Peter MacKay’s helicopter was not available, so I had to take my time getting here.

And I understand you had my other colleague Jim Flaherty here yesterday, my fellow Irishman in cabinet. We both wear the green tie. Reminds me that exactly a year ago I was in Ireland on a recruitment trip, the first time a Canadian immigration minister had gone abroad deliberately to recruit people for our labour market, and I went on their biggest—Lynch is an Irish name too, isn’t it Kevin? I went on our biggest—Ireland’s biggest television program. It’s called the Late, Late Show. And it’s kind of like the David Letterman Show, but a little more serious, a little less frivolous. Thankfully, they weren’t talking about the Mayor of Toronto.

But they said to me: “How is it that Canada—we noticed that you went through the recession barely scathed. It seemed to go pretty well in Canada.”  And they wondered, how did this happen? And I said, well, very simply. I said we had an Irishman, a Flaherty who was the Finance Minister, Carney was the Central Bank Governor and a Lynch was the head of the civil service. And they said, “Well, our finance minister, our bank governor and the head of our civil service were all Irish and they got it completely buggered up.”  But I guess we have some other things going for us in Canada, and that’s what I want to talk to you about, as I’m sure Jim highlighted.

For all of the challenges we face, we have some good problems here in Canada. The best economic record in the G-7, one of the best in the OECD, the best-educated workforce in the developed world, one of the strongest fiscal positions in the developed world. We will have a balanced federal budget in 2015. Lowest federal debt and deficit ratios amongst the major developed economies. Expanding export and trade markets, that’s a big strategic point. With the Comprehensive Economic and Trade Agreement (CETA), our new virtually tariff-free access to the 27 members—developed member states of the European Union, representing 500 million consumers, and with our preferential access to the U.S., we’re the only country in the world that will soon have special preferential trade arrangements with developed markets representing 800 million people. The huge extractive resource industries that are coming on stream with some $650 billion of projected capital investments. We have got a lot going for us and Ontario has a lot going for it. This must and will continue to be the engine of Canada’s economy.

So if we have a big challenge, the challenge I hear constantly from employers and business groups is that of the skills shortage.

Now this is a complex and nuanced issue because I’m reminded every day that the aggregate labour market information--the data that is extracted from the Stats Can surveys and that is analysed by economists--indicates that we aren’t, according to that data, we’re not really facing a skill or labour shortage in our economy. And that view would seem to be supported by wage levels which have, in the post-recession period, barely kept track with inflation. Not exactly indicative of a super-tight labour market or the—normally, you would expect quite rightly, as the labour economists point out, you would expect to see higher levels of wage inflation in the context of general labour or skill shortages. So that’s one side of the story.

But then there’s a whole other side of the story that I hear when I meet with employers across Ontario and right around the country. Whether I’m in the Kitchener–Waterloo IT corridor or talking to agricultural operators in eastern Ontario, big construction companies dealing with mines in the Ring of Fire or Tenaris building pipe up in Sudbury, it doesn’t matter where I am, over and over again employers, business groups, sector councils, industry associations tell me that one of the top, if not the top challenge that they are facing today is that of a skills shortage and they project this only to get much worse.

The construction sector says—this is nationally—that they’ll need 319 000 new workers before the end of this decade. The mining industry says they’ll need 145 000 more by 2020. The petroleum sector estimates 130 000 workers needed by the end of the decade who are not currently in the pipeline, so to speak. The supply chain sector expects a shortage of 357 000 workers between now and 2020. The Association of Canadian Community Colleges—who held an excellent skills summit in Ottawa two weeks ago, by the way—says that in less than a decade employers will not find qualified candidates for 1.5 million available jobs. Skills Canada—excellent organization—tells us that we’re going to need a million skilled trade workers alone by 2020. The Conference Board of Canada, with whom I just met in Toronto at their Education Summit, says Ontario alone is losing out on $24.3 billion in economic activity because employers can’t find workers with the skills they need. And I think they also estimated that the province is losing about $3.7 billion in annual revenue as a result.

And your national body, the Canadian Chamber of Commerce, listed skills shortages as one of Canada’s top 10 barriers to competitiveness. It’s asserted in a survey that showed that a third of the owners of small and medium-sized businesses identified skills shortages as a significant constraint on their growth.

So how do you make —how do you describe this —or explain this paradox, the paradox of too many jobs without people and too many people without jobs? And how do you explain this weird, I call it, parallel monologue that we’re having on these issues? It’s not really a dialogue. You’ve got —let’s be blunt about it, you’ve got most labour unions, many academic economists, some in the media and some political figures saying that based on the high-level aggregate labour market information, all of which, by the way, is essentially retrospective, that there is no labour or skill shortage in Canada. And then yet you have the lived reality of employers—small, medium and large—in sectors right across the spectrum and all across the province and the country saying something different.

Well, clearly what this points to is a failure in our labour market information system. And I’m here essentially to plead guilty, to admit that we must do a radically better job of getting robust, nuanced and sector-specific labour market information that can give us all a much better picture of the realities that we are facing, because what the employers tell me from coast to coast—well, you know, and by the way, it’s not just—here’s the peculiar thing. It’s not just what we call the skills mismatch. There are actually and quite paradoxically, quite perversely, there are areas of our economy with a lack of available low-skilled or unskilled workers.

I was just out in Fredericton—sorry, I know your summit is on Ontario issues, but I think you have to look at the national perspective—meeting with fish processing plant operators pleading with me to accelerate access to temporary foreign workers because apparently they need people to leave their village in Thailand to drive 10 hours to Bangkok and fly 24 hours to Toronto and fly out to Moncton and drive out to a rural Canadian Atlantic village where there is 14 percent unemployment and people collecting employment insurance, but who are unwilling to work for $16.00 an hour processing fish off-season. There is something fundamentally wrong.

Right down the street, right around us, right within a kilometre of where we are, there are farm operations that have to bring people in from the Caribbean and Mexico, even though—in order to work in agricultural jobs even though we’re in a province with 8.3 percent unemployment, and what is it, 16 percent youth unemployment.

So actually, you know, yes, the skills mismatch, skills shortage debate is a really interesting one, but there are also some broader structural issues at play here that we should not lose sight of.

And so, you know, this is difficult for us as policy-makers to explain to Canadians, because intuitively they say well, my kid or my niece or nephew, they’re out of a job, you know, it’s 21 percent youth unemployment in the GTA. Why are you bringing in any of these temporary foreign workers at all, for example? Or why do we have any immigrants coming to Canada? And what is this you’re talking about a skills mismatch?

So there is a general public scepticism about what’s going on, and we all need to do a better job of getting relevant, robust, detailed sector- and region-specific labour market information. This is something, one of the many issues that I intend to raise tomorrow in my meeting with my provincial and territorial colleagues in what is, ridiculously, the first meeting of the Forum of Labour Market Ministers in four years.

But much more must be done, and I’m going to address a number of different policy areas at a high level with you. First of all, education. Let’s talk about primary and secondary education. You will have seen the very troubling data that came out of the OECD study on the STEM disciplines and the focus on numeracy—very robust research. I think the Canadian portion of that study was based on over 17 000 respondents, which indicated that Canada is falling behind in terms of educational outcomes on basic numeracy and the STEM disciplines.

Given what we all know about the future economy, this should be deeply troubling, deeply worrisome to us. But what about the tech—the whole old tradition of technical and vocational training in our high schools? Whatever happened to that? Forty years ago, of course there was widespread availability of technical and vocational training, shop schools and classes for young people. But we had interest groups—sorry, I’m just very direct, I’m going to say it, teachers’ unions lobbied to say that anyone who’s going to teach in a high school had to have a certification having gone through teachers’ college. Well, how many guys who used to teach shop have a year or two to go to get their certification at teachers’ college? None is the answer, which is why there are virtually no kids enrolled in full-time vocational high schools.

You know that York University about a decade ago did a study that found that the number of individual technology courses taken by secondary school students in Ontario schools dropped from nearly half a million in 1973 to a quarter of a million in 1996. I haven’t seen more recent data. If you have—if anyone here has it, I’d like to see it, but I expect the slope has continued downward. To give you another reference point, vocational diplomas granted in Quebec declined from 17 000 in 1976 to 5 000 in 1992. And another study I’ve seen indicates that only one percent of high school kids are enrolled in vocational programs.

Not only did we stop—you know, did we create these ridiculous barriers to the tradition of technical training in high schools, but we began culturally to devalue that kind of practical work. And I don’t think we have been sharing adequate information with young people about the signals that are being sent by the labour market.

We intend to—we in fact announced in our budget this year that we will be launching a program to provide relevant information on incomes and other possibilities in the full spectrum of occupations, in a way that is, by the way, user-friendly and through social media. So we need more kids—if they’re not hearing this from their high school counsellors, we want them to be able to go online to an app and find out that they can make three times more in Ontario as a certified welder than as someone with a BA in political science. We have a surplus of those in Ottawa, by the way.

And the importance of STEM industries in—STEM disciplines in general. You know that in the last decade, university enrollment in Canada has skyrocketed from 850 000 in 2001 to 1.2 million students enrolled last year, an increase of nearly 400 000 students. However, in the science, technology, engineering and math fields, enrollment increased by only 50 000 students. In the last decade—and this is a particular challenge with young women—in the last decade, we’ve seen 220 000 women enrolling in university—an increase, but of that, only 15 000 are enrolling in these high-demand STEM disciplines, only less than 10 percent of the increment of young women in our universities.

Now these fields used to make up—the STEM fields used to make up 24 percent of university enrollment in Canada. That has now dropped to 20 percent, and I think these numbers are all essentially the same for Ontario.

At the very same time that students are turning away from the science, technology, engineering and math fields, employment in these areas is growing at 2.5 percent, which is double the growth rate of overall Canadian employment. The Canadian Occupational Projection System states that there will be over 1.1 million job openings in the science, technology, engineering and math fields in the coming decade.

This speaks to the heart of the reforms we need to make. Students are turning away from the very fields in which they’re likely to get the best job prospects in the future. And this is particularly critical now that women make up 60 percent of those enrolled in post-secondary university education.

Now look, I want to be clear, put this on the record. I’m an advocate of the humanities. I studied philosophy. I believe that kids should have an opportunity to go into the liberal arts, but they should also know what the opportunity cost of that is. They should make informed choices. And in every way—in our high schools, in our universities, our political leadership, our economic leaders—we need to send positive reinforcing messages about the dignity of all forms of work, not just those that flow from professional, post-secondary academic style education.

And moreover, I think as Canadians, as Ontarians, we need to take a step back in humility, to recognize that perhaps there are other jurisdictions around the world who have figured this out much better than we have.

Take, for example, Germany, whose famous Mittelstat dual training system has led to the most robust labour market in the developed world and certainly in the European Union. In Germany, half as many young people enroll in academic university programs as is the case in Canada, and yet their youth unemployment rate is five percent versus 13 percent youth unemployment in Canada. Half as many in university, almost three times more likely—or actually the unemployment rate one-third virtually of what it is for young people in Germany versus Canada.

And so tomorrow—and by the way, you know why that is? Because right from the junior high school level on, young people are approached in a collaborative way by unions, employers, their educators, supported by the state and federal governments, encouraging them to get practical on-the-job skill training, where in many cases, even in high school, they’re spending two days on a shop floor while continuing their academic studies. But everything from co-op programs that pay them to the messages that are sent by their teachers, to the welcoming attitude of the labour unions, all of this is designed to reinforce positive vocational decisions by young people.

And this is why I want to encourage my provincial colleagues tomorrow to join with me on a mission to Germany and perhaps a couple of the other European countries to study closely their dual training systems, to see what is applicable here in Canada.

Bill Clinton always used to remind us that one definition of insanity is doing the same thing over and over again expecting a different outcome. Well, it’s about time that, quite frankly, those responsible for our education systems—I’m going out on a bit of a limb here in terms of federal jurisdiction—but those in charge of the education systems have to begin to thinking—rethinking some of these questions quite fundamentally, in my view.

Just as we need to rethink our apprenticeship system. This is an area where the provinces hold almost all of the levers and where we need to do much better. Across Canada, we have 13 different apprenticeship systems with enormous inconsistencies.

For instance, the training and certification requirements vary in relation to on the job hours, technical curricula and program duration. There are also disparities with respect to in-school training and assessments. These inconsistencies mean that apprentices who wish to move to another province or continue or complete their training are often unable to do so because the systems can be so different—yet another barrier to labour mobility within Canada.

At the same time, employers wishing to recruit new apprentices from out of province face similar challenges. Many have told me that one of the most difficult regulations for them is having to employ a specific number of certified journeymen to be eligible to register an apprentice. Known of course as the apprenticeship–journeymen ratios, they vary between provinces and among different trades—vary quite significantly. Apprenticeship–journeymen ratios are much higher in Ontario and Quebec and lower in Alberta and Saskatchewan. But does that mean that the workplaces in Alberta and Saskatchewan are less safe? I don’t think so. I think this is a reflection, at least in measure, of a 1970s style labour protectionism that does not reflect the demographic reality of today.

Now I know the Ontario College of Trades has reviewed the ratios for the 33 trades in this province, but frankly, I believe that more action needs to be taken by the College to fix Ontario’s high ratios. And I believe there is a strong case for harmonization across Canada.

How does it make any sense that a young Ontarian who’s done a first couple of years on his apprenticeship program on the way to become a journeyman electrician hears about a great opportunity in Saskatchewan, he moves out there and finds that his hours are not portable or he has to start out all over again?

There are a lot of other things we can do to help. You know, our government has introduced a number of incentives—the Apprenticeship Incentive Grant, a hiring credit for employers of apprentices, the Apprenticeship Completion Grant. If you combine all of these things together, it represents up to $4,000 in support for people who go into apprenticeships.

The last missing piece in terms of policy, though, seems to be really facilitating the completion. We have, I think, over 400 000 Canadians enrolled in apprenticeship programs, but fewer than half that many go on to finish them, so there really is a bit of a gap that we need to work on.

One of the things I’m looking at is to modify the rules of the Canada Student Loan Program, so that we could actually help those kids get preferential financing when they take time off work to do their formal classroom training. Right now, typically they have to go on employment insurance.

But I have an even better idea. How about the employers in this country step up to the plate in the way that they do in many European countries and actually pay their apprentices at their proper wage level through the formal training period? When I ask employers this―when I ask employers why is it that the private sector is at the bottom end of the OECD, the Canadian private sector is at the bottom end of the OECD with respect to investments in skills training and job training, the answer I typically get is people are concerned about poaching, particularly the SMEs. How does it make any sense for a small contractor to invest thousands of dollars in developing a new apprentice and the moment he gets his ticket, he goes to the bigger dollars of a major employer? We have to find ways to get beyond this.

We have to realize, like they do in Germany, that all employers are in this together, and that by growing the available pool of skilled and certified labour, we will all end up benefiting in the long run.

Quickly, another point I want to touch on is ensuring that we do everything possible to help new Canadians realize their potential in our labour market. You know the story here. For 40 years, we’ve seen declines in the economic results for immigrants. We used to—back in the early ‘70s, before the points system came in, when we actually allowed skilled tradesmen and women to come into Canada, the average immigrant was making 90 percent of the average income in Canada shortly after their arrival. That’s now down to 60 percent. And of course the rate of unemployment amongst recent immigrants is twice as high as in the overall population.

This—and of course behind these figures lies terrible, terrible stress and missed opportunities and tragedies for many families who have uprooted themselves from other parts of the world to come here, ostensibly as professionals, only to face a cycle of survival jobs as their skills atrophy. We must do better for those folks.

We need them because of the changing demography, because of the retirement of the boomers and our low birth rate, but it’s not right to invite people to come here just to face under-employment.

That’s why our government put so much emphasis on fundamental reform of the immigration system, to move from what was a rigid, slow-moving, passive immigration system with deteriorating outcomes to a fast, flexible, demand-driven, labour market- linked immigration system that will increase significantly the percentage of immigrants who arrive here with a pre-arranged job, who have already been pre-assessed so that when they get off the plane, both they and their employer are confident that they’ll be able to get their certification if they don’t already have it, so that people can walk off that plane, instead of with a sense of foreboding, with a spring in their step knowing who their first employer will be with a pre-arranged job. Our data tells us that immigrants who arrive with pre-arranged jobs earn twice as much as those who don’t. It’s just common sense.

I raise this because Ontario, of course, which has typically been the recipient of the largest number of immigrants to Canada, Ontario employers need to understand and seize the opportunity of our new fast and flexible immigration system. I won’t go into this in great detail now except—because I simply don’t have time, and you don’t want to get me started, immigration reform will take several hours. But I want you to know that through the new system we are designing, which will be fully implemented by the end of next year, is a whole new world in terms of immigration selection for economic immigrants, and we need employers to be partners with us in making this work. The system is in large measure based on success stories in Australia and New Zealand and we know it can work here in Ontario.

I’ll close with one last point that I’ll be raising tomorrow with my provincial counterparts, and that is our proposal for a Canada Job Grant. Now this has been contentious and I’m expecting to hear lots of different views from my provincial colleagues tomorrow, but I just want to take a step back and explain what we’re trying to do here. You know, employers have been telling us for year that they should be playing a larger role in the training decisions. It just makes sense. It’s the employers who create the jobs. Training is ostensibly to prepare people for jobs, so why wouldn’t we have employers participating in identifying who gets what kind of training with a job at the end of it? That’s the logic.

It’s based on the following observation. We spent billions of dollars at the federal and provincial levels on skills development and job training and yet we have relatively high unemployment and many unfilled jobs. And secondly, it’s based on the observation that employers are not investing enough in training.

So what the Job Grant conceptually hopes to do is to prime the pump, to leverage more private-sector investment in training by inviting employers to identify specific individuals to receive specific training programs, at the end of which they’re willing to guarantee that that person will receive a job, which at its simplest level is what the Germany system does, of course starting from an earlier age.

Now the provinces are saying, well, look, we prefer you just send us this money and we’ll use it to help to—basic life skills, literacy and so forth for people who are at the margins of the labour market. I recognize there’s a need for that. I would tend to call that more social programming than job training. And I think provinces have a responsibility to address those folks, just as we at the federal government do through billions of dollars that we invest in training for Aboriginal Canadians, disabled Canadians, young unemployed Canadians, older workers in need of retraining. So we’re not talking about abandoning those groups that are under-represented in the workforce. We are talking about taking one discrete portion of the public training investment and basically trying to get employers to identify people who will actually have guaranteed jobs at the end of it.

We’ll be very flexible with the provinces in how we try to develop this program, but it—I think it’s consuming too much oxygen in the debate. Quite frankly, there are much bigger and more important issues, including apprenticeship reform, labour market mobility and—but let me just say this: How ridiculous is it that you can move from—you can be a dentist and go from Portugal to Poland and practise the next day or a welder who goes from Slovakia to Ireland, you can work and get your certification in principle the next day, but you can’t go from Ontario to Quebec? We respect provincial jurisdiction, but we also must not lose sight of the vision of our Constitution which sees Canada as an economic union.

And so let me just say in closing that we must do a radically better job of implementing the spirit of the Agreement on Internal Trade for interprovincial labour mobility, for mutual recognition of credentials, for streamlining and speeding up credential recognition for foreign-trained professionals, for reforming our education systems, both secondary and post-secondary. If we get these things right, and if employers put more skin in the game and governments get beyond some of the interest group politics that have held up reform in these areas, I believe the sky is the limit.

Look, we have, as I said at the beginning, a lot of great problems, but fundamentally the best educated population in the world, best fiscal situation of the major developed economies, a huge and growing expansion of our trade markets, and the incredible blessing of our natural resources. So let’s fix this one thing, and the sky will be the limit for Canada’s economy in the future.

Thanks very much.

Src:news.gc.ca