The topic of my remarks is one I know you have been hearing a lot about. It goes by many names.

Transcription

1 Notes for remarks by The Honourable John Manley President and Chief Executive Officer Canadian Council of Chief Executives to the Canadian Club of Toronto November 28, 2013 CHECK ON DELIVERY 1

2 2

3 The topic of my remarks is one I know you have been hearing a lot about. It goes by many names. Some call it the skills gap. Others talk about labour shortages and skill mismatches. Many people are taking about a skills crisis. Everywhere in Canada, there is rising concern about young people s transition from education to the job market. Parents are worried about their children s future career prospects and standard of living. Journalists are talking about the so called barista generation, and about the growing problem of income disparity caused, in part, by the challenges facing young Canadians as they try to make their way into the job market. These are all legitimate, important concerns. But before we can start to identify solutions to our labour market and skills challenges, we need to develop a much clearer understanding of the source and nature of the problem. In my view there is a looming crisis but it s probably not the one most people think it is. 3

4 Over the next 20 minutes or so, I ll try to explain what I think is the most serious skills problem facing Canada. And when I say that, I m not just talking about the needs of the business community, although those needs are significant. When you get right down to it, what s really at stake here is whether our country is adequately preparing its citizens to succeed in a world that is increasingly driven by information, knowledge and innovation... and in an age of unprecedented economic, social and technological change. Let me start by telling you about some of the work we are doing at the CCCE. Over the past few months, we have been meeting with and sharing ideas with a wide range of educators, policy advisors, consultants, and senior government officials. Each has given us his or her own perspective on the skills issue. Many have also encouraged us to get more involved to play a more active and constructive role in helping to shape an education and skills strategy that will position Canadians for success in the new economy. 4

5 In response, we are launching today an initiative that will help drive much of our policy work over the next two to three years. We re calling it, Taking Action for Canada: Jobs and Skills for the 21 st Century. As part of this initiative, we plan to publish a series of papers and reports that will examine different facets of the skills challenges facing Canada, and the contributions made by each of the major players in the education and skills training system. That includes the primary and secondary school system, colleges, university and polytechnic institutions, apprenticeships and employer sponsored workplace training. Today, we are distributing copies of the first of these papers, a provocative overview prepared by Bernard Simon, the former Canadian correspondent for the Financial Times of London and now a faculty member at the Munk School of Global Affairs. Bernard s paper is subtitled So much noise, so little action, which I think accurately conveys the frustration many people now feel about the skills debate in this country. Also today, I m pleased to be able to share with you some preliminary results from a justcompleted survey of 100 large Canadian employers, representing two thirds of our member companies. The identities of the companies themselves are confidential, but to give you an idea of their size and impact on the economy, as a group they have hired approximately 325,000 Canadians over the past two years. Over the next five years, and including their affiliated companies, they expect to fill well more than 700,000 job openings. 5

6 The first question we asked these companies was whether and to what extent skills shortages are currently a problem. Here you can see their responses: more than two thirds told us that skills shortages are either a moderate or big problem for their company. When we asked them the same question from the perspective of their industry or sector, the answers were roughly the same. I d characterize this as a significant degree of concern, though not necessarily a critical situation from a national perspective. 6

7 Next, we asked them to tell us where in the country they are experiencing skills shortages. Bear in mind that most of our member companies have operations in several provinces, if not right across the country. The responses here were unequivocal, though not necessarily surprisingly: more than twothirds said they are having trouble finding workers in Alberta. That s more than twice as many as selected the two most populous provinces, Ontario and Quebec. (NOTE: in follow up comments, companies pointed to shortages of bilingual workers in Quebec.) 7

8 We also asked them to indicate the reasons for the challenges they are facing in recruiting and retaining talent. By a significant margin, the number one answer was a shortage of workers with specific skillsets. The second most common response was a perceived reluctance of some Canadians to relocate for employment, followed by barriers to recruiting outside the country, and concerns that the education system is not producing people with the skills companies need. 8

9 This chart shows the kind of jobs that large Canadian firms are struggling to fill. Using a simple weighting system that assigns three points to their first priority, two points to their second and one point to their third, we found that, among these companies, the greatest need is for engineers and workers with related credentials, such as engineering technologists and technicians. Another area in which our members are reporting significant shortages is IT, a category that includes web developers, network administrators and cybersecurity specialists. In third and fourth place were workers with general business skills including managers, accountants and finance staff and skilled trades. Again, what I think we are seeing in these results is that, for the most part, the serious skills shortages that Canadian companies are experiencing are concentrated in specific fields and specific areas of the country, most obviously Alberta. 9

10 But when we asked these same companies what qualities matter to most to them when evaluating a potential new employee, their responses were interesting. Well down the list, in 6 th place in terms of importance, were industry specific knowledge and experience. The top five answers are all aspects of what are often termed soft skills : the ability to work well with other people, communication skills, problem solving and analytical abilities, and leadership skills. 10

11 Next, we asked our members to estimate the percentage of their payroll that is likely to retire within the next five years. This is a big concern for many companies in light of the fact that Canada s population is aging. Sure enough, well over a third of the companies in this survey are expecting to lose 11 per cent or more of their employees to retirements between now and Almost as many said they expect to lose between six and 10 per cent of their workforce. When you think about that, that represents a huge opportunity for young Canadians. 11

12 When we asked those same companies whether they anticipate any problems in recruiting people to take the place of their soon to retire workers, the responses were mixed. Less than a third said, yes, they are confident that they will be able to replace retiring workers. Twice as many said they were only somewhat confident, while 7 per cent said they were not at all confident. 12

13 I ve given you just a sample of the results from our survey of CCCE member companies, but I think the overall message from Canada s largest employers is clear: yes, there are skills shortages. For the most part they are being experienced in specific areas of the country and in certain fields. Right now, technical skills, IT skills and the skilled trades are in high demand... but the common denominator across the economy is that, everywhere, employers are looking to recruit young people with a strong complement of soft skills, such as the ability to communicate, think critically and work in teams. And the good news is that there are likely to be plenty of rewarding career opportunities for young Canadians over the coming decade or more, as our population ages and companies seek to replace large numbers of retiring workers. So with that as a background, the question I think we need to ask ourselves is whether our country is doing everything it can to prepare Canadians especially young Canadians to succeed in the 21 st century labour market. And on that score, I don t think we are performing anywhere near as well as we should. Let me explain what I mean. 13

14 First, let s consider how Canadian students have been performing on one of the world s most closely watched benchmarks of education excellence an OECD study called PISA, the Program for International Student Assessment. Every 3 years, the OECD tests reading, science and math skills of 15 year olds in developed and emerging economies around the world. In the most recent round of tests, in Canada didn t do too badly. Our students ranked 5 th in the world in reading. But we were in 8 th place in science and 10 th place in math. Personally, I don t think we can afford to brag about landing in 10 th place in math. But what really concerns me is that, compared to the results of previous PISA studies going back to the year 2000, Canadian students math performance has been falling in 6 provinces: Newfoundland, PEI, New Brunswick, Manitoba, Alberta and BC. The results of the latest PISA study, based on testing in 2012, will be released next Tuesday, Dec. 3. The buzz is that it will show further slippage in Canada s performance. 14

15 Next, let s take a look at the results of another massive international study, this one called PIACC the Program for the International Assessment of Adult Competencies. Unlike PISA, which measures the skills and knowledge of 15 year olds, PIAAC focuses on adults ages 16 to 65. The point of this study is to measure the sorts of everyday skills required to succeed in today s knowledge economy. For example, under literacy one of the tasks was to read the package insert of a drug and then indicate the age at which that drug could safely be taken. In the math portion of the study, a typical question asked people to imagine themselves in a supermarket, looking at a coffee display. If the coffee is on special this week two packs for the price of one how much is the percentage discount? The first results from PIAAC were published just last month, and in many ways they represent a wake up call for Canada. 15

16 Let s start with literacy, where Canadians have historically done well in international rankings. The first thing you can see from this chart is that although Canadians 25 and older tend to do a bit better than their peers in the rest of the developed world, our 16 to 24 year olds are actually performing worse. 16

17 Here s another way to look at it. Our 16 to 24 year olds rank below the OECD average on literacy, and they are significantly weaker than their peers in countries such as Finland, Japan, Korea, the Netherlands, Australia, Sweden and Poland. 17

18 Now let s take a look at our numeracy scores. Here, Canada ranks below the OECD average across the board, in every adult age group. 18

19 Looking again just at the 16 to 24 year old age group, the top ranked countries in basic math skills include Finland, the Netherlands, Korea, Japan, Sweden, Germany and Denmark. When I look at these results, the question I ask myself is why given the supposed excellence of our public education system Canada is performing below average in comparison with many of the world s other advanced economies. Yes, we are doing better than the United States, which is wrestling with deeply rooted problems of poverty, inequality and underfunding. But Canadian governments invest heavily in education, and historically we have taken pride in the quality of our public education system. Surely Canadians have a right to expect something better much better than below average. 19

20 For those of us who want to see how Canadians stack up internationally, the PIAAC results are a treasure trove. But in the interests of time, let me show you just one more example of the data contained in this study. This table compares the math skills of all post secondary graduates in the 24 countries that participated in the study. It also highlights the math scores of teachers in each of those 24 countries. Teachers are represented by the red bands on the chart. The blue arrow near the bottom of the screen points to Canada s ranking. The text is hard to read, but here s the takeaway: in terms of their basic math skills, Canada s teachers are roughly on a par with their peers in the United States, and in 19 th place overall. Nineteenth place out of 24 countries. Does that worry you? I hope so, because it certainly worries me. 20

21 Finally, since we are here in Ontario, I want to mention the annual tests administered by this province s Education Quality and Accountability Office, or E.Q.A.O. The most recent E.Q.A.O. results came out in August, and they showed that while Ontario elementary students literacy skills have been improving, their math scores have been declining steadily getting worse in each of the past five years. To quote directly from the report, Elementary school math programs are losing ground in the effort to help students achieve and maintain math success particularly in Grades 4 to 6. 21

22 In highlighting these poor results, it is not my intention to pick on teachers. Nor am I attempting to blame the education system for the wide range of labour market challenges facing Canada. Quite frankly, a lot of the skills people need to succeed in the workplace are developed on the job, and through employer sponsored training. And I will be the first to acknowledge that Canada s employers need to do more to help develop the skills of their workers. Some companies invest heavily in this area, but many others don t do as much as they could. That s short sighted, and it needs to change. Let me be clear on this point: employers and industries have a responsibility to step up when it comes to developing company and industry specific skills. But as a Canadian, what really troubles me is the growing body of evidence that shows Canada is falling behind when it comes to equipping its citizens with the broad knowledge and cross cutting skills that are required to succeed in life, and in an increasingly competitive global economy. It s time for an honest conversation about what s working and what isn t working. It s time to stop congratulating ourselves on the quality of our primary, secondary and postsecondary education systems, and face up to the fact that our performance in 22

23 international rankings is getting worse, not better. As Canadians, we should not aspire to be average or worse still, below average. We should aim to be better than average in fact, to be number one in the world. In the paper we are distributing today, Bernard Simon asks a number of contentious and pointed questions about Canada s education and skills training systems. Questions such as: How can we encourage closer collaboration between businesses and educational institutions? How can teachers performance be measured and improved? How can we foster a culture that places as much value on an apprenticeship or technical certificate as on a university degree? How can businesses be encouraged to provide more long term training for their employees? How can Canada generate more useful labour market information information that enables students, workers and employers to make smarter decisions? As Bernard points out, the answers to these questions are not clear cut. In many areas, the solutions will not be easy to implement. But we need to come to terms with a range of very real problems that threaten Canada s place in the world, and the quality of life that our citizens enjoy and have a right to expect. In launching our initiative, the CCCE is committed to spearheading a business response to what is fundamentally a national crisis a crisis that isn t just about finding workers with the right mix of skills to fill today s job vacancies, but about Canada s declining performance overall in international measurements of the skills our citizens need to enjoy rewarding and fulfilling lives. The business community will have something to say on these issues, but many others need to get involved as well. Together, we need to tap the energy and ingenuity of Canadians to find solutions. And we need to take action. Thank you. 23