CANADIAN CONSTRUCTION ASSOCIATION Pre Budget Submission To The House
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CANADIAN CONSTRUCTION ASSOCIATION Pre-Budget Submission To The House of Commons Standing Committee on Finance August 2008 75 Albert Street, Suite 400 Ottawa, Ontario K1P 5E7 Tel: (613) 236-9455 Fax: (613) 236-9526 PRE-BUDGET SUBMISSION Canadian Construction Association August 2008 Page 2 EXECUTIVE SUMMARY In order for Canada as a Nation to meet its current human resource challenges, (i.e. aging workforce, re-training of older and displaced workers; integration of traditionally under-represented groups such as Aboriginal Canadians; training and integration of immigrants; meeting the needs of industry in a more timely and collaborative manner), much more enhanced strategic investment in Canada’s community colleges is required. These publicly-funded institutions are best positioned to deliver on all of the aforementioned fronts. However, through years of underfunding and neglect, most do not possess the physical and human infrastructure to meet the increasing demand on their resources. The federal government has a clear leadership role to play in ensuring this key element of Canada’s apprenticeship and supervisory training infrastructure is adequately funded and supported in order to meet that demand. Introduction Since 1918, the Canadian Construction Association (CCA) has served as the collective national voice for Canada’s non-residential construction industry representing some 15,000 individual construction firms located throughout Canada in an industry that contributes over 6% of Canada’s Gross Domestic Product and that employs more than 1.22 million Canadian men and women. 1 out of every 14 people in the workforce today works in the construction industry. Pre-Budget Consultations The House of Commons Standing Committee on Finance has asked that Pre-Budget briefs contain one recommendation only and that it reflect the author’s most important federal program spending or taxation priority. CCA feels that the need to enhance infrastructure funding for Canada’s community colleges is critical to Canada meeting its skills shortage challenge and that leadership is required at the federal level. The Training Need The Construction Sector Council (CSC) recently released its updated review of the current construction labour market in Canada. That analysis concludes that the construction industry in Canada will need to engage over 250,000 new trained construction workers by 2016 simply to replace retiring workers and to keep pace with rising demand. In addition, the CSC says that the industry nationally must find some 15,500 new construction supervisors by 2025, (i.e. 21% of the 2006 labour force!). Construction labour shortages present significant challenges for everyone. Impacts include: Longer completion times Lower quality of work. Greater safety concerns. Higher overall costs, due to less tendering competition and higher labour costs. Given that many construction projects are taxpayer funded, higher costs results in greater pressure on limited tax dollars. Reduced capacity to compete internationally. Many of Canada’s construction workers, both trades and supervisors, are trained by Canada’s community colleges. A good many are Civil Engineering Technologists recruited from the colleges. PRE-BUDGET SUBMISSION Canadian Construction Association August 2008 Page 3 Virtually all construction trades are trained via the apprenticeship system in Canada. Apprenticeship programs combine classroom training with workplace experience, with roughly 20 percent of the typical program being delivered in the classroom and 80 percent in the workplace. As a major provider of the classroom training community colleges have an indispensable role in provincial and territorial apprenticeship systems across Canada. Statistics Canada says that skilled trades – those usually requiring a community college diploma or apprenticeship training – have not kept pace with the labour force as a whole – they accounted for 30% of the total labour force in 2001 down from 32 percent a decade earlier. The construction industry is not the only industry that is in desperate need of college graduates. Many other industries equally rely on the college system to produce their future skilled workforce. The construction industry is competing with them for an ever-shrinking pool of skilled labour. The Federal Government has made public commitments to attracting more youth to the trades and to supporting apprenticeship training. Earlier this year, the Federal Government pledged $5.5 million over the next 3 years to groups like the CSC and the Canadian Apprenticeship Forum (CAF). “As you know, our Government has made somewhat of a mission of encouraging smart, ambitious young people to consider a future in the trades. We’ve done more that just run some ads to encourage this career path. We’ve introduced some financial measures to support it. - an Apprenticeship Incentive Grant to reduce the cost of schooling, a Job Creation Tax Credit to reward employers who hire apprentices and a Tools Tax Credit to render buying tolls less expensive for tradespeople. Now, why have we done these things? We have because in the years to come, Canada is going to need literally hundreds of thousands of skilled tradesmen and women. Skilled trades are the backbone of our economy. That’s why we have to make sure the next generation of carpenters, welders, pipefitters and others will be there when we need them.” (Prime Minister Stephen Harper at the Sarnia Construction Association’s annual construction apprentice graduation ceremonies - May 22, 2008 Sarnia, ON) The very useful measures referenced by the Prime Minister have been matched by the construction industry efforts to recruit more youth, Aboriginal people, and displaced workers from other sectors. Unfortunately, the sad fact is that these new recruits are being turned away due to the lack of training capacity in our community colleges. We have created a training “bottle-neck” that must be widened. Not only is there greater demand being placed on the colleges due to the huge skilled trade shortage, but also due to the growing recognition by both parents and high school students that universities are no longer the only post-secondary education vehicle. A college education is being promoted much more to students and their parents by high school career counselors. At a time when industries like construction are in desperate need of people, and when we are having to import tens of thousands of temporary foreign workers to fill the gap, and when the demand for training is clearly present, it is simply unconscionable that we are having to tell young Canadians, Aboriginal and older, displaced workers wanting to pursue a career in the construction industry “sorry, we have no room for you.” The College Deficit PRE-BUDGET SUBMISSION Canadian Construction Association August 2008 Page 4 Because of past neglect, the college system in Canada is now unable to provide the effective and modern training we and other industries like the construction industry desperately require if we are to build the prosperous, environmentally-friendly Canada of the future. Physical Infrastructure/Buildings Many college facilities across Canada were built 40-45 years ago, with an expected lifespan of roughly 40 years. These institutions have not been able to perform the appropriate maintenance or upkeep of those facilities let alone expand to meet increasing demand. A July 2008 study conducted by the Association of Canadian Community Colleges (ACCC) estimates that the community college system in Canada needs an immediate injection of some $6.5 billion simply to retrofit or upgrade their aging physical infrastructure to secure existing capacity. Equipment The status of teaching equipment is not much better. College training is in large measure a practical, hands-on experience. Employers expect graduates will be familiar with contemporary technologies. In the recent ACCC survey, however, no institution reported an adequate inventory of leading edge equipment and most reported making due with used or recycled equipment. One institution reported that 85% of its equipment used in trades programs is below the current standard. Although industry partners donate some equipment, the gap in equipment availability remains considerable, running into the hundreds of millions of dollars for the system. Staff/Instructors Many colleges also do not possess the human resource capacity in terms of qualified faculty and instructors to deliver the expanded programs and courses required as a result of the rising demand. Once again the funding neglect of the past has led to reduced teaching capacity. Oversubscribed Programs Colleges are under intense pressure to meet Canada’s growing need for highly skilled workers, yet given the lack of funding even to sustain infrastructure let alone expand it, there is no prospect of increasing the output of graduates so desperately needed by many sectors. In the recent survey, forty programs in one institution were reported to be oversubscribed. The ratio of qualified applicants to spaces available varies by program from a low of 2 to 1, to a high of 18 to 1. All institutions reported an immediate need for facilities, equipment and instructional support, to meet the demand for graduates. Quantification of the investment needed is a complex exercise but the ACCC study suggests that upwards of $1,000,000,000 could be used immediately. Several institutions have wait lists of upwards of 9,000 people for skilled trades programs. As an example, Algonquin College in Ottawa advises that it has received over 39,000 applications in their trades programs for 7,400 available first-year spaces. Red River College in Winnipeg has a waiting list of three years for their Carpentry Program. Many on these wait lists are Aboriginals, women, and those recently employed in the manufacturing sector. Funding History PRE-BUDGET SUBMISSION Canadian Construction Association August 2008 Page 5 Canada’s community colleges have been forgotten. In many ways they have been treated over the last 20 to 30 years as poor cousins to universities. Canadian Governments, including the federal government, have focused on university funding while neglecting our colleges. The following is a list of just some of the investments that the federal government has made in Canada’s universities over the past ten years: In 2006, the 3 granting councils which fund university research had a combined budget of $1.6 billion. In 2003, Ottawa created a $225 million fund for indirect costs of research, which has since increased to $300 million annually, paying for items such as maintaining facilities and resources and providing support systems such as computers or equipment. In 1997 the Canada Foundation for Innovation was created, supporting funding for mostly university-based infrastructure. Almost $4 billion in federal funds have been spent on the CFI. In 2000, the Canada Research Chairs program was created, with $300 million annually spent to attract leading edge university faculty. The Canada Graduate Scholarships were created in 2003 which supports 2,000 Masters students and 2,000 PhD students annually. $120 million was provided in 2007 to CANARIE, the research broadband network linking various university research centres. In addition, the federal government has boosted its support for university core budgets through increases to the Canada Social Transfer, and has supported predominantly university students through the Canada Millennium Scholarship Fund introduced in 2000. Funding for community colleges over that same time period pales in comparison. The point in raising this imbalance is not to suggest that universities should be funded any less or that colleges deserve that funding in preference to universities. The point in raising these various programs is to demonstrate that there has been a lack of balance with regard to the federal government’s priorities in terms of higher education. Canadian colleges have not received a proportionate amount of attention or funding from the federal government. Conclusion Canada’s community colleges are uniquely suited and positioned to provide the “hands-on” training that is required to build the skilled work force Canada needs for its immediate and long term prosperity. As community-based institutions they provide our best solution to dealing with the aging workforce; the re- training of older, displaced workers; the integration of traditionally under-represented groups such as Aboriginal Canadians; and the training and integration of immigrants. However, because of years of funding neglect, they lack the infrastructure and capacity to meet these challenges. Much more enhanced strategic investment in Canada’s community colleges is required. While education is a provincial jurisdiction, the importance and urgency of this matter requires a national effort with the same kind of effective and determined leadership that the Federal Government has displayed in such areas as municipal infrastructure renewal.