Reform Experiences of Asian Pacific Countries: The Case of Canada

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Reform Experiences of Asian Pacific Countries
The Case of Canada

• Linda French
• A/Director General
• Labour Market Policy
• Human Resources and Skills Development Canada
• Presentation prepared for the OECD Policy Forum
  on Reassessment of the OECD Jobs Strategy, July 7
  8, Tokyo Japan

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Overview of the presentation

1. Macroeconomic and labour market challenges in the
   early 1990s
2. Policy responses to these challenges
3. Current macroeconomic and labour market
   challenges
4. Emerging policy directions

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Portrait of Canada
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1. Challenges in the early 1990sMacroeconomic

• Recession of 1990 1991
• Worsening fiscal situation - increasing debt and
  deficits
• North American Free Trade Agreement (NAFTA) in
  1994
• Widespread corporate downsizing

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Challenges in the early 1990sLabour Market

• Double digit unemployment
• Jobless recovery
• Decreased labour force participation for youth
  and older workers

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2. Policy responses to the key challenges in the
early 1990s

• Strengthened macroeconomic management fiscal
  and monetary discipline
• Pension reforms
• Labour market reforms

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Labour Market Reforms

• Drivers
• Enhanced labour market flexibility and attachment
• Fiscal imbalance generate labour market
  efficiencies and reduce budgetary pressures
• Objectives
• Appropriate incentive structures
• Reducing unemployment, long-term unemployment and
  benefit dependency
• Reducing regional disparities
• Making work pay
• Labour mobility
• Strategy
• Getting people back to work quickly

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Specific labour market and social reforms

• Reforms to Unemployment Insurance (UI)
• Employment Insurance (EI)(active measures)
• Tightening eligibility
• Intensity rule (discouraging repeat use of EI,
  eliminated in 2000)
• Agreement on Internal Trade (AIT)
• Encouraging labour mobility
• National Child Benefit
• Levelling the playing field for those leaving
  social assistance (continued to receive child
  benefits while working)
• Promoting labour force attachment (reinvestment
  of social assistance savings to promote labour
  market entry)

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Current state of the economy

• Strong macroeconomic performance
• Balanced budgets
• Improving labour market productivity but still
  lags behind the United States
• Low inflation and interest rates
• Strong labour market performance
• Strong job growth
• Rising employment rates
• Low unemployment

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3. Current challenges and opportunitiesGlobal/Ma
croeconomic

• Realignment of global economic power
• The United States but vulnerable to budget and
  trade deficits
• Europe
• China and India

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Current challenges and opportunitiesLabour
Market

• Population aging constraining labour supply and
  economic growth
• Certain groups having difficulties participating
  fully in the labour market Aboriginal people
  and new immigrants, low skilled workers, lone
  parents, persons with disabilities
• Persistent regional disparities
• Lagging productivity growth
• Rise of non standard work
• Skills mismatch and consequent skills shortages
  in specific occupations (e.g. trades occupations)
  and local labour market pockets
• Income polarization between high skill and low
  skill workers
• Underemployment (relative to educational levels)

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4. Emerging policy directions

• Drivers
• Demographics
• New technology
• Globalization

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Transformative Change

• Old Policy Reality
• Entitlement
• Learning during youth
• Job-for-life
• Reducing unemployment
• Any job is a good job
• Remedial skills development
• Domestic vs. international interests

• New policy reality
• Empowerment
• Lifelong learning
• Employability-for-life
• Increasing participation
• Quality jobs and full skill utilization
• Proactive upskilling for the future
• Lines between domestic and international blurring

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A human capital agenda is fundamental to many
Government of Canada priorities

• Human capital agenda supports the following
  goals
• Wealth creation
• Stronger communities
• Regional development
• Innovation
• Social inclusion
• Global competitiveness
• Prosperity of Aboriginal people

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A forward looking strategy

• Action in both the learning and employment
  systems
• Skills and learning across the life course
• Variety of settings
• More demand-driven, enhance employer investments
  in skills
• Enhance skills and adaptability of existing
  workforce
• Maximize participation
• Partnerships

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Initiatives

• Demand driven policies
• Workplace Skills Strategy
• Lifelong learning
• Skills agenda
• Increasing participation among at-risk groups
• New immigrants, persons with disabilities,
  Aboriginal people
• International Trained Worker Initiative (ITWI)
• Review of Canada Labour Code (Part III)
• To address changing work arrangements, work-life
  balance issues and non-standard work
• Innovative employment programming

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Conclusion

• These emerging labour market issues and global
  challenges are not unique to Canada
• Canada is well positioned to take advantage of
  the opportunities of the new economy
• Canada looks forward to continuing to work with
  our OECD partners to share best practices and
  find solutions to emerging labour market issues