Reform Experiences of Asian Pacific Countries: The Case of Canada

1. 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

2. Overview of the presentation • Macroeconomic and labour market challenges in the early 1990s • Policy responses to these challenges • Current macroeconomic and labour market challenges • Emerging policy directions

3. Portrait of Canada

4. 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

5. Challenges in the early 1990sLabour Market • Double digit unemployment • Jobless recovery • Decreased labour force participation for youth and older workers

6. 2. Policy responses to the key challenges in the early 1990s • Strengthened macroeconomic management – fiscal and monetary discipline • Pension reforms • Labour market reforms

7. 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

8. 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)

9. 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

10. 3. Current challenges and opportunitiesGlobal/Macroeconomic Realignment of global economic power • The United States – but vulnerable to budget and trade deficits • Europe • China and India

11. 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)

12. 4. Emerging policy directions Drivers • Demographics • New technology • Globalization

13. 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 Transformative Change

14. 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

15. 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

16. 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

17. 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