June 26, 1980

PC

Frederick James (Jim) Hawkes

Progressive Conservative

Mr. Hawkes:

The job will start this year and it may continue into next year.

Topic:   GOVERNMENT ORDERS
Subtopic:   EMPLOYMENT TAX CREDIT ACT
Sub-subtopic:   AMENDMENT RESPECTING EXTENSION OF PROGRAM PERIOD
Permalink
?

Some hon. Members:

Hear, hear!

Topic:   GOVERNMENT ORDERS
Subtopic:   EMPLOYMENT TAX CREDIT ACT
Sub-subtopic:   AMENDMENT RESPECTING EXTENSION OF PROGRAM PERIOD
Permalink
PC

Frederick James (Jim) Hawkes

Progressive Conservative

Mr. Hawkes:

I think we should stay with the community services program for another second or two. In the back-up paper which the minister provided to the House of Commons, he says that that program will create 1,000 jobs. Can the minister tell us whether his departmental officials have estimated the average cost per week for one job within that specific program?

Topic:   GOVERNMENT ORDERS
Subtopic:   EMPLOYMENT TAX CREDIT ACT
Sub-subtopic:   AMENDMENT RESPECTING EXTENSION OF PROGRAM PERIOD
Permalink
LIB

Lloyd Axworthy (Minister responsible for the Status of Women; Minister of Employment and Immigration)

Liberal

Mr. Axworthy:

1 would caution you, Mr. Chairman, that this is exactly the same question that was asked two or three times earlier. It has already been answered. I am quite prepared to answer it again to make sure that the hon. member is clear on it. It is a question that is becoming repetitive, and I think the Chair should recognize that fact.

The point is that we are simply saying that the program is not operative. Therefore, the guidelines of the program are very difficult to judge. We are saying within the parameters of what we can guesstimate in terms of when the program may get started, the length of time in which the community services may be operative in terms of the individual applications, which can go anywhere from eight weeks as a minimum to a full year, we have estimated that the cost per week would be in the range of about $200.

Topic:   GOVERNMENT ORDERS
Subtopic:   EMPLOYMENT TAX CREDIT ACT
Sub-subtopic:   AMENDMENT RESPECTING EXTENSION OF PROGRAM PERIOD
Permalink
PC

Frederick James (Jim) Hawkes

Progressive Conservative

Mr. Hawkes:

I am just busy writing down that figure. The minister indicates that the average cost per week for the community services program may be in the neighbourhood of $200. Could he give us the average cost per week of the community development program which involves an expenditure of $72 million?

Topic:   GOVERNMENT ORDERS
Subtopic:   EMPLOYMENT TAX CREDIT ACT
Sub-subtopic:   AMENDMENT RESPECTING EXTENSION OF PROGRAM PERIOD
Permalink
LIB

Lloyd Axworthy (Minister responsible for the Status of Women; Minister of Employment and Immigration)

Liberal

Mr. Axworthy:

It would be within the same range.

Topic:   GOVERNMENT ORDERS
Subtopic:   EMPLOYMENT TAX CREDIT ACT
Sub-subtopic:   AMENDMENT RESPECTING EXTENSION OF PROGRAM PERIOD
Permalink
PC

Frederick James (Jim) Hawkes

Progressive Conservative

Mr. Hawkes:

Could the minister give us the cost estimate as a cost per week of the new technology program?

Topic:   GOVERNMENT ORDERS
Subtopic:   EMPLOYMENT TAX CREDIT ACT
Sub-subtopic:   AMENDMENT RESPECTING EXTENSION OF PROGRAM PERIOD
Permalink
LIB

Lloyd Axworthy (Minister responsible for the Status of Women; Minister of Employment and Immigration)

Liberal

Mr. Axworthy:

In the order of $250 to $260.

June 26, 1980

Employment Tax Credit Act

Topic:   GOVERNMENT ORDERS
Subtopic:   EMPLOYMENT TAX CREDIT ACT
Sub-subtopic:   AMENDMENT RESPECTING EXTENSION OF PROGRAM PERIOD
Permalink
PC

Frederick James (Jim) Hawkes

Progressive Conservative

Mr. Hawkes:

It is wonderful to come back in the evening, Mr. Chairman. These questions were not getting the same response in the afternoon. Maybe people have looked a few things up. What about the native training program, the additional $10 million? What is the cost per week of native training?

Topic:   GOVERNMENT ORDERS
Subtopic:   EMPLOYMENT TAX CREDIT ACT
Sub-subtopic:   AMENDMENT RESPECTING EXTENSION OF PROGRAM PERIOD
Permalink
LIB

Lloyd Axworthy (Minister responsible for the Status of Women; Minister of Employment and Immigration)

Liberal

Mr. Axworthy:

Two hundred dollars, Mr. Chairman.

Topic:   GOVERNMENT ORDERS
Subtopic:   EMPLOYMENT TAX CREDIT ACT
Sub-subtopic:   AMENDMENT RESPECTING EXTENSION OF PROGRAM PERIOD
Permalink
PC

Frederick James (Jim) Hawkes

Progressive Conservative

Mr. Hawkes:

Those four examples are among the biggest allocations of money from the department and they run between three and four times as expensive for the creation of a week of work as does the employer tax credit program. What does the minister consider as being three or four times the value in these programs as compared with the employer tax credit program? We established earlier that under the employer tax credit program it cost around $65 to create a week's work. These other programs cost between $250 and $260. Why does the minister favour programs of that kind as opposed to the employer tax credit program?

Topic:   GOVERNMENT ORDERS
Subtopic:   EMPLOYMENT TAX CREDIT ACT
Sub-subtopic:   AMENDMENT RESPECTING EXTENSION OF PROGRAM PERIOD
Permalink
LIB

Lloyd Axworthy (Minister responsible for the Status of Women; Minister of Employment and Immigration)

Liberal

Mr. Axworthy:

If the hon. member had been listening to recommendations made by other hon. members of this House he would have his answer. We heard from his hon. friend from Richmond-South Delta a strong and persuasive case for establishing special programs to train young people and move them into new resource areas, as well as for helping native people and other groups with special needs. When we introduced the job-creation program our primary purpose was not to rely on any one technique but to have a variety of instruments at our disposal so that we could target in on hard core unemployment areas.

The employment tax credit plays a role in this general strategy and, as I said, we are prepared to spend close to $100 million on that program. It is designed to provide an incentive for an employer to bring in a worker he would otherwise not hire. Work of this kind tends to be created in areas where there is a fairly high frequency of manufacturing organizations and businesses which can take advantage of the tax credit. But there are many regions which do not have such an opportunity; the underpinning of small business does not exist. These are the areas we want to target in a geographic or regional way.

There also areas where special groups of people, the hard core unemployed, would not be affected by a tax credit program. We have introduced a direct job-creation program to assist in those circumstances. The underlying philosophy does not encourage one program to the exclusion of another but is an attempt to provide a balance of programs and find an equation applicable to each area. We have given our regional directors some degree of autonomy in choosing the mixture of programs which would be employed in each area. That is why we have restored direct job creation.

Topic:   GOVERNMENT ORDERS
Subtopic:   EMPLOYMENT TAX CREDIT ACT
Sub-subtopic:   AMENDMENT RESPECTING EXTENSION OF PROGRAM PERIOD
Permalink
PC

Frederick James (Jim) Hawkes

Progressive Conservative

Mr. Hawkes:

The minister has told us it takes direct job creation to reach some of the disadvantaged groups. There is some truth in that proposition, but it is not all truth. I would draw the minister's attention to the fact that one of the new programs he announced had to do with job training for women

in non-traditional areas. This affects a group about which we are particularly concerned. The basic principle we follow when providing jobs of that kind is the tax credit principle. There is another supplementary and somewhat similar program which we have not seen. It is not in the legislation we are examining today and it is not in the $137 million program which the minister announced earlier. I refer to a wage subsidy program. Could the minister tell us whether or not we are likely to see a wage subsidy program in operation in the future? Can he give us his own analysis of what might be good about such a program and what might be not so good?

Topic:   GOVERNMENT ORDERS
Subtopic:   EMPLOYMENT TAX CREDIT ACT
Sub-subtopic:   AMENDMENT RESPECTING EXTENSION OF PROGRAM PERIOD
Permalink
LIB

Lloyd Axworthy (Minister responsible for the Status of Women; Minister of Employment and Immigration)

Liberal

Mr. Axworthy:

Again, I believe that if we look at the wide variety of employment incentives which might be offered we shall find that a wage subsidy is being used by certain jurisdictions. It was my hope that through discussions and debate in which the parliamentary committee will engage, and in which our own talk force will engage, we would be able to come up with a proper assessment and evaluation of those techniques as well as others. As the hon. member knows, because he is well versed in this field, there are a number of options available. What we have to do is determine the proper mixture of programs in the future; it is not enough to throw a smorgasbord of plans on the table and simply hope they will work. We now have a job program which is within the parameters of the money available to us to meet the short-term need and fill the vacuum which was created. We hope through the work of those two task forces to make an exact assessment of other techniques which are available, and determine which will best serve us. Wage subsidy programs will be examined as part of that process.

Topic:   GOVERNMENT ORDERS
Subtopic:   EMPLOYMENT TAX CREDIT ACT
Sub-subtopic:   AMENDMENT RESPECTING EXTENSION OF PROGRAM PERIOD
Permalink
PC

Frederick James (Jim) Hawkes

Progressive Conservative

Mr. Hawkes:

The data base relative to wage subsidy programs is growing, I believe, as more and more jurisdictions around the world have made use of this technique. One element of a data base which might be collected by the minister's department would include some idea of the cost vis-a-vis direct job creation and so on. Does the minister have any idea where wage subsidy programs might fit in this range from the cheaper employer tax credit program to the more expensive direct job-creation effort?

Topic:   GOVERNMENT ORDERS
Subtopic:   EMPLOYMENT TAX CREDIT ACT
Sub-subtopic:   AMENDMENT RESPECTING EXTENSION OF PROGRAM PERIOD
Permalink
LIB

Lloyd Axworthy (Minister responsible for the Status of Women; Minister of Employment and Immigration)

Liberal

Mr. Axworthy:

I do not have that information on hand at the moment but I know it is part of the data base being assembled by the task force in my department; figures of that kind on alternative job-creation options will be developed.

Topic:   GOVERNMENT ORDERS
Subtopic:   EMPLOYMENT TAX CREDIT ACT
Sub-subtopic:   AMENDMENT RESPECTING EXTENSION OF PROGRAM PERIOD
Permalink
PC

Frederick James (Jim) Hawkes

Progressive Conservative

Mr. Hawkes:

1 would think such data already exists somewhere in the department given the number of people who are involved in research. One of the advantages of a wage subsidy program is that in the Canadian context it is estimated it would make the other 50 per cent of our businesses eligible to employ people. Once this legislation is passed, the richest 50 per cent of Canadian businesses will be in a position to use the employer tax credit program and hire people, receiving benefits, in a sense, from the other taxpayers of the country. That is because they make a profit and pay certain taxes. Unfortunately, we are in a period of the economy at which bankrupt-

June 26, 1980

cies have risen by 15 per cent, 20 per cent or 25 per cent, depending on the month.

The fringe businesses in this country, the 50 per cent which have not been in business long enough to make profits, or which are experiencing particularly difficult times, cannot provide jobs. Every time a business goes bankrupt a certain number of jobs are lost. We lost 61,000 last month in Ontario alone. They disappeared from our economy. I wonder whether the minister might care to speak for a minute or two about the consideration he has given to wage subsidies relative to employment possibilities in fringe businesses which are barely profitable.

Topic:   GOVERNMENT ORDERS
Subtopic:   EMPLOYMENT TAX CREDIT ACT
Sub-subtopic:   AMENDMENT RESPECTING EXTENSION OF PROGRAM PERIOD
Permalink
LIB

Lloyd Axworthy (Minister responsible for the Status of Women; Minister of Employment and Immigration)

Liberal

Mr. Axworthy:

Mr. Chairman, I think it would be wrong to assume that the employment tax credit is utilized only by large, rich corporations. It is actually quite the contrary. The major users of the employment tax credit program are small businessmen. Well over 70 per cent of the applications which come under this program are put forward by business organizations which employ fewer than 20 people, so the major recipients and users of this program are small business organizations.

As far as the other problem the hon. member puts forward is concerned, I agree with him. There is nothing that is giving me greater concern at this point than the major dislocations which are taking place in traditional industries which have been very strong and have not required support. The automobile industry is a prime example. However, I do not think a wage subsidy is necessarily the panacea for that problem. We are examining it very closely. We have had a series of meetings with the UAW. We are looking at different ways by which we can provide for transition in that major area but, as I tried to answer the hon. member who spoke before, we are really going to have to work jointly with business and unions to find a way to combine a number of programs to impact upon those areas where major industrial change or dislocation is taking place.

It could well be that a wage subsidy is one example, but I can also point out to the hon. member, for example, that in the American jurisdiction what they are using now is increasing the use of split work programs or work-sharing programs, which is another concept the Americans are beginning to employ with more frequency. The hon. member is probably aware of the experience in the state of California with the four-day week insurance programs that they are beginning to develop. Those are all options we are looking at, and I encourage the hon. member, as one of the representatives of his party in the parliamentary task force, to use his experience and his obvious interest and concern about wage subsidies and to bring that forward for examination by the parliamentary task force so that we can get the benefit of his wisdom.

Topic:   GOVERNMENT ORDERS
Subtopic:   EMPLOYMENT TAX CREDIT ACT
Sub-subtopic:   AMENDMENT RESPECTING EXTENSION OF PROGRAM PERIOD
Permalink
LIB

Denis √Čthier (Deputy Chair of Committees of the Whole)

Liberal

The Deputy Chairman:

Order, please. The traditional 20 minutes allotted to each member of the committee has expired. However, if nobody else seeks the floor, the hon. member for Calgary West may be recognized for a second round.

Employment Tax Credit Act

Topic:   GOVERNMENT ORDERS
Subtopic:   EMPLOYMENT TAX CREDIT ACT
Sub-subtopic:   AMENDMENT RESPECTING EXTENSION OF PROGRAM PERIOD
Permalink
PC

A. Daniel McKenzie

Progressive Conservative

Mr. McKenzie:

Mr. Chairman, I would like to discuss with the Minister of Employment and Immigration the industrial benefits from the new fighter aircraft contract which is in progress now.

To date we know that 49 per cent of the spin-off benefits will go to the province of Quebec, 37 per cent to Ontario, and 12 per cent to the rest of Canada. As the minister well knows, we have a very capable aerospace industry in the province of Manitoba. There are four firms there: Standard Aero, CAE, Boeing and Bristol. They are very concerned, and to date there have been only some minor contracts allotted to Bristol for the manufacture of but one part of the new fighter aircraft. Is the minister taking into consideration where the remaining 12 per cent is going to be allotted across Canada? If there are not going to be some industrial spin-offs and if at least 10 per cent of the remaining 12 per cent for eight provinces is not going into the province of Manitoba to these four aerospace firms, they could face very serious problems with lay-offs because, once the old fighter aircraft is finished, which is being worked on now, there will be nothing more for them. Can the minister explain what he is doing about getting part of the new fighter aircraft contracts into the four aerospace firms in Manitoba?

Topic:   GOVERNMENT ORDERS
Subtopic:   EMPLOYMENT TAX CREDIT ACT
Sub-subtopic:   AMENDMENT RESPECTING EXTENSION OF PROGRAM PERIOD
Permalink

June 26, 1980