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 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

3 Portrait of Canada

4 1. Challenges in the early 1990s Macroeconomic 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 1990s Labour 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 opportunities Global/Macroeconomic Realignment of global economic power The United States – but vulnerable to budget and trade deficits Europe China and India

11 Current challenges and opportunities Labour 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 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

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