HUMA Committee Meeting

37th PARLIAMENT, 2nd SESSION

Standing Committee on Human Resources Development and the Status of Persons with Disabilities

EVIDENCE

CONTENTS

Tuesday, March 18, 2003

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1525

The Chair (Mrs. Judi Longfield (Whitby—Ajax, Lib.))

Ms. Monique Guay (Laurentides, BQ)

Ms. Diane St-Jacques (Shefford, Lib.)

Ms. Monique Guay

Ms. Diane St-Jacques

The Chair

Mr. Scott Murray (Director General, Institutions and Social Statistics, Statistics Canada)

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1530

The Chair

Mr. Scott Murray

The Chair

Mr. Scott Murray

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1535

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1540

Mr. John Finlay (Oxford, Lib.)

The Chair

Mr. Eugène Bellemare (Ottawa—Orléans, Lib.)

The Chair

Mr. Scott Murray

Mr. Eugène Bellemare

Mr. Scott Murray

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1545

The Chair

Mr. Eugène Bellemare

Mr. Scott Murray

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1550

The Chair

Mr. Scott Murray

Mr. Eugène Bellemare

The Chair

Mr. Scott Murray

The Chair

Mr. Scott Murray

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1555

The Chair

Mr. Scott Murray

The Chair

Mr. Scott Murray

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1600

Mr. Monte Solberg (Medicine Hat, Canadian Alliance)

Mr. Scott Murray

Mr. Monte Solberg

The Chair

Mr. Scott Murray

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1610

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The Chair

Mr. Monte Solberg

Mr. Scott Murray

Mr. Monte Solberg

Mr. Scott Murray

Mr. Monte Solberg

Mr. Scott Murray

Mr. Monte Solberg

Mr. Scott Murray

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1620

Mr. Monte Solberg

Mr. Scott Murray

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1625

Ms. Diane St-Jacques

Mr. Scott Murray

Ms. Diane St-Jacques

Mr. Scott Murray

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1630

Ms. Diane St-Jacques

The Chair

Ms. Diane St-Jacques

Mr. Scott Murray

Ms. Diane St-Jacques

Mr. Scott Murray

Ms. Diane St-Jacques

The Chair

Mr. Sébastien Gagnon (Lac-Saint-Jean—Saguenay, BQ)

Mr. Scott Murray

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1635

Mr. Sébastien Gagnon

Mr. Scott Murray

Mr. Sébastien Gagnon

The Chair

Mr. Eugène Bellemare

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1640

Mr. Scott Murray

Mr. Eugène Bellemare

Mr. Scott Murray

Mr. Eugène Bellemare

Mr. Scott Murray

Mr. Eugène Bellemare

Mr. Scott Murray

Mr. Eugène Bellemare

Mr. Scott Murray

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1645

Mr. Eugène Bellemare

Mr. Scott Murray

The Chair

Mr. John Finlay

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1650

Mr. Scott Murray

Mr. John Finlay

Mr. Scott Murray

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1655

Mr. John Finlay

Mr. Scott Murray

Mr. John Finlay

The Chair

Mr. Scott Murray

The Chair

Mr. Scott Murray

The Chair

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CANADA

Standing Committee on Human Resources Development and the Status of Persons with Disabilities

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NUMBER 017

l

2nd SESSION

l

37th PARLIAMENT

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EVIDENCE

Tuesday, March 18, 2003

[Recorded by Electronic Apparatus]

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[English]

    The Chair (Mrs. Judi Longfield (Whitby—Ajax, Lib.)): Good afternoon, ladies and gentlemen. I welcome you to the 17th meeting of the Standing Committee on Human Resources Development and the Status of Persons with Disabilities.

    We are continuing with our study of literacy.

    Before I introduce our witness for today, members of the committee will know that one of our regular members is not with us today; she is ill. Madame Tremblay is a very valued member of this committee, and we miss her being with us.

    Madame Guay, could you perhaps provide an update as to Madame Tremblay's health?

[Translation]

    Ms. Monique Guay (Laurentides, BQ): I simply want to provide you with a little information. I will be replacing Suzanne on the committee until the month of May. She was to have undergone bypass surgery, but there were some complications due to the fact that they did not have a supply of her blood type. Consequently they had to collect a supply of her own blood for the operation. She is doing very well; she is in hospital under observation and will only be having surgery at the end of March. She will then convalesce. I simply wanted to inform you of what was going on.

    You said that you had tried to call her. She cannot be disturbed; she is in hospital. I have news because she phoned me. She's doing very well. Do not worry too much.

    Ms. Diane St-Jacques (Shefford, Lib.): Could we have her coordinates? Not even that?

    Ms. Monique Guay: Perhaps her e-mail address only. I know that her assistants will be taking information to her. Sébastien is here to send her her e-mail. But she does not want any flowers; in fact, she does not want anything. She has to rest and avoid stress. That way, she will come back here in great shape.

    Ms. Diane St-Jacques: We are going to respect her wishes.

[English]

    The Chair: Thank you, Madame Guay.

    I know a number of people have been inquiring after her health. It is good to have an update. Please convey our very best to her and tell her she has our very best wishes. While we're pleased with the substitution that is here at the table, it's not quite the same as having Suzanne with us. Tell her to come back as quickly as she possibly can; she has all the best wishes.

    We have with us, from Statistics Canada, Scott Murray, who is the Director General of Institutions and Social Statistics.

    Mr. Murray, we are looking forward to your presentation today, which will be followed by, I would think, a rather lively exchange of comments and questions. Thank you for joining us.

    Mr. Scott Murray (Director General, Institutions and Social Statistics, Statistics Canada): Thank you very much. I'd like to thank you for the opportunity to speak to you.

    I've spent the last 15 years of my professional life, in large measure, trying to measure literacy internationally and to understand its causes and consequences. I'm going to try to condense 15 years into 15 minutes.

    The presentation you have in front of you was supposed to be done in PowerPoint on-screen. I'm going to have to get you to jump around a little bit, but it shouldn't be too difficult.

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    The Chair: Mr. Murray, rather than having to worry about 15, if you need to take 20 minutes, then do what you can.

    Mr. Scott Murray: I'm going to start with the punch line. The sum of all of our analysis and measurement over the past 50 years leads us to believe that literacy and numeracy are key determinants of economic and social development, in the developing world and the developed world. I'm going to try to lead you through the data that leads us to that conclusion.

    I'll talk about what I'm going to try to do. I'm going to try to define literacy, but not in any great detail, and to show its basic distribution. I'm going to turn to the other side, away from the supply of literacy—what skills Canadians have and what they know and can do—to the demand for literacy, because that's really where public policy has to begin thinking: what are the demands that the economy and the society face?

    Now I'll show you a little bit about how Canadian employers reward literacy and numeracy in the workplace. Then I'm going to talk a little bit about the processes by which literacy is acquired and lost, because those processes will have a huge impact on the available supply that the economy can draw on. That will turn us to focus on the future.

    In our work on literacy—and I want to note in passing that the Canadian government has played a key role at the international level in promoting the direct assessment of literacy skills—we've defined literacy in three domains: prose literacy, the ability to deal with connected discourse, things that come in sentences and paragraphs as in books; document literacy, the ability to deal with things like government forms and the kinds of documents workplaces run on; and numeracy, the ability to deal with the mathematical demands in the workplace and in the community at large.

    I know from reading the testimony of earlier witnesses that there is some concern about whether these measures are reliable. I can hopefully dispel those concerns.

    In order to measure literacy, we start with a theory of what makes adult reading and numeracy tasks difficult. We have a set of variables that define the nature of the text being used by an individual and the nature of the task they're asked to accomplish.

    The first thing you have to get out of your minds is that literacy is about decoding—recognition of the alphabet and recognition of individual words. It's actually how you use printed information to accomplish the kinds of tasks that confront individual Canadians in their daily lives.

    I won't spend any amount of time on those variables, except to say that with those variables you can explain between 85% and 90% of the relative difficulty in the range of tasks that Canadians face in their daily lives. That allows you to understand from the demand side the sort of societal and economic demands that are being placed, and it leads to efficient testing of individuals to understand what skills they actually have.

    With that introduction, I'll turn to chart 15 in the presentation, where I'm going to show you, first, data for the adult population.

    The Chair: It's on page 15.

    Mr. Scott Murray: There are coloured bars in two colours, bluish aquamarine and green. The bars down the middle are the mean scores for different countries: the average literacy level in a range of OECD countries, the key countries with whom we compete economically. The length of the bar is the range of skill observed in the country.

    The thing I want you to take away from this is that the countries differ a great deal more in their literacy ability than they do in their educational attainment distributions, and they differ a great deal in the range of ability that's exhibited in their population. These two things have big implications for how countries perform economically at the aggregate level, how efficient firms are at adopting innovative work organizations and technology, and on the wages and employability of the workers who work in those firms.

    Canada situates itself pretty well in terms of other countries. We fall just below the Nordic countries, which display very high and very equally distributed skills, but we're characterized by having very high and variable skills. There is a wide range of skills in the populations.

    It is scale scores that those are based on. We also define performance levels in the scales, from levels one through five. Slide 18 gives you a description of what those performance levels are.

    It's only at the very lowest level, level one, that individuals are close to being what you'd call “true illiterates”, where they're unable to decode, but level one also includes large numbers of individuals who have mastered decoding but have very limited reading skills. They can deal with simple sentences and simple tasks, but nothing beyond.

    As you go up, the levels become increasingly difficult, cognitively and from a reading point of view. When you get to levels four and five, you find roughly only 5% of the adult Canadian population is capable of performing at that level. They are individuals who are capable of drawing inferences from very complicated texts with what amounts to very obscure information, where there is a lot of what in the theory is called “distracting information”—things that might plausibly be correct answers but that aren't; that serve to make the task more complicated.

    The next chart, chart 19, presents data for the same group of countries by performance level. The black stuff at the bottom includes people at level one. The next group are people at level two. This graph is pinned at level two because it's the level at which you will start to see in all OECD countries very significant labour-market outcome differences. People below that line suffer lower wages, higher unemployment rates, greater reliance on welfare and other social transfers, and a host of other problems.

    Canada's also characterized, if you look above the line, as having quite a large percentage of people at the highest levels of literacy. In some respects we're quite schizophrenic. That's just a reflection of the range of ability that's in the country.

    Now I'd like to take you back to chart 7. We're going to switch gears here. I'll take you through this quite slowly, because this is the demand side. The left-hand panel shows the range of reading literacy demands in Canadian workplaces. The black bar up the middle of the longer bars with the red tails on them are the mean literacy demands. As you go out, you get proportions of all jobs that have either lower or higher reading demands.

    Going from top to bottom, the jobs in the top bar are the most knowledge-intense jobs. Those, as I'll come to point out when we go to the right-hand side, are the kinds of jobs the Canadian economy is creating.

    The jobs at the very bottom, “other goods”, have the lowest reading demands, and that's where we've had very little Canadian employment growth. If you go to the right-hand side, it shows quite clearly the Canadian economy is generating jobs that place extraordinarily high reading demands on workers.

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    Going to chart 8, here is a complicated table. It comes from data from HRDC's essential skills research program that profiles the occupational skill demands of about 181 occupations, representing 54% of all employment in Canada.

    I would point you to the chunk in the middle—NOC skill level C. Go to the reading column and you'll see there's 100% at level two and 94% at level three.

    That 94% is an important number. It means that 94% of the jobs covered by this demand-side, occupational-skill standards exercise require reading at level three or above.

    Jobs at levels C and D in the national occupational classification are jobs that require only high school graduation but represent half of employment. The point of this is that the Canadian economy, again, is generating incredible literacy demands that workers have to have skills to meet.

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    Mr. John Finlay (Oxford, Lib.): Madame Chair, may I ask an odd little question for understanding? I don't know what NOC means.

    My colleagues and I are having a little trouble following, at the speed at which Mr. Murray is going. I'm sorry, but we are.

    The Chair: Yes.

    Mr. Eugène Bellemare (Ottawa—Orléans, Lib.): I'm having a lot of difficulty following this. I've asked my colleagues, and they also are honest and admit it. I haven't asked the people across. When we talk about definitions, for example, I'd like to see a definition, not hear it. If I hear a definition, and then all of a sudden we're going through documents—and these are all statistics, and charts, and so on—the gentleman making the presentation is very knowledgeable, but he's going at a speed that's intellectually too fast for me.

    I want to understand what's going on, and when he mentions definitions, I would like to have a sheet in front of me that gives me the definition, not what he tells me off the cuff; otherwise, I really have difficulty when he talks about level one, level two, and then about black bars, blue bars, red bars. I'm trying to find out where exactly it is, and I'm switching from French to English text. I'm really having a hell of a time trying to follow.

    I'm wondering if it could be brought down to perhaps my level of education. I don't think I'm dumb; I have a master's degree in administration. But I have difficulty following this guy.

    The Chair: I think Mr. Murray warned you to begin with that he was trying to condense 15 years of studying and information into 15 minutes. I think we're all sort of struggling to keep up.

    Mr. Murray, I said 20 minutes, but if it takes you half an hour to go through this, it is an important part of what we're all here for.

    I think you've heard the comments from the members.

    Mr. Scott Murray: Okay. I'll recapitulate. I'll go back to the definitions.

    Mr. Eugène Bellemare: Wonderful.

    Mr. Scott Murray: You have the long presentation that has 41 different slides. If you go back to page 3 of that presentation, there's a general definition of literacy: “the ability to understand and employ printed information in daily activities—at home, at work and in the community—to achieve one's goals and to develop one's knowledge and potential”. It's very much about what individuals want to do with their lives, but it's also about the kinds of challenges individuals are confronted with that are created by the society or by the economy.

    That's the general definition of literacy. It's the act of reading and the application of the information obtained through reading to accomplish tasks. It's a very functional definition. It's not up in the cultural domains of reading; it's very functional, applied reading, to do the things the vast majority of Canadians do.

    When we come to measurement, we defined three different areas of literacy skill. There is prose literacy, which is the knowledge and skills needed to understand and use information from texts that include editorials, news stories, brochures, and instructional materials. These are things that are presented in standard sentence and paragraph format: newspaper editorials, books—anything that comes with standard structure.

    The second domain of literacy that we've defined is “the knowledge and skills required to locate and use information contained in various formats”, including job applications, payroll forms, charts and graphs, transportation schedules, tables. Things such as the tax system have a lot of forms. They are documents that have a different structure in terms of their relative difficulty—the things that make them more or less difficult for people to use—and therefore are more or less accessible to people at different levels of skill.

    The third domain is numeracy, where what we've measured to date is simple mathematical operations that are based upon information that's presented in the printed word. Lots of prose literacy tasks and lots of document literacy tasks have embedded in them numerical computation tasks such as addition, subtraction, multiplication, and division: figuring out and balancing your chequebook, figuring out a tip, completing an order form, doing your taxes—things like that.

    You can use these definitions to define the demand for skill in the economy and the society and to characterize the supply of skill—what actual, individual Canadians know and can do.

    In the data I'm going to present, I'm going to present data from three studies: the national longitudinal survey of children and youth, the OECD program for international student assessment that assesses the skills of 15-year-olds before they leave secondary school, and our assessment of adult literacy skills. Each of those studies actually tested the individuals using these definitions and this framework to find out what it was they were able to do. The underlying framework allows you to be very predictive about how difficult something is going to be a priori, in the abstract.

    The next part of the story was really: forget about what people know and can do; what kind of demands is the Canadian labour market creating? The story there is, the kinds of jobs we're creating are information- and knowledge-intense. Those jobs, the information- and knowledge-intense jobs, are being driven by changes in technology and rates of innovation in the workplace that are leading to those jobs allowing workers more flexibility, more decision-making, and very much higher demands for communication, including communication through the printed word. They're far more independent, with far fewer layers of supervision and direct guidance from supervisors.

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    The complicated table is really just meant to show that we have a system in Canada for monitoring the skill demands the Canadian economy is creating. What it's saying is that for the lower half of the Canadian economy, where you would think skill demands might be quite low—what have been called “McJobs”—they are actually very skill-rich. Because Canadian firms are so engaged in the global economy, they have to be competitive, and they're using in many cases state-of-the-art technology that has driven up the skill demands very rapidly.

    I'll come back to that in the theme. The policy question is whether the sources that create skill in the Canadian economy are up to the task of meeting those rapidly rising skill demands.

    Are there any questions about definitions or measurement before we turn to...?

    The Chair: Mr. Bellemare.

    Mr. Eugène Bellemare: On page 8, ESRP...?

    Mr. Scott Murray: HRDC, in order to understand the rapidly changing skill demands in the Canadian labour market, particularly for Canadian workers with lower education levels, has implemented this program that profiles the skill demands—what it takes for a worker to perform at a satisfactory level in their job. The skills they look at are reading, writing, numeracy, and document use—those are some of the skills they look at.

    They have a very elaborate methodology for doing this. It's independent of looking at the skills individuals actually have, so they're able to say “Of all the jobs in the national occupation classification that are skill level C, these many require reading at level two; these many require reading at level three....”

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    The Chair: Perhaps it would be helpful if you gave us some examples of occupations in skill level B, C, and D.

    Mr. Scott Murray: Okay. B is a little different, because they are jobs that require more than high school graduation—some post-secondary, usually at the college level—and the coverage of the monitoring program is quite limited there, so I would tell you to ignore the data there.

    Levels C and D are all the blue-collar jobs in Canada, but many of them quite technical, requiring quite high levels of skill. It ranges everywhere from child care workers to truck drivers. Everywhere where HRDC has a sector council, most of the sector councils have jobs in levels C and D: there are 181 occupations out of roughly 350 key occupations in the Canadian economy.

    Mr. Eugène Bellemare: When you bring your definition to the school level, it gets to be more comprehensible. I understand it better once you say “Working as a”—whatever—“you require at least a grade 3 or 4; working at another level, comprehension would be at least your elementary school, your high school, or your college or university,” and so on. Then we're quicker to say “Oh, yes, okay, it's there that the difficulties lie”.

    The Chair: Mr. Bellemare, I think we're going to have to let Mr. Murray continue, because if we do this, I think we're going to be micro-managing things.

    Mr. Scott Murray: I can come back and answer your question, because part of the presentation deals with that issue.

    The Chair: All right. So we're going to carry on with this.

    Mr. Scott Murray: What I'm going to turn to now will give you some idea of how Canadian employers identify and reward literacy and numeracy skills, because, coming back to the opening slide, it's one of the key things that determines how much people earn and whether they're employed.

    The first slide I'll show you is slide 9. It looks like a ski slope. On the left-hand side of that graph are people at the lowest skill levels. As you go towards the right, you're getting to higher skill levels. What it shows is the probability of experiencing unemployment, based on your skill level. In Canada, people at level one have an almost 60% chance of being unemployed at some time during the year. At level five, at the highest skill levels, there's a vanishing small probability of being unemployed. So the first effect that literacy has is that employers use it as a sorting mechanism to decide who gets employment.

    If you go to graph 10, it has three coloured bars: blue, purple, and yellow. This says wages vary for some reasons. They vary because people are educated to different levels; they vary because workers have more experience, or less, in the labour market; and for the first time, because we have the data now, we can look at the degree to which their wages vary or are predicted by their literacy levels. What this says for a number of countries, and most importantly Canada, is that literacy is the most important factor in determining wages. It explains 33% of the variability in wages, so it's something that would matter a great deal to the average worker. This implies that employers are able to identify the skill, and they pay a lot for it. So it's economically important.

    On here, I'd also like you to take a look at Sweden. I'd say that Sweden has the highest average skill level we've measured so far and the least variable skill level in the population. So they're the ideal case to look at internationally for a comparison point. There, literacy skill matters hardly at all, not because it isn't important for the economy, but because almost everybody has it. So the goal of public policy is to make literacy widely available and not important economically--if that makes any sense.

    The next chart, chart 11, looks at the probability of getting into university based on your literacy skill level. I'll just point to two numbers here. Looking at the second number from the bottom, you're 2.2 times as likely to get into university if your skill level is at level five. If you have skill levels at levels one or two, you have a 9% chance only of getting into university. It's an odds ratio, so it's way less than one. It's something that greatly affects the chance of kids accessing the post-secondary system.

    I'll take you to chart 13 now. This is also a probability chart. It shows the probability of whether your employer is going to pay for your training, will train you and then pay for it, depending on whether you have a job that's rich in literacy or not. The only story it tells is that you're about eight times as likely to get your employer to pay for training if you're high-skilled, as opposed to low-skilled. In some industries and in some occupations, those probabilities go up to 14 and 15 times as likely. So employers are investing, and irrespective of the question of the overall level of employer training in Canada, the training that employers are doing in Canada is focused on the very skilled and leaves behind those with poorer skill levels.

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    The next chart is chart 14; this is to human dimension. Forty percent of Canadians at level one acknowledge the fact that their skill levels really limit their economic participation. So it is not an awareness problem. It's very rare.

    These percentages, when you look at people at level two, fall quite a bit, because people in level two, for the most part, are full-year, full-time employed, they have mortgages, they have cars, they have children. But we still deem them to be at risk because they're suffering significant economic penalties because of their skill levels.

    Chart 15 is the next one. It has a nice sloping red line on it.

    The Chair: There's no red line on 15.

    A voice: There's a dark green line in the middle.

    The Chair: What we have as 15 is the distribution of literacy scores.

    Mr. Scott Murray: Oh, 22, I'm sorry.

    The Chair: Okay. Yes, a red line on 22.

    Mr. Scott Murray: I don't want to turn this into a statistics lesson, but these are very information-laden. The most important thing is that the slope of that line reveals how equitably skill is distributed in the population. So people from poor, less educated backgrounds are on the left and have relatively lower scores. People on the right-hand side, from higher educated, higher-income families, have much higher scores on average. This is for 16- to 25-year-olds, and it shows there is still quite a gradient in outcomes across social classes in Canada.

    If you're trying to create an egalitarian society, that line would be flat. So one of the objectives of Canadian education is to try to raise the average, which is the midpoint of that line, and to flatten the gradient.

    We compare roughly to many of our key trading partners. We're better than a lot of European countries and other OECD countries, but among key competitors not so much better. The U.S. were better because they have a much higher range of ability in the population. Their system creates a great deal more inequity.

    I'll take you to graph 25 now and credit this to Doug Willms from the University of New Brunswick. Again, this is complicated, but I'll make it simple. We call this the Christmas tree. The point of the Christmas tree is the skills of kids at age six. What it shows is that in almost all provinces kids have literacy and numeracy scores that are about the same. The bottom of the Christmas tree is when they're 16 to 25 years old. By then, depending on which province you're in, your skills are quite a bit better or quite a bit less.

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    Mr. Monte Solberg (Medicine Hat, Canadian Alliance): Is this a different chart?

    Mr. Scott Murray: Page 25. Or page 24.

    Mr. Monte Solberg: Ah, there's the Christmas tree. Okay.

    The Chair: It's 24. It's just the lights you can see, you don't see the branches.

    Mr. Scott Murray: If we want to get particular, the red dots are Quebec, where kids start out at about the same level as all other provinces and then they get considerably better through time. For a fair number of the other provinces, you see them bumping along at the national average.

    As you can see, the school system does play an important part in creating the stock of literacy available to the Canadian economy and to the post-secondary system.

    Almost all the maritime provinces find themselves below the line with Ontario, and the western provinces do not do as well as Quebec, except perhaps Alberta--they're almost as good--and Manitoba, Saskatchewan, and British Columbia outperform the national mean.

    The next slide, number 25, is another ski slope. It looks at the literacy skills of 15-year-olds in provinces and countries that participated in the OECD PISA study. We see that Canada is second only to Finland in average reading skill. We're characterized by having very low differences in skill, judged by the length of the bar. If Alberta were a country, it would be the best country in the world—except Flanders, which would like to be a country; it is above Alberta. All of the provinces are above the OECD mean. So relative to our trading partners, we're doing very well with 15-year-olds, but there is a great deal of variability from province to province.

    From reading the earlier testimony, I know there has been some concern about our having adult skill measures that say we have quite a large literacy problem on one hand, and the PISA study that says we're second best in the world on the other hand.

    The next two colourful slides, numbers 26 and 27, indicate this is a technical issue, in that the two surveys used different performance standards. They have different scales, with one using a 500-point scale and another an 800-point scale, and the proficiency levels are defined differently in them. So if you go to slide 27 and actually put them on the same scales, they give the same result. In the 15-year-old population, 39% of students are at levels one or two using the adult labour force performance standard, which is what the labour market demands. In the 16- to 25-year-old population, 36% are at levels one and two. The difference reflects the fact that kids keep learning literacy skills in that 16- to 25-year-old age range.

    So the two studies are giving exactly the same answer. It's just a matter of what performance standard you apply. To be placed at this level in the adult survey, you have to get right 80% or more of the items of that difficulty. So you have a very high standard for mastery, or the kinds of things that the ISO 9000 standard and most employers require their workers to perform at.

    The next slide is number 29, where I'll direct you to the purple bar. This shows what makes scores variable in Canadian secondary schools. There's good news here, in that almost all of the variance in Canada is within the schools rather than between schools. So relative to almost all of the other OECD countries, Canada does not stream schools in different levels of ability. We mix our students up in schools that are heterogeneous. All of the evidence points to the fact that the more you do this, the higher the average outcome you get, and the more equitable outcome you get across social classes. So this is a good-news story for the Canadian elementary, secondary, and preschool system, because these studies measure skill acquired right from birth up to age 15.

    I'll go through charts 30, 31, and 32 quickly. While these look like a mess, they're interesting. Quebec did remarkably well in this assessment of 15-year-olds' reading skills. The fact that the red dots are clustered above the line and in the centre shows that they accomplished this high performance by doing very well with kids from average socio-economic backgrounds.

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    If you flip to the next one, you can look to Ontario. And in Ontario almost all the red dots are clustered under the line for kids from medium socio-economic status backgrounds and high socio-economic status backgrounds. So relative to the Canadian average, Ontario schools, serving kids from those backgrounds, are underperforming.

    Then the next one shows that Alberta is doing extraordinarily well because it's doing extraordinarily well with kids from high socio-economic status backgrounds. The schools that serve students with those characteristics outperform. This re-enforces the point that the education systems do matter. They're creating different pools of skills that will eventually have an impact for individuals and for the performance of their provincial economies.

    Now we'll take you to chart 33, because the story is a lot more complicated. This chart presents skill level by age. And if you look at the blue line in the middle, at about the age of 30, it shows that skill levels in Canada start to fall off. The purple line at the top is individuals who have post-secondary education, and in that case skill levels don't start to fall off until the mid-forties. The bottom line is people who don't participate in post-secondary education; their skill level starts to fall off almost immediately at the point at which they enter the labour market.

    These differences are not based on longitudinal data, so they're the product of two things. They were the product of educational quality being poorer in the past, so that schools weren't doing as good a job. We also have lots of evidence to suggest that part of it is due to the fact that there is a lot of skill loss going on in the Canadian economy, that people are losing skills for a lack of social or economic demand for skill use. And we do not yet understand which of the mix of those two things is going on.

    This pattern is different from that observed in other countries, such as Sweden, which is on the next graph, where the loss is very highly attenuated compared to Canada.

    I'll take you to chart 36, which explains why we're so concerned about not understanding the processes with skill gain and skill loss after you leave school. This chart projects skill levels into the future, out to 2036, using the relationships that currently exist between literacy skill, educational attainment, age, and immigration status. The story these tell is this. If the relationship remains the same, the proportions of people at levels one and two change hardly at all, because gains associated with higher educational attainment levels are being eaten up by loss of skills in adulthood, due to these processes of inadequate social and economic demand. This is probably the worst case, because the causality might run in the opposite direction. People with high skills create interesting jobs that demand reading. That alludes to people maintaining their reading levels, and that in turn turns into higher productivity in the workplace. We do not yet understand if that's the case or not.

º  (1610)  

    I'll take you to the last chart, number 38, so we can get asking some questions.

    I'll try to encapsulate the presentation. We have an economy that's creating incredible increases in the demand for literacy skill. That skill is key to realizing high rates of technical innovation and organizational change in Canadian workplaces. The question is, do we have the skills to meet that demand? The answer is, probably not.

    Our school system is generating kids with very high skill levels compared to other countries, but what this chart tell us is that there are hardly enough of them to meet those emerging skill demands. The relative size of the youth core in Canada compared to that of many of our trading partners is small. No matter how well the education system is doing, it's not going to be enough, which leads to the question, what is it you have to do with adults by way of providing them with training generally and literacy training specifically?

    We know from the assessment of adult skills that there are large numbers of Canadian adults who do not possess the skills to deal with jobs in the information economy, the kinds of jobs the Canadian government and Canadians covet and our economy is generating, unlike the economy in the United States.

    Here's just one closing word before I answer questions. We are currently in the field with a new assessment in a number of OECD countries. We won't have data until next December. The sample size is relatively huge in Canada. It will allow us to look at the distribution of skill in a lot of socio-economic status groups and special interest groups and by industry and occupation, and it will allow us to look at this question of how the skill levels have changed since 1994, when we had the last assessment data. That's going to be crucial, I think, to your deliberations about whether we are heading up, are about the same, or are heading down. We can't give you an answer for that yet.

    I'm sorry to have been technical and to have had lots of charts and graphs. It's a professional weakness, probably.

º  (1615)  

    The Chair: Thank you, Mr. Murray.

    We'll turn to questioning, and we'll start with Mr. Solberg from the Alliance with about a seven-minute round.

    Mr. Monte Solberg: Thank you very much, Madam Chair.

    Thank you, Mr. Murray, for the presentation. It was interesting.

    Of course, when you look at the charts comparing Canada to other countries, obviously we all want to see Canada on top, but it's sometimes difficult to compare these countries, because, I suspect, of things like immigration. For instance, look at Sweden, a very closed country relative to Canada when it comes to immigration. We have a lot of immigrants coming in and we have English as a second language to deal with and that kind of thing.

    First of all, I'm assuming that these charts don't separate out people who were born and educated here, who have been here their whole lives, from immigrants. I'm making that assumption. I'm wondering, to what degree does that impact these rankings? Isn't it important to note this so we're not operating under the illusion we've done something wrong compared to a country such as Sweden?

    Mr. Scott Murray: You're correct, in that they don't separate out immigrants, although the reports we produce do provide information on immigrants. The case for Canada is that immigrants are actually distributed in two ways. Overall, immigrants actually increase the average skill levels in Canada, official language skill levels, because they are so educated. But the distribution is bimodal, in that there are two groups. The economic immigrants are very highly skilled, while the family reunification people and the refugee claimants tend to be relatively poorly skilled. But overall, they raise the average.

    Mr. Monte Solberg: So they raise the prose average?

    Mr. Scott Murray: Yes.

    Mr. Monte Solberg: Really? That's interesting.

    Mr. Scott Murray: That's important to note, and it's directly attributable to the sort of policy we have--that is, for recruiting very skilled immigrants.

    In one way you're right, but in another way you're not. If you do the analysis separately, what you see is that on a proportional basis there's a higher probability that immigrants have low skills. But in terms of absolute numbers the vast majority of people with low literacy skills have been born and educated in Canada, so from an internal public policy point of view it doesn't matter.

    I'd like to open another door by giving you an anecdote. The sort of line of reasoning we have is that we're in an economy that's global, where financial markets are global, markets for technology are global, and the multinationals control a good deal of production. Therefore, you can move a plant from one place to another tomorrow because you can buy everything, including the very highly skilled scientific inputs you need.

    The one thing that's going to make a difference is the skill of the average worker. We're working with Nuevo León, doing this assessment. They're the industrial heartland of Mexico, responsible for something like 80% of industrial production. They think they're able to compete and have a skill profile like Canada's, but they're willing to work for 30% or 40% less on average while producing the same quality with the same technology for the same multinational corporations.

    The immigration question matters, but maybe not so much when companies can move production from one place to another so quickly.

    Mr. Monte Solberg: There really are no historical measures on here, and I'm wondering, how relevant are historical measures, given the fact that skills change because of technology and that kind of thing? Do you track these things over time, or in your judgment is it not relevant enough to do that?

    Mr. Scott Murray: I'm going to give you a schizophrenic answer. The technology we use to measure was only invented in the late seventies or early eighties. The statistical technology and the testing technology did not exist, and there wasn't a time series because of that. But even if there had been, tracking students as they graduated wouldn't be good enough because of all these changes in skill levels, skill gain, and skill loss, depending on what kinds of lives adults are living. We're left on some with the results of educational quality from long ago, and that's going to condition our overall skill profile for a long time.

    For me, the question is much more.... I'll turn to Richard Lipsey, a renowned economist, who said don't leave it to economists to decide what kind of society you want. If you apply that to literacy, there has not been a process in Canada that has said what skill levels we need if we want to be a global leader and keep high-skill and high-wage jobs.

    We've done a great job, I think, in documenting what the skill demands are in the current labour force, what the current skill supply is, and what implications that skill supply holds for individual Canadian workers. But no one has answered the question, where do we want to be if we want to compete with Nuevo León in Mexico, the Americans, or the Swedes?

º  (1620)  

    Mr. Monte Solberg: I have a question with respect to a graph you had. You told us it showed that the Americans were behind us in terms of skills, though I don't want to put words in your mouth. But on the other hand, we note that in the last number of years the Americans have outstripped us in terms of productivity overall. If in fact both those things are the case, should I assume that while we're making good headway in terms of skill development, they're outstripping us because of superior investments in equipment and that kind of thing? Or do you draw conclusions like that?

    Mr. Scott Murray: I can give you a theoretical answer, but I have to tell you that the empirical data is not yet available for me to answer it unequivocally. The best theory says there are, depending on the model, six or seven factors that underlie aggregate growth. There are things such as the efficiency of capital markets and the investment in physical plants and human capital, which is one of the things we're measuring here. You have to have all those things to achieve the high rates of economic growth, productivity growth, and technical innovation that are related to the overall growth.

    Each country is constrained by their history as to what their industrial and occupational niches are. There is an unresolved tension as to which matter the most, the skills of the average worker or the skills of the knowledge elite, with all the debate about the brain drain, all the investment in research chairs, and higher rates of R and D in Canada.

    The data don't give us a good answer to your question. The Americans have much more variable skills; they have lots more people at the very bottom than Canada does, and those people pay even more of an economic price than they do in Canada. But they also have a much higher percentage of people at the highest level, and those people attract very rich rewards economically in terms of employability and wage rates. It's difficult to net out the relative impact of the different rates of capital investment from the skills of the workers and from all the other historical factors that determine productivity.

    We have a study, as yet unfunded but planned, that would test workers from within firms...both representative samples. It would give us that very answer as to how schools condition the performance of firms, given what market they are in, how exposed to international competition they are, what capital investments they've made, and what their training culture is. But we don't have funding for that yet, not completely.

º  (1625)  

[Translation]

    Ms. Diane St-Jacques: Thank you, Madam Chair.

    Mr. Murray, I would like to raise the issue of the different levels of literacy from one province to another. I forget which page refers to Quebec, Ontario and Alberta. Socio-economic status does not seem to be a determining factor. I was wondering if you had determined the factors that explain why people are more successful in some provinces than in others? Can those factors be used to attempt to improve training throughout Canada?

    Mr. Scott Murray: I will answer you by telling you a fairly complex story.

[English]

    We've been able to analyze what causes the differences in skill profile across countries. The same analysis relates to provinces.

    About 60% of the differences from province to province in the adult population and between countries are attributable to the quantity of education people have, simply the number of years of schooling, on average, they have. That's an historical artifact. Using Quebec as an example, it has historically had low educational attainment compared to other provinces, so you in fact see lower average scores in the adult population.

    That effect is compounded by the fact that about 15% of the differences across populations are attributable to the education levels in the previous generation. Highly educated parents usually had more economic resources and used those to buy educational resources for their children and to create a consumer taste for education. That translates into higher scores. All other things being equal, kids from highly educated parents have higher skill levels.

    Again using Quebec as the example, in the previous generation educational attainment differentials were even larger than they are now. So you see that intergenerational transfer of skill, a negative one.

    Then return to what happens in adulthood, and much of the rest of the variability across provinces and across countries depends on what happens to adults in terms of the kinds of jobs they get, what industries and occupations they're in, how skill-demanding those jobs are, what the rates of adult education and training are--and these things vary by a factor of two in the provinces and in countries observed--and then also something that we've come to think of as cultural. The amount of reading that people choose to do outside of work, in the community or at home, varies incredibly in the countries we've studied and varies quite a bit from province to province.

    Sweden trained at about twice the rate as we do--adults. And they read about twice as much at work and choose to read about twice as much outside work. You see a positive impact.

    If I answer your question backwards, once you adjust for those differences, there's absolutely no difference between anglophones and francophones in Canada. All the differences you see are artifacts of historical factors of industrial and occupational structure, education quality and quantity.

    Sticking with the Quebec example, looking at their current distribution of skill--and I can use Alberta as an example, as well--they're doing extraordinarily well. But Quebec is a better example because they have come the farthest from being, in older generations, one of the poorest skilled, on average, to being one of the top in the world now. There's an incredible amount of interest in other countries about how they've achieved that, what factors they put in, right from early childhood education programs up to how they've structured their secondary system to achieve those very remarkably high skill levels.

    That's a complicated answer to you.

[Translation]

    Ms. Diane St-Jacques: Yes, but when you talk about the quality of education, can the programs make a difference? You say that people wonder why the transition to better education took place so rapidly in Quebec.

[English]

    Mr. Scott Murray: I can point to an analysis by Doug Willms. He has written a paper called “The Quebec Advantage”, comparing largely to Ontario, about the things they're doing right in the education system: a strong and demanding curriculum; an extensive assessment system; and very highly qualified teachers compared to some other jurisdictions. I think something like 100% of math teachers in Quebec have mathematics or science curricula. In some other provinces, that percentage is much, much lower. The organization of schools, subsidies for schools that find themselves in de-favourized areas--I think they're up to 25% in Quebec...each of those things contributes a little, but collectively they result in very large differences in performance across provinces.

º  (1630)  

[Translation]

    Ms. Diane St-Jacques: Do I have time to ask a final brief question, Madam Chair?

[English]

    The Chair: You do.

[Translation]

    Ms. Diane St-Jacques: I would like to have information concerning the procedure you used to choose your sample group. How did you choose your sample group? Were aboriginal people, visible minorities and the disabled included in all the statistics you gave us?

    Mr. Scott Murray: We used a base sample taken from the LFS, the Labour Force Survey, which provides monthly statistics on unemployment and employment.

[English]

    We selected a sample of households, and then within each household a sample of individuals was selected at random. So the coverage of the literacy assessment matches the coverage of the labour force survey, which is pretty good.

    The exclusions are the territories, individuals living in institutions, first nations people living on reserve--

    Ms. Diane St-Jacques: They are excluded?

    Mr. Scott Murray: --and the members of the military. They are excluded by design. They amount to something like 1.5% of the population of Canada collectively, so a little better than 98% of the Canadian population is represented.

[Translation]

    Ms. Diane St-Jacques: That is all. Thank you, Mr. Murray.

[English]

    The Chair: Mr. Gagnon.

[Translation]

    Mr. Sébastien Gagnon (Lac-Saint-Jean—Saguenay, BQ): Thank you.

    Thank you for being here today. I am pleasantly surprised by the report, as it has some interesting things to teach us even though it is a bit technical.

    I would like to refer you to table 38. Could you provide some explanation of relativity, for instance when you compare Canada to other countries and provide a perspective on future economic development? We know, for instance, a great deal about future economic development when we refer to the fourth transformation of the knowledge industry.

    Today, you are talking about a trend. You said—perhaps you could repeat it—that as for international competitiveness, we may be affected by the fact that we do not reach certain other countries.

[English]

    Mr. Scott Murray: Historically, the labour market has met its.... Let me put it this way. Skill demands have been increasing for a very long time, and the policy response to that has been to increase the incidence and duration of education. So you add higher and higher rates of high school completion, higher rates of post-secondary participation and completion.

    Because the size of our youth cohorts were big enough--we are pushing enough kids through schools--the skills coming out of the education system were enough to meet the skills of the demand. At least there was very little evidence in the labour market performance data that we were suffering from big skill shortages except in some specific areas.

    What has happened now is the relative size of those youth cohorts, the number of kids graduating from our system, has shrunk because of drops in fertility. Canada is one of the countries that's the most touched by the shrinkage in the size of that population. The ability of the education system to meet the skill demands being created in the labour market is constrained by the size of that group. So the question becomes how does the size of our group compare to our competitors?

    If we look at the very top of that graph, at Ireland, their youth cohort is relatively large and their education system is performing very well, so they'll be able to generate a lot of very new, brand-new high-level skills to meet their demands.

    In Canada, we're close to the OECD average, but with a very small cohort. Analysis is that there isn't enough skill coming out of the education system to meet the demands that employers are creating. That's the basic story here.

    We see that the Americans have done some analysis. I showed you things on how wages are related to literacy skill. The Americans have paid for some analysis that looks at how those wage differentials change as you look at jobs that are more knowledge-intense. What happens is that those differentials go up. So to the extent that the Canadian economy is creating knowledge-intense and knowledge-rich jobs, which are the jobs one would want, because they pay higher wages, the wage premiums will go up--that's what the American analysis says--and that will stretch the difference in wage differentials across different groups of Canada.

    So it's like the mechanism operating in the labour market that's stretching the range of what people earn, not by paying people at the bottom less, but by paying people at the top more. It's stretching out this way, and the people at the bottom of the skill distribution are being left behind in relative terms.

º  (1635)  

[Translation]

    Mr. Sébastien Gagnon: Let us set aside that comparison among various countries and take a look at the regional picture. We know, for instance, that Quebec statistics compare regions — for instance my region, Saguenay--Lac-Saint-Jean, where there are 350,000 inhabitants, and Montreal. There is a high departure rate among university age young people, who head for large cities, as there is a concentration of universities in these large urban areas.

    Do you have any statistics that could illustrate current differences among regions?

    Mr. Scott Murray: Yes, there are some, but these are statistics that have been modelized.

[English]

    The sample size in the last year was about 6,900 Canadians, and that wasn't enough to produce sub-provincial-level data. In fact, some of the data for the smaller provinces aren't reliable. So we used a statistical model to generate estimates of literacy skill distribution by census subdivision that allow you to add it up for any municipality in Canada and for each federal electoral district.

    So we have the percentages of individuals at each level for all of those areas. We'll be using the new survey, which has a much larger sample, to produce estimates for as fine a geography as we can. Then we'll do the modelling again and produce very fine-level estimates, because any policy response is going to have to come at the local level. It's going to have to involve literacy training organizations, employers, municipal governments, provincial governments, and the federal government all working together. That will give them a tool to help with that process.

[Translation]

    Mr. Sébastien Gagnon: I invite you to do that. It is important, in light of local issues, all the more so since regions are going to have to redefine their action strategies. In our area, for instance, we have primary resource industries in resource regions and we see that there is a brain drain from the regions. We have to be competitive but we also must be responsible for the second and third transformations. So this is important if we want to be consistent.

    Today I am a bit surprised by these statistics. This is indeed related to regional development. It would be important to channel our efforts so that we can react together and put in place programs in light of this.

[English]

    The Chair: Thank you.

    Monsieur Bellemare.

    Mr. Eugène Bellemare: I'm trying to separate two angles from this session here: productivity and competitiveness versus personal economic survival or achievement, depending on at which end of the scale you are. I want to stick to productivity and competitiveness for argument's sake, and lead my question in that area.

    For example, I chanced to meet with a leader of an automobile manufacturing company at a meeting. They're about to decide whether they're going to put a plant in Canada or in Mexico. So competitively speaking, you said earlier it would cost 30% less to hire Mexicans to accomplish the work of that plant. If that fellow were here he'd hear this--and he probably knows about it by now.

    So in Canada it costs you so much, but it costs you 30% less dans la main-d'oeuvre in Mexico. How do we counter that? How do we fight that?

º  (1640)  

    Mr. Scott Murray: You fight it by having the skills of the average workers high enough that they're that much more productive. A lot of data suggests that Canadian workers are that way.

    Mr. Eugène Bellemare: So hard productivity here would outstrip the bargain-basement price of the labour costs. This is what I understand you're telling me.

    Mr. Scott Murray: Yes. You have to think in dynamic terms. They're running as hard as they can to improve the quality of their education systems. And because of their birth rates they have a lot of young people going through the school system, so compared to Canada, they can change their school profile rapidly and create very skilled pools of workers. In a dynamic framework we have to stay that much further ahead of them if those are the jobs that Canada would want to have.

    Mr. Eugène Bellemare: How are we competing in NAFTA? The question is very parallel. It's similar. It's probably the same question--Canada, U.S., and Mexico.

    Mr. Scott Murray: On balance, I'm probably not the best person to answer this, but my reading of the data that we have is we've done quite well in terms of the number of jobs that have been created. The growth in our exports to Canada and Mexico, the growth in bilateral trade, has been quite remarkable since NAFTA was put in place.

    Mr. Eugène Bellemare: On that level, in the last weeks we've read reports that in the United States they're losing jobs and in Canada we're gaining jobs. Is this related to your presentation today or the information you gave us on this presentation?

    Mr. Scott Murray: We can't make a direct association because it does depend on all of these other factors of production: what the investments in technology are, how well Canadian capital markets are working, what the tax regime is, in terms of what subsidies and tax deferrals you're willing to give. So there are a whole lot of factors in play, and the game is really that you don't want to be without one of those factors, because the lesson will be really hard.

    We can point to Sweden. They went through a period of about 13 years with very poor economic performance, where they had almost all of the factors of production in place but they had such a compressed wage structure that there weren't any incentives for people to work hard. So they suffered and they had very low productivity growth. They've changed their policy since then and they have managed to create employment and create wage growth again.

    Mr. Eugène Bellemare: What would be your recommendations when we address, for example, the immigration requirements that we have in Canada versus the provincial education performance of different provinces? What would you recommend we do?

    Mr. Scott Murray: Going from the data, rather than from my own opinions, it's clear that in the Canadian labour market, people without skills pay a big price. So giving people access to tools where they could diagnose their skills before they come so that they could understand what a challenge they face....

    An immigrant needs information on what kinds of labour market conditions they're going to face, whether their credentials will be recognized. If we extend that to their skill levels, we can show that individual literacy and language skill levels, even for very highly educated workers, engineers, petrochemical engineers, are important. And if they're going to factor those things into their decision, they need a tool to figure out how good they are in advance of coming. And then, if they have skill requirements, after they've made the decision to come to Canada, they need some way to upgrade. And I'm not sure the systems are in place that would allow that fully.

    I can give you an example of Sweden. I mentioned the highest average levels, the least variable levels. Compared to our 22% at levels one and two, they found 9%, I think. They immediately created a program where those people were entitled to four years of paid leave to get their skills up to level three. That has been pushing, for the last five years, 100,000 people a year through that system, specifically to deal with that issue of largely immigrants coming to Sweden with limited literacy skills.

º  (1645)  

    Mr. Eugène Bellemare: I know we live in a global village, we all know this, and there are swings in manufacturing locales. I presume that your report should be very helpful to governments--provincial, federal, municipal, and so on--especially at the educational field, so that we can become competitive, so that the manufacturing locales, for example, don't swing from this area to the Orient.

    My last question is on subculture. We all know that in some countries, because people can't make it through the regular streams, they form their own subculture to make money, and they make money that way. That has a terrific effect on the underground economy.

    Have you studied the literacy levels of, let's say, Canada and the United States, or even Mexico? Because we talked about NAFTA, where illiteracy is very causal to the underground economy or subculture. I put them in the same bag today.

    Mr. Scott Murray: We haven't explored that specific issue analytically, but we have looked at cultural effects. We've done an analysis of youth in Canada and the U.S., looking at how their average skill level and the distribution of skill by socio-economic status differs, controlling for a whole lot of variables, including the education levels of their parents and how far they went in school. What you find after you net out the differences between the Canadian and American kids is that what distinguishes the two countries--and it's almost a perfect gradient from north to south--is how much they choose to read outside of work or school.

    So you see this cultural effect that the farther north you get, the more you read, and maybe that's due--as John Diefenbaker would say--to the weather. But there are significant cultural effects in the data not specifically related to the underground economy.

    The other one we find is a remarkable negative relationship between skill level and television viewing. The lower your skill level is, the more you watch television. We have interpreted this to mean that everybody has roughly the same information needs. People with high literacy skills get it from newspapers and magazines. People with low literacy skills still have those same needs to make their way in the community or in the economy, and they get their information on a variety of subjects from television, which probably has a negative reinforcing effect on their skill level.

    So you get these social, cultural, and economic processes increasing differences in skills across different groups of Canadians.

    The Chair: Thank you.

    Mr. Finlay, you have the last round.

    Mr. John Finlay: Yes, Madam Chair, thank you very much.

    You've been most interesting. I'm struck, Mr. Murray, by the number of things you've said these studies have shown, which most good teachers have known for years intuitively--that children learn in different ways, the amount of time you spend makes a difference, and the amount of challenge makes a difference. It's amazing.

    I have a couple of specific questions, and a comment I noted beside one of these graphs. On page 29--this is where I put down teaching--you dealt with the variation of performance within the schools and that our schools tend to have less variation, and that's a good thing. A little further on, pages 33 and 34.... Have you any explanation for why things drop off as they do? I mean, I guess we all get older and maybe we think we know it all or have seen it all, but this shows that the gap between those who are more literate gets wider as we live longer in our society. You know, it's one of those things where we say if the kids didn't watch as much TV, if they did more art, or they had another skill, or if they read more, they'd be better. What you just said about that socio-economic thing would suggest that it might be true.

º  (1650)  

    Mr. Scott Murray: The truth is we don't know, because those drops in skill are by age, not for the same people. It could be that all of that drop-off is attributed to the fact that education quality, particularly for people who didn't go to post-secondary, was much worse in the past. If that's the case, then the system is already taken care of, and we'll keep turning out very highly skilled kids and there won't be this drop-off with age in the future. But there's also lots of evidence that part of it is due to the kinds of jobs we're creating and the culture we have that doesn't value reading as much as say in Iceland or in Sweden.

    So there's a possibility that some of this loss is due to the lack of economic and social demand. If that's the case, then public policy would need a balanced response. Part of it would have to ensure that people have skills, or if they didn't get them originally, improve their skills, but it will also have to concentrate on creating high social and economic demand. Get employers to create skill-rich jobs rather than non-skill-rich jobs, whatever it takes to do that.

    Mr. John Finlay: And make sure that they pay more for the skill-rich jobs, so that—

    Mr. Scott Murray: They're doing that. There's been a lot in the economics literature that employers weren't very good at identifying skills and didn't pay for them. The data we have says that they use credentials at the point of intake, but to get these wage differences they're really able to identify skills as time goes on or as workers are with them. They promote these individuals and pay them way more than others. In fact, these skill differentials explain a fair bit of what has been attributed historically to systemic bias of employers in the labour market against specific groups.

    I can give you an example. The U.S. has done research looking at what happens to the wage gap between men and women, particularly black women, once you take account of individuals' literacy skills. They got the astounding result that the wage gap actually reverses, that black women are paid a premium once you control for their skill level. There's no wage gap, but a positive wage gap, because skilled black women are in relatively short supply. So the labour market pays more for them.

    This has some pretty big implications. It turns the gun away from systemic discrimination back down to how or by what process people get access to skills. It also turns the affirmative action and employment equity programs much more into educational issues, or about how to ensure equitable outcomes out of the education system. That is not to say there isn't bias and discrimination in the labour market. It's just that this data suggests that what has been attributed to bias in the past may have been overstated.

º  (1655)  

    Mr. John Finlay: Thank you very much.

    I wrote on the graph on page 7, where you're dealing with employment growth, reading demand, and so on, which is what we've been talking about a little bit. I think you suggested that perhaps we need to put something into the job, to add a level, a demand, or some responsibility, or something....

    People do the same thing all the time, such as in that old Charlie Chaplin film where he's turning one bolt on a.... I have a friend who does a lot of drywalling, and he says “I like to do the drywalling, because I don't have to think about it. I think about something else while I'm doing it”, which is fine for him.

    But it seems to me that more and more of the jobs the government needs done require skills, including people skills and decision-making skills. This suggests that we should be giving people at the entry level a little more responsibility. I am thinking that if we give some more responsibility to the people in our employment offices, the EI offices, and the people in my office who deal with the public and their problems all the time, they will do more. They will learn more and will be more valuable, instead of the over-supervision and over-checking requiring them to fill in a blank here, and asks them there, “Did you get a receipt for that; does it cover the date and time; who got it and who paid for it?” I think we jam up a lot of jobs with busy work, which people don't appreciate and which doesn't teach them anything. We're wasting a lot of human potential.

    Mr. Scott Murray: The graph on page 7 and the table on page 8 suggest to me that Canadian employers and the Canadian economy are actually doing what you suggest, because all of those jobs and growth are heavily concentrated in data knowledge, in management, and in service occupations with high skill demands. By skill demands, I don't mean the technical skill demands. They may well have those, but they also have high, good old-fashioned reading, writing, and arithmetic requirements.

    Because Canada is so exposed to trade and has to compete, our employers are pretty good at responding to competitive pressures from international labour markets. This says that they've done it by increasing the skill levels of jobs and by making them more interesting and higher-paying. But then we have to worry about the people who don't have the skills to compete in an economy like this.

    Mr. John Finlay: Thank you.

    The Chair: Thank you, Mr. Murray.

    You've certainly given us a lot of information. I appreciate your patience with us as we try to review all of this. I know that you will continue to monitor what this committee is doing in terms of literacy.

    If someplace down the line you have some recommendations for us, I would invite you to not be shy as we begin to prepare our report and to forward them along to us. We will accept all of your recommendations gratefully and give them a full hearing.

    Mr. Scott Murray: We will at least give you data.

    The Chair: Okay. Great. Data are great, but you've been in the field and you can certainly give us some of your own personal thoughts as well.

    Mr. Scott Murray: Thank you.

    The Chair: The meeting is adjourned.