Observation (CEACR) - adopted 1997, published 86th ILC session (1998)

1. With reference to its previous observation, the Committee took note of the Government's report for the period ending June 1996, which contains a set of useful information on the employment policies implemented, both at the federal and provincial levels. The Committee notes that the overall employment growth rate, which stood at 2.1 per cent in 1994, was only 1.6 per cent in 1995 and, according to the most recent data published by the OECD, was 1.3 per cent in 1996. The Government indicates that employment growth in the private sector, mainly in the form of full-time jobs, coincided with a significant reduction in employment in the public sector as a result of the programme designed to restructure and to reduce public expenditure. The reduction in the unemployment rate, from 10.4 per cent in 1994 to 9.5 per cent in 1995, was initially enhanced by a significant reduction in the activity participation rate, in particular among young people under the age of 25. However, the latter group continues to be subject to a significantly higher rate of unemployment than the average, and since that time the downward trend in unemployment seems to have been stemmed, with a rate of 9.7 per cent in 1996.

2. The Committee notes that the main orientations in the Government's economic policy, which it noted in its previous observation, and which aims in particular to re-establish balanced public finances, have been confirmed in the 1996 budget. In this regard, it observes that the progress made in reducing public deficits and controlling inflation has not for the time being been matched by equally significant progress in the fight against unemployment. In this context, the Committee recalls that under Article 2 of the Convention the measures to be adopted for attaining the objectives of full, productive and freely chosen employment must be determined and kept under review "within the framework of a coordinated economic and social policy". The Committee would be grateful if the Government would specify whether the effects on employment of the efforts made to stabilize the budget have been assessed. It would also like information on the perceived or anticipated effects on employment of the application of the North American Free Trade Agreement (NAFTA) and of the Internal Trade Agreement. Furthermore, the Committee notes that the main structural reform occurring during the period is designed, with the entry into force in July 1996 of the Employment Insurance Act, to achieve better coordination between the system of unemployment benefits and the active employment policy, by strengthening labour incentives and allocating increased resources to the measures designed to help people get back to work. The Committee invites the Government to provide details of any assessment available of the implementation of this reform.

3. The Committee notes with interest the substantial information provided on the implementation of the different active labour market policy measures. It notes that in its report the Government emphasizes the priority attached to the integration programmes for young people, and that an employment strategy for young people was to be announced in the autumn of 1996. In addition, the Committee notes the information to the effect that the responsibilities of the provincial governments should be increased within this strategy and, in more general terms, in respect of employment policy. The Committee would be grateful if the Government would specify the manner in which the new methods of cooperation between the federal Government and the provinces help to achieve a more effective employment policy, in particular in support of the regions with the highest unemployment rates.