Piecing together the labour puzzle
At no other time in the history of the oil and gas industry in Canada has one province experienced such an expansive and long-lasting boom as Alberta. Having started around the mid-1990s, this boom appears to have no end in site as thousands of people flock to Alberta to jump on the province's economic bandwagon.
But cries of a shortage of labour and skilled workers abound. And the shortage is expected to get worse in the upcoming decade as more oilsands projects and the construction of five heavy oil upgraders start ramping up and the Baby Boom generation starts to retire in droves. Alberta's population increased by almost 600,000 people since 1996. Shouldn't there be an abundance of labour rather than a shortage?
Many employers say they are so desperate for workers that they've had to apply to the federal government to hire temporary foreign workers to ease their labour shortage. Others say there is plenty of labour to meet the current needs but several factors are skewing the big picture.
For an employer to qualify to hire a temporary foreign worker, the employer must be able to demonstrate to the federal government it has tried unsuccessfully to hire a Canadian worker. Employers do this by applying for a Labour Market Opinion with the federal government.
Alberta Employment, Immigration and Industry (AEII) does not play a role in the federal government's Temporary Foreign Worker Program. Rather, after temporary foreign workers have arrived in Alberta, the provincial government plays a role in such areas as employment standards, workplace safety, and health care.
"We have heard many times that labour and skill shortages are a myth in Alberta; that there are enough workers in Alberta and Canada to fill the jobs that are currently available. But if you drive anywhere in Alberta you will see help wanted signs everywhere," AEII Minister Iris Evans says.
Thirty-one of 53 occupations that Evans' department tracks have an unemployment rate of less than three per cent, an indication to human resource professionals that the province is experiencing a shortage of skilled labour.
AEII suggests, however, that where there might be enough workers with the right skills for currently available jobs, some workers are not willing or able, for a number of reasons, to accept those jobs. Reasons include family considerations, the location or scope of the job, or medical or addictions issues. All of these reasons not to accept employment by skilled workers are not quantified in labour market research.
Alberta's economy is generating jobs and it is definitely an employees' market right now. Workers have the luxury of being very choosey in the jobs they accept. Ultimately, it's up to the individual to decide which job they want to accept.
And this is only the beginning. The list of current and planned major projects in Alberta is only expected to grow and the province is expecting a shortfall of over 100,000 workers in the next decade.
Alberta's Occupational Supply Model is the first working supply model of its kind in North America. When the province forecasts its labour demand, it looks at the number of jobs expected to be created in Alberta. This is based on economic information such as Alberta's Inventory of Major Projects. Then the government compares this data to the number of people it expects to enter the labour force through in-migration, anticipated new graduates and other demographic data.
"This is how we came up with the labour forecast that by 2016, Alberta will create 400,000 jobs yet only 291,000 workers will enter the labour force by this time. This leaves a net potential shortfall that could be as high as 109,000 workers during the next decade," Evans explains.
She says the province's focus, as well as AEII in particular, is to create an environment where people and businesses can thrive. "We are working to ensure Alberta has the right workers with the right skills for the right job."
The president of the Alberta Federation of Labour, Gil McGowan, says the tight labour market is not as bad as some employers claim. But to the extent that there is a problem, McGowan says the provincial government is actually creating a tighter labour market by refusing to set a more reasonable pace for oilsands development.
"By allowing so many oilsands projects to go ahead at the same time, the provincial government has overheated the labour market," McGowan says. "This in turn has increased the demand among employers for temporary foreign workers and it has also increased the incentive for energy companies to build their upgraders and refineries in places like Montana, Illinois, and Texas in the United States, instead of Edmonton or Fort McMurray in Alberta."
McGowan has no doubt that Alberta's existing construction labour force could handle the current and projected work if only one or two major projects at a time were underway, rather than five or six. He's also convinced that a more reasonable pace of development would help bring down construction costs and make Alberta a more attractive place to build value-added facilities in the long term.
"The first people in line for temporary foreign workers were the non-union construction employers. They said they couldn't find qualified tradespeople, but what they really couldn't find was people who would be willing to work for their sub-standard wages and working conditions. Instead of tapping into the pool of domestic unionized tradespeople, these employers are going directly to temporary foreign workers from overseas."
McGowan says both the provincial and federal governments are making it incredibly easy for these non-union construction companies to get their applications for temporary foreign workers approved.
"By lowering the bar and loosening the rules, our governments are making it easier for employers to use temporary foreign workers as tools to bring down wages and bypass unionized workers," he says. "We believe this is an inappropriate use of government power. In a very real sense, they are encouraging union-busting."
The International Brotherhood of Electrical Workers is one of several high-demand unionized trades in the oil and gas industry. Tim Brower, business manager for IBEW Local 424 in Alberta, is one union official who believes the shortage of skilled workers in Alberta is a myth.
"We do not believe there is a shortage of skilled labour in Alberta," he says. "Rather, we believe there is a shortage of cheap labour in Alberta and that some contractors are using this reality to justify their bogus use of temporary foreign workers as replacement workers in the skilled trades."
Brower says many contactors prefer to recruit workers from the East Coast because they get a "desperate workforce" that won't rock the boat.
"With high unemployment rates on the East Coast, contractors recruit people from this region because not only will they work for less money than a skilled tradesperson but they will work in somewhat unsafe work conditions," he says. "Basically, these contractors are exploiting a captive workforce and they use these workers as â€˜cheap, disposable labour' for short-term projects. We believe these contractors could recruit better trained workers right here in Alberta if they put quality and safety ahead of their bottom line."
Ken Gibson, president of Alberta Construction Association, points out that recruiting workers from other provinces isn't new. Fort McMurray is often jokingly referred to as "the second largest city in Newfoundland." He adds that there's no evidence to suggest that safety practices are superior or inferior in certain segments.
The IBEW's Local 424 currently has 1,000 electricians on their out-of-work list. These are electricians who are unemployed or working other types of jobs because they can't find work in their trade. "Our members would gladly travel anywhere in Alberta but preferably for more than two days' worth of work at a time. Some of our members prefer to accept other work rather than work for open shops such as CLAC or Merit where nothing is added to their pensions and their benefits are inferior to what we offer," says Brower.
He says the IBEW's number of out-of-work or underemployed members is similar to the situation found throughout other building trades in Alberta. But both the provincial and federal governments have allowed an increasing number of temporary foreign workers to take these jobs.
"Industry companies, in applying for permission to bring in temporary foreign workers, are required first to consult labour unions in order to prove a shortage of available craftsmen here in Alberta and across the country. Our union has never been consulted. I suspect that if any consultation is done at all, it is done with other non-unionized organizations. In my opinion, these types of organizations do not represent workers. They only represent the desire for cheap labour," says Brower.
The IBEW believes temporary foreign workers are less capable and sometimes uncertified to do the required work here in Alberta, but they do cost employers less to hire. Profits appear to be more important to some companies than craftsmanship or public and worker safety. Hiring temporary foreign workers is a dangerous race to the bottom that will eventually turn the boom economy to bust.
Merit Contractors Association is an Alberta-based not-for-profit association comprised of over 1,200 contractor member firms that employ over 33,000 people in commercial, institutional, and industrial construction sectors.
Bill Stewart, the vice-president of Merit, says according to a survey of 567 Alberta construction companies Merit conducted in January 2007, the shortage of skilled construction personnel remains acute. "The survey reaffirms that there continues to be insufficient qualified tradespeople who are ready, willing, and able to fill available job opportunities," he says.
Stewart cites several reasons why the shortage continues to remain high. "Various union leaders say the shortage of construction workers is a myth. They refer to their long out-of-work lists. What these union leaders neglect to point out is that they have people unemployed because either these people choose not to go where the work is, which is predominantly located near Fort McMurray, or they choose to work in other lines of work."
At the same time, he says, some collective agreement provisions impose "severely restrictive" hiring provisions. IBEW, for instance, requires that one out of every six journeymen hired must be over 50 years old. Provincial regulations notwithstanding, its agreement also stipulates that a minimum of two journeymen must be hired to supervise each apprentice.
"These restrictions contribute to increasing construction costs and do not help open the labour force to younger, potentially productive tradespeople," Stewart says.
Paul de Jong, the Alberta provincial director of the Christian Labour Association of Canada, a multi-craft union providing representation to over 45,000 members across Canada, believes there is somewhat of a shortage of skilled workers in Alberta.
"Due to the tremendous growth in the size and scope of oilsands construction projects, there has been some challenge in meeting the labour needs for certain trades," he says. "These trades include electricians, pipefitters, ironworkers, and welders. However, the oilsands are not for everyone so there are some tradespeople who prefer to look for employment elsewhere."
de Jong believes external factors are exacerbating the shortage of skilled workers. "Even though apprentice tradespeople might look for employment in the oilsands sector, they might find themselves unable to secure work due to inadequate numbers of [journeymen] to guide their technical training. This creates an unfortunate backlog of available apprentices."
The CLAC, he says, is working successfully with contractors, owners, the Construction Owners Association of Canada, and the Apprenticeship and Industry Training department of the government of Alberta, as well as accredited educational institutions to develop and provide training programs for journeyman competencies, interprovincial Red Seal certification, and on-site apprenticeship.