NATHAN VANDERKLIPPE - The Globe and Mail
Canada’s oil patch is scrambling to bring back foreign workers, desperate to avoid a repeat of the labour crunch that clobbered the industry three years ago.
With oil prices hovering at a lofty $100 (U.S.) a barrel, new discoveries scarce and Asian energy demand on the rise, Canadian companies are taking every measure to ensure oil sands projects aren’t slowed down by labour shortages. The federal government has resumed granting approval for companies to fly in trades workers from other countries. And labour recruiters are drafting corporate international hiring plans and reopening skills training centres to prepare workers in places like Mexico to come to Canada.
The surge in hiring comes amid forecasts that Alberta will need tens of thousands of new workers in coming years as it attempts to cope with a spending spree expected to top the heights of the last boom, which peaked when crude hit $147 a barrel in 2008. Then, a shortage of workers and soaring labour costs caused widespread pain, bringing delays, multibillion-dollar increases to project costs and shoddy work that has plagued newly built facilities.
Companies have since instituted labour caps, chopped projects into smaller sizes that are easier to manage, committed to finish engineering before building, and hired overseas firms to manufacture key components. Canadian Natural Resources Ltd. is even promising to halt major construction from Dec. 15 to Feb. 1, a time when cold weather and holidays hurt productivity.
But for all those efforts, the industry is again hurtling into a situation that may prove worse than last time. The oil sands have attracted major spending commitments from some of the world’s largest petroleum companies, including giants from Europe, the U.S. and Asia. The vast, known oil reserves in the Fort McMurray area have proven a powerful lure.
The result is a tide of spending that is now hitting Alberta’s bitumen-rich boreal forest. Wildfires have recently forced production shutdowns and affected project construction in some areas, but the interruptions are expected to be temporary.
In 2008, oil sands capital spending hit about $18-billion (Canadian). Projections by Calgary-based investment dealer Peters & Co. suggest industry will surpass that level by next year. By 2014, the firm forecasts capital spending will exceed 2008 levels by nearly 25 per cent.
The Alberta government says the province will be short 77,000 workers in the next 10 years. The Petroleum Human Resources Council has predicted up to 130,000 new workers will be needed in the coming decade, both to staff new jobs and replace retirements.
For Flint Energy Services Ltd., the pinch is already on. The project construction, oilfield transportation and equipment design company has brought in 20 Filipino insulators this year. It has authority from the federal government to bring in 60 more foreign workers, and expects to apply for more later this year.
“Everybody’s got a bit of a guess at all of this, but the numbers are like nothing we’ve seen before,” said international recruitment lead Brent Guthrie. “Whereas Flint was bringing in hundreds in 2008, an expectation of going to 1,000 is not unheard of going forward … The local market gets burned out quite quickly on these major projects, and then everybody’s scrambling.”
PCL Industrial Contractors Inc., the arm of the construction giant that is heavily involved in building the oil sands, hit 350 temporary foreign workers in the last boom. Today it has little more than a dozen, but is laying plans for a spree starting early next year that far outstrips the past.
“We’re looking at the 1,000-person mark for a prolonged period, probably peaking in late 2012,” said Gary Truhn, the company’s director of construction and labour relations. “We think there’s some major projects that are going to be there for quite a while.”
The hiring will begin months before, however. Depending on the country of origin – a factor that affects the speed of visa processing at local embassies – it can take between four and six months to gain government approval to bring in a foreign worker. That’s why companies are working now to start the process.
In the first four months of this year, Alberta companies applied to bring in 9,910 temporary foreign workers, according to Human Resources and Skills Development Canada.
Peter Veress, president of immigration consultants Vermax Group Inc., recently set up a new training centre in Saltillo, Mexico. In early May, it welcomed its first group of workers to a course designed to impart safety, language and other skills to pipe-fitters and welders before they head north.
“Companies are a little more proactive this time around. They don’t want to get caught like they did last time around,” he said.
It’s not cheap, though. Between paperwork, training and travel, it can easily cost $10,000 to bring in a temporary foreign worker. And in Alberta, hiring can be uncertain. Workers in certified trades have a year to pass Red Seal exams in their area of specialty. If they can’t, they must go back home.
For those who have found work in Canada, the resurrection of temporary foreign worker hiring is cause for celebration. Luis Arce, from Pachuca, just north of Mexico City, first came to Alberta in 2008 to work in the concrete industry. He was laid off in 2009, but had made enough to buy his first house. In the months of unemployment that followed, however, he began to despair that he would lose it – until, last September, he was called back to Canada to work as an electrician in Edmonton.
“I’m happy, because I know the work is good – and the pay is very good,” he said. “Working in Canada, I make in one day what I would make in a week in Mexico.”
But the hiring of foreign workers is fraught with controversy.
On the East Coast, where many trade and construction workers remain unemployed, the mention of overseas hiring rankles.
“We have probably 150 guys on the out-of-work list,” said Ian MacIsaac, business representative for local 1178 of the Nova Scotia & PEI Regional Council of Carpenters, Millwrights & Allied Workers, which has 240 members.
Temporary foreign worker “is a bad word to me,” he said.
The Alberta government is starting to feel the same way. It recently released a strategy to keep older workers in the labour pool. Thomas Lukaszuk, Minister of Employment and Immigration, has called on Ottawa to shrink employment insurance eligibility in other provinces, in hopes of compelling workers from elsewhere in Canada to come to Alberta. He also wants authority for the province to nominate far more foreign workers to become permanent residents.
“We will be severely short on workers, not [just] the next few years but the next few decades,” he said.
