BC Business
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Is this so-called labour shortage a gateway to prosperity or a ticket to slave labour? Marcos Baac came to B.C. for a job he couldn’t find back home in Mexico. Last January, he and a crew of his compatriots started work at the Golden Eagle Group berry farm in Pitt Meadows. They’d arrived under the Seasonal Agricultural Workers Program (SAWP), a federal agreement with Mexico and the Commonwealth Caribbean that supplies Canadian employers with temporary migrant labour. Baac, 35, had a simple plan: send money to his family in the Cancun area and return home at the end of his eight-month contract. Almost a year later, though, Baac is still here. He’s unemployed and seeking refugee status. At a coffee shop on Commercial Drive, he explains through an interpreter how the federal program meant to help B.C. farmers fill their labour gap turned sour for him. Baac’s problems began last April, when he and 31 other Mexican workers went public with a letter of complaint about conditions at the farm. Among the allegations: they didn’t get enough hours on their $8.60 wage, lacked proper medical care and lived in cramped, unsanitary housing. In May, Baac, a sullen-looking father of three, was told he would be sent back to Mexico. He chose to stay in Canada, citing safety risks for criticizing the SAWP, which is heavily promoted by the Mexican government. Baac’s former employer says he was fired for just cause and that the workers’ concerns were addressed before the letter appeared. Baac, who has also worked illegally in America, clearly isn’t sold on the SAWP, which approved more than 1,200 Mexican agricultural workers for jobs in B.C. last year. “In the U.S., you are illegal but you make more money,” he says. “Here, you are legal but you make less money.” Baac is one of thousands of foreign workers who have found swift and easy passage into B.C. to help this province cope with its widely publicized labour shortage. But not all migrant workers share his story. A chipper Brit earning his pay on the slopes of Whistler tells a very different tale. Ed Robinson couldn’t be happier. He and his girlfriend showed up at the ski resort last June, after obtaining one-year work visas in the U.K., and quickly found jobs. Robinson, who used to do sales and marketing for a hotel in his hometown of Bristol, now mans the front desk at Whistler’s staff-housing office. “I’m not earning as much as I was,” he admits, “but I’m enjoying it a lot more here.” In fact, the 24-year-old visitor is so fond of Whistler that he hopes to get his visa renewed. He’s heard talk that permits like his might be extended for a second year, to combat the village’s shortfall of Canadian workers. “I’d love to stay for a bit longer if they’ll let us,” Robinson says. Robinson and Baac are living proof of B.C.’s apparently insatiable demand for labour – and their clashing experiences reflect a larger debate about whether a full-blown labour shortage even exists. And if it does, who benefits and who’s to blame? As the economy thrives, employers mouth a steady refrain that skilled – and not-so-skilled – workers are tougher to score than drugs at a Raffi concert. From Victoria to Prince George, the phrase “labour shortage” has heads nodding the way “brain drain” did in the late 1990s. Last November, the provincial unemployment rate was just 4.9 per cent. Our population is greying. The B.C. Competition Council forecasts that we will see a million job openings in the next 12 years, but we’ll have only 650,000 high-school grads to fill them. We’re also losing talent to head-office-flush Ontario, red-hot Alberta and the hungry global marketplace. But there are critics who dismiss all the buzz about a labour shortage as a pretext for recruiting large numbers of foreign workers, some of them low-paid temporary ones. What if this shortage lent itself to hyperbole and buck-passing by some in the business community? And what if government has its own reasons for jumping on the bandwagon? Dissenters point to evidence that the labour shortage may be exaggerated and accuse the federal and provincial governments of needlessly fast-tracking new arrivals and failing to uphold employment standards. According to other skeptics, there isn’t so much a scarcity of workers as an unwillingness to hire anyone over age 50. Along with that, businesses have been caught flat-footed by a tighter market after decades of throwaway labour. On the other side of the argument, employers point to compelling numbers that back their claim that this province, and indeed Canada, is in the grip of a labour crunch that threatens to stifle economic growth. Show me the shortage Some critics outright deny any existence of a nationwide labour shortage. David Foot is a professor of economics at the University of Toronto and author of the 1996 bestseller Boom, Bust & Echo: How to Profit From the Coming Demographic Shift. Unlike most of his peers, Foot has long predicted that Canada will enjoy a labour surplus for years to come before it hits a shortage in the next decade. His reasoning: there’s a huge surplus of discarded baby boomers that could make a valuable contribution to today’s economy, but employers think they cost too much. “That’s not a labour-market shortage,” he says. “That’s a deficiency in wages.” Right now, Foot adds, Canada doesn’t have a general labour shortage. As proof, he points to the national unemployment rate, which stood at 6.3 per cent last November. Some B.C. construction unions also doubt that we’re hopelessly crunched for labour. Local 97 of the International Association of Bridge, Structural, Ornamental and Reinforcing Ironworkers has claimed that 1,500 Canadian ironworkers are jobless. And last November, Local 993 of the International Brotherhood of Electrical Workers had 199 journeymen and 90 apprentices out of work, according to business manager Wayne de Delley. On the line from Kamloops, de Delley says it’s partly a mobility problem: some of his members can’t afford to go to, say, Vancouver unless employers give them a living allowance. But he also thinks that certain companies prefer to hire cheaper non-union workers from abroad. “The main theme is the foreign worker can be used and abused – and they are, unfortunately,” de Delley claims. Then there’s the Construction and Specialized Workers’ Union Local 1611, which last spring said it had more than 500 unemployed members in B.C. Business manager Mark Olsen doesn’t deny there’s a construction labour shortage in some areas, but he questions employers’ motives. “In our opinion, companies in general are taking advantage of that true statement that there’s a labour shortage and bringing in people when they don’t need to be brought in.” Olsen speculates that part of the motivation is to offset wage increases in the new four-year collective agreement with B.C. building-trades unions. At the same time, he worries that in addition to depriving Canadians of jobs, foreign hiring will make provincial contractors less competitive. “If a big international company is able to come to Canada, bring in an all-foreign crew and pay them whatever the foreign workers are willing to work for, then our companies in this marketplace will never be successful in a tender,” says Olsen. Wayne Peppard, executive director of labour group the British Columbia and Yukon Territory Building and Construction Trades Council, isn’t a big fan of the temporary foreign-worker program in wide use throughout B.C. There’s no cap on the number of guest workers entering Canada, and last September nearly 250,000 held work permits – 43,000 in B.C. alone, the highest percentage of any province. According to Peppard, the foreign construction workers now arriving in growing numbers are in hock to the bosses who hold their visas. “If the employer doesn’t like them, they’re gone,” he says. “Or they’re gone into the underground economy, which is a burgeoning problem.” Construction is the flashpoint of B.C.’s broiling labour debate but the conflict isn’t limited to that sector. Park Place Seniors Living Ltd. recently used the provincial government’s Bill 29, which permits contracting-out of healthcare jobs, to fire 70 unionized long-term care aides at Kelowna’s Windsor Manor. The workers had turned down an opportunity to reapply for their jobs at lower pay, and Park Place enlisted Kelowna-based AdvoCare Health Services to fill some of the positions with registered nurses from overseas. (AdvoCare CEO John Manton did not respond to interview requests.) B.C. Government and Service Employees’ Union president George Heyman calls this move an artificially created labour shortage, and an abuse of the federal immigration process. “The Canadian government has to make clear to Canadians exactly what its goal and purpose is here,” he says. “Is it to meet temporary or ongoing skill shortages, or is it simply to lower the wages of working people in Canada?” Peppard fears that as these hiring practices spread, they will hurt B.C. by doing the latter. And in contrast to landed immigrants with families, he argues, temporary foreign workers send their pay home, thus benefiting employers more than taxpayers. Wanting for workers On the opposing side, many argue – and have strong numbers to back it up – that the B.C. construction sector is running at or near capacity. As of last September, the value of a record 783 major capital projects either planned or under way hit $110 billion, according to the provincial government. Keith Sashaw, president of the Vancouver Regional Construction Association, says a lack of skilled workers is the No. 1 issue for his 600-plus members. Citing a recent labour-market analysis by the national Construction Sector Council, Sashaw adds that the B.C. industry requires some 40,000 more skilled workers through 2011. Half of that is due to increasing demand and the rest is attrition through retirements. Agreeing that it makes sense to hire Canadians first, Sashaw says construction competes with every other sector for scarce human resources. “We’ve been encouraging foreign workers to move to Canada as permanent residents, and now we have to be looking at temporary foreign workers.” Sashaw has been doing some looking of his own. Last March, he travelled to immigration fairs in the U.K. and in Germany, where unemployment is sitting at about 12 per cent. Several of the workers he talked to ended up moving here, and one VCRA member brought back a group of carpenters and project managers. Who’s to blame? Although David Foot insists there is no overarching labour shortage in Canada, he agrees that the booming construction industry faces a challenge to find enough workers. Foot and Peppard blame both government and employers for bungling the chance to bring more construction apprentices onstream. As well, Peppard points to Construction Sector Council projections of less B.C. building activity this year and a market downturn in 2009. Foot argues that the construction industry brought the current crisis on itself. In the 1980s, he explains, businesses stopped funding apprenticeships and expected government to pick up the slack. During the fiscal restraint of the ’90s that didn’t happen, and Foot says the result is that most construction companies are hurting for young workers. “And now they’re going to expect an instant solution, when they haven’t been willing to fund it along the way?” In Foot’s opinion, business could do a better job of educating young people about opportunities in the trades. It should also offer flexible work arrangements to older employees. “There are all sorts of creative ways to start to handle this, but I don’t see any of this,” he says. “I just see this knee-jerk reaction: ‘Labour-market shortage. Government should solve our problems. Crank up immigration levels.’ No longer-term thinking that could be beneficial to both the company and the country.” Foot has co-authored several papers with Rosemary Venne, an associate professor at the University of Saskatchewan’s College of Commerce. Venne points out that North American employers got spoiled by loose labour markets during the 1970s and ’80s. Referring to a 2003 essay by Peter Cappelli, professor of management at the Wharton School of the University of Pennsylvania, she says HR departments have had trouble adjusting to a somewhat shallower pool. But that doesn’t constitute a widespread labour shortage. A 2006 Deloitte talent survey of the Canadian energy-and-resources sector sheds some light on the HR situation. Stephen Diotte, a partner with Deloitte’s human-capital practice, says just 18 per cent of survey respondents had strategies to deal with talent shortages. “That’s because they’re capital-intensive businesses,” Diotte says from Calgary. “When you’re talking about return to shareholders, the focus has always been on efficient use of capital, and they’ve always been able to take the labour supply for granted. And now that’s changed.” Manley McLachlan, president of the B.C. Construction Association, attributes the lopsided trades workforce to lean times during the 1990s. He says his industry can rebuild by ramping up training and recruitment. Like its Vancouver counterpart, the BCCA is helping member companies scout talent in Western Europe. “But unless we’re bringing those skilled workers in in a capacity that they’re going to be working with apprentices, then it’s not a solution that has lasting consequences,” McLachlan admits. “It just simply gets us over the short term.” Federal fix Many European tradespeople arrive through the Provincial Nominee Program, which offers accelerated immigration for workers in business categories and “strategic occupations” such as nursing and high-tech. This past August, Victoria expanded the program, which is Canada’s second largest, by adding six new staff. The PNP brought in 750 skilled workers in 2005, and the goal for last year was a 41-per-cent increase in nominees. That provincial change coincided with September’s opening of temporary-foreign-worker units in Vancouver and Calgary. This pilot project is based on a similar outfit that has operated in Montreal since 2003. Besides streamlining work-permit exemptions, the units help speed up the paperwork for anyone exempt from what’s called a labour-market opinion. Granted by Service Canada, a labour-market opinion is meant to ensure that foreign workers don’t compete with Canadians for the same jobs. However, trade agreements such as NAFTA allow a long list of exemptions, for professions ranging from accounting and dentistry to geology and engineering. Those able to work without a permit include business visitors and performing artists. Ottawa insisted that the new units weren’t a policy change but an effort to help the west meet its labour needs. Then on November 15, Citizenship and Immigration Minister Monte Solberg visited Vancouver to announce that the feds were beefing up the temporary-foreign-worker program in B.C. and Alberta. Besides promises of federal-provincial working groups to tackle skills shortages, the changes included a long list of “occupations under pressure” for both provinces. Companies wishing to hire foreign workers in these job descriptions can now do so after advertising domestically for just one week, rather than the normal two or three. “I’m absolutely astounded,” says Wayne Peppard of the Solberg visit, which he characterizes as a Conservative PR stunt to curry favour with business. In Peppard’s view, the new measures throw wide the doors for employers but fail to protect foreign workers from exploitation. He also thinks the entire program is an end run around Canada’s 750,000-strong landed-immigrant backlog. All the same, the building-trades unions have met with Immigration and Service Canada officials, and Peppard says the two sides will hold a “Construction 101” session in February. “We are now putting together our own information from our own affiliates about the employment numbers, and we’re sharing those with Service Canada to better provide them with information that is current,” he adds. Keith Sashaw – whose organization recently lobbied Solberg in Whistler – finds the immigration process too cumbersome and time consuming. According to Sashaw, it can take skilled European tradespeople more than three years to get into Canada. “That’s ridiculous,” he fumes. “We need workers now.” That’s a concern echoed by Amber Jordan, employee-retention manager at Radical Entertainment. The big Vancouver video-game developer – acquired in 2005 by Vivendi Universal – is always on the lookout for staff. Making this search more intense is the advent of new gaming hardware requiring bleeding-edge programming skills. To stay ahead, Radical hired a talent manager named Mark Meruha who scours the planet for new permanent employees. Early last October, Meruha was in the U.K., where Radical is doing most of its current overseas recruiting. “I definitely would like to see the federal government step up a little bit more,” Jordan says of the foreign-worker file. “It continues to be a struggle and something that we’re trying to actively lobby them on so that we can make the time frames shorter, because right now it can take 12 to 18 weeks to get the [immigration] approval.” Further complicating things is the fact that Radical is focusing on the U.K., so NAFTA exemptions don’t help 95 per cent of the time. At the B.C. Technology Industries Association, president Rob Cruickshank sings a tune much like Radical’s. Pleading sluggish enrolment in IT programs, the BCTIA and its fellow associations across the country plan to demand more and speedier visas for skilled foreign workers. “We want to see a fast-track process on highly qualified personnel that are looking to immigrate to Canada and especially to B.C.,” Cruickshank says. The B.C. tourism industry is taking up arms, too. Through the nonprofit association go2, it recently released a study foreseeing a chronic, decade-long tourism labour shortage in the Sea-to-Sky region. The problem is especially acute in remote areas, according to go2 CEO Arlene Keis, who also met with Monte Solberg in Whistler. “We think it’s a step in the right direction,” Keis says of the November announcement, though she’s disappointed that no tourism jobs were on the list of occupations under pressure. Keis portrays overseas hiring as a last resort provoked by changing national demographics. “We don’t want to use temporary foreign workers,” she says. “We’d love to have Canadians, but there just aren’t enough.” Keis adds that go2 has met with union representatives to hear their concerns. “We don’t condone employers who exploit people, whether they’re Canadians or immigrants.” Marlene Jan is principal of Think Relocation Consulting, a Vancouver firm that helps companies import new foreign recruits. She says the provincial labour shortage has intensified in the last several months and that it’s common for local businesses to hire foreign workers on contract. She also sees companies moving employees temporarily to B.C. from elsewhere in their global operations. Jan doesn’t think training Canadians will fill the labour gap. “When [businesses] have the need right now and they’ve got their shareholders breathing down their backs, it’s hard to say, ‘Well, we’ll have someone in five years.’” Foreign imports Several people interviewed for this story agree that boosting foreign recruitment alone won’t remedy skills shortfalls. Deloitte’s Stephen Diotte says he recently spoke with a client who doubts there are people lining up to come to Canada temporarily. Diotte, who spent 15 years as a labour negotiator, also flags the poor optics of importing foreign workers at substandard pay. “If we were dealing with a client on this, it’s not something that we would advocate.” For Amber Jordan of Radical Entertainment, however, finding the talent she needs is a race against time. Last spring, the U.S. government bowed to industry pressure by upping the number of H-1B visas for foreign engineers and high-tech workers from 65,000 to 115,000. H-1B workers can stay for up to six years, and there’s a chance the American quota will increase by 20 per cent annually. This decision has riled critics, who cite research showing the visas raise unemployment – and that new U.S. tech jobs are on the decline. Also, in 2005, the Washington, D.C.–based Center for Immigration Studies published a report revealing that H-1B computer workers earned US$13,000 less than their American counterparts. Good news for local employers: Uncle Sam isn’t dishing out any more H-1B visas until October. “That helps us to be able to say, ‘Welcome to Canada!’” Jordan explains of the dash to recruit the best and the brightest from around the globe. “Thankfully, we don’t have those same kinds of quotas,” she adds, “so we just keep bringing them in.” The gates are open for business. Whether or not that’s a blessing for all British Columbians – and foreign workers like Marcos Baac – is another question.
See also: Flap over foreign workers