“You resign yourself to the fact that this is what you have to do, to live on the lifestyle I have. Because I’d never live the lifestyle I have here on minimum wage – or even $25 an hour wouldn’t do it,” said Gerard Kean, who lives in Renews, a small town 100 kilometres south of St. John’s. For years he worked in the oil industry offshore Newfoundland, but now has a more lucrative job working on windmills in the North Sea off Germany.
Fuelled by the mining and offshore oil sectors, Newfoundland and Labrador boasts one of the best growth stories in the country, and a lengthy roster of looming megaprojects. Beyond skilled workers, the province needs engineers, project managers, accountants and other service sector employees that grease the wheels of an expanding economy.
Offshore oil, mining, hydro
With oil prices near $100 (U.S.) a barrel, activity in the offshore is picking up again as companies like Chevron Corp. and Norway’s Statoil ASA pursue new discoveries.
Meanwhile, a consortium led by Exxon Mobil Corp. is preparing to build a production platform for the $8.3-billion Hebron offshore development that will include a massive concrete base to be constructed at Bull Arm on Trinity Bay, and drilling and housing superstructures that will create fabricating work in St. John’s and around the province.
At the same time, the provincially-owned Nalcor Energy Corp. is preparing to break ground on the $6.2-billion Muskrat Falls hydro project on the Lower Churchill River in Labrador, subject to final approval.
The province’s mining sector is also booming, particularly in western Labrador where iron ore companies are building mines to feed China’s seemingly insatiable appetite for steel.
But no one is quite sure where they’ll find the manpower to complete all those capital projects. Hebron and Muskrat Falls together would require some 5,700 workers, the large majority of them skilled trades people.
“It is not inconceivable they could slow things down if the labour market becomes so tight there are not enough people to complete the projects,” said Fred Bergman, senior analyst with the Atlantic Provinces Economic Council. “Where will those people come from to fill these jobs?”
Addressing the skills gap
The provincial government is eager to address the skills gap issue, knowing that a shortage of skilled workers would not only hold back economic growth but would represent a failure to ensure its citizens are benefiting as much as possible from the economic growth.
The government increased by nearly 50 per cent the number of apprenticeship spots at the St. John’s College of the North Atlantic, but the province worries that employers appear reluctant to take on trainees, and would rather import journeyman workers.
“If they see shortages now but they’re not willing to participate and hire apprentices and move them through the system, in years to come they’ll have no supply of labour,” said Advanced Education and Skills Minister Joan Burke.
Employers see a ready work force that flies in and out of the province on a regular base, from home to remote workplaces.
Competing on wages, benefits
But many, including Vale’s Mr. Stefan, say they can’t compete with the wages and benefits that are offered in the Alberta oil sands, where tradesmen regularly earn triple-digit incomes and live in well-appointed camps that offer a wide range of amenities.
John Kearney, chief executive officer of Labrador Iron Mines Holdings Ltd., is planning ahead. The company is developing properties in Labrador and is expanding its construction work force there as production grows from 600,000 tonnes per year to 3 million tonnes.
“One of our main challenges is how to compete with the oil sands in Alberta,” Mr. Kearney said. “Whether they are going to fly in and fly out to northern Labrador, or fly in and fly out to Alberta – it’s only the difference of a couple hours on a plane.”
Labrador Iron Mines hasn’t hit a labour crunch yet, but it still has fairly modest demands. As part of the answer, Mr. Kearney has turned to the local aboriginal communities, which now account for 25 per cent of the work force. But many of those workers have basic skills deficits and need training.