Canada’s EV revolution has a problem - not enough skilled labour to support it

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In the city long known as Canada’s unemployment capital, there are too many good jobs to go around.

Only a few years ago, it was uncertain whether the auto sector on which the Ontario border city of Windsor was built – shrunken by the long decline of traditional manufacturing in North America – would be able to compete at all in the transition to electric vehicles.

Now, its success in landing major new investments – highlighted by the decision from the auto giant Stellantis NV and LG Energy Solution to partner on Canada’s first EV battery factory here – has created a relative boom. And employees to staff that plant, and offshoots along the supply chain, are in very high demand, which the city and region are struggling to meet.

It is, in some ways, a good-news story – a tribute to governments at all levels working together to court companies putting down EV-making roots, and a promising example of how the shift to a low-carbon economy can provide Canadians with well-paying work.

But there are also warning signs, about the readiness of the labour market to capitalize on clean-growth opportunities ahead.

In interviews with people leading this industrial transformation on the ground – at local businesses, unions, academic institutions, municipal government and economic-development agencies – a shortage of skilled labour is frequently cited as the biggest obstacle to attracting more multinational commitments, and to leveraging the existing ones to grow domestic businesses around them.

Increasingly visible efforts are under way to address that problem, including educational and training programs. But the clear takeaway is that Canada needs to do much more to prepare for jobs of the future – both for those who have not yet entered the work force, and those displaced and having trouble re-entering it.

The challenge is hardly unique. Labour shortages are a mounting problem internationally, including in the United States and Europe, as aging populations take on industrial transitions. Canada, at least, benefits from comparatively open economic migration policies.

The Windsor area specifically, where generations of families have worked in the auto sector, has still been perceived to have a relative work-force advantage. In an interview, Mark Stewart, Stellantis chief operating officer for North America, cites existing expertise and a strong relationship with the University of Windsor (alongside geography, infrastructure and clean-electricity supply) as factors that helped woo his company and LG.

But that edge is being put at risk by what is commonly cited here as a skills mismatch, reflected by the juxtaposition of available jobs and ostensibly available workers.

There are widespread job vacancies in the skilled trades, with Ontario Labour Minister Monte McNaughton putting the number at about 3,300, citing recent Statistics Canada data for the somewhat broader region of Windsor-Sarnia.

The demand for employees is underscored by salaries that are rising much faster in the region than nationally. In the third quarter of 2022, the latest period for which StatsCan has released such data, the average wage offered to fill a vacant job in Windsor-Sarnia was up 30 per cent over the same time the previous year.

But that comes as employment numbers still show higher joblessness here than most other places in Canada. As of December, the unemployment rate for Windsor and surrounding Essex County was 8.2 per cent, compared with 5 per cent nationally.

“There is sufficient labour in the area,” says Peter Frise, a University of Windsor associate dean and one of the city’s most established authorities on the auto sector. “But you’ve got to look at what kind of labour it is that you’re talking about.”

The products are changing, with different expertise needed in particular for anyone working on powertrain components of the supply chain, as internal combustion engines give way to electric motors and batteries. And, crucially, automation in manufacturing means that manual labour is being replaced by more technical work with higher educational and skills requirements.

Nobody seems to think that the Stellantis-LG joint venture, branded NextStar Energy Inc., will prove unable to staff the more than 2,500 battery-making jobs it needs to fill, albeit with some of those workers coming from abroad. (That includes South Korea-based LG, which is the lead on the project, bringing at least a small number of employees from that country to help set things up.)

But the local economy would be hard-pressed to support another development of this scale moving in. That includes a Volkswagen Group battery plant that Canada is currently trying to land, which would likely have to go to a different region.

Meanwhile, smaller auto-sector players are sounding the alarm about NextStar’s hiring spree, in advance of the battery plant’s 2024-25 opening, exacerbating their existing struggles to find and keep skilled workers.

That was the message when a local MPP recently met with members of Automate Canada, an industry group representing companies that supply manufacturers with production technologies, to gauge their policy needs.

Dave Fortin, an Automate Canada director who runs the Windsor-based company DataRealm Inc., says that he and his fellow board members made work-force concerns their sole focus at that meeting.

“This battery plant is wonderful,” Mr. Fortin recalls the message as it was delivered. “But you know where they’re going to get the labour, right? From us.”

It adds up to less of an all-around win for the local economy than a landmark battery-making commitment should be. And in retrospect, that represents a failure to prepare the work force for new jobs during a long runup – dating back at least to the 2008-09 recession that devastated local industry – when it was clear that old jobs could no longer be relied upon.

“Governments didn’t do enough investment in training at that time,” laments Emile Nabbout, the president of Unifor Local 195, which represents vehicle supply-chain workers.

“But it’s not too late,” Mr. Nabbout adds. “I think right now, this is just the beginning of a shift in technology.”

There indeed are now concerted efforts to play catch-up.

Mr. Nabbout’s local is home to some ground-level examples. It recently opened a provincially funded career-planning centre for nearly 300 members displaced by last fall’s closing of Windsor’s Syncreon Automotive plant, which sequenced and sorted automotive parts. (Another Unifor local is home to a similar facility for hundreds of workers laid off at Stellantis’s Windsor vehicle assembly plant, which will see more disruption soon as it retools to add EV lines.)

Before that, in between the announcement of the Syncreon closing and its actual shuttering, Local 195 undertook an effort to better understand who the laid-off workers are, where they might land next and what skills gaps need to be addressed to get them there. It did so using an online survey that gauged factors such as age, education, experience with specific work tasks and immediate postlayoff plans.

At a larger scale, the economic-development and labour agencies Invest WindsorEssex and Workforce WindsorEssex are similarly trying to better understand how prospective advanced-manufacturing workers can be upskilled and connected with jobs.

They’re planning to launch a new website this spring that will solicit information on skills profiles. Among its aims will be to inform people of how their skills line up with jobs they’re interested in, what gaps they have and available programs to address them. The hope is also to build a database so qualified candidates can be directly informed when a posting goes up.

The University of Windsor has in recent years made significant efforts to better tie its programs to the region’s industrial needs. The expansion of its Centre for Hybrid Automotive Research and Green Energy (CHARGE) lab – which partners with automakers and suppliers on battery research and testing – will lead to more training opportunities for engineering students to work in high-level EV-making jobs.

And the current Ontario government has made it a mission to expand and adapt the skilled-trades labour pool more broadly. That effort is centred around its Skills Development Fund, which was launched in 2021 and largely funds apprenticeships and other workplace training opportunities, as well as a revamped second-careers program called Better Jobs Ontario.

Beyond the specific policies, the province is pointedly trying to highlight the well-paying labour opportunities in places like Windsor to younger Ontarians who might otherwise gravitate toward white-collar professional paths.

”My whole plan is built around ending the stigma around the trades,” says Mr. McNaughton, the Labour Minister.

The culture-shift language that Mr. McNaughton repeatedly uses during an interview is echoed constantly in Windsor.

It is invoked in terms of both enticing more people to see the appeal of working in the auto sector, and getting those who already want to be in the industry to recognize how much it’s changing.

The concept has relevance far beyond just this corner of Ontario, as global shifts toward clean technology stand to impact work forces across the country.

Asked about supports that would help ready Windsor-area workers for EV-making opportunities, the federal Employment and Social Development Ministry cited $3-billion sent annually to provinces through labour-market transfer agreements. It also noted a range of smaller national programs, although few of those are geared specifically toward the skilled trades. Last year’s federal budget did commit to launching a new Sustainable Jobs Training Centre, to identify and help meet skills needs for low-carbon-economy jobs.

Ottawa is in the midst of developing what could be a more comprehensive clean-jobs strategy – aimed largely at helping ensure that people employed in high-carbon industries find future work in more sustainable ones – which it has been promising for years.

That undertaking (widely known as a “just transition” plan, though the government has been trying to rebrand it) has recently been thrown off track by debate about whether it signals intent to force a shift upon Alberta oil and gas workers.

But the signal being sent from Windsor is that it’s best to bridge between present and future job demands before that gap proves costly – in lost opportunities for domestic industry and workers alike.