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Vol. 19, No. 15 Week of April 13, 2014
Providing coverage of Alaska and northern Canada's oil and gas industry

Jobs plan for LNG boom

Canada, BC allow hiring temporary foreign workers; skills-training plan in works

Gary Park

For Petroleum News

British Columbia Premier Christy Clark, supported by a delegation of top cabinet ministers and petroleum leaders, has persuaded the Canadian government to declare that the LNG sector is a potential “nation-builder” which could create 100,000 jobs.

Although the accord signed in Ottawa earlier in April is non-binding, it includes a commitment to promote the active use of temporary foreign workers, TFW, which could ease one of the deepest concerns among investors in the industry.

Clark said that her province’s enormous LNG potential hinges on access to skilled Canadian workers and, if necessary, those from offshore.

“You cannot build an economy without people who are trained and ready to take those jobs,” she told a gathering of federal and British Columbia legislators.

British Columbia Jobs Minister Shirley Bond said industry executives were impressed by the level of cooperation shown by both levels of government.

She told the Vancouver Sun that British Columbia is trying to “avoid what happened in Australia,” where wage inflation caused by a shortage of skilled works has caused project cost overruns.

“We’re hearing that this is the first time they’ve seen this kind of cooperation early in the process, where both senior levels of government understand this is a once-in-a-lifetime opportunity and we need to be working together,” Bond said.

She said the LNG opportunity available to British Columbia is also an “opportunity for Canadians. We want to make sure that LNG is on the national agenda.”

BG in working group

David Keane, an executive with the United Kingdom-based BG Group, operator of the Prince Rupert LNG project, has been a member of Clark’s working group on labor-related LNG issues.

He said the industry does not want to repeat the “overly restrictive immigration policies” that have caused problems in Australia.

The danger to British Columbia of losing momentum in the LNG sector was reflected in a research report by RBC Capital Markets which said the rising tide of comparatively inexpensive LNG has surfaced in the United States.

“A window of opportunity exists for Canadian LNG projects to capture market share, but that opening is limited given intensifying supply competition from the United States, Russia and Mozambique.

“While the global LNG market is likely to remain supply-constrained into 2018, demand growth limitations could play a much bigger role thereafter, particularly if Japan’s nuclear utilization rates rebound as we expect,” RBC said.

Building union trust

Clark has invested considerable effort in building trust with trade unions, which she clearly hopes will pay off with their support for an apprenticeship program that would see 25 percent of trades jobs on LNG projects filled by apprentices.

A report from Clark’s working group warned that competition for skilled laborers in British Columbia’s north will be heavy, noting: “This is a key risk factor for the LNG proponents.”

Clark vowed that better training opportunities, resulting in a new wave of qualified journeymen by the time LNG projects are ready to break ground, will be offered “immediately” through a “re-engineering” of the education system in high schools and post-secondary institutions.

The working groups said that from 2013 to 2023, 47 major projects — mines, dams, pipelines and LNG terminals — are planned for British Columbia that are each worth more than C$500 million, with the peak labor years starting in 2016.

“We have a plan to grow our economy,” Clark said. “We are going to make sure the work force is there.”

Jim Sinclair, president of the B.C. Federation of Labor, representing 450,000 workers, said the apprenticeship strategy is a solution to trades training concerns. “We don’t want to just build bridges, we want to build B.C., too,” he said.

Bond said seven British Columbia LNG proposals have received export permits so far and “we are going to keep working tirelessly ... to make sure these projects move to final investment decisions.”

Some issues with TFW

The TFW program allows the hiring of foreign workers who have skills sought by Canadian companies, although the program has been troubled in the past by abuses, forcing the Canadian government to toughen sanctions against employers who use the initiative to drive down wages.

Clark and federal cabinet ministers also stressed that temporary workers will not get hiring priority over qualified Canadians.

“Our commitment is this: British Columbians first, Canadians second, and then, when we have maxed out every opportunity to put Canadians to work on these projects, we will look overseas,” Clark said.

Canada’s Employment Minister Jason Kenney said the TFW program will actually make it harder, not easier, for employers to bring in foreign workers.

In answer to criticism from the opposition New Democratic Party, NDP, he said the federal government has made it “absolutely clear” British Columbia’s LNG industry must “employ and train Canadians first, particularly young Canadians and aboriginal Canadians, and only look to the TFW as a last and very limited resource.”

However, Jinny Sims, an NDP Member of Parliament from the Vancouver region, said LNG should provide a “generation of quality, decent-paying jobs for British Columbians, which should not make it easier to bring in even more temporary foreign workers when there are plenty of Canadians to fill jobs.”

Kenney said the “hypocrisy of the NDP on this question is really bizarre,” given that party members have written letters in support of employers trying to recruit foreign workers.

In the 1990s, the intake of foreign workers was relatively flat, peaking at 164,972 in 1999, before surging to 255,331 in 2004 and a record 491,537 in 2012.

The natural resource provinces of British Columbia, Alberta and Saskatchewan have claimed a disproportionate number of those workers.

Yuen Pau Woo, chief executive officer of the Asia-Pacific Foundation of Canada, wrote in the Vancouver Sun that the majority of employers are “not interested in global talent; rather they are looking for specific skills and capabilities, developed abroad perhaps but applied to a domestic market.”

He said the British Columbia government’s hope of building an LNG industry and opening a gateway to Asia can benefit from recruiting “globally connected talent,” noting that there could be as many as 600,000 Canadians (most of them foreign-born) living in Asia and eager to return to Canada.

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