Oil Faces Labour Crunch. Unions Angered.

Oil faces labour crunch
Unions angered. Oilsands needs 10,000 tradesmen for next two years

Claudia Cattaneo and Jon Harding
Financial Post

Wednesday, May 17, 2006

CREDIT: Jenelle Schneider, CanWest News Service

HEADHUNTING OVERSEAS…OILPATCH LOOKS TO FOREIGN WORKERS BUT UNIONS ARE UP IN ARMS: Despite protests against foreign labour, the oilpatch will need thousands of skilled workers to meet the demand of the energy boom.

CALGARY – Oilsands developers are planning to import as many as 10,000 foreign temporary tradespeople in the next two years — up from an estimated 200 today — to plug a widening shortage of skilled labour in Alberta, according to the federal government.

The move, unprecedented for the province, is bound to further inflame already irate labour unions and result in a standoff with conflict-shy big oil.

Mark Zeliger, manager of the foreign worker program with Service Canada, said oilsands employers have taken steps to bring in foreign nationals, many on one-year permits, as a way to alleviate an expected shortfall in Alberta of as many as 100,000 workers over the next decade.

“If all of the applications that we are seeing these days do result in the arrival of foreign nationals to work in the oilsands, we may see something in the vicinity of 10,000 tradespeople over the course of the next year to two arriving to do various projects that are associated with oilsands development,” Mr. Zeliger said.

“It's something that we haven't seen in this province before. We try to respond to what the market needs are. We want to make sure that the projects aren't prevented from developing as they should because of a lack of manpower.”

Mr. Zeliger said the employers, which he said include all the major oilsands developers, must prove they cannot fill positions with Canadians. Qualifications of the foreign nationals are tested by the Alberta government and their pay and working conditions must be equivalent to those offered to Canadians.

So far, oilsands companies have used few foreign temporary workers. About 250 Chinese workers are due to arrive this fall to work on Canadian Natural Resources Ltd.'s Horizon project. Another 200 workers from the Philippines and other countries are working at the Long Lake project owned by a partnership of OPTI Canada Inc. and Nexen Inc.

Even though the numbers are small for now, the practice is stoking a firestorm with some of Alberta's top unions.

Gil McGowan, president of the Alberta Federation of Labour, the province's largest union group, charged that the foreign-worker strategy, aided by governments, aims to undermine unionized labour in Alberta's booming oilsands industry.

“It's not about temporary foreign workers,” he said. “What this is about, from our perspective, is union busting, plain and simple,.
“There is no shortage of tradespeople,” said Mr. McGowan, who claims there are thousands of skilled tradesmen out of work in Edmonton. “What there is a shortage of is non-unionized workers willing to work for the substandard wages and conditions that Canadian Natural is offering.”

Meanwhile, oil companies are going out of their way to downplay the foreign worker plans.

One oil company source said the sector is keeping its head low because it recognizes the issue is a hot potato and doesn't want to get drawn into a fight with unions.

Canadian Natural insisted at its annual meeting two weeks ago in Calgary — picketed by 500 union members — that the foreign workers are hired by its contractors at the $10.8-billion Horizon project, not directly by the oil company.

Canadian Natural got off on the wrong foot with the union movement when it secured special status from the provincial government two years ago to build its project outside long-standing labour rules. The company created an open site to broaden its labour pool to non-union tradespeople and members of the non-traditional Christian Labour Association of Canada.

In fact, six Alberta trade unions are challenging the province's decision to grant Canadian Natural the special status, so-called Division 8 status, under the Labour Relations Code, in an Edmonton court next week.

“Division 8 in its purest form allows for there to be no risk of project shutdown for the life of the project,” through a strike or lockout, said Building Trades Council executive director Paul Walzack, who's leading the court challenge.

The issues at Horizon have also pitted union against union, with the CLAC seen as lowering the standards of collective bargaining. As an example, unionized members have more flexible work scheduling, but don't receive double-time pay on weekends, which is a core benefit of traditional unions.

“This just a turf war between unions,” said Dick Heinen, executive director of CLAC in Alberta, who supports foreign workers strategies if there are no Canadians to fill the jobs.

“Historically, the building trades have had the big projects and have managed to negotiate non- or exclusive arrangements for these sites that wouldn't allow for CLAC people on the site, the wouldn't allow for non-union people, that wouldn't allow anyone who was not affiliated with them, ” Mr. Heinen said.

Oil companies say they need to look at all strategies to build oilsands projects that will require up to twice the skilled labour workforce employed today by 2008/2009, when construction will hit a new peak of 38,000 skilled tradesmen, according to a report by Dominion Bond Rating Service.

“What is driving [the need for foreign workers] from an industry perspective is the lack of skilled labour,” said Mike Glennon, Fort McMurray-based executive director, Athabasca Regional Issues Working Group, which represents oilsands developers.

“The only reason they would go to a temporary foreign worker is when there isn't availability of those personnel. It's driven by demand and availability.”

Companies say it's more expensive to recruit abroad because of transportation, recruitment and training costs.

“At the end of the day, the project has to get built, and to the extent that we need to, we are prepared to allow people to come from outside Canada,” Jim Arnold, OPTI Canada Inc.'s chief operating officer. “For us it's a necessity, because Canada today can't provide enough workers.”

Mr. Zeliger said the 10,000 figure may seem large, but should be viewed in the context of Alberta's overall workforce of 1.9-million people and also in the context of the expected job growth.

According to the Alberta government, the provincial economy is expected to create close to 400,000 new jobs in the next decade, but currently only about 300,000 new workers are expected to enter the labour market.

Mr. Zeliger said it's difficult to tell at this point whether the influx of foreign workers will stay at 10,000 people, or whether there will be different requirements over the long term.

Foreign tradesmen are tested by the provincial government to ensure they have qualifications equal to those of Alberta journeymen, Mr. Zeliger said.

He said he didn't know which countries are supplying the workers. In the past, oilsands companies have recruited in countries like Venezuela, South Africa, the U.K. and the U.S.

National Post 2006