February 26, 2014
B.C. budget lacks extra training cash
One of the largest barriers to establishing a liquefied natural gas (LNG) industry in B.C. is a shortage of skilled workers, which has a labour leader concerned about the lack of funding in the provincial budget for apprenticeship training.
“In actual fact in B.C., we sit on one of the largest reserves of natural gas in the world. But, we have a problem with that resource, we have nowhere to send it,” said Rich Coleman, Deputy Premier of British Columbia and Minister of Energy and Mines.
“There is an opportunity. Asia needs natural gas. We have to keep in focus that we have to pursue their marketplace in LNG. And, basically from a standing start, we need to create a new industry in B.C.”
Coleman outlined the challenges and opportunities associated with the construction of a new LNG industry to a group of industry leaders, during the annual CEO Breakfast at Buildex Vancouver on Feb. 19.
Currently, the National Energy Board has approved an LNG export licence for eight proposed projects in B.C. The most recent approval was issued on Feb. 20.
The Ministry of Energy, Mines and Natural Gas commissioned a study by Grant Thornton in 2013, which estimates that the construction of five LNG projects will generate an average of 39,400 full-time equivalent jobs annually for a nine-year construction period. Over this period, construction of five LNG projects is expected to generate 102,500 direct full-time jobs.
Coleman said that even if every person graduating from high school in B.C. over the next five years goes into a trade, there will still be a shortage of about 50,000 skilled workers.
This estimate takes into account the demand for workers from the shipbuilding, mines and other growth industries.
The strongest employment gains are expected in 2014, driven by the start-up of new major oilsands projects, as well as repairs from the Calgary flood in June 2013.
Economic growth in Alberta is being driven by investment in major new oilsands projects, which took a pause in 2009.
However, growth resumed in 2010 and by 2013 total construction employment had surpassed the 2008 peak level.
Over the whole period, stronger demand is expected in 2014 and 2015, which will ease in 2016 and 2017.
A more modest peak in 2018 and 2019 reflects the start-up of new oil sands projects.
Later in the scenario, construction employment is expected to shift from new capital projects to maintenance work that will sustain these capital projects, as large oilsands developments move into operation phase and the oilsands industry matures.
The growth in the construction labour force between 2014–2023 includes the addition of more than 38,000 new workers.
Labour requirements to replace retiring workers add another 37,500 and there are just more than 30,000 young Albertans who might be expected to join the workforce.
This leaves a total requirement for 45,000 new workers to be recruited from outside the Alberta construction industry.
In response, employers will continue to bring in residents from outside the province and temporary foreign workers to work on major projects.
However, a series of major resource, infrastructure and engineering projects in other provinces will compete at different times for the key trades needed in Alberta.
The report predicts a rising proportion of industrial and engineering projects at a national level will take place in remote northern locations, which are referred to as centres of resource construction.
In B.C., the report predicts new construction activity will increase employment to a new record level by 2017, compared to the last peak in 2007.
Employment growth is expected to accelerate each year to 2017, as four LNG projects, with related pipeline work, are assumed to start up.
This coincides with a series of mining and electricity generation and transmission projects, which will need a group of skilled and specialized trades and occupations.
A large share of the work is in the northern and more remote regions of the province.
Construction firms may need to offset this market pressure by the fly-in, fly-out work arrangements that have become more common in western provinces.
The B.C. labour force is forecast to grow by more than 15,800 workers over the next decade, as expansion demand rises.
Over the same period, replacement demand due to retirements adds requirements estimated at just over 34,000.
New entrants from the younger population are estimated at more than 23,700.
On balance, the B.C. construction industry will need to recruit more than 26,100 workers from outside the local market.
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