N.L. into labour, productivity pinch: report

Published on April 17, 2014

The province is coming through the crucible in terms of regional major project construction, according to a new report from the Atlantic Provinces Economic Council (APEC), a Halifax-based think tank.
“The Labour Requirements for Major Projects in Atlantic Canada” report is available online and offers gathered numbers showing the collection of large construction projects in Newfoundland and Labrador in recent years has resulted in a notable jump in the demand for certain types of skilled workers.

That demand has led to shortages in some cases and those shortages have, in turn, led to challenges for both subcontractors and those responsible for the bottom-line costs on construction.

"The total number of workers required for major projects in Newfoundland and Labrador grew by about 80 per cent between 2010 and 2013. ... Several developers in Newfoundland and Labrador reported challenges finding sufficient numbers of skilled workers in engineering, project management and the skilled trades in 2013," said Patrick Brannon, an APEC director and co-author of the report, in a statement issued Wednesday.

According to the report, projects like the Vale processing facility in Long Harbour, the Hebron offshore oil project and the Muskrat Falls hydroelectric project have driven construction investment and increased demand for workers, contributing to a rise in both wages and hours worked.

“Newfoundland and Labrador continues to be the key driver of investment activity in Atlantic Canada due to its energy and mining sector,” it states.

”In Newfoundland and Labrador the companies interviewed raised concerns about labour shortages in engineering, project management and many of the trades, especially at the journeyperson level.”

Additional concerns noted by APEC include an aging workforce and increased pressure on the worker pool, as a result of the draw from major project work in other provinces. Those draws include oil projects in Alberta and the start of federal shipbuilding work in Nova Scotia.

“Overall labour productivity in Newfoundland and Labrador is (currently) considered low by international standards as (it) is weakened by the loss of skilled workers moving to Alberta. Productivity is also weakened in commercial and smaller industrial projects due to the pull of skilled labour into large industrial projects in the province,” it states.

“Higher wages are having an impact on project costs and the time it takes to complete projects is increasing due to the use of lower skilled labour.”

The report suggests skilled workers are looking for stable, longer-term opportunities, but company managers indicated it can be challenging to meet that need when they are into ebb and flow of major project contracts.

And when the major projects are peaking, it is difficult for the same employers to task their journeyperson employees to train apprentice level employees, without sacrificing productivity. Yet the report also notes the labour demand resulting from major project work is not expected to remain at the same level.

“The number of workers required in Newfoundland and Labrador rises rapidly to 2013, remains high until 2015 in both the baseline forecast and the alternative scenario, and then declines through 2018,” APEC’s team says of its forecasting.

The APEC report comes ahead of its annual Major Project events, with tickets available through the APEC site, offering a keynote speech and the provision of a list of planned major projects in the region. The Major Project 2014 event for St. John’s is scheduled for May 28.