Report Projects Oil Sands to Contribute Trillions to the Canadian Economy

The Deloitte report says pipelines are the most efficient way to transport oil produced in Western Canada

A comprehensive report on the challenges and opportunities of Canada’s oil sands by auditing giant Deloitte projects that the hydrocarbon deposits will contribute an estimated $2.1 trillion to Canada’s GDP over the next 25 years.

The economic benefits of the added wealth include up to $783 billion in extra tax revenues over the period, which will provide a significant boost to local, provincial and federal governments and help them meet the growing costs of providing social services to an ageing population.

In addition to tax revenue, the export revenue generated from oil sands production will fund up to 905,000 jobs a year according to the Deloitte report.

The report cites lack of pipeline infrastructure as a potential limiting factor in the growth of Canada’s energy exports, as oil production is expected to reach current pipeline capacity by 2017.

Oil producers are currently look to use alternative transportation methods, in particular rail transport, to move the oil to international markets once pipeline capacity has been reached, but these solutions are expensive and inefficient in the long run, and the report says more efficient pipeline transportation will be required to fully realize the oil sands’ potential.

The report mentions the Northern Gateway pipeline, the Keystone XL pipeline and the Trans Mountain Expansion (TMX) as three pending infrastructure projects that are critical for providing sufficient conduits for getting Canada’s oil sands production to world markets.

According to Deloitte, the benefits of completing these projects include: 1) reducing up to $131 billions in losses that are currently incurred from Canadian oil being sold at below market prices due to lack of access to world markets, 2) reducing over-reliance on the US market, and 3) getting access to the fastest growing oil consuming regions of the world in India and China.

The biggest challenge in the oil sands development according to the report is the poor public perception of the oil industry in Canada and the hyperbolic nature of the debate surrounding the potential environmental harm of oil pipelines. The report urges a more fact-based debate on the costs and benefits of pipeline construction that avoids broad generalizations and sweeping judgements about environmental criticism, the oil industry, and energy projects.

New Canadian Immigration Program for Skilled Trades Opens

The Federal Skilled Trades Program was launched on Wednesday to acclaim from construction industry leaders

Citizenship and Immigration Canada (CIC) officially launched the Federal Skilled Trades Program (FSTP) on Wednesday, and plans to admit up to 3,000 permanent residents through the program in 2013.

Applicants of the FSTP must meet three general requirements to be eligible for the program:

  • meet the minimum language requirements of the program,
  • have at least two years of full-time work experience (or an equivalent amount of part-time work experience) in an accepted skilled trade within five years of the date of the application,
  • have a Certificate of Qualification or a job offer(s) from up to two Canadian employers that totals at least one year of full time work

Construction industry leaders have welcomed the program, which they say could mitigate the pressing labour shortages they are facing in many of the trades.

“Today’s announcement is good news for the construction industry because the need for workers with trade skills will continue to grow as Alberta’s economy grows,” said Merit Contractors Association in Alberta vice-president Bill Stewart.

Canadian Construction Association president Michael Atkinson had similar praise for the program:

“The Canadian Construction Association is especially pleased to hear today’s announcement that the new federal Skilled Trades Program to be launched on January 2nd, 2013.”

In order to make it easier for skilled trades persons to immigrate to Canada, CIC created the FSTP with no post-secondary education requirements and lower language proficiency requirements than the well-known Federal Skilled Worker Program.

Canadian Immigration Department Finalizes Occupation List for Federal Skilled Trades Program

Welders will be one of the occupations that will be accepted without a 100 application sub-cap under the new Federal Skilled Trade Program (Joe Mabel)

CICS News has learned that Citizenship and Immigration Canada (CIC) has made a final decision on which occupations will be eligible for the new Federal Skilled Trades Program (FSTP) that is scheduled to open on January 2nd.

CIC is expected to announce that the FSTP will give occupations one of two treatments; Group A occupations will be sub-capped at 100 applications per year for that particular occupation, and Group B occupations will have no sub-cap and will be accepted until the program’s total cap of 3,000 applications has been reached for the year.

Occupations within Group A will be:

  • Contractors and supervisors in electrical trades and
    telecommunications occupations
  • Contractors and supervisors in carpentry trades
  • Contractors and supervisors in other construction trades,
    installers, repairers and servicers
  • Carpenters
  • Contractors and supervisors in mechanic trades
  • Contractors and supervisors for heavy equipment operator
    crews
  • Supervisors in logging and forestry
  • Supervisors in mining and quarrying
  • Contractors and supervisors in oil and gas drilling services
  • Logging machinery operators
  • Agricultural service contractors, farm supervisors and
    specialized livestock workers
  • Supervisors, mineral and metal processing
  • Supervisors in petroleum, gas and chemical processing
    and utilities
  • Supervisors in plastic and rubber products manufacturing
  • Central control and process operators, mineral and metal
    processing
  • Power engineers and power systems operators
  • Water and waste treatment plant operators

Occupations within Group B will be:

  • Machinists and machining and tooling inspectors
  • Sheet metal workers
  • Structural metal and plate work fabricators and fitters
  • Ironworkers
  • Welders and related machine operators
  • Electricians (except industrial and power system)
  • Industrial electricians
  • Power system electricians
  • Electrical power line and cable workers
  • Telecommunications line and cable workers
  • Telecommunications installation and repair workers
  • Plumbers
  • Steamfitters, pipefitters and sprinkler system installers
  • Gas fitters
  • Construction millwrights and industrial mechanics
  • Heavy-duty equipment mechanics
  • Refrigeration and air conditioning mechanics
  • Railway carmen/women
  • Aircraft mechanics and aircraft inspectors
  • Elevator constructors and mechanics
  • Crane operators
  • Drillers and blasters — surface, mining, quarrying and
    construction
  • Water well drillers
  • Underground production and development miners
  • Oil and gas well drillers, servicers, testers and related
    workers
  • Petroleum, gas and chemical process operators

The FSTP is intended to meet labour shortages in Canada’s resource sectors by creating a path to immigration for foreign nationals skilled in high-demand trades like welding and drilling.

Immigration Department: 1 Year Canadian Experience Class Launching Jan 2013

Citizenship and Immigration Minister Jason Kenney tweeted more details in recent days about coming changes to the Canadian Experience Class and Federal Skilled Worker programs

The length of time that a temporary foreign worker needs to have worked full-time in the Canada to qualify for permanent residence under the Canadian Experience Class (CEC) immigration program will be reduced from 24 months to 12 months in January 2013, according to a tweet by Citizenship and Immigration Minister Jason Kenney.

The long expected change in the CEC program’s work experience requirement is intended to increase the share of immigrants that come through the program, as Citizenship and Immigration Canada (CIC) considers immigrants with Canadian work experience as more likely to be successful in integrating into Canada’s labour market than those who are admitted under more traditional routes like the Federal Skilled Worker (FSW) program.

The announcement on the date of the CEC program rule change was made in a response to a tweet directed to Kenney, who is quite active on the micro-blogging site, on November 5th:

@KaushikJay The new 1 year threshold for high-skilled temporary foreign workers to qualify for CDN Experience Class will start January, 2013

In a series of tweets on November 4th, Kenney also described when and in what form the revamped FSW program will be launched.

He posted that the final details for the relaunched program would be released in the “1st half of 2013” and that there would only be “a very limited number of new applications” accepted in 2013, to help CIC “asses [sic] the new grid & educational evaluation”.

He also posted that CIC’s goal was to launch the new Expression of Interest model for the FSW program “around late 2014 / early 2015”.

CIC placed a moratorium on accepting new applications through the FSW program in July 2012, to give it time to deal with the program’s pending application backlog and to design new selection rules and assessment procedures that it says will make the program more economically beneficial for Canada and its application review process faster.

Protectionist Workplace Regulations Marginalizing Canadian Immigrants -Vancouver Sun

A new CLSRN study finds that occupational licensing requirements are preventing many Canadian immigrants from working in their field of study

An article in Monday’s Vancouver Sun blames trade and professional associations for hampering the economic integration of Canadian immigrants.

The story, by columnist Don Cayo, cites a new report by Canadian researchers that finds that occupational licensing is preventing immigrants to Canada from working in their field of study, at a cost of $2-5.9 billion a year to the country’s economy.

The Canadian Labour Market and Skills Researcher Network (CLSRN) report notes that a full 20 percent of workers in the Canadian labour market now work in an occupation that requires a license, and that these licenses create significant barriers to entry that take up to a decade for a new immigrant to overcome.

Drawing from several studies authored by CLSRN researchers, the report finds that the average Canadian immigrant experiences an immediate drop in the skill level of their occupation upon arriving in Canada, and that even after four years, only 20 percent of women and 25 percent of men are working in their pre-immigration occupation.

Commenting on the report’s findings, Cayo says the mismatch between immigrants’ work experience and their post-immigration occupation is due to self-regulating trade and professional associations imposing licensing requirements in order to limit competition to their members:

Self-serving self-regulators are capable of a lot of sanctimonious bumph — and of greatly complicating accreditation procedures — to minimize the competition and protect their comfortable sinecures. Simply put, the old boys are way too prone to put down the “new kids on the block.”

He argues that unless self-regulating labour associations reduce regulatory barriers to entry in their fields, the government should repeal their regulatory powers.

Occupational licensing and the immigrant income gap

The income gap between recent immigrants and native-born Canadians has grown from 20 percent in 1970 to 40 percent in 2011, despite the proportion of recent immigrants with a university degree increasing from 10 percent in 1980 to over 54 percent in 2007 – or more than double that of native-born Canadians.

One possible explanation is the shift to an immigration selection criteria that favours foreign professionals who are trained for occupations that are regulated in Canada, like teachers, nurses, doctors, lawyers, engineers and veterinarians.

Canadian Immigration Minister on Irish TV on Expansion of Working Holiday Program

Citizenship and Immigration Minister Jason Kenney appeared on Ireland’s Late Late Show last Friday to discuss the coming expansion of the International Experience Canada program for Irish citizens, through which the number of working holiday visas available will be increased to 10,000 per year:

Several Irish audience members, the majority of them in their 20s, spoke of their plans to work in Canada and the general interest among Ireland’s youth to visit and live in Canada.

Minister Kenney said that Canada is an attractive destination for Irish nationals because it has the strongest economy in the G8 and holds many opportunities for workers. He spoke of the labour shortage in the country, and mentioned that there were over 50 Canadian companies in Dublin for the Working Abroad Expo, looking to fill over 3,000 positions.

Kenney said there were positions available in construction, the trades, engineering, services, video game production and software development.

Canada Has Fastest Population Growth in G8, Driven By Immigration and Led by Prairies

The Prairie provinces, prospering from their abundance of natural resources, led Canada in population growth in the year ending June 30th, 2012. Two thirds of the world's potash reserves are near Saskatoon, pictured above, the largest city in Saskatchewan.

A Statistics Canada report released today estimates that Canada’s population grew by 1.1 percent in the year ending June 30 2012, giving it the fastest population growth among the G8 countries.

In comparison, the second fastest growing population in the G8 was that of the United States, which grew by 0.7 percent over the same period. Japan, with its shrinking population, had the lowest population growth rate, at negative 0.3 percent.

The largest source for Canada’s population growth was immigration, as the country has continued to sustain the highest immigration levels in the world as a percentage of its population.

Among Canadian provinces, Alberta saw the fastest population growth, at 2.5 percent, as the province, which has the highest per capita GDP in Canada, continued to lead the country in inter-provincial and international immigration and natural population growth.

The economy of Alberta has benefited in recent years from a booming oil sector as production in the Athabasca oil sands, which is one of the largest oil deposits in the world, continues to ramp up.

Other Prairie provinces also saw rapid population growth, with Saskatchewan and Manitoba’s populations growing by 2.1 and 1.2 percent respectively.

A recent Fraser Institute study found that Alberta, Saskatchewan and Manitoba have the best labour markets in Canada, with the lowest unemployment rates and fastest employment growth in the country, thanks to strong performance from their resource sectors.

Bank of Canada Governor: Commodities ‘Unambigiously Good’ For Canada

Spruce Meadows, south of Calgary, where Bank of Canada Governor Mark Carney was a marquee speaker for the annual Spruce Meadows Changing Fortunes Round Table

Wading into a national debate that was ignited by a controversial claim by Thomas Mulcair, leader of Canada’s left-leaning National Democratic Party (NDP), that Canada’s booming resource sectors harm the overall Canadian economy- the so-called ‘Dutch Disease’ hypothesis, Bank of Canada Governor Mark Carney on Friday strongly rejected the notion and endorsed the view that high commodity prices are a net benefit to the Canadian economy.

The Dutch Disease argument Mulcair first put forth in April is that higher revenues from Western Canadian oil exports have increased the value of the dollar, which has made Canadian manufacturing less competitive in international markets, and that in the long-run, the contribution made by the resource sectors to the Canadian economy does not make up for the resultant decline in manufacturing.

In a presentation given to the annual Spruce Meadows Changing Fortunes Round Table near Calgary, an event that attracts business leaders from across Canada, Carney roundly dismissed the argument, saying “the [Dutch Disease] diagnosis is overly simplistic and, in the end, wrong.” He added that “Canada’s economy is much more diverse and much better integrated than the Dutch Disease caricature”, and that much of the decline in manufacturing is not related to the rising value of the dollar.

Carney provided the following chart to demonstrate that the decline in Canadian manufacturing’s share of GDP “is part of a broad, secular trend across the advanced world” as opposed to a Canadian peculiarity owing to the country’s natural resource wealth:

Carney said that an analysis done by the Bank of Canada using its Terms-of-Trade Economic Model (ToTEM) projects that the economic effect of a 20 percent increase in oil prices would be positive for Canada under all three scenarios modelled:

Stronger demand from the U.S. would contribute to a 3 percent increase in GDP over five years. Stronger demand from Asia, as is the case now, would boost GDP by 1 percent over the same time frame, and a short term supply shock would increase GDP by 0.2 percent in the first year.

Maximizing Returns

Carney said that to increase the benefit that Canada derives from high commodity prices, the country should shift “export markets toward fast-growing emerging markets”, in particular in the Asia Pacific region, as U.S. growth had slowed and would likely stay muted for the foreseeable future.

He also prescribed that the country build “new energy infrastructure—pipelines and refineries” to bring Western Canadian oil to Eastern Canadian consumers, who are now importing oil and paying an average premium of $35 over the price in Western Canada. The infrastructure would bring “more of the benefits of the commodity boom to more of the country”.

Other recommendations Carney made were:

  • Improving interprovincial mobility through changes like standardizing occupational licensing across provinces, to help bring more skilled labour from other regions of the country to where it’s needed in Western Canada,
  • Increasing skills of labour force by encouraging more graduates in the sciences, technology, engineering and math (STEM) and focusing “on skills upgrading and (re)training for existing workers”
  • Increasing business investment in light of sufficient “precautionary cash balances” and “the scale of the resource opportunity”

Building on Canada’s Strengths

Carney concluded the talk by saying that the strength of Canada’s resource sectors should be recognized as “a reflection of success, not a harbinger of failure.”

He said that attempting to reverse the effects of Canada’s energy exports on the value of the dollar “requires that we undo our successes in order to depreciate our currency. Taken to its natural conclusion, this logic dictates that we shut down the oil sands, abandon our resource wealth, have high and variable inflation, run large fiscal deficits and diminish our financial sector.”

“Such actions would surely weaken the Canadian dollar, but they would also weaken Canada,” he added.

“In a world of elevated commodity prices, it is better to have them,” he concluded. “Rather than debate their utility, we should focus on how we can minimise the pain of the inevitable adjustment and maximise the benefits of our resource economy for all Canadians.”

Program Trains Recent Canadian Immigrants for Oil and Gas Jobs

The Oil and Gas Training Program (OGTP) helps recent immigrants start promising careers in the oil and gas industry

Canada’s shortage of workers with the skills needed to service its oil and gas industry and the higher than average unemployment rate of recent immigrants are both being addressed by a new Alberta program that provides oil drilling training for recent immigrants to help them get jobs in the province’s oil-patch.

The Oil and Gas Training Program (OGTP) was created by the Calgary Catholic Immigration Society which administers it jointly with Enform, a Western Canadian oil and gas safety association created by major upstream oil and gas companies.

The latest class of 16 trainees graduated last week after completion of the 15-week training program. The skills they acquired will enable them to get entry-level positions in Alberta’s oil and gas industry, which has a pressing need for workers to expand oil sands projects in northeastern Alberta.

Data emerging over the last several years showing a growing income gap between recent immigrants and the general population since the 1970s has prompted non-governmental immigrant serving organizations and governments at different levels to look to find ways to improve the employment prospects of immigrants.

Canadian PM Promotes Resource Projects in Country’s North

Prime Minister Harper at a press conference in the Yukon during his annual Northern tour (Government of Canada)

Prime Minister Stephen Harper says “tremendous economic opportunity” lies in tapping Canada’s northern resources, describing it as a key to the country’s prosperity. The comments came in a press conference in the Yukon, which he visited as part of his seventh annual Northern Tour.

The tour, which runs from August 20-24, is part of a long-term drive by the federal government to facilitate the development of resource projects in Canada.

The Prime Minister said the Canadian economy can outperform that of the United States, Japan and Europe by continuing to exploit its vast natural resources, much of which lies untapped in the North, and that there are more than 500 new development projects, worth half a trillion dollars, being proposed in the country over the next decade.

The Canadian economy is heavily reliant on natural resources, with $142.5 billion or 11.5 percent of Canada’s gross domestic product (GDP), and a staggering $200 billion in export revenue, amounting to over 50 percent of the net worth of all Canadian exports, being produced by the country’s resource sectors each year.

The announcement of a new Federal Skilled Trades Program (FSTP) last week by the Department of Immigration was largely a reaction to the growing demand for skilled workers like welders, boiler makers and heavy equipment operators in resource extraction hubs, particularly in western provinces like Alberta, as the country’s energy and mineral sectors have boomed, and ageing workers in the skilled trades have begun to retire in greater numbers.