Steve Payne
There is no "skilled trades shortage" in Canada, economist declares
Canadian Contractor canadaFrom an ivory tower, Don Drummond, a well-respected economist, declares the skilled trades shortage to be nothing more than a mirage.
Prime Minister Stephen Harper has called Canada’s looming skilled-trades shortage an “urgent” problem.
But a well-respected economist, Don Drummond, received a fair bit of publicity in an article in the Toronto Star last week, when he said that this whole “skilled trades crisis” thing is a mirage.
Time for a little bit of editorializing.
Contractors across Canada were just hammered by horrible government policies, mostly tax-grabs and stupid regulations, during the recent recession. Most of these policies have been jet fuel to the under-the-table renovators who can do the work for up to 40 per cent less than legit, fees-paying, properly licensed and insured professionals. When governments of all stripes hand out billions of dollars to their corporate and/or unionized friends, the homebuilding and renovation industries get nothing (and ask for nothing) and the first serious initiative in years to increase publicly-funded training of our next generation of framers, carpenters, plumbers, electricians, bricklayers, tile setters, etc. is now being described, in effect, by an egghead (sorry, nothing personal) in an ivory tower as unnecessary.
Perhaps Canada needs a few less economists on public payrolls and a few more programs to help boost our industry. Instead of hammering it with extra fees and insane regulations.
Rant over.
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I agree on some points Steve– disagree on others.
“horrible government policies, mostly tax-grabs and stupid regulations…”, agree, nuff said.
Training people to work construction jobs which won’t find jobs when they are trained is idiotic. Guys cannot hire because they are competing with under the table companies. Want steady work for low wages…no cpp…no benefits…there is plenty around.
Training young people for trades is simply setting them up for failure.
Until the present economic situation changes–until people expect to pay tradesmen, it will continue to be a non viable job.
You cannot legislate the economy back to health. We need to make things here…viable businesses that create valuable things. When 1/4 of the jobs have taken pay cuts (the trades) and or turned into retail jobs the employment rate stays the same–but the economy suffers.
You cannot make things here when the dollar is at par and the trend is outsourcing to slave labour nations.
k, my rant is done also.
Well said, Mr. Winter.
40 years in business (second generation Alberta company) means my business has experienced the highs and lows the economy (and terrible governments) can produce.
Regardless of affiliation (open shop or signatory) I would suggest that we can unite on at least one issue: a level playing field. This is achieved by active, swift, and public enforcement of the laws we are expected to abide by. This goes to labour code (interestingly, something our farmers in Alberta can work outside of), the Safety Code (interestingly, something our farmers in Alberta can work outside of), Without this enforcement, the market favours the lawless, and this is what we have.
The lawless also have alienated an entire generation of Canadians from the trades, to the point that the lawless have successfully allowed for the bloating of an already bloated public service empire to solve their HR issues. None of this will end well, but I would appeal to you to not stop your ranting. Unless the law abiding speak up and insist on proper use of our tax dollars (enforcement of the law over running the HR department for poor employers) this bad situation will continue much longer than it needs to.
The best path forward for now, although difficult, I would suggest, would be to let the poor employers have the work. The faster they gain market share, the quicker our governments will realize that these folks don’t pay tax. Neither do their staff. The money they provide to political parties to buy their influence will dry up as the industry finds bottom. This is likely what it will take to turn things around anyway, and I for one would rather get there sooner rather than later.
Let’s also agree to vote for better government next time around, or at least vote out failed administrations.
Dear Unsubsidized–
Alberta is immune to what I speak of. Tradesmen don’t have to charge PST there… (there is none)… just GST.
Here we have had an increases in basic business licensing and overhead plus HST (13%) line on the contract… which is hard for people to swallow.
Legitimate builders are at a realistic 35-40% disadvantage to Kijiji builders.
The answer might be that all the legitimate builders should go to Alberta where there is an actual shortage of workers in the building trades.
Careful what you wish for– “You may want to tread lightly!”, lest the word get out about your Shangri La!
My remarks are intended to address a problem I suggest is nation wide. Whether contractors must collect 5% or 50% in their jurisdiction is immaterial; When it is required of all, the playing field is level (see my comment to Mr. Drummond’s article). Minimum Permit fees in Edmonton were raised 50% a couple of years ago, which makes those of us who are law abiding much less competitive than those who are not, so fees and any other costs factor into this for sure. As for a shortage, I contend there is no shortage of Tradespeople in Alberta. A ‘shortage of labour’ has been marketed to us. Think about it, most trades mathematically double their numbers every four years. This supposed ‘labour shortage’ has been going on in Alberta for at least 10 years. An ongoing ‘shortage’ in a free marketplace can only exist through foolish government policy. In this case, lack of enforcement of the law, and allowing poor policy to be implemented due to influence from special interest groups on inexperienced elected officials and their departments. There will likely always be a ‘shortage’ of tradespeople willing to work for sub standard pay in ‘wild west’ conditions.
Legitimate businesses should be welcome anywhere in Canada, though I can report from Alberta that the exact same issues exist here. The marketplace today favours the lawless.
Thanks for your comment, Lar.
Given that only a small fraction of a student’s (pretty well any field of study: from a general arts degree to law to a technical, hands-on subject at a community college) is paid for by the tax payer, not the student, it stands to reason that Ottawa and the provinces are paying mega-bucks into all kinds of education. Any decrease or plateau in taxpayer’s money going into carpentry programs at, say, a community college will, in my opinion, just get ploughed into Ivory Tower academics elsewhere. I used to be a publisher’s textbook sales rep. I once paid a sales call to a sociology department in the Maritimes. One of the senior profs there had written a book called “The Sociology of Icelandic Shrimp Fishing.” On our dime. So it’s prudent to ask, do we really want the hate on (so to speak) for training in the trades by some egghead. I’d like that egghead, while he’s sipping martinis at his swank Ottawa party of the week, to want more, not less, of the pie to be directed into our young people in our industry.
I am not sure that there are skidloads of recently graduated carpentry technology kids working at Starbucks. I am not sure we are training people for jobs that don’t exist. I think that if a kid has paid big bucks for a carpentry education somewhere, he can start a renovation firm, no matter how small. I have faith in our kids to make it work if we can train them.
The aspect of the under-the-table people ripping the heart out of the good jobs, are those people the ones who got a real education in the trades, or just a bunch of hacks?
Again, thanks Lar for your excellent post.
Thanks for the ideas to chew on Steve–
Yes… love to see money going towards education and training for young people–however in this case it is money in the wind. This is a highly difficult time for any young person to get into the trades.
Here is a view from the trenches. I only design woodwork–so I am in the loop because we have a few independent builders in Ontario that I am in tight contact with. Here is what they tell me.
People used to call us for normal decks and small renovations–however, because our website pictures exclusive work–they tend to only call when money is no object or with a highly skeptical outlook regarding what it will cost.
First question, even for high end jobs from the client? “Do you do Cash?”…and if you say no most will show you to the door. Better to just load the tax into the prices you quote (don’t show it as a separate line), and pray that they don’t go to Kijiji for a competitive quote from a tailgate builder. Better to just claim the work and stay legitimate–though I can’t be sure they are doing that–not my business.
Kijiji is where unemployed factory guys and backyard builders can connect with people wanting to avoid paying tax… and it is getting the major share of the web traffic for renovations and home improvements for that reason.
Whether our guys are professionals or not… these are guys that went through the training and have an average of about 20 years full time in the trade.
(I started in the trade through a government program 30 years ago because there was a shortage of framers foreseen then–only 2 of us remained in the carpentry trade after the course).
When I see a deck or renovation botched, the client with their head hung low says yes… last time we did it low bid–this time we know better. There are plenty of guys out there that quote so low that I can’t buy the materials for the price they quote– so you can tell me how they are doing it.
Hey Lar:
Totally get you on this, all of it. Completely.
Can you give me a call if you get a chance, 416.219.9949 or email me your coordinates to spayne@canadiancontractor.ca, because we could try to get you hooked up with some people who can POSSIBLY assist.
I really, really appreciate your thoughtful posts. Any time, get in touch.
Best wishes,
Steve
So much of the discussion this year is about “legitimate” contractors.
Who is legitimate exactly?
Is it the contractor who will gut the quality of their workmanship and overall quality of their product in order to stay competitive and comply blindly with every government program, fee, tax, insurance, etc?
Or, is it the contractor who is willing tell a dead and bloated Government to F#@& Off and work outside the rules in order provide their customers with affordable rates?
Look around, Everything you buy is poorer quality than it was 25… even 10 years ago, and it costs twice as much! “Legitimate” contractors are becoming thieves by sacrificing every ounce of quality they can in order to make a buck. When driving by a construction site, one will often see seven people standing around operating one shovel and they get to take winters off either by faking injury or milking E.I.
When Government gets so bloated from internal decay, I would say the “legitimate” contractors are the ones you won’t find on government radars, provided that they are still offering the end-user a “legitimately” high quality product.
@Chris Langman, You sir, have a point. It is a frightening concept. Wander through Vaughan and see who is building these 80,000$ pool cabanas I am designing. It isn’t our legitimate guys. But the work is stunning… it is all off the books I would expect.
There is your evidence. However, these are just old school Italian craftsmen trying to stay alive I would expect. They aren’t trying to make a point–just doing what they have to to put food on the table.
Chris, probably the best – and scariest – post online here that we have ever seen. You nailed it.
I totally agree with you that the trade’s shortage is nothing but a mirage, or actually a scam to fill in classrooms and churn out a surplus of available hands to drive down wages. After raising us, our father instead of buying his red sport car for midlife crisis he went to school and got a 3 years degree (with honors) in industrial electrical engineering techniques. 2 years down the road he got out of 600 plus applications few offers at minimum wage in the GTA (we live 4 hours North of GTA). The few others that called back, not from the GTA, wanted a personal interview and would not consent the first one be done over Skype. Yeah someone is going to drive 7 hours one way, of fly, to interview for a pennies above minimum wage offer. The man is in better shape that most of 18 years old athletes, has a quite well functioning brain, hands that can build or fix almost everything, doesn’t check his phone every five seconds and yet nothing on the horizon. Sure he can kick a garbage can and job offers for labor and driving (he drove heavy floats before for a company that offered good time off and benefits, an important feature for a single dad) will pop up like hornets from a disturbed nest. Electrical apprenticeship offers? None.
Samantha Madisson G.
I do not understand why in North America we paint a dark cloud over top of Blue Collar Workers. This is a mindset that has to change as not everybody wants to be working in an office. More available training to men and women on how to do simple chores around the house so we do not have to look any farther than a toolbox at home to fix it.
I am a red seal plumber and gasfitter, and I refuse to work in my trades anymore because WCB denies all of my workplace injuries. I have made 9 claims and been denied coverage 9 times. If there is a trades shortage, then I believe it is caused by the WCB. If we are not permitted to recover from workplace injuries, then journeymen will quit their trade at an early age. Just as I have done at the age of 35. 10 years of constant agony was finally enough for me. I will not return to the trades until I see a big change in wcb’s policy. I am now back at school training towards a sustainable career.
-Thanks WCB. – The trades deserve what they get!
worked as a construction and maintenance electrician for thirty years,laid off all the time, there was never a shortage of electricians in ontario,never . most all tradesman are laid off at one time or another,thats why they call us journeymen.made forty dollars an hour back in 1999.be offered twenty in the last few years,hiring agencies now make things worse,middle men taking wages and benefits from hard working people. feel bad for the future of the trades. and yes the wages are very low and benefits few and far between.joe the plummer is very correct in his plight,i know from experience
Can anyone tell me ,why electricians make the same money now as thirty years ago, when interest was 12 percent.a nice house under a hundred grand, a good house under 150 and a great house 250.who wants that for a future