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Wednesday, April 14, 2010

BC primed for economic upswing

We indeed live in interesting economic times. The Canadian dollar is now at parity with the US greenback and running at around $1.50 with the British Pound. Despite, or perhaps because of mortgage rates that are set to increase and a Harmonised Sales Tax (HST) that is to take effect on July 1st consumers are stampeding into the housing market driving market prices even higher.

Whether those prices remain sustainable is an increasing source of contention, with even National Realtor Royal LePage describing the housing market in British Columbia as “irrational.” However, what does seem clear is that BC’s economy is set to enjoy a significant post Olympic boom buoyed not only by the rising housing market, but increased construction activity and manufacturing output.

The Conference Board of Canada is predicting economic growth of 4.0 per cent in Vancouver and 3.2 per cent in Victoria. However aside from a still recovering domestic market, i.e. consumer demand, the other constraint on BC Business growth is a shortage of skilled labour. The shortage of skilled labour is especially troubling in the construction sector where the average age of a fully certified skilled tradesperson is now in their early to mid 50s.

Recognizing this demographic problem, about half a dozen years ago, the Mechanical Contractors Association of BC in conjunction with the Electrical Contractors spearheaded the effort to secure a provincial Apprenticeship Training Tax Credit (ATTC). This tax credit is designed to help offset some of the costs of fully training and certifying a new tradesperson.

The alternative to training is a bidding war when too many companies chasing too few skilled apprentices. Clearly it is to the construction sector’s benefit and to the consumers to make sure there are enough skilled tradespersons to do the work required.

Even China with its one child policy is now starting to run out of skilled and unskilled labour. Shanghai and other major east coast cities are now scrambling to find workers thanks to an economy that in the midst of a US led global recession grew by 8.7 per cent in 2009.

Thus looking to somehow outsource, deskill or bring in cheap labour is not in any way a viable long term option. Ensuring that our own young citizens have the skills and training to build and maintain our 21st Century cities is what will help ensure not only the sustained growth of BC’s construction industry but the economic growth of our province as well.

Thus it is vitally important that the Province of BC put a renewed focus and significantly increased funding into apprenticeship training. As a province we have put a great deal of tax dollars into academic training, but relatively little into the training of people who construct and maintain the buildings we live, work and study in.

As we move to newer “greener” technologies infrastructure is going to become more sophisticated; whether it is with regards to heating and cooling of buildings to waste management of both buildings and communities.

Greater provincial investment is not only required to make sure we have enough skilled tradespersons to repair and upgrade existing infrastructure, but to ensure that our current and next generation of skilled tradespersons are able to keep up with new technologies and new materials as they are developed and implemented for the 21st Century.

Apprenticeship Training has for too long taken a back seat to academic education. If our economy is to fully prosper and our young people have well paying jobs this situation needs to change. In the coming months the Mechanical Contractors Association of BC will be increasing its efforts to make apprenticeship training a greater funding priority for government and to better promote the advantages of becoming a skilled tradesperson to young British Columbians.

Mike Geoghegan is an economist, political commentator and a government relations and media relations consultant based in Victoria, BC. He can be reached via his website at www.mgcltd.ca and you can follow him on twitter @BCLobbyist

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