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JDI Roundtable on Manufacturing Competitiveness in New Brunswick

New Brunswick risks losing major employers if it can’t address labour supply issues

By Sarah McRae

Cooke Aquaculture recently launched a media campaign informing New Brunswickers of its critical need for workers. Joel Richardson, VP Public Relations, said the company has struggled to recruit employees during the pandemic. The available jobs are across Atlantic Canada, but the most pressing needs are in New Brunswick in Blacks Harbour and St. George. The open positions include seafood processors, vessel crew members, and truck drivers. These are full-time, year-round jobs starting at $15 dollars with the opportunity for pay growth.

Cooke Aquaculture is a major employer and driver of GDP in the province. The seafood company was founded in Charlotte County and has grown into an international business with operations around the globe. Even as its reach expands, it says it has always been committed to being headquartered in New Brunswick – which begs the question, at what point will the challenges of doing business in New Brunswick force out even the companies that have attachments to the province? When a company of this stature makes a call for help, the risk of inaction is that failure to find labour here will results in jobs and GDP migrating to states and provinces where there are workers available.

Our own research has shown the manufacturing sector in New Brunswick is facing a potential labour shortage due to challenges like an aging workforce, perennial out-migration of young workers and a mismatch between available workers’ skills and employer needs. New Brunswick manufacturers in particular are facing challenges with labour supply given their relatively high reliance on labour intensive production. These labour supply challenges hamper manufacturing competitiveness and discourage investment.

Labour shortages are acutely felt by food processing firms, which tend to be labour intensive. This is a problem: as we noted in a recent post, seven of the top ten manufacturing employers in the province are in the food sector. COVID-19 has exacerbated labour supply issues, particularly for seasonal jobs, which are hard to fill even under normal conditions. This Spring, a common refrain among seafood processing firms throughout the Atlantic provinces was that they were struggling to attract seasonal employees to replace the temporary foreign workers that at the time had been banned from entering the province due to COVID-19. Premier Blaine Higgs even launched a campaign to persuade unemployed New Brunswickers to take up the jobs normally filled by temporary foreign workers, mostly in the agricultural and food processing sectors. The campaign was largely unsuccessful – although some vacant positions were filled by local youth (including preteens), not enough New Brunswickers heeded the call, and the province once again opened its borders to temporary foreign workers.

Although the COVID-19 pandemic has exacerbated labour shortage issues this year, the problem won’t go away when the risk posed by the coronavirus has passed. Premier Higgs blamed the federal CERB program, which provides furloughed Canadian workers $500 a week for 16 weeks, arguing it was creating an incentive for people to stay home. Food industry employers have echoed this sentiment in recent months.

But the difficulties faced by food processing plants to fill vacancies didn’t appear suddenly as a result of the pandemic: the manufacturing labour force has been tightening in New Brunswick for a while. It’s predicted that there will be 10,000 job openings to replace exiting manufacturing workers over the next 10 years. Meanwhile, the number of workers aged 15 to 64 for every resident over age 64 is expected to fall from 4.5 in 2009, to 3.1 in 2018, to 2.3 in 2027. Labour market entrants from the New Brunswick population are predicted to meet 55% of the job openings. Immigration at current levels of 4,000 people per year will address 10% of the replacement demand after backfilling for the assumed continued out-migration. That leaves a gap of 34% between projected labour demand and labour supply (see also: “manufacturing”). Whatever competitive advantage New Brunswick once had from labour abundance is disappearing as manufacturers compete for labour.

As we head into another provincial election, a key question should be “How does NB let this keep happening?”

The risk of labour shortages forcing companies to move operations elsewhere has been raised before. Last year, participants in the JDI Roundtable Forum discussed the labour force challenges facing New Brunswick manufacturers and what can be done. One of the major action items coming out of the event was to Identify who owns and/or leads workforce development in New Brunswick. Research interviews and panel discussions showed that, from the employer’s perspective, there is a lack of clarity about which arm of government is responsible for labor force development.

Stakeholders asserted that government needs to establish one clear and unambiguous owner/leader of workforce development in New Brunswick, with direct reporting lines from other departments if necessary. They came up with the following action items for the owner/department responsible for workforce development:

  • Set employer-focused priorities and measures for investments in training and immigration strategies;
  • Lead government, education/academia, and employers in action-oriented discussions to identify workforce needs;
  • Direct action on workforce needs through education, post-secondary education, training and immigration programs;
  • Promote jobs/needs in demand and increase the value and perception of trades and jobs in manufacturing; and
  • Increase the diversity of the manufacturing workforce.

Successful workforce development programs have been implemented in other jurisdictions with significant impact on the local economy. New Brunswick should study the Georgia and Virginia workforce development models with a view of determining whether a similar model is feasible in New Brunswick. If not, the government should find a better model and make it happen.

If we have not progressed on those basic steps, then when will actions be taken? And until then, what can GNB do to support Cooke Aquaculture and other exporters in the province find the workers that they need?

Most policy solutions to labour and skills shortages, such as changing immigration programs and seeking an alignment of PSE programs with labour market needs, are slow to implement and are not likely to provide much immediate relief for manufacturers in the province. Our past research proposes shorter term action items for the Federal and provincial governments to tackle these issues and help manufacturer cope with current labour shortages:

  • Data: Governments need to pick up the pace of policy development and reforms with respect to growing labour supply. They should monitor labour market changes and make labour market indicators (LMIs) publicly available;
  • Technology: Governments also need to create policies and conditions to spur investment in labour saving technology to raise labour productivity and reduce the high degree of labour reliance of many of the province’s producers; and
  • Workforce preparation: Government needs to provide information and tools to equip newcomers for the job market and mobility in the manufacturing sector. Employers need to collaborate with training institutions and newcomer orientation bodies to prepare new labour market entrants.

A year has passed since we shared the recommendations listed above. Beyond unsuccessful campaigns for unemployed New Brunswickers to take the jobs that are available, what policy-level actions has the government taken to address what’s turning into a chronic labour supply problem?

August 25, 2020

Dr. Sarah McRae is a postdoctoral fellow at the University of New Brunswick and a member of the JDI Roundtable research team.

The JDI Roundtable on Manufacturing Competitiveness in New Brunswick is an independent research program made possible through the generosity of J.D. Irving, Ltd. The funding supports arms-length research conducted at UNB.

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