Who will build LNG plants?

The cornerstone of the B.C. Liberal government’s long-term economic strategy is an expanded liquefied natural gas industry, but a new study underscores how shaky some of the assumptions embedded in that strategy are.

The study, commissioned by the B.C. Natural Gas Workforce Strategy Committee, estimates that an eye-popping 75,000 skilled workers will be needed once five LNG plants are operational. As well, a further 60,000 workers will be needed in the construction phase.

This represents an enormous amount of skilled workers. Of course, the study is optimistic that all five LNG plants will come in line within a few years, which is by no means guaranteed.

But if even two or three plants become reality, a large number of skilled workers will be needed. This underscores the urgency of the need for government action and funding to address the looming skills shortage that will soon confront British Columbia.

I’ve written before how our changing demographics are working against us when it comes to skilled trade workers. Recent Statistics Canada data shows about two-thirds of those workers in B.C. are over the age of 45, which means many of them will soon be approaching retirement.

Compounding the problem is that those retirees will take with them their years of experience. This means foremen and other managers will start leaving the trades at a disproportionately higher rate than those trained but inexperienced workers who enter the profession.

The government, in its recent Throne Speech, promised a “comprehensive 10-year skills-training plan” that presumably will deal with

this looming crisis. So far, however, we have yet to see any details of that plan.

And the government doesn’t seem to have a lot of room to move on this front any time soon. It is desperately trying to balance its budget, and the three-year fiscal plan shows that funding for advanced education – which funds skills training – is actually set to decline by more than $40 million over the next two years.

The fact the government appears locked in a fiscal box for a few years suggests it may want more say in how universities, colleges and institutes spend the dollars it allocates to them.

For example, given that there is a surplus of teachers in B.C., is it wise to continue to fund as many people to become teachers? Or should some of that money

be redirected into training people for professions that will provide well-paying jobs for years to come? Post-secondary institutions jealously guard their independence, but I have to wonder whether the government that funds them will start providing that funding with some strings attached.

If a strong liquefied natural gas industry is indeed the key to B.C.’s economic future (and many, such as Green Party MLA Andrew Weaver, are very skeptical about that claim), and if it does require thousands of newly trained workers, the B.C. Liberals better get moving fast on that file.

Hopefully, we’ll have some idea what that 10 year plan for improving skills training will look like in the fall. If I was a university president, I might be a bit nervous about some of the things that may be part of it.

   The old debate over where B.C. Ferries should build its ships has resumed with news the company will need three more vessels.

Some, such as the NDP and the B.C. Federation of Labour, are demanding they be built in B.C. shipyards. Others, like Transportation Minister Todd Stone, say it’s up to B.C. Ferries to decide.

Understandably, B.C.

Ferries wants competitive bidding on the projects, which means shipyards in Europe can bid – a German shipyard built the three “C Class” ferries a few years ago. The NDP’s argument about the economic spinoffs that would come from building them in B.C. mean nothing to B.C. Ferries, since those spinoffs have nothing to do with their bottom line.

In fact, allowing only B.C. shipyards to bid on the vessels’ construction would dampen the competition, since the B.C. yards would have less motivation to submit lower bids, given that rivals in Germany were being shut out.

It’s likely the B.C. shipyards will bid on the vessels, and I suspect they’ll have a better chance of landing the contracts this time around. The vessels are smaller than the C Class ones, and the shipyards’ own infrastructure has expanded and improved since landing those big federal government shipbuilding contracts a couple of years ago.

In other words, they are probably more competitive now – which means they may not need the inside deal the NDP and labour are demanding.