Two years after winning a portion of $38.3 billion worth of federal shipbuilding work, North Vancouver's Seaspan says it's well on its way to ramping up infrastructure and hiring more than 1,000 new employees.
"Our build-up is controlled," Seaspan president Brian Carter told Business in Vancouver. "We have 150 people in our production workforce today, and that number will grow over the three or four years starting in 2014 to about 1,000."
On October 19, 2011, the federal department of public works announced that Seaspan's Victoria and North Vancouver shipyards and the Irving shipyard in Halifax would each get a portion of the work. Irving will make combat ships; Seaspan will manufacture civilian vessels.
Since then, the two shipyards have invested hundreds of millions of dollars into expanding and updating their yards. Seaspan has already been awarded 17 vessels, with 10 of those (worth $3.3 billion) announced on October 7.
The federal shipbuilding procurement program will spread the work out over a 20-year period. The endgame is to create enough new Canadian shipbuilding capacity to allow the country to compete with Germany, Finland and other major shipbuilding nations.
Germany and Finland currently lead the world in building specialty vessels like icebreakers and ferries; South Korea and China dominate in manufacturing container ships.
But in order to compete with those countries, B.C. is going to have to do much better in training the next generation of skilled tradespeople.
"I don't think we have enough people in the long run," said Tom Roemer, vice-president of strategic development at Camosun College, which has teamed with four other colleges to offer specialized shipbuilding training in anticipation of the federal work.
"The same people are needed in LNG, pipelines, oil and gas exploration, shipbuilding, the aerospace industry, and the construction industry," Roemer said.
According to Carter, the company said thus far hired 65 engineers, planners, project managers and procurement professionals.
Seaspan's hiring practices up to this point show the rustiness of Canadian shipbuilding: while many of the procurement staff could be found locally, Seaspan has recruited internationally for engineers and project managers with shipbuilding experience. Those people have been found in the United Kingdom, the United States and South Korea.
However, when it comes to the next batch of hiring – 1,000 electricians, mechanics, welders and metal fabricators – Carter believes the company will have no trouble finding those people in B.C. and Alberta.
"There are a lot of trades that are attracted to major oil and gas projects, mostly in Alberta, that have gone there [and] made the money, but are now looking for more of a family life," he said.
Carter also noted that the company has already successfully increased its Victoria shipyards workforce to 1,200 from 400.
But Roemer questioned whether depending on taking workers away from another industry is sustainable over the long term.
"We need to invest in creating a stream of people. We cannot expect that people will come from the oil patch and work for us just because we're in Vancouver. The wages will always be higher in the north."
Over the past three decades, large companies have become increasingly reluctant to hire apprentices, who must complete a combination of workplace and school training.
Roemer said private industry in B.C. needs to commit to take on more young apprentices and help to pay for training. Companies have failed to strategically hire apprenticeships in anticipation of big contracts, leaving it to the public post-secondary system — which expects $46 million in cuts in the next two years— to fund the cost of non-apprentice foundation programs.
He also thinks B.C. should take a page from countries like Germany, where companies are much more committed to the apprenticeship model (see sidebar).
Seaspan has averaged 100 apprentices a year between its North Vancouver and Victoria facilities over the past three years, said a spokesman, but has yet to determine whether that number will increase during the expected hiring boom.
Worker housing a challenge for tony North Vancouver
North Vancouver is well prepared for some of the increased infrastructure needs that will come with increased shipbuilding activity at Seaspan's drydock and shipyard, said Richard Walton, mayor of the District of North Vancouver.
Yet to be solved is the question of where all those new workers will live and how they will get to work if they can't find affordable housing in pricey North Vancouver.
"There's going to be a lot of young people who need a place to live. There may be an argument for working with Seaspan, looking at worker accommodation, much like Whistler," Walton said.
The Whistler Housing Authority provides 1,900 units of price-controlled housing for people who work in the resort municipality.
If a housing solution can't be found, North Vancouver could miss out on a major economic boost.
"For us to have a ton of young guys bringing their cars from Surrey and Langley each day to work is not going to put much into our economy," Walton said. "Those paycheques are going to go back to Surrey."
In North Vancouver, single detached houses average $953,600 compared with $568,600 in Surrey, according to the Real Estate Boards of Greater Vancouver and Fraser Valley.
Canada's productivity gap: a more robust apprentice system could help
If Canada truly wants to compete with other shipbuilding nations, that will mean reforming our apprenticeship system, said Tom Roemer, vice-president of strategic planning at Camosun College in Victoria.
Along with his counterparts at the British Columbia Institute of Technology, Roemer recently toured Korea, Germany and Finland to see how those countries have trained the next generation of shipbuilders.
In Germany, for instance, companies take on many more apprentices. The apprenticeship system also extends beyond the trades to fields such as banking.
"The German industries are more aware that in order to keep high productivity up, they have to create a constant supply of highly qualified individuals," Roemer said.
For several decades, Canada's productivity has been lower than other countries. Economists and policy-makers have identified it as a key factor affecting the Canadian economy. In a report published this March, the Conference Board of Canada said Canada's productivity had improved only 0.8% in 2012. While the rate improved compared with other nations, that was only because productivity worsened in those countries.
"What we need," Roemer said, "is a provincial discussion on productivity: how to produce goods at a very high quality in a sustainable manner so it doesn't get too expensive for the end user."
