Wednesday, November 14, 2012

On the Albertan advantage over the United States

Back in 2006 and 2007 I blogged about how the demographics of the Canadian province of Alberta were being altered by that province's substantial oil-driven prosperity, attracting migrants from across Canada. Ricardo Lopez' Los Angeles Times article "Canada looks to lure energy workers from the U.S." is the first article I've seen talking about Americans being attracted to Alberta.

With a daughter to feed, no job and $200 in the bank, Detroit pipe fitter Scott Zarembski boarded a plane on a one-way ticket to this industrial capital city.

He'd heard there was work in western Canada. Turns out he'd heard right. Within days he was wearing a hard hat at a Shell oil refinery 15 miles away in Fort Saskatchewan. Within six months he had earned almost $50,000. That was 2009. And he's still there.

"If you want to work, you can work," said Zarembski, 45. "And it's just getting started."

U.S. workers, Canada wants you.

Here in the western province of Alberta, energy companies are racing to tap the region's vast deposits of oil sands. Canada is looking to double production by the end of the decade. To do so it will have to lure more workers — tens of thousands of them — to this cold and sparsely populated place. The weak U.S. recovery is giving them a big assist.

Canadian employers are swarming U.S. job fairs, advertising on radio and YouTube and using headhunters to lure out-of-work Americans north. California, with its 10.2% unemployment rate, has become a prime target. Canadian recruiters are headed to a job fair in the Coachella Valley next month to woo construction workers idled by the housing meltdown.

The Great White North might seem a tough sell with winter coming on. But the Canadians have honed their sales pitch: free universal healthcare, good pay, quality schools, retention bonuses and steady work.

"California has a lot of workers and we hope they come up," said Mike Wo, executive director of the Edmonton Economic Development Corp.

The U.S. isn't the only place Canada is looking for labor. In Alberta, which is expecting a shortage of 114,000 skilled workers by 2021, provincial officials have been courting English-speaking tradespeople from Ireland, Scotland and other European nations. Immigrants from the Philippines, India and Africa have found work in services. But some employers prefer Americans because they adapt quickly, come from a similar culture and can visit their homes more easily.

The Canadian-American border is porous, and throughout its history has not been much of a barrier to migration whether we're talking of Americans moving north or Canadians moving south. If traditionally the flow south to the United States has been greater than the flow north into Canada, that relates to the tendency for the United States to be a more attractive destination for migrants, offering higher wages and whatnot, than Canada. (In a historical coincidence, Alberta and its neighbouring province of Saskatchewan once saw substantial American immigration, a consequence of the agricultural districts of those two provinces being opened up to colonization at the end of the 19th century as adjacent districts of the United States were finishing up the process.)

Alberta's ongoing labour shortages are a matter of public record.

Alberta has the highest job vacancy rate in the country, according to the Canadian Federation of Independent Business, and that is translating into close to 55,000 unfilled private sector jobs.

The CFIB said Tuesday that as Canada’s labour markets continue to recover from the 2008-2009 recession, the percentage of unfilled private sector jobs increased slightly from 2.3 per cent in the second quarter to 2.4 per cent in the July-to-September period.

The latest 2.4 per cent vacancy rate is equivalent to about 275,900 full- and part-time private sector jobs, said the CFIB. Canada’s construction industry has the country’s highest sectoral vacancy rate (3.7 per cent), although hospitality (2.9), agriculture, forestry and fishing (2.8), oil, gas and mining (2.8) and professional services (2.7) are also high.

Alberta and Saskatchewan have the highest vacancy rates (3.6 per cent each), while Newfoundland and Labrador (2.8) is also above the national average. Quebec (2.4), Prince Edward Island (2.2), Ontario (2.1), Manitoba (2.1), British Columbia (2.1), Nova Scotia (1.9) and New Brunswick (1.8) either match, or fall short of the overall rate.

“The smallest firms have the highest job vacancy rate and are being hit the hardest by labour and skills shortages,” said Richard Truscott, Alberta Director for CFIB. “The considerably higher rate in Alberta also clearly refutes the assertion by some labour leaders that there isn’t a shortage of qualified labour in our province.”

[. . .]

Ben Brunnen, chief economist with the Calgary Chamber of Commerce, said the vacancy numbers are consistent with the strong economic growth the province is experiencing.

“If the global economy remains stable, labour shortages are going to be the single greatest impediment to economic growth confronting Alberta. These vacancy numbers demonstrate that,” said Brunnen.

“It’s very possible that we’re right at a peak level of vacancy rates for the province … The global economy is at its highest risk of going into a recession since four years and we’ve seen some of the investment numbers for Alberta stabilize a little bit. However, we also are seeing the greatest period of net interprovincial migration since 2006. So that means people are coming to fill the job vacancies. We might see a bit of a plateau in terms of the total jobs created right now. So hopefully we’ll see a bit of an alleviation in the next few months of the labour shortage in Alberta.”

But if the global economy remains relatively stable and the United States economic picture is strong, the labour challenge could persist for Alberta employers, added Brunnen.

What's interesting to me is the extent to which these shortages are attracting substantial numbers of American migrants, a product of strength in Alberta and weakness in the United States. It'll be interesting to see where this goes in the long run, since as Brunnen notes the direction of the American labour market matters substantially.

(I'm also curious about American reactions to emigration as an idea, not least in the context of American exceptionalism and the sense that, generally, the United States is one of those countries that people travel to in order to find their fortunes, not the other way around. How is this limited change being received?)


Richard said...

Do Americans even notice?

Alberta has 55K unfilled jobs. California has 1877K unemployed people.

If every single vacancy in Alberta was filled by Californians, the unemployment rate in that state would drop all of 0.3%.

Literally a drop in the bucket.

Noel Maurer said...


Can you reformat this with paragraphs? I can't read it as-is.


Noel Maurer said...

Ohhh, my head. OK, considering that I just skimmed the piece, the answer is clear.

(1) What Richard said;

(2) Even if it became significant, Americans would not consider emigration to Canada to be emigration.

Which is exactly the same attitude you have up there to migration to the U.S. of A.

Deep down, most citizens of both countries just don't consider the other to be a foreign place.

I'll present evidence of that assertion if you tell me that you think it's wrong. But I think you can guess the first two words of my answer ...

Randy McDonald said...

Reformatted. Still getting used to the new Blogger format--so much less intuitive.

Colin said...

According to Wikipedia, there are 6 million US citizens living outside the US, excluding military personnel. There are thought to be over a million living in Mexico alone. Alberta isn't just small potatoes compared to the US labour market, it's pretty small as a component of American emigration.

Anonymous said...


It is likely that most of those US citizens living in Mexico are originally Mexicans who have obtained US citizenship.

There are about a million US citizens living in Canada. But there are also about a million Canadian citizens living in the US - a much higher percentage of the Canadian population.

What`s interesting is the direction of the flow which varies according to economics or politics.

tag1555 said...

Not to mention that there's similar jobs to be found in the States now, with the North Dakota oil boom and the new natural gas fields opening up in the Marcellus Shale. No need to cross the border for employment, once you've made the decision to work in this sector.

John Belshaw said...

Americans have historically constituted one of the larger immigrant groups in Canada. They come to our country, take our jobs, marry our womenfolk ... no, wait, that's not right. That's Albertans moving to BC. And they take our tee times.

Seriously, if movement across the Medicine Line doesn't seem like immigration, Noel, it's because return trips are so easy. "Emigration" in Canada and the US -- as a concept -- seems to involve either an ocean or a fortified border. And both countries suffer from so much hubris that the very idea of someone leaving is anathema.

As to the "Alberta advantage," movement over the border has always been controlled by the phases of the moon as much as the economy -- it's a flow back and forth. It's in the nature of booming economies like Alberta's, however, to toot their horn as long and as hard as they can. And Albertans have always admired America -- so having Americans migrate their to work is like validation.

Jeremy Norton said...

Well Alberta is superior than other states in the US.