In 1886, the newly built town of Calgary Alberta held the first of what would become an annual event celebrating agriculture producers in the West. Since then, the Calgary Stampede has expanded to include livestock, rodeo showmanship and a celebration of what makes Western Canada so special. The need for a communal show of support really hit home in 2016 after the devastating fires in Fort McMurray, northern Alberta and Saskatchewan. The fires caused an estimated $9.9 billion in damages, drove whole communities from their homes, destroyed thousands of forested acres and wreaked havoc with the oil and gas industry.
Two years later, still in recovery, the region, like the rest of Canada, has been hit by political protectionism unleashed by the U.S. Canada joins other previous American allies and trade partners scrambling to rationalize and manage the impact to our economies and industries in the face of radical, erratic change. That’s not even taking into account what part, if any, environmental issues and climate change will play in the new world order.
what do the US tariffs mean for the west?
The fate of Canada’s west has been thrown back into uncertainty. After the recent economic downturn, Canada’s west was finally back in recovery mode. The price of oil per barrel was stabilizing, employment was up, and all signs were pointing to a rebound. With an escalating trade war possibly on the horizon, those things are in doubt once again. And with trade escalation becoming the new ‘normal’, they’re unlikely to happen any time soon.
A 2015 Labour Market Report issued by Engineers Canada (Engineering Labour Market in Canada: Projections to 2025) predicted a shift in economic activity to Western Canada, a shift that would attract engineers to the regions. How naïve that seems now that the US recently initiated 25% and 10% tariffs on Canadian steel and aluminum imports respectively. Globally, the entire oil supply chain relies on steel and aluminum, along with the automotive and industrial sectors. Even with Canada’s retaliatory tariffs on a broad range of goods from the US, this is going to hurt.
Engineers from all disciplines were once drawn to the West’s rich, limitless natural resources, federal investment in research and development, and NAFTA agreements that allowed for a steady flow of goods and materials between us and our major trading partner. That’s shaping up to change.
the skills gap is growing in engineering
Like many of their cohorts across Canada, engineers are retiring, leaving gaps in industries reliant on civil, mechanical, electrical and computer skills. While many of these gaps are being filled by inter-provincial mobility, fewer engineers are finding Western Canada an attractive career destination in light of the effects on industry and business by recent changes to import/export tariffs and taxes, and the abolition of long-standing trade agreements. More Western businesses are relying on internationally educated engineers to fill their requirements, and initiate, complete and monitor projects.
The Canadian government continues to assert Western Canada is still attracting businesses because of its “abundant natural resources, thriving technology and service sectors and low business costs.” To its credit, the federal government is putting its money where its mouth is. In 2016, Western Economic Diversification Canada (WD) funded support to Canada’s aerospace industries, where Western Canada is a major player in maintenance, repair and overhaul services for the industry. This is a forward-moving industry that may ride the tides of change more successfully than others, and good news for aeronautical engineers.
it’s not all bad news for the west
On a more positive note, the Financial Post reported in April 2018 that the energy sector is expected to modestly rebound after three straight years of losses. Alberta remains Canada’s largest employer of petroleum engineers, and there’s hope these specialists will find the quality of employment they seek.
Economist Peter Tertzakian predicts those industries that are creative, flexible and innovative will likely survive. He calls it becoming lean and mean, being disciplined in costing, increasing efficiency and ensuring operational excellence, something industrial producers in the West are already familiar with. This will put them in good stead in a long-term, globally competitive arena, especially should the US trigger the next worldwide recession. Similarly, it’s critical Canada finds and develops new trade relationships and builds infrastructure to facilitate trade beyond North America. Engineers, along with Canadian professionals of all disciplines, are counting on it.
The current political and economic situation is like riding a bronco at the Stampede – rough, bone-jarring, and only for the fittest, most agile and best equipped to hang on tight and ride it out. And ride it out we will.