When most of Canada was suffering from a severe labour shortage, the effect on the mechanical insulation trade was mixed. Some industry experts say last year’s boom left all trades in a “state of emergency” when it came to stabilizing a skilled labour force; other contractors say they never felt the pinch. Now, as Canada’s economy takes another potentially perilous turn, insulators are facing new challenges. Shelved contracts, outsourced labour, and growth in new industries are inspiring both caution and careful optimism among industry experts, though one thought seems to be shared across the board—now is not the time to take jobs for granted.

Maintenance contracts, growth in the power industry, and government announcements to put money into infrastructure development are all indicators that the trade’s labour force will remain in rotation and most contractors will manage to keep busy, at least for now. Next year might be a different story, as the effects of Canada’s economic downturn may not trickle down to insulators until then. A delay is expected between projects scheduled to wrap up at the end of 2009 and those that were supposed to start next year, but have been put on hold.

Power-related industries may be the saving grace in Ontario, says Jim Flower, president of Pro Insul, which has offices in Ontario, Alberta, and the Maritimes. He says although there has been a slight decline in activity in that province (mainly in the auto and steel sectors), the market there is “almost business as usual” because of the activity in power generation.

New units are scheduled at the Darlington power plant, and rehabilitation projects are also planned at Darlington, Pickering, and Tiverton, ON, says Joe de Wit, labour relations manager for Crossby Dewar. His company hasn’t had any trouble maintaining a labour supply over the past year, and doesn’t foresee any in the future. He does note, however, that some of the bigger projects aren’t scheduled to begin this year or even next, which is causing some concern for the short term.

“People are worried,” says de Wit. “But as long as the work comes out and the projects keep coming, everything should be okay.” He adds that infrastructure funding should also have a positive effect on Ontario’s insulation industry as it aims to build more hospitals and retrofit older buildings.

B.C. contractors like Vancouver-based Ron Russell, owner of New Central Mechanical, still seem to remain in the economic “bubble” the province is famous for. Despite having some projects cancelled or put on hold, Russell’s crew has remained the same and his employees shouldn’t worry about lay-offs, he says.

“We haven’t slowed down at all. I’ve had the same crew for five years, and we have enough projects ahead that we haven’t had to make changes,” he says. With anywhere from six to 10 jobs closing daily, Russell doesn’t anticipate a shortage or overstaffing problems for at least the rest of this year and the company hasn’t had to change it’s bidding practices to stay competitive. “The jobs we have are medium sized,” says Russell, “but we are still doing well. It’s a lot easier for us because we have a low overhead.”

Between B.C.’s infrastructure announcement and bids closing soon on two large projects that won’t begin until 2010, Russell believes Central Mechanical will “cruise right through the media-hyped economic downturn.”

Like Russell, Brad Haysom, owner of Tight 5 Contracting in Burnaby, BC., has enough work lined up to keep his team busy for at least two years. Though the company recently had two large jobs and one medium-sized project shelved, Haysom says the future is still bright as Tight 5 heads into the remainder of 2009 with a full docket. But the bubble may burst going into 2011, he says, when the slowdown finally makes its way into his industry. “I think that at that point we may be scrambling to keep people employed. Then again we made it through the mid-90s as a company half the size it is now.”

If anything, the downturn is in some ways perpetuating last year’s skilled labour shortage as more and more laid off workers start businesses of their own and compete for the same projects. “Unfortunately some of these new companies are a little less skilled than established businesses and lower the market value of projects,” says Haysom.

A year ago Western Canada was in what Tony Ceraldi, international vice-president International Association of Heat & Frost Insulators Union calls an “emergency situation” when it came to the region’s labour supply. Workers were brought to Alberta, mainly from the Philippines, Korea, and the U.S. to work in Ft. McMurray, among other places. As jobs were completed they were sent home, but when the oil industry began slowing down near the end of the year, unemployment came with it.

Ceraldi says this post-boom period was a lot like falling off of a big mountain: “As soon as everyone got to the top it was a quick slide down, a long way down, and in a big hurry to the amazement and surprise of everyone.”

But some say B.C. has been so over heated that past 18 months, its recent slowdown has basically just brought it closer to “normal” pre-boom levels. This is likely where things will stay for the rest of 2009 and some of 2010, says Ceraldi, noting that as long as there are industrial commitments on the drawing board, insulation contractors should be okay. For now, provincial commitments like the replacement of an aluminum plant in Kitimat may have slowed down, but are still active. “As long as projects like this are kept on the active board, they will keep a number of people busy,” says Ceraldi.

The commercial market is a different story. Ceraldi says it’s been “devastated” nationally by cancellations, a number of which were in BC. “They aren’t just closed completely; they are closed for lack of funding. [That sector] is not going to be as big for us in 2009.”

B.C. housing condos aren’t expected to see a rebound until 2010 or later, he says, noting the situation is the same in Edmonton and Calgary. Saskatoon and parts of the Maritimes are actually seeing increases in housing, mainly because of growth in their industrial sectors including a rapidly expanding potash market and new Co-op refinery in Saskatoon, the Voisey’s Bay nickel smelter in Newfoundland, and various projects in New Brunswick. “2010 is really the year we may see a comeback in all trades,” says Ceraldi.

Some industries are taking advantage of the rest period offered by the economic shift. Refineries in Alberta are using the availability of skilled labour and low price of oil to schedule upgrades and equipment refurbishing for this year and next. “These are big jobs for all trades,” says Ceraldi. “Some shutdowns are already scheduled for 2009.”

This is part of a general trend reflected in pockets of steady employment across the country that are mainly focused on large industrial projects that won’t complete until the end of 2009 or later. The Irving’s refinery in New Brunswick and the new expansion on a Shell Scotford refinery just outside of Edmonton are cases in point. But whether as many people as in years past will be willing to relocate for here-and-there employment remains to be seen.

The federal mobility grants of the 90s are long gone, and though last year in some industries the cost of moving people was priced into the job, it’s difficult to say whether that will be the case in the coming months. Some unions offer assistance with relocation, but that may not be of use to those who have been away from home long enough to set down roots.

A case in point is Manitoba, which is still experiencing a labour shortage in its mainly government-funded commercial market. “We have a windfall of work happening here, more than we normally have,” says Robert Gray, owner of Thermo Applicators based in Winnipeg and chair of the Manitoba Insulation Contractors Association. The province has two new correctional facilities, upgrades to the airport, and the Museum for Human Rights underway with no signs of slowing down. The problem, says Gray, is that many insulators left to go to Alberta, where they’ve purchased houses and made other commitments and are choosing to stay and wait out the economy. Gray hopes the shortage will begin to turn around as Manitoba’s newly developed apprenticeship program gains traction.

The Maritime provinces are having the opposite problem. New Brunswick, for instance, is 95 percent industrial work with the country’s largest refinery, pulp and paper activity, and a thriving power industry creating viable opportunities. However, the Maritimes as a whole had the most people in Alberta during the boom, says Flower. When things started to slow down people began to “trickle home,” only to find most of the jobs at the larger projects already taken.

“All of the insulators were gone when they needed them,” says Flower. “So they brought workers in from Europe. Now, even though people are going home [from Alberta], they are on the unemployed list because foreign workers are doing the work there.”

There is, of course, a bright side to the downturn, especially in places like B.C. and Alberta where the economy has been running on overdrive for the past two years. “This is a good thing from an owner’s perspective,” says Flower. “The costs were terrible, and with everything running ahead of schedule, labour shortages, and the pressure to do projects before the engineering was even done, the costs were exceeding the owner’s expectations.

“Now they have some breathing room. Engineers can catch up, the environment is a little more competitive, and though there is a lull, they have the capacity to do what they have started with good people and mostly just native Albertans, rather than people from across the country.”

Gray also notes the downturn can make the industry stronger as demand for energy efficiency grows, especially among commercial building owners who are more likely to skimp on insulation to reduce costs when the money is flowing freely.

Ceraldi says one of the growth areas for work opportunities for insulators and all trades is maintenance contracts, the largest of which are in Ontario, Saskatchewan (in potash), and in Alberta’s oil and gas industry. Flower adds that Manitoba and Saskatchewan are becoming more desirable work locations because they don’t have the same “wild fluctuation” as markets farther west. He also sees the current situation as a return to normal levels of activity, and the next 18 months as simply a pause before things get busy again.

“It’s a time for everyone to catch up on some things they didn’t have time to do when they were busy,” he says. “The projects on the go, in Alberta in particular, are all fairly long, and the ones that were delayed over the last six months might be delayed six months or a year, but will pick up again.”

It’s not going to be 100 percent employment, but it’s getting back to a traditional level, he adds. “The impact to us as insulation contractors won’t be felt immediately once the projects start again, but down the road, yes ... things will proceed as is for year or 18 months, but by end of 2010 and in to 2011 things should be back to normal.”

In the meantime, Gray advises contractors to keep treating their employees well in hopes they will stick it out in places where activity is slow. Ceraldi says the onus is also on employees to keep from taking their jobs for granted.

“Last year [insulators] had jobs of their choosing,” he says, “but this year the jobs they take they’re going to want to hold on to. In 2009 contractors should at least be able to put workers into rotation, but the reality is that they might be unemployed for a while [in 2009].” 