Human Resources Committee on Feb. 29th, 2012

[Gary Merasty]

I think one of the big issues for grade 12 graduation in our communities is funding adult students, and this is one of many, but I'll give you an example.

If you went into any of the northern first nations schools and entered a grade 10 classroom in September, you would find students standing up with their books all around the classroom because there are not enough seats. The reason, and maybe it's because of the effects of poverty, is that there have been a lot of dropouts in earlier years, through the middle years perhaps. Basically we fail those kids, and they quit again by October. This is a huge lost opportunity for us in terms of a portable and a mobile and available workforce, because these are younger adults who need that grade 12 to get into the trades.

One of the things we'd like to see is actually targeting those young adults who are coming back to challenge the high school system, to have the opportunity to get some pre-trades and early trades training, maybe at the community level, as was mentioned before, and mobilize them into the workforce.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

I think, as Mr. Scott pointed out, the retention rates when you hire northerners is significantly higher.

Mr. Stewart or Mr. Scott, do you have a comment on K to 12?

[John Stewart]

I could just mention a couple of other things, which is about the motivation element. Rather than adding bricks and mortar, I would explore—and I'm not an expert in the subject—looking at the actual behavioural elements of the students and what is motivating them, what is their desire when they come into the class, and what keeps them there.

I'll pass on to my colleague.

[Ryan Land]

I would add that really for us what we're finding is that it's as much about exposure as it is other factors.

In the north, in many of our communities, even though we are one of the largest, if not the largest, employers in our region, most of the students in our first nations communities don't know that mining is an option. They know about health care, they know about the RCMP, they know about working in the band office, or maybe for hydro, but they're not aware that this is one of the options.

When you know what's at the end of the road, motivation kicks in from an educational perspective. We need to provide them with that full slate of options. And it's through partnerships like we have with the National Aboriginal Achievement Foundation, where we facilitated the creation of a careers in mining modular curriculum that can go into classrooms in aboriginal communities and show students that not only is there an option, but they can be doing that for a living.

That's some of the work we're trying to do, enabling programs like the skills and partnership fund, the work that CAHRD is doing, the work that sector councils are doing, to raise that awareness and exposure that there are jobs and there are opportunities in the north.

We'd love to be hiring northerners to do those jobs.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Do I have time?

[The Chair, Conservative, Ed Komarnicki]

No, you don't.

Mr. Butt, go ahead.

[Brad Butt, Conservative, Mississauga—Streetsville, ON]

Thank you very much, Mr. Chairman, and thank you all for being here, those in person and those by video conference. It's a great thing we have now so that we can hear from people across the country when the rest of us are all here in Ottawa. So welcome to everybody and thank you for your participation.

I think it was Mr. Scott who mentioned the 50% turnover of people working for you in these remote communities. I come from a business background, and I'd like you to comment on this. I'm assuming it makes better business sense and is actually more cost effective for you to hire people who are local rather than to fly people in from all parts of the country—you have to find them a place to live; they've got to move their families. It would make business sense, one would think, to hire as many people locally as possible to do the work in all these areas, whether it be in a mine, or a factory, or a smelter, or whatever it happens to be.

Could you comment on that? When you've looked at that type of analysis, I'm assuming it makes a better business case to hire locally where you can, rather than trying to get people in from all over the country, or from around the world, potentially. As we know, some industries rely significantly on foreign-trained workers to come over because they can't get people with the required level of skilled trade here in our country to go and work.

Can I get each of you to comment on that and whether you're got any suggestions about what we can do more specifically to be getting local people to be working in these industries?

Do you want to start, Mr. Scott? Then we can work our way around.

[Wayne Scott]

Sure. Thank you.

It absolutely makes business sense. One point of clarification, though, before the full committee believes that our Thompson operations have a 50% turnover every couple of years. Just for clarity, the 50% turnover is new hires. So in the first two years of employment we lose 50% of that particular population. We have a fairly stable workforce who are long-term residents of Thomson, and so on. It's still very alarming. I think our Thompson facility has the highest turnover rate.

Compare that to a Voisey's Bay environment, where the majority, upwards of 85% to 90%, of the workforce is from the local area, the province of Newfoundland and Labrador. The turnover rate there is 5% to 6%, quite dramatically lower.

No question, it makes total business to invest locally. And investing is not just the hiring of those people; it's investing in the training of those individuals. You are far better off at the end of the day with a more stable workforce, a long-term workforce. They're individuals who have made the decision to reside in a northern area. They like it. They've got the ties to the area. It makes far better business sense to invest locally, yes.

[John Stewart]

I'd just mention a few things, which largely have already come up.

There's the motivation factor, which I've discussed, exploring what it is that students are after or that graduates are after when they come.

Building trust and comfort with industrial employment—a company may be entering a community where there are various negative historical factors, and one of those negative historical factors could have been a negative experience with industry. So of course our member companies spend a long time building relationships and building up that trust.

Understanding the local environment and allowing for local factors—this goes back to what previous witnesses have called the “made in northern Canada” approach; you want to allow for local lifestyles and habits and be prepared for things such as seasonal pursuits, where for a month every year people are going to go off and do some specific seasonal activity. A company that has done its homework will be aware of those things well ahead of time and will build that into the whole structure, and so will educators.

[Brad Butt, Conservative, Mississauga—Streetsville, ON]

Did the group in Saskatchewan want to jump in on that?

[Gary Merasty]

Sure, I'll jump in on that. I absolutely agree 100%.

As I mentioned, one of the reasons why we do have over 50% of our employees from northern aboriginal Saskatchewan is because of that homegrown training and the efforts undertaken there over a number of years. I think that is why we say it's a competitive advantage to us as a company: the loyalty and the retention rates. I agree with my colleague sitting there with you in Ottawa today that the retention rate is absolutely great.

We have great employers over in Fort McMurray. Sometimes the employees we fly in from southern Saskatchewan we lose to the oil sands, but when it comes to our northern aboriginal employees, they don't leave. They're close to home, they've been trained near home, and there's a loyalty, so that is a huge competitive advantage for us as a company.

I just wanted to speak also on the return on investment there, because we're taking individuals who may be below the poverty line, so they're drawing down on welfare and there's a negative productivity situation there for our country and for our province. When we train them, invest in them, and get them to a state of employment, they're then, in large part, middle class. They're contributing. There's positive productivity. So any investments made actually come back to Canada, come back to Saskatchewan, and come back to the company.

So any of the current initiatives mentioned by my colleague Pam Schwann here in terms of supporting the multi-party training plan, the Northern Career Quest ASEP-type programming, or those mentioned by my colleagues there, are absolutely worth the investment, because they pay themselves back very, very quickly, and the taxpayer I think appreciates that.

[The Chair, Conservative, Ed Komarnicki]

Thank you very much, Mr. Merasty.

We'll now go to Mr. Cuzner.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Thanks very much for being here today and also for the video feed from Saskatchewan. I want to remind my former caucus colleague Gary that the camera puts on 10 pounds here, so I'm still lean, mean, and clean at 217.

[Voices]

Oh, oh!

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

I'm going to ask two questions and then back off, because I know we're running tight on time here.

Coming off the discussion and your response to Jean's question with the K to 12 situation, GE was in the other day and they talked a bit about some of their initiatives. They hold camps where they actually engage with the youth in some communities, just to sort of let them know exactly that there is something at the end. Are there any initiatives like these that you see merit in or that you're engaged in currently? If so, could you expand on that a bit? I think that early trades training or a mix of trades training through high schools is beneficial in the food area and beneficial in many areas, and certainly in remote areas that would be beneficial as well.

The other thing is that I think any successful community would have a fair degree of entrepreneurship within that community. With companies coming in, are there particular carve-outs for first nations or local businesses, even if they don't have the capacity to do a complete job? You want to come in and you want to do a specific project in an area. Are there carve-outs for some of the smaller first nations businesses to partner with some of the larger businesses so that you generate work but you continue to develop the entrepreneurship within that community, so that it is a legacy once the project is finished as well?

Could I get comments on either or both of those questions?

[Wayne Scott]

Yes. I have a couple of points.

Is building community capacity business capacity? Absolutely. Voisey's Bay is an example. It's a critical part of the business model that we create business opportunities for aboriginals. That's done mainly through joint ventures. We've had tremendous success there. I think in Thompson—

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Do you target a specific amount?

[Wayne Scott]

No, not a specific amount—

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Not really...?

[Wayne Scott]

—because again, it's what capacity is brought to the table. We still have to ensure that the business is able to operate effectively, efficiently, and so on. But we look for those opportunities.

As a matter of fact, we look for opportunities to broker partnerships, to bring an aboriginal business entity together with another business entity out there in the corporate world. In Thompson, I think we're entertaining similar things like that, of course.

So it's not just about building the employee base. It's also about building that community base, as you referred to, through business capacity and, as you say, the legacy beyond the life of mines.

[John Stewart]

The answer is yes. I know there are such carve-outs for such allocations, but I'm afraid that I don't know the details. I do know that it's considered great for all parties. It builds the whole region if you build these individuals who want to be contractors and individuals who want to create a supplying organization. You make not just that hamlet or that village but the whole region stronger.

I will just comment that this, too, is quite personality driven and has a large motivation factor behind it. It's not something that's for everybody. But there is a certain kind of individual and a certain percentage of employees who have the inclination to do that kind of thing. If they do, then you recognize them and open that door for them.

[Gary Merasty]

I'll answer from our site in Saskatchewan, if I can.

I can give you a chemical example on this front. We have the northern preferred supplier program. We set a target a few years back: 35% of all goods and services provided or required at our mine sites would be provided by aboriginal-owned companies. But we put a caveat on what an aboriginal-owned company is. It was one that is 51% or more owned by an aboriginal community or individual, so that there's real capacity and real management developed there, and so on.

Through our northern preferred supplier program, we work with our communities to do forecasting of business opportunities. We do workshops on how to become a supplier with Cameco. We've engaged preferential bidding processes. We sole-source opportunities as they fit the capacity of the potential northern aboriginal supplier, and we provide evergreen opportunities.

We have, in northern Saskatchewan, aboriginal-owned companies in catering, trucking, construction, security, engineering, road construction, and so on. I can say that we've exceeded our 35% target. We're closer to having 70% of all the services at our mine sites provided by northern aboriginal-owned companies. The site benefit of this is that 50% of their employees are aboriginal or northern. We employ 1,500 directly at Cameco. Our contractors employ another 1,500, so we're talking about 3,000 aboriginal employees through this process.

I can say that since 2004, we've procured over $1.6 billion from these aboriginal-owned companies in northern Saskatchewan, and by the end of 2012 we're confident that we'll exceed $2 billion.

[The Chair, Conservative, Ed Komarnicki]

Your time is up, Mr. Cuzner.

It's certainly interesting to hear the initiative you've taken to involve entrepreneurs and contractors and about how you have structured that. It's certainly an innovative way of ensuring that some of those dollars go right to the community.

I think we have one more questioner.

Mr. Shory, did you want to engage for a few moments?

[Devinder Shory, Conservative, Calgary Northeast, AB]

Thank you, Mr. Chair, and thank you, witnesses, for being here.

I will cut short my questions. Basically, I want to ask all of you if you want to share any specific challenges you face in your organization while working on skills development in the remote communities.

[The Chair, Conservative, Ed Komarnicki]

Does anyone want to respond?

Go ahead, Mr. Scott.