07 August 2014

Cost Driver #nlpoli

Companies large and small in the province are under considerable stress as a result of Nalcor’s Muskrat Falls project.

The cause?  This CBC story from Labrador mentions “steep wages” as the major issue:

"Over across the river, the average paying job is up to $40 an hour, and that's before benefits and everything else, so it's very, very hard to compete with," said [Mike] Hickey [of Hickey’s Construction].

According to CBC,  Hickey’s been having a hard time keeping employees as a result.  He just can’t compete with those kinds of wages. 

The CBC story isn’t about that, though.  The story is about a subsidy that the Labrador Aboriginal Training Partnership is offering local employers to hire aboriginal workers.  But hang on a second.  One of the partners in the partnership is Nalcor.

And the wage subsidy is available not only to companies that aren’t working on the Muskrat Falls project,  it is available to Muskrat Falls companies as well.  As the partnership website notes,  it offers up to 60% of actual wage payments to “businesses working directly on the Lower Churchill Project, and other private, public or not-for-profit sector enterprises working in related fields in Labrador and Newfoundland.” 

Last year, though, the partnership was complaining that they couldn’t get enough people hired at Muskrat Falls.  Even by the end of the year,  the project’s executive director wasn’t happy even though – from this news story last December – it’s clear that the provincial government and Nalcor were vigorously spinning the partnership and Muskrat falls as a huge hiring success for aboriginal people.  Maybe the CBC story is a sign things are still problematic for the partnership and the Falls.

There’s also federal and provincial cash in the venture as well.  A 2013 government announcement noted the partnership started with an initial cash injection from all hands – federal, provincial government plus Nalcor, Innu Nation, Nunatsiavut Government, and NunatuKavut Community Council – totalling $30 million.  Half the initial cash came from Ottawa.   In 2013,  the gang kicked in another $15 million to keep the partnership hiring programs going to 2015.