HOT TOPIC


T


he headline for the Canadian economy over the last year has been the dramatic fall in the price of oil, which has slid from highs of over USD100 to lows of between USD40


and USD50. Neil Gascoigne, business development director of Hays Oil &


Gas, says that, in North America, “the prolonged downturn in the price per barrel of oil is really two stories. On one side, you have the oil industry itself, with the prolonged downward spiral of the oil prices resulting in significant expenditure cuts by the exploration and production companies. “This, in turn, has affected oil services companies. With little


new drilling or exploration taking place, in many cases they have had to restructure their businesses and cut costs to ensure survival. It has been well publicised that oil and gas companies have been downsizing their operations, and tens of thousands of people have lost their jobs due to the decline in oil prices and the global oversupply in the system that has driven this decline.”


Implications for mobility Paul Coleman, president and CEO of Montreal-based TERN Financial Group, which provides financial services to the global mobility industry, says that Alberta is feeling the impact and the mobility sector is feeling the pinch. “The recent announcement by the US government that the


heavily-debated Keystone XL pipeline won’t be proceeding, the price of oil going down to USD35 per barrel, and the international backlash against the environmental impact of the oil sands have all served to put the brakes quite forcefully on the industry out there – and that, obviously, is a huge element of the international mobility sector. “I think we saw that this year in Montreal, where, at the


Canadian Employee Relocation Council (CERC) conference, firms and organisations which had been perennially participating and dispatching large numbers of delegates to the conference were just not in attendance. And that equally affects the service sector. The relocation management companies are rationalising and closing down offices. “So we’re seeing an exodus, we’re seeing house prices falling,


we’re seeing the turning back of services offered. Obviously, as buyers of relocation services, these organisations are experiencing a period of very low productivity and expenditure, which is felt throughout the industry.” Cindy Mulhall, former chair of the CERC board and a relocation


specialist with decades of experience in the Canadian energy sector, agrees. “From what I can see, there are fewer assignments. Companies are shutting in wells, because if it’s costing them more to get the gas out of the ground than they can sell it for, they’re just not going to operate there.” She adds, “There are significant lay-offs in the industry, so


many people are out of work. That’s putting more pressure on the individuals who are remaining behind. There may be fewer relocations and long-term assignments, but there are more business travellers, and that’s causing quite an impact. I don’t think employers recognise or fully understand the impact from a tax perspective, particularly on cross-border travel. “Companies don’t have structures in place to deal with that. If


you’re on an assignment, they have programmes and they have tax advisers, but I don’t think many companies fully appreciate the impact the additional business travel is going to have on the business as well as the individuals.” Cuts to in-house staff are having an effect on how business is


being done in the Canadian mobility industry. “I think there’s going to be more reliance on consultants or outsourcing of processes to vendors and suppliers, rather than using internal resources. They’ve had to lay off staff because they just don’t have the numbers in need of relocating any more, and they’re relying on the expertise of the relocation providers or the experts outside the company,” says Ms Mulhall. While external providers are benefiting, they can’t understand


the full extent of the implications of assignments from the company perspective as far as payroll and benefits go. “They can help you organise and get the people,” says Ms


Mulhall, “but you need to have someone internally who understands what needs to be looked at, what aspects need to be considered, and what the cost impact and return on investment will be to the company, because it’s a huge cost to companies to be relocating people. “And maybe they don’t see it now if they’re doing more business


travelling, but when the industry picks up again, they will need people to stay on short-term or longer-term assignments in various locations, and they need to have that expertise. The external providers can’t hold all of that knowledge and have all of the systems in place to manage that.”


Immigration centre stage Temporary Foreign Worker visas have become a hot topic for Canada over the last few years, with the previous, Conservative government taking steps to crack down on the number being issued (see p30). “Temporary foreign workers were this massive political issue,


because the people who were serving you at your AMT or your Tim Hortons are from all over the world,” says Paul Coleman. “And it turns out that they’re here on Temporary Foreign Worker visas. It’s easy for a politician to jump up on a soapbox and say that these people are taking our jobs.” While clamping down on the programme gained some support,


it wasn’t popular with business. “There are some specialised skills and knowledge where we don’t have sufficient resources in Canada to fill those roles, and the government was putting barriers up to businesses looking to bring people in with those skill bases. “From a business perspective, it was becoming quite difficult,


because the government wasn’t really taking business into account. That was the opinion at the time,” Cindy Mulhall notes. There


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