Posted on 2011-10-06

Questions asked by Senator Suzanne Fortin-Duplessis on October 6, 2011.

Proceedings of the Standing Senate Committee on Foreign Affairs and International Trade

First Session, Forty-first Parliament, 2011

Chair: The Honourable A. RAYNELL ANDREYCHUK

Wednesday, October 5, 2011
Thursday, October 6, 2011

Issue No. 2

Third and fourth meetings on:
Study on the political and economic developments in Brazil

• Minutes of Proceedings
• Transcript (Evidence) of Proceedings – October 5, 2011 (51K)
• Transcript (Evidence) of Proceedings – October 6, 2011 (75K)

WITNESSES

Wednesday, October 5, 2011

Brazil-Canada Chamber of Commerce:

Eric Bonnor, Chairman;

Eduardo Klurfan, Vice-Chair

Thursday, October 6, 2011

SNC Lavalin International:

Elias. G. Ray, Senior Vice President — Latin America.

McCoy Global:

Jim Rakievich, President and CEO.

Canadian Manufacturers & Exporters:

Jean-Michel Laurin, Vice President, Global Business Policy.

Transport Canada:

Kristine Burr, Assistant Deputy Minister, Policy;

MEMBERS OF THE COMMITTEE

The Honourable A. Raynell Andreychuk, Chair

The Honourable Percy E. Downe, Deputy Chair

and

The Honourable Senators:

*Cowan (or Tardif), De Bané, P.C., Finley, Fortin-Duplessis, Johnson, *LeBreton, P.C. (or Carignan), Mahovlich, Nolin, Robichaud, P.C., Segal, Smith, P.C. (Cobourg), Wallin

* Ex officio members

(Quorum 4)

Senator Fortin-Duplessis: First of all, I would like to thank you for appearing before our committee and I would like to thank Mr. Rakievich for joining us by videoconference. I noticed that you took the time to familiarize yourself with the answers that our witnesses gave when they appeared before our committee.

As you might know, Brazil ranks third among the countries that are experiencing the most difficulties with recruiting qualified staff, which exceeds the global average. Those results were published in the latest Manpower study conducted with a panel of 40,000 employees in 39 countries.

Behind Brazil, listed at 57 per cent, is Japan with 80 per cent of employers being dissatisfied; in India, the rate is 67 per cent, and the global average is 34 per cent.

The shortage is especially felt by developing sectors. We are talking about civil construction, with an ambitious social housing program, the major projects you mentioned, the projects in preparation for the 2014 FIFA World Cup and the 2016 Olympic Games. Generally, technical positions and jobs in technology are the most difficult to fill.

I also read that Brazil trains 40,000 engineers and architects per year when they actually need 60,000. The temporary solution would be to relax visa formalities for highly skilled foreign nationals. At the same time, Brazil is a very protectionist country.

Do you know whether Brazil is doing something to make up for this lack of technical training? On the ground, do you hire Brazilians for the major projects or do Canadians go there to do the work?

The Chair: Are you asking Mr. Ray or Mr. Rakievich?

Mr. Ray: Excuse me; I think I missed the translation, if there was any translation.

The Chair: Then you are probably not on the right channel.

Senator Fortin-Duplessis: I asked if the Brazilians work for you when you have projects there, or if Canadians can go and work there. Do only Brazilian workers work for your projects?

Mr. Ray: There is one issue ongoing in Brazil. The country is going through such a high growth in so many different sectors that there is a real lack of qualified personnel in Brazil. You can hear the Brazilian companies speaking about that very openly.

For example, about two months ago I heard Eike Batista, one of the wealthiest men in Brazil, speaking about how many welders he needs to bring from Brazil to work in their operations.

We definitely need to maximize the number of Brazilian engineers that we work with from a cost-competitive situation, but in many instances, we need to have lead engineers in specific sectors brought in on an expat situation for the specialized or project managers. A customer said to me, when I was asking where I could find a good project manager, that that is a species in extinction in Brazil. There are certain qualifications that are just not available, and we need to, obviously, bring them from here, to the extent that I think we are reaching the point where it will be as competitive to deliver the services from Canada and paying the services. Obviously, there is high inflation in Brazil that also impacts the labour market that makes you more competitive to deliver the services from there. Typically, you have to do it there, and if you have BNDES funding, you have minimum local content requirements. You have to watch that, too.

Mr. Rakievich: When it comes to looking for local skilled talent in Brazil, it is very difficult. Right now, the labour market is very tight for engineering and finance people. We know at some point in the future we will have to establish a footprint. I have been spending my time down there. I looked at two potential acquisition opportunities in Brazil. One of the reasons we considered acquiring was that when you do an acquisition, you get the people that come with it. That gives you a head start.

There is no question that the growth in all sectors in Brazil is so rapid that the country has not kept up with providing skills to match the growth. It is definitely a very tight labour market, especially for skilled people from anyone that you will have do professional services or in an operating plant, like a machinist or things like that, no question.

…

Senator Fortin-Duplessis: Welcome to both of you, Ms. Burr and Mr. Rioux. I have a quick question about the recent Open Skies agreement between Canada and various partners, including Brazil. This agreement is likely going to significantly change the architecture of the sky as we know it.

If the agreement leads to increased competition and therefore to a drop in prices, are you not worried that it might put passengers and the environment in danger?

Ms. Burr: With this type of agreement or link, we are first and foremost concerned about safety and security. We look at the other issues too, but safety and security are the main objectives for Transport Canada and the Government of Canada.

Senator Fortin-Duplessis: Do you feel that partners from other countries and Brazil have the same concern, or does Canada seem to be the only one to care about security and protection?

Ms. Burr: I think that almost all the countries are members of the International Civil Aviation Organization, whose headquarters are in Montreal. Countries like Brazil are also concerned about safety and security.

Senator Fortin-Duplessis: A number of airplane crashes have occurred in Brazil. So that was their area of weakness. Their security programs did not seem very effective. I assume they will be making an effort to overcome those challenges.

• Transcript (Evidence) of Proceedings – October 6, 2011 (75K)