01/30/2013 01:58 EST | Updated 04/01/2013 05:12 EDT

Labour shortage report urges Saskatchewan not to use temporary foreign workers

REGINA - Saskatchewan is being urged not to use temporary foreign workers or to compete with the private sector for employees during a labour shortage.

The recommendations are in a report released Wednesday that looks at a labour shortfall in the province and what the government needs to do to keep its economy growing.

The report by Herb Emery, a University of Calgary economics professor, notes that the province's growth plan indicates it will work with the federal government to "expedite entry of foreign workers into Saskatchewan to meet critical skill shortages."

Emery says that approach pulls down wages and doesn't encourage local employment.

"You're going to bring them in, they're going to allow them to (lower salaries) ... rather than paying a higher wage, which might induce your local workers in," he explains.

"But in the meantime ...you've cut off employment of local workers. They're not going to respond to it."

The report points out that private and public sector investment spending in Saskatchewan is high right now. Emery says that's why the government should shift some infrastructure projects to times when it would not be competing with the private sector for workers.

"You should actually be building in times when the labour market is slack because your labour costs are lower," he says.

"It makes no sense in a lot of ways, to try and build when the private sector is bidding up wages so high and now you're going to have these huge cost overruns on every project.

"From an economic consideration, I don't know why a government wants to build a highway when wages are through the roof."

In the last decade Saskatchewan has experienced remarkably strong growth in labour demand which is forecast to continue to 2020 if the province can find enough workers, the report says.

The provincial government has said at least 60,000 more workers will be needed in the next seven years.

Premier Brad Wall and other provincial officials have gone overseas, most notably to Ireland, to find workers willing to move to Saskatchewan.

But in addition to recruiting labour from outside the province, more effort could be made to entice a large pool of underemployed males between 15 and 24 into post-secondary trades training, the report suggests. Emery says the province could also look to Ontario for workers.

"One of the puzzles that I've raised is, is there some kind of bias in Ontario about the West?" he asks.

"I find it very strange that you have to recruit from Ireland and Scotland and not from southern Ontario and Thunder Bay, which have lots of available labour right now and lots of skilled trades."