FREDERICTON (CP) – Economists say the sudden closure of a call centre operation in New Brunswick and the loss of 400 jobs underscores the transient and unstable nature of an industry once billed as the saviour of the province’s economy.
Officials with Connect North America said Thursday the strong Canadian dollar is to blame for the sudden closure of its call centres in Fredericton and Bathurst, N.B., earlier this week.
Employees learned they were out of work when they arrived at the call centres Wednesday morning, only to find notes pinned to locked doors saying the operations were shut down indefinitely.
Company CEO and president Barry O’Donnell said in a news release the negative impact of Canada-U.S. exchange rates forced the closures. He said if the economic situation changes, efforts will be made to reopen both sites.
Elizabeth Beale of the Atlantic Provinces Economic Council said the strong dollar is making call centres and other export-oriented businesses vulnerable.
She cited the exchange rate as a factor in the levelling off of the call-centre industry in the Maritimes, after 10 years of fairly vigorous expansion.
“The rising dollar is a factor for any company exporting products or services abroad,” Beale said in an interview.
“The nature of the call-centre industry is changing and many of those jobs have been outsourced to other locations. … There are multiple competitive pressures on the industry.”
It’s a reality check for job-hungry Maritime governments that actively recruited call centres in the 1990s to provide quick jobs in depressed areas.
In New Brunswick, former Liberal premier Frank McKenna led the drive to rein in as many of the centres as possible, doing what he could to guarantee low wages, training subsidies, lower workers’ compensation premiums, tax breaks and other incentives.
While some of the more sophisticated contact centres have remained, especially in the IT and financial services areas, other centres that live from contract to contract, calling out to sell everything from phone service to insurance, are transient.
“Call centre jobs are among the most migratory types of jobs, ” said Charles Cirtwill of the Atlantic Institute for Market Studies, a think-tank based in Halifax.
“They go where the lowest-cost supplier is and when things change, as they changed in the case of Connect North America with the shift in the dollar value, it didn’t make any economic sense for them to stay where they were.”
Cirtwill said McKenna did a good job building call centre interest on the basis of a low-cost work environment and a bilingual workforce. But now companies are looking at countries like India, with a much lower cost environment and a multilingual workforce.
“There is a lot of transition,” he said.
New Brunswick government officials said they are not worried about the long-term future of the call-centre industry, although Business Minister Greg Byne said the province realizes it can’t put all its eggs in one basket.
“We realize we have to have a diversified economy,” Byrne said, adding that about 21,000 people work in call centres in the province.
Despite this week’s closures, Byrne said the call-centre industry is “healthy and vibrant” in New Brunswick.
He said several companies are considering expansions and may be able to pick up some of the employees who lost their jobs with Connect North America.
The New Brunswick government gave Connect North America about $100,000 dollars to help train new employees when it expanded in 2002.
There are about 100 call centres currently operating in New Brunswick.