Businesses in the Lakeland are waiting to see what the oil companies do...
A collective of rig welders is asking for an increase to the rates paid to their businesses, saying the current $100 to $110 hourly rate leaves them short of their operating costs.
In a letter to clients and prime contracts dated Sept. 14, Rig Welders of Central Alberta announced they are raising the hourly rate to a minimum of $150 per hour, with consumables, fuel, and rod to be supplied by the client and a $25 per hour premium on specialty alloy welding. The new rate will be effective Oct. 1.
“This change reflects the current rising operational costs, equipment maintenance, and market conditions in Alberta,” reads the letter.
The letter does not explicitly threaten job action, but rig welders in Fort St. John and Dawson Creek, B.C., have already made the same demands and started to strike.
The letter says the new rate will be considered active on Oct. 1, and “subject to annual review and increase to continue maintaining profitability for direct service providers.”
Welders as a whole are not unionized in Alberta, though some are represented by the United Association of Piping Trades Local 488, Boilermakers Lodge 146, or Ironworkers Local 720.
Rig Welders of Central Alberta is not a union, “just a group of like-minded people,” according to a spokesperson for the group, who is also a welder who asked not to be named. The group is organized primarily through word of mouth and social media, with approximately 1,400 welders participating in the group chat.
According to labour data from the Government of Canada Job Bank website, there are about 17,100 people working as welders and related machine operators in Alberta. There is no breakdown available for how many are specifically employed as rig welders.
“The work we do is hard. It’s difficult. We train extensively and we’re one of the only trades that has to requalify every two years, if not every year on all of our tickets,” said the spokesperson for Rig Welders of Central Alberta.
Welding is a Red Seal trade, meaning there is a nationally recognized standard for education and training. Training is a three-year apprenticeship including 720 hours of technical training and 4,680 hours on the job.
“We have overhead. We have maintenance. We have tools we have to buy, insurance we have to pay, tickets to keep up with.”
According to the cost breakdown, which was included with the letter, based on a 2,000-hour work year with 80 per cent of the time directly billable to the client, it costs an estimated $91,000 per year to operate a mobile welding rig. There is also an estimated $200,000 capital investment for the one-ton truck, equipment, and tool set up.
“Most of us are working almost twice that, but at $110 an hour if you’re running your truck, you are in a profit deficit of $7 an hour. You’re losing $7 an hour on your overhead,” said the spokesperson.
“Some of these companies require we have trucks five to 10 years new, and those are $150,000 to $200,000 now. We can’t keep up,” said the spokesperson. “It is simply not profitable at the current rates and businesses are going under.”
Dorian Michaud, who owns Northern Lights Welding in St. Paul confirmed the cost of operating a rig welding unit is expensive.
“That’s kind of why we stopped supplying that,” said Michaud, whose business is now primarily in fabrication.
Although Michaud isn’t a rig welder, he is still paying attention to what happens in the dispute.
“Rates up north affect rates everywhere else,” said Michaud.
According to the Rig Welders of Central Alberta, some companies have just paid the requested $150 per hour.
Others have offered to increase to $125 to $130 per hour, which is on par with what welders in Fort St. John and Grande Prairie increased to about four years ago...
-with files from Lakelandtoday.ca
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