Tarun GeorgeArledge Partners Real Estate Group In the international sourcing arena, what is Canada’s competitive advantage? As Eric Hochstein wrote in his recent Nearshore Americas article, Canada Offshoring: A Disappearing Act, “In the horse race of the Western Hemisphere outsourcing destinations, the early leader, Canada, faded fast over the past few years allowing Latin America countries like Costa Rica, Guatemala, Mexico and Brazil to take the lead and land the jobs. Today, with the dollars at par and with emerging nations competing aggressively for increasingly sophisticated types of work, Canada is generally an afterthought for most service providers. Lower costs elsewhere have drained the country of many of the largest providers.”
While it is certainly true that Ontario has not able to compete with the LATAM region for the Spanish speaking workforce, one area where Ontario still remains strong is in the area of French/English bilingual labor and this area offers a strong alternative for companies seeking a bilingual workforce.
Rising demand
Overall, Ontario is experiencing an unprecedented demand in contact centre attraction these days due to lower business costs. Combined federal / provincial tax rates are on the decline from 28% in 2011 to 25% by 2013. The provincial government has substantially increased training and hiring subsidies to create employment in this important sector, such as the Contact Centre Apprenticeship Training Program whereby an employer could be reimbursed via a refundable tax credit up to $10,000 per agent per year for a maximum of 4 years. Additional subsidies related to hiring displaced workers, provides employers can provide up to a maximum of $10,000 per agent.
Recently, a US based company put together a business case for establishing a call center in Canada. This company has a 50% market share in Canada for credit card processing and wanted to tap more directly in this market and desired to open their own location in Canada. There was a need for at least 20% of their agents to be fluent in both French and English, with an even greater preference for a French Canadian dialect. The immediate need was for 250-300 agents with the ability to grow to 500 and the company wanted to consider alternatives to Montreal, Quebec.
Specific to Northern Ontario, 25% of the province’s French speaking population resides in the north representing 18% of the population in this region. In particular, north-eastern Ontario has the highest concentration of fluently bi-lingual labour representing 24% of the population in this part of the province. Sudbury and North Bay are the larger cities in the north with high percentages of bi-lingual labour. French capacity also dominates some smaller communities such as Kapuskasing, West Nipissing, Cochrane, Mattawa and Capreol.
Sudbury, Ontario
Sudbury is located in Northern Ontario, approximately a four hour drive north of Toronto or a one hour flight from Toronto’s Pearson International Airport. Sudbury is served both by Air Canada and Porter Airlines, which offers twice daily service at a lower cost and departs from Toronto’s downtown airport. Sudbury’s population is 165,000, with 45 percent fully bi-lingual in English and French. Post secondary institutions include: Laurentian University, Cambrian College and College Boreal (a fully French speaking educational institution). Sudbury is the second largest city in Ontario with such a large bilingual population, just behind Ottawa, the nation’s capital.
Today, the unemployment level in Sudbury is 9.5 per cent. Northern Ontario communities often experience higher levels of unemployment due to vast distances between major cities, resource based economies, youth-out migration, to name a few issues. As such, there is some unique provincial funding for the northern communities that is appealing to prospective investors. The Northern Ontario Heritage Fund (NOHFC) matches an investor’s contribution up to a $1M in grants / low-interest loans to help off-set capital costs.
The BPO sector has been quite successful in this community, with a proven agent, supervisory and management culture. There was a significant change to the Contact Centre Apprenticeship Training Tax Credit in 2009 and now employers will be offered $10K per year, per agent for four years in refundable tax credits with no cap.
North Bay, Ontario
North Bay is also located in Northern Ontario and eligible for Ontario’s unique funding from the Northern Ontario Heritage Fund. North Bay is located, about 3.5 hours north of Toronto. There is a population of 56,000 and within an hour’s commute, the population increases to 200,000. It is a fully bi-lingual community and approximately 30% speak English and French fluently.
North Bay has a proven contact centre culture. Private sector contact centre employers include:
• Flowers By Sears
• Grand and Toy
• L’Alliance De Caisse Populaire
• Northern Communication Services
• Ontera
• Optimum Insurance Company
• Phonebusters
• Telespectrum Canada
Windsor, Ontario
Windsor, located just across the US border from Detroit, has approximately 9% of its population that is bilingual. Windsor has 14.1% unemployment and about 400,000 people live within a one hour drive of Windsor. Sutherland Global has two sites in Windsor with a total of 1200 agents and Wind Mobile Cellular has about 100 agents and plans to grow to 200.
Hawkesbury, Ontario
Hawkesbury, although small with a population of 11,000, would be a good option for a company needed a smaller bilingual center. There is; however, a population of about 60,000 within a one hour drive and 69.6% of the population is bi-lingual.
Mandated Operating Costs in Ontario
Operating costs in Ontario are relatively low, compared to some of the other provinces and the chart below reflects the mandated fringe benefit costs (shown as a percent of payroll) allocated to an employer:
Some of the most recent announcements for this sector include the opening of On-Line Support in North Bay, a new contact center facility scheduled to ramp up to 300 agents. Earlier last year, this company added a new contact center in Thunder Bay employing 250 and since then has expanded the operation by another 100 staff. Cross Country Automotive in Sault Ste. Marie has increased its operation by another 150 agents. Zedd Customer Solutions, a Canadian contact center company that acquired Telespectrum in North Bay, is increasing its workforce to 150 agents. Aditya Birla Minacs also reopened its contact centre in Chatham, hiring 310 agents.
Sudbury has recently announced that a new call center will open in the former Sitel location at Southridge Mall at Four Corners. The US based company expects to hire at least 400 fully French/English bilingual agents and could expand to employ as many as 1,000 workers.
Susan G. Arledge, SIOR, is president and CEO of Arledge Partners Real Estate Group, located in Dallas, Texas.
Other Columns by Susan Arledge:
Interesting in Sourcing and Services in Canada? Join us for a brand new conference “Sourcing Decisions 2017” in Toronto coming in March, 2017: LEARN MORE and REGISTER
Great article Susan! Do you have any information on how New Brunswick, Canada's only officially bilingual province, compares to Ontario as it pertains to opportunity for call center rebirth?