Canadian Manufacturing

Scotiabank CEO says outsourcing not in the plans

The company said it is not its practice to replace permanent positions with offshore workers, however it did currently contract out some IT services to augment project work.



HALIFAX—Scotiabank is not planning to outsource jobs at the bank to temporary foreign workers, but will expand the use of international call centres, chief executive Rick Waugh told the bank’s annual meeting Tuesday.

Ottawa is investigating whether the Royal Bank outsourced dozens of Toronto jobs to a company that brought in temporary foreign workers for training in Canada.

The controversy prompted a shareholder to ask the chief executive if Scotiabank was doing something similar.

Waugh said it wasn’t part of the bank’s plan.

“I’m not aware of these details that have come up over the last day or two but it’s certainly not… in our strategy to do temporary outsourcing of jobs,” he responded.

He also said the bank intends to create more jobs in Canada, “while still expanding and maintaining some efficiences … contact centres around Canada and around the world.”

The company said it is not its practice to replace permanent positions with offshore workers, however it did currently contract out some IT services to augment project work.

Many Canucks have lambasted RBC after it came to light that Canada’s largest bank contracted an external supplier called iGate to provide certain technology services, a decision which ousts 45 employees from their current roles.

Questions have been raised about how iGate brought its own employees into Canada under the temporary foreign worker program so they could be trained at RBC branches for the services they’ll be providing to the bank. The foreign worker program itself has been criticized as a tool that allows companies to opt for temporary workers who can be paid up to 15 per cent less than Canadians.

iGate told The Canadian Press on Tuesday that it operates with a “high level of integrity” and will “fully co-operate” with a government investigation into the situation.

“iGate’s hiring practices are in full compliance with all Canadian laws,” said Jason Trussell, senior vice president and regional head of iGate Canada.

Human Resources Minister Diane Finley has asked officials to review documents submitted by iGate after apparent discrepancies appeared between public statements made by RBC and information previously provided to the government by iGate.

“We are very concerned with recent issues involving the Temporary Foreign Worker program,” Finley’s spokeswoman Alyson Queen said Tuesday.

“Officials are investigating recent reports concerning labour market opinions granted to iGate and will look into any evidence that the program is being misused.”

Scotiabank is Canada’s most international bank and has made much of its profit by expanding its presence in foreign countries, though it has also been expanding its Canadian workforce, Waugh said during a speech at the meeting.

“This year we expect GDP growth in our key international markets to be more than twice what it is in Canada and the U.S.,” Waugh told the annual meeting.

Now that Canada is through the recession, he said there is a window of opportunity for more in exports and investments overseas.

The strategy of looking abroad is paying off for the country’s third-largest bank.

Last year, Scotiabank earned a record $6.47 billion, which was 21 per cent higher than in 2011. The results included gains from the sale of its headquarters in 2012.

As the Canadian market for private-sector loans has become increasingly saturated, Scotiabank turned to Colombia, Peru and Mexico—where Waugh said there is lots of room to grow.

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