Royal Bank and iGATE : "Business as usual"

A LiveMint/Wall Street Journal article reported three weeks ago that Royal Bank of Canada (RBC), Bank of Nova Scotia, Bank of Montreal and CIBC have temporarily halted their hiring of workers from outsourcing firms like iGate, Tata Consultancy Services Ltd (TCS), and Infosys Ltd, while they wait for the public backlash to blow over   :

"The backlash against outsourcing jobs comes at a time when the unemployment rate in Canada stands at 7.2% and remains above the levels that were seen before the 2008 recession. The Canadian banking and financial services (BFS) outsourcing market is estimated to be worth more than $5 billion. "

The article also mentions that IT services provider CGI Group has signed $12 billion in outsourcing contracts with various Canadian corporations, and IBM - $7 billion.

"To be sure, the halt in outsourcing is expected to be temporary, with experts and IT service providers expecting outsourcing projects to resume after six-eight months. 

'After the RBC controversy, companies are waiting for things to die down. Banks are slowing down projects—they are keeping a low profile, while the tension over offshoring jobs blows over," said an executive from an outsourcing advisory firm who requested anonymity.'  "

You're shocked, I'm sure.

So how's poor old iGATE managing this difficult temporary tension in offshoring?

Aside from reporting "Strong Second Quarter Results; Profits Up 136% ", I mean.
July 17, 2013 :

On Wednesday, during a post-earnings conference call, iGate said it did not anticipate any impact on its business due to the immigration laws in Canada and it had not seen any pull-back from any of its Canadian clients after the government probe.

“It’s pretty much been business as usual since we got a clean bill after the audit,” said interim CEO Gerhard Watzinger, an iGate veteran. 

An RBC spokeswoman declined to comment on whether the bank had started shifting work away from iGate and said it would continue to work with iGate if it complied with RBC’s policies on outsourcing.
“IGate is a long-standing supplier and we will continue to work with them provided that they comply, like all our suppliers have to, with our supplier code of conduct,” the spokeswoman said in an emailed reply.

And here's a job posting from a search of the last 30 days at WowJobs iGATE Canada Jobs page :


Apparently the supposed temporary rollback of outsourcing jobs for a few months till the public backlash blows over isn't really all that after all. 
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Cons pay manufacturers to move to China

From Blacklocks, via The Jurist, a tale of taxpayer-funded government-facilitated corporate welfare off-shoring :

"Cabinet paid millions of dollars in grants to Canadian manufacturers to move production and jobs overseas in the name of foreign aid. 

Newly-released accounts show the program paid cash grants totalling $3,852,927 to manufacturers to move production out of Canada, including $450,000 paid to one applicant that told Fantino’s department it had to “establish ourselves in Mexico so we can offer lower costs.” "

But most went to factories in China - automotive parts, rugs, fencing, furniture, plastics recycling .... over a two year period in 2006-7.

Because clearly China, the world's 2nd largest economy by GDP and we're #11, btw , is sorely in need of our "foreign aid" and "manufacturing jobs".

"International Cooperation Minister Julian Fantino ... had not heard of the grant scheme called the Industrial Cooperation Program."

Ah well, that's because you guys rebranded it in 2010 as the Investment Cooperation Program  or CIDA-INC.  According to the DFAIT website : 

• Managed by DFAIT, the Investment Cooperation Program, formerly the Industrial Cooperation Program, supports developmentally beneficial direct investments by Canadian firms in developing countries.

But only Canadian firms with at least $2M in annual revenues were eligible for 50- 75% taxpayer coverage of up to $1M of their costs in assessing and moving a project abroad.

Happily touted as a Canadian success story as late as March 2012 by the previous International Cooperation Minister Bev Oda, CIDA-INC was the object of damning internal audits until it was finally shut down on May 18 2012 by Trade Minister Ed Fast in a statement citing "irregularities" and "taking immediate action to recover taxpayer funds that had supported these particular INC projects" and promising a "fundamental review of the program, expected later in 2012-13".

Terrific. 

What about those intervening six years of sending Canadian manufacturing jobs to China and elsewhere - you know, the period from 2006-7 covered by Blacklocks and up to when you shut it down last year?

And does your newly branded "foreign aid" model of "doubling down on partnership with the business sector" and "vigorously promoting and defending Canadian interests and values abroad” benefit anyone here in Canada? Outside of those in the business sector looking for new avenues of taxpayer money to send Canadian manufacturing jobs overseas of course.

5 pm Update : I see SNC Lavalin had a multi-year contract with the Investment Cooperation Program, dated 2011-11-04.

"The purpose of this Investment Cooperation Program (INC) contribution agreement is to support responsible, developmentally beneficial, private sector engagement in developing countries leading to sustained economic growth and poverty reduction."

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