Number of Canadians employed by oil and gas sector falls by 14,000, data shows

Month-to-month employment information suggests the variety of folks working in Canada’s oil and fuel sector has fallen by greater than 14,000 to this point this spring, because the sector offers with low oil costs and the financial impression of COVID-19.

Figures revealed this month by Petroleum Labour Market Data (PetroLMI) say oil and fuel employment fell to 162,748 in Might from 177,332 in March — a drop of roughly eight per cent. In contrast with Might 2019, oil and fuel employment is down 14 per cent, or 25,600 jobs. 

PetroLMI’s information and figures are sourced from Statistics Canada’s Labour Power Survey. 

“It is not simply the COVID-19 impression, but in addition the low oil and fuel costs, that are persevering with,” mentioned PetroLMI vice-president Carol Howes of the roles figures.

We do anticipate to see some extra layoffs within the subsequent coming months and into subsequent 12 months.”

Howes mentioned she’s not anticipating the sorts of layoff numbers witnessed a couple of years in the past after the decline in oil costs in 2014, when direct employment within the oil and fuel exploration, providers and pipeline sectors stood at about 226,000. 

“The sector is already fairly, fairly skinny by way of the variety of folks working within the business,” Howes mentioned. “Because of that, we solely have a lot we are able to lower, so many locations we are able to lower by way of employment.”

‘The sector is already fairly, fairly skinny by way of the variety of folks working within the business,’ says Carol Howes, vice-president at PetroLMI. (CBC)

North America’s oil business has been hammered by the financial impression of the COVID-19 pandemic, with demand for gas plunging as a global worth struggle flooded the market with low-cost crude.

The scenario spurred oil and fuel corporations to slash manufacturing and lower their capital spending plans by billions of {dollars} this 12 months. It has additionally led to job losses.

On Thursday, oil and fuel producer Ovintiv — previously generally known as Encana — mentioned it has slashed its workforce by 25 per cent because it prepares for extra modest progress within the power sector. The choice affected roughly 650 jobs.

Earlier this week, pipeline big Enbridge introduced that 800 folks working for the corporate could be taking voluntary buyouts, together with early retirement, because it aimed to keep away from layoffs.

PetroLMI experiences that whereas the majority of oil and fuel employment is in Alberta (128,180 folks), 1000’s of jobs are positioned in British Columbia (8,304), Saskatchewan (8,940), Central Canada (4,924) and Atlantic Canada (7,680).

Howes mentioned the sector most affected to this point seems to be the oil and fuel providers sector.

“They’re the primary sector to be impacted and largely as a result of in the event you’re not drilling for oil and fuel, these are the roles which might be most immediately impacted by layoffs,” she mentioned.

A pumpjack works at a properly head on an oil and fuel set up in Alberta. The Canadian oilpatch has been hit laborious by a drop in oil costs and the financial fallout of the COVID-19 pandemic. (Jeff McIntosh/The Canadian Press)

Elizabeth Aquin, interim president of the Petroleum Providers Affiliation of Canada, mentioned a survey of their members in current weeks discovered many had seen layoffs within the order of 35 to 50 per cent this 12 months.

She mentioned a troublesome few months has come on prime of a number of powerful years, including service corporations don’t wish to lay off any extra folks.

“These staff have years of expertise and we’re famend all over the world for that technological experience and our innovation,” she mentioned. “We have to preserve the talents and experience.

She mentioned whereas corporations in her sector have shed 1000’s of jobs, it could be worse with out the federal wage subsidy. However, she added, not each firm that wants this system was capable of qualify.

Ottawa additionally introduced that it could spend $1.7 billion to assist clear up orphaned and inactive oil and fuel wells in Alberta, Saskatchewan and B.C., a transfer it is hoped will put some folks again to work. 

Tristan Goodman, president of the Explorers and Producers Affiliation of Canada, mentioned a lot of how the approaching months play out for the power sector and its staff will depend on pricing and authorities coverage.

He mentioned if benchmark oil costs stabilize above $40 US a barrel — or higher nonetheless, $45 US — it could assist. On Friday, the worth of West Texas Intermediate shut simply shy of $40 US.

Goodman mentioned it’s going to even be essential to see how the insurance policies of assorted governments take maintain, together with federal loans and mortgage ensures aimed toward serving to small and mid-sized corporations keep afloat throughout the downturn.

All of it comes again in the long run to staff,” he mentioned. “It’s folks, households, jobs.”

There are nonetheless many opinions on how shortly economies and oil costs will stabilize given the unpredictability of the COVID-19 pandemic and its impression on industries and customers.

Matthew Fitzsimmons, vice-president of power service analysis at Rystad Power, believes the employment image in Canada’s oil and fuel sector shall be tough till capital funding returns to a extra regular state.

“It is a powerful scenario,” Fitzsimmons mentioned.

“However we’d anticipate these jobs, as funding picks up, to come back again. It will not be like flipping a light-weight swap essentially, as a result of we do see a protracted highway to restoration from a spending standpoint versus the place we had been in 2019.

He mentioned Rystad’s expectation is that funding will backside out in late 2020 and begin to enhance in 2021, however believes it might take a pair extra years to recapture the spending ranges seen in 2019. 

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