Alberta has lost 35,000 oilpatch jobs, petroleum producers say

After years of struggling to find enough staff, energy companies have now shed 35,000 positions, many of them in the services sector. With energy prices still very low, more cuts are likely to come.

With cuts more likely to come in the fall

Alberta’s rough year

7 years ago
Duration 6:08
Todd Hirsch, chief economist at ATB Financial, looks at oilpatch jobs and Alberta’s economy

Less than a year ago, Alberta was still complaining of a labour shortage.  Schools couldn't find bus drivers, job vacancy rates were the highest in the country.

It's no secret that the situation has changed.

The Canadian Association of Petroleum Producers says that 35,000 oilpatch jobs have been cut this year, 25,000 from the oil services sector and 10,000 from exploration and production. CAPP pulled the number together by canvassing its members, reviewing Statistics Canada numbers and working with the Canadian Association of Oilwell Drilling Contractors.

I have CEOs that have pulled free pop out of the office, because they can save $40,000 across the company and that's half a job."- Tim McMillan, CAPP

"This is tough, they've been struggling to get a workforce, that was always the challenge," said Tim McMillan, chief executive of CAPP.

"Today they are laying off people that they view as very valuable. I have CEOs that have pulled pop, free pop out of the office, because they can save $40,000 across the company and that's half a job."

Meanwhile, other industries are picking up some of the slack. The monthly labour force survey shows that Alberta's job growth has been largely flat this year, jobs that have been lost in the natural resource sector seem to have been created elsewhere.

There are definitely a lot of people from the oilpatch looking right now,- Murray Glass, Southland Transportation

School bus company inundated with applications

After years of struggling to find drivers, Southland Transportation, which provides school buses to Calgary schools, has been inundated with applications this year, including some from engineers and geologists.

"There are definitely a lot of people from the oilpatch looking right now," said Murray Glass, the company's general manager for southern Alberta.

"We take everybody as they come, we try to look at the people who are looking longer term, just for retention."

As we head into the fall and energy companies start to set their budgets for next year, more job cuts are likely. Many companies were able to hedge, or pre-sell, their production at higher prices through the middle of 2015, but those hedges are expiring, leaving producers at the mercy of today's lower prices.

CAPP expects to see a further 25 per cent cut in capital spending for next year, as oil sands development in particular slows. Less spending means less work to do.

McMillan says the industry is doing its best to hold onto to staff, but anxiety about the job market is well justified.


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