Economic downturn in Alberta invigorates other businesses

Cheaper oil, changes in the job market and new businesses mean that someday we can get to the acceptance stage of grief.

There's a bigger labour force to draw on and new opportunities

People leave the Penn West Tower in Calgary last September. Penn West Petroleum is only one of many companies to lay off employees in Calgary. (Jeff McIntosh/Canadian Press)

Stephen Scott worked his way into a plum engineering job with Cenovus Energy, but he's looking elsewhere to start again after being laid off.

The energy sector as we know it is gone- Todd Hirsch, ATB Financial

His future won't look like his past.

"Renewables interest me. I think interest in that will pick up. They expect it to grow four to 10 times over the next 10 years. And with the new airport going in, logistics and supply chain are increasing."

With an MBA and 20 years into a professional engineer career, Scott's layoff was a surprise.

So far, he's managing — he still has his severance and his wife managed to get more hours at her work.

Stephen Scott was laid off in October 2015 after 11 years with Cenovus Energy. He says he's making the best of this unexpected downtime to spend more time with his kids Julianna, 9, and Zach, 12. Scott says he's open to looking outside of oil and gas for his next job. (Judy Aldous)

Scott is taking advantage of his downtime to walk his kids to school and work around the house.

Current economy sparks opportunities

There are a lot of people like Scott in Calgary right now. With deepening layoffs in the oil and gas industry, more will join him.

Some people are managing, others not so well. Economically Calgary has taken a hit.

But there could be an upside for businesses and individuals.

ATB economist Todd Hirsch says the increase in unemployed, highly qualified oil and gas types who are hungry for work may actually result in a more diversified economy.

Todd Hirsch is the chief economist at ATB Financial. (CBC)

"The energy sector as we know it is gone," he said.

Other industries expand

Hirsch knows there's a danger of sounding glib when trying to take a positive spin on plummeting oil prices.

"Having been laid off twice in my career I know it's not easy."

But he says where one industry contracts, others expand. 

"There are examples of non-energy industries that are doing interesting things. For example, digital media marketing.  For the first time, they can get into the market because now people are willing to get paid less."

Hirsch thinks this downturn will permanently change how Calgarians and the economy work.

The oil king has fallen

A year ago, it was too hard to find talent in Calgary.- Cameron Prockiw , Vovia digital marketing

When oil is king, and Calgary booms, it distorts the labour force. Wages are high, the labour pool tight and the costs of setting up a new company become too big. When oil drops, so do those pressures.

Cameron Prockiw feels the weakening of those pressures. He is the founder and CEO of the digital marketing business Vovia. Prockiw opened satellite offices outside of Alberta because "a year ago, it was too hard to find talent in Calgary."

He couldn't compete with wages young recruits were offered at oil and gas companies or the "Shaws of the world."

Things have changed — over the past year he has hired seven new people and refocused the business almost entirely on Alberta clients.  Right now he has one position open, with 200 people vying for it.

And because his clients aren't energy companies he hasn't felt the pinch. Yet.

Other companies able to hire workers

Like any business in this city, he knows the ripple effect of low oil may eventually reach him. Many of his clients are home builders and they rely more directly on oil and gas wealth, which could spell trouble in the future.

BluEarth Renewables is another company finding it easier to fill jobs in the midst of layoffs.

Company COO Kelly Matheson-King says they've hired 10 people in the last six months.

"We have certainly seen more applications than in previous years. Many are from the oil and gas sector."

But Matheson-King is careful not to suggest that her business is feeding off the misfortunes of  others.

She says there's room for all types of energy production in Calgary.

It's a classic Alberta problem 

Craig Alexander, a longtime economist now with the C.D. Howe Institute, says the recession is "broadly negative" but that there are some positives. 

Maybe because we went from above $100 to below $30 oil, this recession will be enough of a memory to encourage lasting movement towards diversification.- Craig Alexander, C.D.  Howe Institute economist

Alexander points to the drop in gasoline prices as one silver lining. Another — first time homebuyers have an easier time making that first purchase as house prices drop and foreclosures rise.

When it comes to the tougher challenge of diversifying the economy, Alexander calls it the "classic Alberta problem". Diversification should happen when times are good and there's money flowing through the economy. But it's when the economy falters that the conversation is renewed.

First time homebuyers will have an easier time making that first purchase as house prices drop. (Robson Fletcher/CBC)

Alexander says this recession feels different than the one in the early '80s.

"Maybe because we went from above $100 to below $30 oil, this recession will be enough of a memory to encourage lasting movement towards diversification."

Stages of grief in recession, but we're still on anger

Economist Todd Hirsch says Calgarians hard hit by the death of $100 oil are like all those in grief. We go through stages.

Sadness over falling oil prices has passed. We're now in the anger stage — Hirsch says he's felt some of that directed his way — and only 2017 will bring acceptance.

He refers to the economic slow down in the United States in 2010. Unemployment rose to 10 per cent, so the government extended unemployment benefits to 99 weeks.

It was only after those benefits ran out that people went back to work, often at lower wages.

"They waited until they had no choice."

Calgary at a Crossroads is CBC Calgary's special focus on life in our city during the downturn. A look at Calgary's culture, identity and what it means to be Calgarian. Read more stories from the series at Calgary at a Crossroads.

About the Author

Judy Aldous

CBC Radio

Judy Aldous is an award-winning reporter and producer who has worked across the country for CBC Radio. She's been working with CBC Calgary since 2002 and is currently the host of alberta@noon.


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