Just how many jobs have been cut in the oilpatch?
Estimates of job losses vary widely. Here's a look at the numbers
The pain of the oil price crash in Alberta has mostly been expressed through job losses, with the idea being that if we can put a number on it, we can get a sense of just how bad the downturn has been.
"We want to know about the drop in employment, because it tells us how many people are going through a particularly tough time in their life," said Trevor Tombe, an economist with the University of Calgary.
"If it's just a drop in profit or shares fall, it's a different kind of pain, it's much more broadly and evenly spread, but job losses are a concentrated type of cost that's felt by individual families, so it's an important number to know."
With that in mind, let's try to figure it out.
- MORE ECONOMIC NEWS | Calgary holds on to its strong credit rating from Standard and Poor's
- MORE ECONOMIC NEWS | Southern Alberta farmers looking forward to potential bumper crop
The number of job losses connected to the oil price downturn can be tricky to pin down. Statistics Canada offers two numbers, one from the Survey of Employment, Payroll and Hours (SEPH), which suggests that from December 2014 until April 2016, 3,853 jobs were lost in Alberta in oil and gas extraction and a further 29,196 in jobs that support energy and mining extraction.
- MORE ALBERTA NEWS | Jason Kenney in Calgary to announce bid for Alberta Tory leadership, sources say
The other number, from the Labour Force Survey, indicates that 43,000 jobs have been lost in mining, forestry, fishing, quarrying, and oil and gas over that same period. Of course, that includes six industries, not just oil and gas, but employment in mining, forestry, and fishing have largely been stable in recent months.
So who is right?
The Survey of Employment, Payroll and Hours is the closest thing to a hard count. It pulls its numbers from payroll reports submitted to the Canada Revenue Agency. But it can be confusing when it comes to inter-provincial employees (fly-in-fly-out workers), since it records the location where the job was cut, not the location where the employee lives.
That's different from the Labour Force Survey, which is based on a telephone survey, but measures people who are out of work in the province where they live, not the province where they worked. The LFS would also capture contractors, who may not officially be on the payroll reports submitted to the Canada Revenue Agency.
While no number is perfect, Tombe said he would tend to rely on the figure from the Labour Force Survey — 43,000 jobs cut between December 2014 and May 2016.
"This is the relevant measure in most people's minds," said Tombe. "And relevant for policy-makers. It also includes contractors and other self-employed people that SEPH does not."
- Despite unemployment rate, military can't seem to hire in Alberta
- Alberta unemployment rate surges to 7.8% with largest decline in hours worked in 30 years
Where the cuts hit hardest
One thing is clear, it's the wide variety of support jobs that have been cut, not the actual operations jobs. This is not a particular surprise, since actual production hasn't fallen, but future growth has fallen off a cliff.
Another way to track job cuts is through the annual reporting of energy companies, each of which is required to disclose the number of employees at year-end. While companies like Suncor and Cenovus shed jobs in 2015, it was a relatively small percentage of full-time staff.
The well service companies took huge hits, with Ensign Energy Services cutting nearly half its Canadian staff and Trican Well Services ending the year with only one-third of the employees it began 2015 with. Precision Drilling cut nearly 4,000 jobs.
Indirect job numbers unreliable
Another number bandied about has been the number of indirect jobs that have been lost. The Canadian Association of Petroleum Producers and Enform both use a multiplier of 2.5, meaning for every direct job that's been cut, 2.5 indirect jobs have been lost. That would put the overall losses at 110,000, more than twice the number of total jobs lost in Alberta in the past 17 months.
- Oilpatch to lose 185,000 jobs? Probably not, says economist
- Thousands more oil and gas job losses in 2016, new report predicts
Tombe thinks that indirect numbers don't add up.
"Conceptually this idea of indirect jobs makes very little sense. If you take all the employment in each of the sectors, combine it with the indirect jobs associated with that sector, you'll end up with twice as many jobs that exist in all of Canada."
To sum up, the best guess is that 43,000 Albertans lost their jobs in oil and gas since the downturn began in late 2014. Some moved for work, some went home, some found other work, and all are hoping that the job cuts are in the rear-view mirror.