A new study says decreased spending in Canada’s oil and gas industry could lead to up to 123,000 lost jobs in Alberta.
The impact employment assessment was released today by the Petroleum Labour Market Information (PetroLMI), a division of Enform.
It anticipates a $31 billion reduction in capital and operational spending in 2015 which would lead to as many as 185,000 direct and indirect job losses related to the oil and gas industry, two thirds of those losses are expected to be in Alberta.
That would be a 25 per cent decline when compared to previous years if current spending patterns held.
“The industry has already experienced significant impacts to its labour force since the price of oil started its decline last November,” says Carol Howes, Director of PetroLMI. “If oil prices continue to remain low, we anticipate additional reductions to spending and jobs before things start to turn around.”
British Columbia could lose up to 20,000 jobs and Ontario an estimated 14,000.
Oil and gas focused engineering construction firms are expected to be the hardest hit with 75,000 jobs potentially on the line.
The support services sector would hold the next largest share of expected job losses with a decline of an estimated twenty-six thousand jobs.
Capital spending on exploration and development is expected to see the highest declines with estimated cuts up to $28 billion.
While oil and gas companies try to increase production to offset lower oil prices operating expenses are expected to decrease by an estimated $3.3 billion.
The assessment notes that if estimated reductions in spending takes place job losses could be even worse than the levels seen during the 2009 recession.
“The outlook for 2016 and beyond is unclear,” says Howes. “Managing labour costs in a time of declining oil prices through creative workforce retention strategies will become more critical in the months ahead.”
PetroLMI specializes in providing petroleum labour market data, analysis and insights.
The assessment was funded by the Government of Canada’s Sectoral Initiative Program.
