The 2019 Labour Market Update by the PetroLMI division of Energy Safety Canada indicates about 12,500 jobs are at risk this year due to several factors including low commodity prices, a decline in capital spending and continued uncertainty over market access.
And Alberta, as the largest energy-producing province, is expected to have the most jobs at risk at 9,600.
“Until such time as additional export capacity becomes available, the employment outlook for Canada’s oil and gas sector will continue to be impacted,” said Carol Howes, Vice President of Communications and PetroLMI, Energy Safety Canada, in a statement.
“Many exploration and production and oil sands companies reported only limited capital and production guidance for 2019 because of the uncertain market conditions. Given PetroLMI’s reliance on capital and operating expenditures to project workforce requirements for our proprietary modelling system, we have for the first time limited our forecast to one year.”
The report said Canada’s direct oil and gas workforce has become much leaner, shrinking from a peak of about 226,500 jobs in 2014 to forecasted employment of 173,300 in 2019 – a 23 per cent drop over the five-year period.
It said the oil and gas industry saw the labour market flatten following the 2014-2016 commodity price collapse with direct employment ending 2018 at about 185,800, down slightly from the 186,300 workers at the end of 2016.
“Workers in the oil and gas services sub-sector continue to be among the most impacted, facing the highest employment risk in 2019 due to lower activity, driven by lower capital investment, according to the report. The pipeline sub-sector is forecasted to be the only sub-sector to grow just slightly in 2019. Regionally, British Columbia is poised to fare the best, with Alberta expected to experience the most job losses,” said the organization.
“When commodity prices collapsed at the end of 2014, Canada’s oil and gas industry focused not only on reducing its workforce, but also on streamlining business processes, using innovation and introducing more technologies to reduce costs. Stalled progress on the development of new pipeline and liquefied natural gas (LNG) infrastructure projects, heightened uncertainty, however, and lowered investor confidence. Oil production met transportation limits in the second half of 2018, causing an oversupply of production, a sudden decline in the price of Canadian oil and a reduction in capital spending for 2019.”
Of the 12,500 employment positions at risk in Canada’s oil and gas industry, 7,600 are oil and gas services positions, 3,700, are exploration and production positions, and 1,400, are oil sands positions, said the report.
Mario Toneguzzi is a Troy Media business reporter based in Calgary.