Just how many jobs have been cut in the oilpatch? - Action News
Home WebMail Friday, November 22, 2024, 10:37 AM | Calgary | -10.8°C | Regions Advertise Login | Our platform is in maintenance mode. Some URLs may not be available. |
Calgary

Just how many jobs have been cut in the oilpatch?

The pain of the oil price crash in Alberta has mostly been expressed through job losses. But there's a wide range of estimates when it comes to oilpatch layoffs. We try to sort through the numbers.

Estimates of job losses vary widely. Here's a look at the numbers

Oilpatch workers on the job.
According to the StatsCan Labour Force Survey, 43,000 oilpatch jobs have been lost since December 2014. (Norm Betts/Bloomberg News)

The pain of the oil price crash in Alberta has mostly been expressed through job losses, with the idea being thatif we can put a number on it, we can get a sense of just how bad the downturn has been.

"We want to knowabout the drop in employment, because it tells us how manypeopleare going through aparticularlytough 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 adifferentkind of pain, it's much more broadly and evenly spread,but job losses are a concentrated type of costthat's felt by individual families, so it's an important number to know."

With that in mind, let's try to figure it out.

Competing estimates

The number of job losses connected to the oil price downturn can be trickyto pin down. Statistics Canada offers two numbers, one from the Survey of Employment, Payroll and Hours (SEPH), which suggests that from December 2014until April 2016, 3,853 jobswere lost in Alberta in oil and gas extractionand a further 29,196 in jobs that support energy and mining extraction.

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.

Then there is theCanadian Association of Petroleum Producers, which estimates that 44,000 jobs were lost since the downturn began.On the other hand,Enform, which is a group funded by industry, pegged the number at 28,145 in direct job losses last year across the country.
Suncor said that it cut 1,700 workers in 2015. More than 1,000 were contractors, which aren't reflected in the StatsCan Survey of Employment, Payroll and Hours. (Jason Franson/The Canadian Press)

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.

Another figure to look at is the number of people collecting employment insurance. In December 2014, 31,220 Albertans were collecting benefits. In April 2016, the most recent month data was available, there were 67,900, a difference of around 35,000. Some of those people collecting EI would have run out of benefits, or found work, or moved to another province.
Precision Drilling cut 3,800 jobs last year, nearly half its workforce. (Ivan Alvarado/Reuters)

While no number is perfect, Tombe saidhe 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."

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 percentageof full-time staff.

The well service companies took huge hits, with Ensign Energy Services cutting nearly half its Canadian staff and Trican Well Services endingthe 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. TheCanadian 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.

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.