Monthly employment data suggests the number of people working in Canada’s oil and gas sector has fallen by more than 14,000 so far this spring, as the sector deals with low oil prices and the economic impact of COVID-19.
Figures published this month by Petroleum Labour Market Information (PetroLMI) say oil and gas employment fell to 162,748 in May from 177,332 in March — a drop of roughly eight per cent. Compared with May 2019, oil and gas employment is down 14 per cent, or 25,600 jobs.
PetroLMI’s data and figures are sourced from Statistics Canada’s Labour Force Survey.
“It’s not just the COVID-19 impact, but also the low oil and gas prices, which are continuing,” said PetroLMI vice-president Carol Howes of the jobs figures.
“We do expect to see some additional layoffs in the next coming months and into next year.”
Howes said she’s not expecting the kinds of layoff numbers witnessed a few years ago after the decline in oil prices in 2014, when direct employment in the oil and gas exploration, services and pipeline sectors stood at about 226,000.
“The sector is already quite, quite thin in terms of the number of people working in the industry,” Howes said. “As a result of that, we only have so much we can cut, so many places we can cut in terms of employment.”
‘The sector is already quite, quite thin in terms of the number of people working in the industry,’ says Carol Howes, vice-president at PetroLMI. (CBC)
North America’s oil industry has been hammered by the economic impact of the COVID-19 pandemic, with demand for fuel plunging as an international price war flooded the market with cheap crude.
The situation spurred oil and gas companies to slash production and cut their capital spending plans by billions of dollars this year. It has also led to job losses.
On Thursday, oil and gas producer Ovintiv — formerly known as Encana — said it has slashed its workforce by 25 per cent as it prepares for more modest growth in the energy sector. The decision affected roughly 650 jobs.
Earlier this week, pipeline giant Enbridge announced that 800 people working for the company would be taking voluntary buyouts, including early retirement, as it aimed to avoid layoffs.
PetroLMI reports that while the bulk of oil and gas employment is in Alberta (128,180 people), thousands of jobs are located in British Columbia (8,304), Saskatchewan (8,940), Central Canada (4,924) and Atlantic Canada (7,680).
Howes said the sector most affected so far appears to be the oil and gas services sector.
“They’re the first sector to be impacted and mostly because if you’re not drilling for oil and gas, those are the jobs that are most directly impacted by layoffs,” she said.
A pumpjack works at a well head on an oil and gas installation in Alberta. The Canadian oilpatch has been hit hard by a drop in oil prices and the economic fallout of the COVID-19 pandemic. (Jeff McIntosh/The Canadian Press)
Elizabeth Aquin, interim president of the Petroleum Services Association of Canada, said a survey of their members in recent weeks found many had seen layoffs in the order of 35 to 50 per cent this year.
She said a tough few months has come on top of several tough years, adding service companies do not want to lay off any more people.
“These workers have years of experience and we are renowned around the world for that technological expertise and our innovation,” she said. “We need to keep the skills and expertise.“
She said while companies in her sector have shed thousands of jobs, it would be worse without the federal wage subsidy. But, she added, not every company that needs the program was able to qualify.
Ottawa also announced that it would spend $1.7 billion to help clean up orphaned and inactive oil and gas wells in Alberta, Saskatchewan and B.C., a move it’s hoped will put some people back to work.
Tristan Goodman, president of the Explorers and Producers Association of Canada, said much of how the coming months play out for the energy sector and its workers depends on pricing and government policy.
He said if benchmark oil prices stabilize above $40 US a barrel — or better still, $45 US — it would help. On Friday, the price of West Texas Intermediate close just shy of $40 US.
Goodman said it will also be important to see how the policies of various governments take hold, including federal loans and loan guarantees aimed at helping small and mid-sized companies stay afloat during the downturn.
“It all comes back in the end to workers,” he said. “It is people, families, jobs.”
There are still many opinions on how quickly economies and oil prices will stabilize given the unpredictability of the COVID-19 pandemic and its impact on industries and consumers.
Matthew Fitzsimmons, vice-president of energy service research at Rystad Energy, believes the employment picture in Canada’s oil and gas sector will be difficult until capital investment returns to a more normal state.
“It’s a tough situation,” Fitzsimmons said.
“But we would expect those jobs, as investment picks up, to come back. It won’t be like flipping a light switch necessarily, because we do see a long road to recovery from a spending standpoint versus where we were in 2019.“
He said Rystad’s expectation is that investment will bottom out in late 2020 and start to increase in 2021, but believes it could take a couple more years to recapture the spending levels seen in 2019.
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
Dollarama Inc.’s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector.
“It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.
“We will keep an eye on all retailers — like all retailers keep an eye on us — to make sure that we’re competitive and we understand what’s out there.”
Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets.
However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store.
The No Name stores being tested by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20 per cent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise.
Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar.
“All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,” he said.
Rossy declined to reveal how much of the chain’s sales would overlap with Loblaw or the food category, arguing the vast variety of items Dollarama sells is its strength rather than its grocery products alone.
“What makes Dollarama Dollarama is a very wide assortment of different departments that somewhat represent the old five-and-dime local convenience store,” he said.
The breadth of Dollarama’s offerings helped carry the company to a second-quarter profit of $285.9 million, up from $245.8 million in the same quarter last year as its sales rose 7.4 per cent.
The retailer said Wednesday the profit amounted to $1.02 per diluted share for the 13-week period ended July 28, up from 86 cents per diluted share a year earlier.
The period the quarter covers includes the start of summer, when Rossy said the weather was “terrible.”
“The weather got slightly better towards the end of the summer and our sales certainly increased, but not enough to make up for the season’s horrible start,” he said.
Sales totalled $1.56 billion for the quarter, up from $1.46 billion in the same quarter last year.
Comparable store sales, a key metric for retailers, increased 4.7 per cent, while the average transaction was down2.2 per cent and traffic was up seven per cent, RBC analyst Irene Nattel pointed out.
She told investors in a note that the numbers reflect “solid demand as cautious consumers focus on core consumables and everyday essentials.”
Analysts have attributed such behaviour to interest rates that have been slow to drop and high prices of key consumer goods, which are weighing on household budgets.
To cope, many Canadians have spent more time seeking deals, trading down to more affordable brands and forgoing small luxuries they would treat themselves to in better economic times.
“When people feel squeezed, they tend to shy away from discretionary, focus on the basics,” Rossy said. “When people are feeling good about their wallet, they tend to be more lax about the basics and more willing to spend on discretionary.”
The current economic situation has drawn in not just the average Canadian looking to save a buck or two, but also wealthier consumers.
“When the entire economy is feeling slightly squeezed, we get more consumers who might not have to or want to shop at a Dollarama generally or who enjoy shopping at a Dollarama but have the luxury of not having to worry about the price in some other store that they happen to be standing in that has those goods,” Rossy said.
“Well, when times are tougher, they’ll consider the extra five minutes to go to the store next door.”
This report by The Canadian Press was first published Sept. 11, 2024.
TORONTO – The U.S. Consumer Financial Protection Bureau has ordered TD Bank Group to pay US$28 million for repeatedly sharing inaccurate, negative information about its customers to consumer reporting companies.
The agency says TD has to pay US$7.76 million in total to tens of thousands of victims of its illegal actions, along with a US$20 million civil penalty.
It says TD shared information that contained systemic errors about credit card and bank deposit accounts to consumer reporting companies, which can include credit reports as well as screening reports for tenants and employees and other background checks.
CFPB director Rohit Chopra says in a statement that TD threatened the consumer reports of customers with fraudulent information then “barely lifted a finger to fix it,” and that regulators will need to “focus major attention” on TD Bank to change its course.
TD says in a statement it self-identified these issues and proactively worked to improve its practices, and that it is committed to delivering on its responsibilities to its customers.
The bank also faces scrutiny in the U.S. over its anti-money laundering program where it expects to pay more than US$3 billion in monetary penalties to resolve.
This report by The Canadian Press was first published Sept. 11, 2024.
