The Death Of The Canadian Oil Dream, A Firsthand Account
We’ve spent quite a bit of time over the past 12 months documenting the trainwreck that is Alberta’s economy.
Most recently, we brought you "This Is Canada's Depression: Surging Crime, Soaring Suicides, Overwhelmed Food Banks" and "For Canadian Repo Men, Business Has Never Been Better", but you can review the story in its entirety by revisiting the following posts:
- Canada Crude Contagion: Calgary home Prices Drop Most In 2 Years
- "Canada's Biggest Oil Casualty To Date: Calgary's Nexen Shutters Oil Trading Desk"
- "The Canadian Housing Bubble Has Begun To Burst"
- "Canada's Oil Patch Confidence Crashes"
- "Canada Mauled by Oil Bust, Job Losses Pile Up – Housing Bubble, Banks at Risk"
- "The Stage Is Set For A Massive Housing Market Correction in Canada's Oilpatch"
In short, Alberta is at the center of Canada’s oil patch and has suffered mightily in the wake of crude's seemingly inexorable decline.
Going into last year, Alberta expected its economy to grow at a nearly 3% clip. That forecast was reduced to 0.6% in March and further to -0.6% in the latest fiscal update. Oil and gas investment has fallen by a third while rig activity has been cut in half.
The fallout is dramatic. Food bank usage in Alberta is up sharply and so, unfortunately, is property crime in places like Calgary where vacancy rates in the downtown area are at their highest levels since 2010. Suicide rates are on the rise as well while the outlook for unemployment continues to darken with each passing month of “lower for longer” oil prices.
Below, find excerpts from an excellent account of the malaise penned by Jason Markusoff who writes about Alberta, lives in Calgary, and has spent 12 years reporting for the city's largest newspapers.
* * *
From "The Death Of The Alberta Dream," by Jason Markusoff as originally published at Macleans
Late last year, Brandon MacKay listed his Kawasaki dirt bike for sale on Kijiji, the online classifieds site. It was the only treat the 25-year-old had given himself in three years living in Fort McMurray. The rest he’d spent on supporting and visiting his wife and kids in Pictou County, N.S. But in crafting the ad for the bike—$4,400 or best offer—MacKay did what any sales agent would advise against: he revealed his desperation to sell. “I lost my job and am in need of money for my wife and kids for Christmas.”
Energy companies are preparing for a grim 2016. Analysts predict budgets will get slashed further, and that more energy firms may have to cut staff, having already laid off thousands. Ongoing oil sands construction projects will continue to wind down with little to replace them, hitting both the residential and commercial real estate sectors hard. For instance, in nearly one-sixth of all the office space in downtown Calgary, the fluorescent lights now shine on empty cubicles, and it’s forecast to get worse. Reports of the symptoms pop up almost daily: more insolvencies, more business for moving trucks and repo crews, even a noticeable uptick in suicides. The Calgary Stampede itself has been forced to lay off staff, as its offseason event bookings dried up. In November, the Alberta unemployment rate came within one-tenth of a percentage point of the national average, the closest it’s been since 1989. Those trend lines are expected to cross over next year, making it more clear to Canadian job-seekers that the Alberta dream is in decline.
The rest of the country isn’t immune from those ominous grinding sounds coming from Canada’s longtime economic engine. Canadian GDP dipped into recession territory in the first half of 2015 on the oil shock, and though the country managed a rebound in the third quarter, Alberta’s troubles—as well as slumps in other oil-rich provinces like Saskatchewan and Newfoundland—have left a gaping wound. The energy sector had long driven Canada’s trade surplus, papering over weakness elsewhere while soaking up large numbers of unemployed and underemployed people from regions like the Maritimes and hard-hit southwestern Ontario.
But even average growth seems a ways off, as troubles keep filtering through the province. In Alberta’s southeast, Medicine Hat drew international acclaim in the spring of 2015 after it became the first city in Canada to eliminate homelessness, having pursued an ambitious five-year agenda to put people into subsidized housing within 10 days of them landing in emergency shelters. After so much progress, Medicine Hat’s Salvation Army shelter is back to averaging 17 clients a night, up about one-third since 2014—too many to promptly find them all affordable housing. Local demand for donated clothing and household items also rose by more than a quarter over the last year, says manager Murray Jaster. But donations slumped too, and he had to reduce staff.
To Jaster’s point, there is much his province used to have that now seems gone. Most noticeable is Alberta’s eroding status as the Promised Land for so many Canadians from other parts of the country. Over the last decade, net interprovincial migration by 18- to 44-year-olds, the key working demographic, swelled Alberta’s population by 200,000, according to a report by a rather envious Business Council of British Columbia. (That province netted fewer than 40,000 over that stretch, while all other provinces were net losers.) The momentum has shifted. While 1,200 more Canadians still moved to the province than left it during the third quarter of 2015, that was the smallest gain since 2010—when the province was recovering from the 2009 oil price collapse—and less than half the average of the last 50 years.
“Seeing that there’s no real light at the end of the tunnel right now, more [companies] are turning to job cuts,” says Wendy Giuffre, the president of Wendy Ellen, a human resources consultancy. “It seems that there’s another wave right now. I think people were kind of hopeful things were going to pick up sooner, but it’s not looking too promising.”
Statistics Canada’s payroll survey shows Alberta shed 63,500 jobs over the year leading up to October. That doesn’t account for lost potential—the Canadian Association of Petroleum Producers estimates 40,000 jobs that were expected to be created never materialized.
It’s no secret that Alberta’s economy is closely linked to the peaks and craters of oil prices—nominal GDP (not adjusted for inflation) swings in tandem with crude prices. It’s why Fort McMurray is like a wounded beast these days. MacKay’s neighbour got laid off this fall. “I watched the bank come and take his truck,” he recalls—it was that or not feed the kids. Home prices in November were 20 per cent below last year’s average, with even townhouses and duplexes losing $100,000 in value. According to reports, a number of people who used to regularly donate to the city’s food bank have become clients.
What happens in the oil fields directly affects one of Canada’s largest business cores. Elevator trips to Beaver’s small ninth-floor Calgary office have gotten lonelier. Nearly one-third of the office space in the 32-storey highrise is listed for lease or sublease. The asking rate to rent downtown Calgary’s “Class A” office space is down nearly 42 per cent from last year, the result of “a complete lack of demand,” according to a report by real estate advisers Jones Lang Lasalle.
The hollowing out of Calgary offices has decimated the corporate lunch crowd. Regulars who would come to Jalapeno’s Mexican Grill three times a week now visit once, or not at all, owner Doug Hernandez says. “We’re not making any money; we’re just floating right now,” he says. “The problem would be when I’m not wearing my lifejacket anymore. Then I’d drown.”
Much more in the full article here
(9 votes)
»
- Login or register to post comments
- Printer-friendly version
- Send to friend
- advertisements -
Right. The loonie has plunged as much as it has because we have precious little else anybody will buy with his own money.
Of course Riyadh will get their guns. Justin owes the Sauds big.
Justin!
Just in..... Justin was appointed by the rulers.
Same old.
Nepotism is alive and well just about everywhere.
Surely you remember his article in zerohedge on December 21, 2015
Russian Oil Production Hits Record As Saudi Gambit Fails The Saudis were never out to destroy Canadian shale production. They were always doing the bidding of their white masters in Washington. And that was to lower Russia's oil revenues.The phony story about shale allowed them to have a relationship with Moscow in spite of their price cuts. And maybe even flatter Putin into selling the Saudis an Iskander or two. (He didn't)
I'd sooner see a pot leaf on the CAD20 bill than Trudeau the tapette. One bullet we managed to dodge when Pierre died.
One of the reasons I consider Canadians as brothers.
https://www.youtube.com/watch?v=w1RN3cYnY9k
Yeah! :-)
Put that cannabis leaf on your currency! The British Empire was built by sailing ships whose sails were made of cannabis. Canvas = cannabis.
I still can't believe Canadians were going to let the oil companies strip-mine an area larger than many USA states.
My neighbor is " French Canuk-istanish" He has celulose of the brain, until the extension cord shocks his ass...
the big oil comanies and banks think of it as black gold
Incorrect. Cite reference please.
Wikipedia:
Alberta Oil Sands 54,000 square miles
Maine 35,385 square miles
Vermont 9,616 square miles
Connecticut 5,543 square miles
Rhode Island 1,214 square miles
New Jersey 8,722 square miles
Maryland 12,407 square miles
West Virginia 24,230 square miles
Louisiana 51,843 square miles
Hawaii 10,931 square miles
For photos of strip-mining, go to Yahoo and enter Alberta Oil Sands. See Image Results.
Wikipedia describes the area as boreal forest and muskeg (peat bogs).
Not prime realestate. Not good for farming or timber. Not many people lived there and there was no work. The oil is there in the soil so no further polution is created. Not like fracking where deep ground water may be affected. I guess everyone in libtard north america should shut down oil production and coal production - we can all spend our days texting if we can stay warm enough.
And this is how humans avoid the Malthusian catastrophe.
http://ericwalberg.com/images/stories/tarsands1.jpg
We strip mine large sections of the planet and wipe out the environment of everything that lived there. Exporting extinction. Course this is only a delaying tactic. The planet remains finite.
Yes we are wiping out the natural environment of the earth - only a poplation reduction will save what is left. But I maintain that the impact on the environment in this part of the world is less than in jungle ares, the oceans, the aquifers in central US, .....
But we don't know that. We don't know that the tundra is less valuable to the planet. We don't know that the boreal forests are less valuable to the planet. Human science is still in its infancy.
Boreal forests and peat bogs provide enormous environmental benefits.
"Environmental" means, "long-term, and it doesn't cost anything".
But many Masters of Industry and their MSM would destroy the environment to get short-term profits for themselves. And, in cheerleading destruction of the environment, they use their army of jobseekers, telling them "YOU need jobs now, and DON'T WORRY about future generations". They also tell their army of jobseekers to have lots of kids, who will very soon need even more jobs. So, by arithmetic, just a few generations down the road, the situtation becomes "WAAAH! SOMEBODY MADE US have all these kids, and there are NO environmental resources left to support them. So now give us welfare to feed and clothe all these kids. Thus, anti-environmentalism is "libtard" because, by destroying the NATURAL resources, it forces government to substitute WELFARE, and whenever government creates WELFARE, it removes people's FREEDOM in order to pay for that welfare.
This is very simple arithmetic that everyone understands. However, the Masters of Industry and their MSM pretend not to understand it, because they want something for nothing NOW, and don't care whether their getting that something for nothing NOW means that somebody else gets nothing for something LATER.
The only way anybody ever gets something for nothing is if somebody else gets nothing for something.
THe tar sands have always leached oil into the groundwater, and surrounding streams. They are the equivalent of a huge spill that is being cleaned up.
Apples and oranges. The natural systems around the tar sands are adapted to the tar sands. The natural systems in estuaries are not adapted to oil spills. The difference is like the difference between living in Seattle and getting rained on most days, and living in New York and having a hurricane wipe out your city.
Most of the oil sands extraction is now using steam injected underground to heat the bitumen and collect it in underground plumbing. Its a lot less impact on your precious fucking tundra that all the bleeding heart idiots like to complain about. Assholes, go live in a goddamn cave in the dark if you think its so bad to have energy. This mini-bust is going to wipe a lot of future production out, and delay big projects for a decade or more. When the easy flowing cheap energy dries up - and it will - then all of the tree huggers are going to find out that life is really not so cheap and convenient after all without all that 'dirty oil' they like to bitch about so much. Enjoy this glut while you can because reality is coming for you in the aftermath. The trouble is that this future shortage is so easy to see, but the people who know better with the skills to do somethign about it are all drowned out in the noise and distraction from the global warming fuckholes, green energy whiners, and general liberal soccer moms that dont know a goddamn thing about anything but insist on being heard. The next crisis is just around the corner and people will be missing the good ole days of 'cheap' oil at $100 a barrel when that time comes.
I would challenge your thought that most of the oilsands is a SAGD operation, suncore and syncrude are huge open pit mine operations..
The photos clearly show strip-mining.
I think we will all be very very sorry if we destroy the tundra.
It's not just global warming. It's also fishery depletion, game depletion, replacement of forests by cropland, soil erosion, poisoning of all waters everywhere and all air everywhere, and on and on and on....
Environmentals want to save the trees Mother Nature has put around them, and Wise Users want to "harvest" those trees, get enough money to escape, and move to some still-unspoiled part of the planet, maybe next to an ocean or a ski range. But all those oceans and ski ranges are also being destroying as fast as the Wise Users already there can destroy them. Wise Users thus foul every nest on the planet, and very soon all the children, including the Wise Users children, are going to wake up nestless. I consider Wise Users to be very similar to Cental Bankers, in that Central Bankers hope to spend the inheritance (faith in "money") everyone else has put there, and Wise Users hope to spend the inheritance Mother Nature has put there, and neither group can put back what they take, and therefore both groups hurt the next generation, and the generation after that.....
There was a lot more personal freedom in the USA before a Central Bank took over. There was also a lot more freedom in the USA before its natural resources became so depleted.
Wise Use -> fewer resources -> less freedom.
More population-> fewer resources -> less freedom.
I am perfectly happy using LED light bulbs, riding a bicycle, and, basically, using as little fossil-fuel-generated power as possible. What's wrong with that?
If conservation is not conservative, then what is?
Nobody lets anyone, do anything, with their own property.
The land is leased, and owned by the taxpayers at-large.
Bit of context for non-Canadian ZHers. This is about more than Saudi oil dumping. In Canada, it's about power---Bay Street's desire to rule Canada as they see fit and to break the spirit of uppity Albertans.
Alberta committed the unpardonable sin in 1935 of electing the Social Credit party to office, with a mandate to reform Alberta's financial system and take back the privilege of issuing money from Bay Street banks---with the money to be issued to Albertans in the form of a monthly dividend ($25 a month to every household, no questions asked), quantitative easing for the rest of us.
Of course, Ottawa had little trouble preventing the Socreds from carrying out their program, but it didn't matter. It was the first time an electorate anywhere in the civilized world had openly defied the banksters. Bay Street never forgave Albertans for their defiance.
That included Stephen Harper. At best, Harper was only barely tolerated by Bay Street while the Liberal Party was in disarray and he governed as a Red Tory (RINO in an American context), doing little to undo the damage done by Pierre Trudeau to Canadian society. Hinting he might do something about Islamisation was the last straw.
Justin Trudeau's life partner Gerald Butts did a fine job of restoring the Liberal brand's cachet among low-info voters. Justin of the Nice Hair was duly appointed our new prince, over the misgivings even of our sickeningly compliant mainstream media, who had been unable to ignore just how shallow and unprepared for office Justin was.
In Alberta itself, the people were robbed of the government of their choice twice. The Wildrose party (a descendant of the Socreds) lost to the ruling "Progressive Conservative" party first, and then to the socialist New Democratic party, thanks to wholesale voter fraud (much perpetrated by urban Muslims who voted several times for the PCs or NDP in areas where Wildrose did not have a fraud-proof majority).
I dare say Canada's master class had a great 2015. Harper's gone, the Liberals are back in charge, and nobody who matters is likely to lose his job or his house on account of the oil slump. Consequences are for proles.
Dude, you guys have voted for a fucking commie party (NDP) in your last provincial elections ! Are you blaming Trudeau and his libs for that too ? You could have asked your neighbors about life under those kooks but noo, no, no, you wanted to prove how smart you really are by yourself... Well, mission accomplished ! Better wake up and smell the coffee, now...
Bay Street back the Alberta NDP and federal Grits both.
Anyway, most Albertans smart enough to have any business voting voted Wildrose. The NDP victory was due to low-info voters convinced by the MSM that Wildrose were "scary" and wholesale voter fraud in Calgary and Edmonton.
Imams sent the brothers and sisters to vote several times for the NDP for fear Wildrose might stop Islamisation in urban Alberta or defend the rights of Christians and Jews to practice their faiths in the province. Naturally, proof of citizenship is not required to vote in the True North.
Whatever, but I don't believe that non-citizens voted in your elections ! Canada is light years away from US when it comes to elections...
Lying trailer-trash.
"Anyway, most Albertans smart enough to have any business voting voted Wildrose. The NDP victory was due to low-info voters convinced by the MSM that Wildrose were "scary" and wholesale voter fraud in Calgary and Edmonton."
I reckon the NDP victory was caused by the tories. As shit as the NDP are and as much as they will indeed fuck the province, its the PCs fault. For chirst sakes, all the tories had to do was hose out their own sewar they would have stayed in power another 3 decades...but oh no. The PCs were SO F'ing corrupt it makes your head swim but they just refused to reign it in....so now they are gone. They will be back in 4.5 years but for now, watch the damage 5 years of unicorns can do.
Squid
Election sounds like the U.S. and Obama's election.
Oui, nous sommes capables!
I can only up vote you once...
Ah yes, the 'Upper Canada' boys. It' a rotten deal, so many in Alberta are getting hit. Was there just before Christmas, up North. The NDP is not rolling well in those lands. The min wage farm bill is a 'no flyer'. Like you say, the vultures are circling. This will be back - one day. Who will own it then; service companies, fabricators etc. that will be the real damage...
Ah yes, the 'Upper Canada' boys. It' a rotten deal, so many in Alberta are getting hit. Was there just before Christmas, up North. The NDP is not rolling well in those lands. The min wage farm bill is a 'no flyer'. Like you say, the vultures are circling. This will be back - one day. Who will own it then; service companies, fabricators etc. that will be the real damage...
The Car People come,
The Car People go.
Its the Alberta story.
Maybe. Right after getting out a I had a short gig working with some unionized contruction workers. They were all telling me how they were pulling in 150K a year and regaled me with their tales of excess. Pull in that kind of money for a few years and with some prudent financial planning there's no way you should be fucking broke. But most people these days lack the financial wherewithall to balance their books, and as soon as serious money start rolling in they blow it all on depreciating assets. Pick-up trucks or muscle cars, useless elecronic excess that is dated by the time you install it; mortgages for sky castles they had no business buying in the first place, a wardrobe full of dumb rags that's dated faster than the electronics. If only they had squirreled away 70% of those riches and lived more frugally, but no.
You had your feast. You should have prepared for the famine. This is a concept that our forebears respected but seems to have gone extinct with a tribe of people believing in the cup-a-plenty from the welfare state.
Fools. No sympathy.
this is why the jew rules over the goyim
most goyim are useless eaters who only eat and consume
most of them are on earth to serve (this) jew.
get to work!!
not today..it is the sabbath....
Thanks for beating me to positn ghits. Calgary has been the home of White Excess for the last 10 years. Kids were leaving high school to jobs paying $150K+ for only 9-months of work. And outside CGY and EDM the costs of loving were moderate. These white trash-done-good could have socked away plenty. Basically everyone I know in CGY (and I know a lot, as I''m in the oil business) has a condo in California or Florida, and/or Costa Rica (hugely poopular)., as well as a ski/lake house to the west
Is the $4400 asking price in USD or CDN? Did he sell it?
Edit: PS. I received a Cuban 5 cent piece instead of a dime in change. Bastards!
Before oil hit big in Alberta, it was considered a have-not province and was entitled to equalization payments from the so-called rich provinces like Ontario. Since Alberta has been paying for about 50 years, maybe its time the flow is reversed.
Homebody
Alberta has never recieved any money from equalization payments. The scheme didn't really start until the 1950's and it was an effort to bail out Newfoundland that had recently joined Canada and was a total basket case.
Premier Notley said she will borrow money to pay equalization payments if needed.
I did not say that Alberta received any payments. I stated that Alberta has been contributing to this program for around 50 years.
I would not buy any stocks right now. Meltdown is in progress. Things are shaky everywhere.
Thanks for the tip
nice to get gold miners.. in Canada... they sell a product in US dollars... cheap labour
Canada, just declare war on Saudi Arabia!
Use your navy and your famous Avro planes to get the job done. LOL.
Alternatively, just boycott Saudi bands, products and services, and demand that they obey the Canadian human rights and labor codes that your Liberals, NDP and Greens have created. LOL.
Lebanese or Pakistani armies are more powerful than Canada's. Iran armed forces are a giant compared to Canada. Israel is also a giant compared to Canada.
Canadians are out of touch with reality, it is sad.... Even Swedish armed forces are better and they actually make a lot of their own stuff and they have only 8.5 million people.
Those F18's we fly, they are from the 80's, useless in combat now, our ships are old, subs are junk that don't work that were UK scrap that they suckered us into.
The only good things we have are a handful modernized leopard tanks and some G wagens.
That's what zionists and being a vassal of USA does to you... sucks everything out
Canada is a gas and mineral station and has no respect for itself.
If there are any countries want to donate some military equipment please call our Minister of Defence, but please not those old humvees the US sent to Ukraine, we can't afford new tires for them either.
the only revolution Canada needs to get away from USA and use our resources for ourselves and perhaps even design a car, or maybe build a factory... even to make toasters or mousetraps to start...
Japan started out with cheap radios, cheap wrist watches and other 'Jap-Crap' (the dirisive term we used to use for japanese products back in the '60's.). From there they moved into being a powerhouse producer in the 80's. They fucked up their economy with bad finance practices (as we have, also, here in the US).
But, yeah, go back to making something, anything, a fucking toaster that lasts forever or a napkin holder that always perfectly dispenses a napkin without rips or jams, and you can build on that. Build solid, quality products that never go bad, in small niche markets and reputation builds for other small niche markets.
That's how a nation gets it's shit together.
Not this financialized shit show currently going on.
One of the big issues with manufacturing anything in Canada is regulations including Safety regulations, then worksafe insurance, liability insurance then taxes. When a craftsman gets taxed 40-50 % what did the item cost to build? Double