Alberta Loses Most Jobs In 34 Years As Oil Crunch Cripples Labor Market

Tyler Durden's picture

Times are tough in Alberta and to be sure, we’ve piled it on heavy when it comes to cataloguing the long list of pitiable outcomes that have accompanied crude’s steep slide.

The province is at the center of Canada’s dying oil patch and as crude extended its seemingly endless decline last year, Alberta saw oil and gas investment plunge by a third. That’s bad news for authorities who count on resources for 30% of provincial revenues.

Rig activity fell by half in the first seven months of 2015 and as the job losses mounted, the sorrow deepened - literally. Suicide rates jumped by 30% and in Calgary commercial break-ins almost doubled from a year earlier, while bank robberies were up 65% and home invasions increased 52% (read more here).

Meanwhile, food bank usage spiked as those who used to be donors found themselves depending on the free meals for subsistence.

And speaking of food, prices for fresh fruit and vegetables are seeing double-digit inflation thanks to the plunging loonie.

All in all, a very bad situation indeed and on Tuesday we learned that the picture was actually materially worse than an initial round of statistics led us to believe.

“Statscan’s annual revisions of its national Labour Force Survey data ratcheted up Alberta’s net job losses last year to 19,600, from the 14,600 the statistical agency originally reported in its final 2015 survey released in early January,” The Globe And Mail reports, adding that the losses “exceed the 17,000 jobs Alberta shed in the Great Recession in 2009.”

In fact, 2015 was the worst year for job losses in the province since 1982.

By the end of last year, Alberta’s unemployment rate had risen to 7.1% from just 4.8% at the end of 2014. As The Globe And Mail goes on to note, that’s the highest level in two decades. And it’s projected to get worse. Alberta could see unemployment rise to 7.5% in H1.

Most of the positions lost were breadwinner jobs. The province shed 51,000 full-time positions for the year, up notably from Statcan's initial read of 44,000. 

"The latest figures are also in stark contrast to 2014, when Alberta added 63,7000 positions, more than half of all jobs created in Canada that year," The Calgary Sun adds, underscore just how sharp the reversal of fortunes has been. 

"Alberta is, in effect, ground zero when it comes to absorbing a commodity price shock," National Bank said last week. "More than any province, it will take the brunt of the expected drop-off in business investment."

Right. And that means more hardship ahead for O&G sector employees like Sean O’Reilly, 46, who, until last November, was a senior manager at Enbridge Inc. 

O'Reilly, who spoke to The Globe And Mail, says he's "embarrased and ashamed", but with a wife and two small children he may be forced to change career paths and move out of the province.

"Southern Ontario manufacturing looks pretty good right now," he says. "I just need one job."

*  *  *

For those who missed it, below are a few excerpts 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

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Canadian Dirtlump's picture

Can confirm as well. We're lucky to be hanging on, but we have work. I took a 10 point paycut last september. You'd be surprised what the effective marginal tax rate here is with respect to child support & my share of expenses. I walked through a 10 point paycut, looked like a hero, and barely noticed it.


Either way I look forward to the religious experience property value wise the good people here earned.

nope-1004's picture

+1.  I have always said and still maintain that Canadian house prices are the most out of touch with reality when compared to any other G7 nation.  A couple of years ago house prices in that oil town of Fort Mack were equal in median price to Maui.  Something is seriously wrong in Canada and the starting commerical real estate correction in Calgary is proving my point.



Id fight Gandhi's picture

Are they "hooking for cheese sammiches" level yet?

Canadian Dirtlump's picture

To be honest. IF you've got some cheese to spend there are more than a few gold diggers used to being taken care of downtown and it certainly won't cost you what it once did due to deflating gold digging prices, and the fact that pubs and bars tends to have brought prices down.

venturen's picture

Some people got Pumped and Dumped

medium giraffe's picture

Nice to think all of the tar sands environmental destruction around Alberta is now entirely pointless. Go humans!

Canadian Dirtlump's picture

Is this a common misconception? That the tar sands are the only form of oil in alberta, and that there is no environmental remediation process in place?

medium giraffe's picture

I don't recall suggesting tar sands being the only form of oil production in Alberta?

Canadian Dirtlump's picture

So now the environmental part? Full disclosure. I'm not a big fan of that part of our industry. Fort Mac has a deserved bad rep, dealing with the big oil companies is terrible, however the footprint of oilsands projects from what I've seen ( we have done SOME modular work for them ) has gotten much smaller, and remediation efforts, at least from what I've seen, are good. Have there been sins? For sure. In my experience, it isn't anywhere near a dystopian pinko doom porn infomercial.

I'd have thought someone on zerohedge would have been sharp enough to look past the msm bullshit.

This is like the article talking about price shock here, quoting prices from the arctic. Go ahead and harbor incorrect assumptions based on distorted facts. Doesn't change the truth for somebody who sees it every day. It does make you look like an asshole though.

nufio's picture

there has been no msm coverage for environmental damage from tarsands. which in itself should be a cause of concern.

Canadian Dirtlump's picture

looks like you have an employment opportunity.

medium giraffe's picture

I generally avoid msm so I've obviously missed the doom porn, but the mess being made near Banff is pretty clear from available photos.  I'm not a crazed tree hugger, but destruction on such a scale for very slim eroei, now almost irrelevant with depressed oil prices, on the only habitable planet for at least 20 light years is a legitimate cause for concern I think.  If that makes me an asshole in the eyes of a nationalist with an inferiority complex, I can live with that.

Reichstag Fire Dept.'s picture

The Canadian Oilsands is the largest soil decontamination project in the world! Do you really think oil companies would dig up the earth and then leave the oil behind? They make their bones recovering oil from the soil. Then remediate and restore...or you could listen to the Tides Foundation financed NGO's and be wrong like every other socialist. 

medium giraffe's picture

So you're saying I should believe the oil company PR?  Ok, will do.

lost in the cosmos's picture

It's actually in the history books from over 100 years ago.  The place was an oil-oozing wasteland to begin with.

thesoothsayer's picture

I thought this is what the Alberta government wanted? To get rid of the tar sands and carbon tax it to death. 

Canadian Dirtlump's picture

I expect a 1 and done. Certainly they are a victim of bad timing, but these fucking retards couldn't find their asses in the dark with both hands and a torch. The environment minister is a stuffed cunt named shannon phillips who was a down and out ndp loser in Lethbridge until the pcs finally fucked up bad enough to make angry ( and retarded ) voters put them in. Her long time loyalty to the party was repaid by a ministerial position. I guess actual poliicians were in short supply since grocery baggers and college pub waitstaff were elected as well.

I listened to the bitch speak last summer and there was no vision, no plan, no specifics. Just her ass on a van covered in solar panels doing a cheap stand up comedy act about how bad the environment was from conservative rule.

franzpick's picture

This and all the other bad stats are worth another 1000 INDU points down when the hopium hangover starts to clear up.

Lady Jessica's picture

Well the silver lining is the extent to which this crimps the extraction of exorbitant privilege by the eastern provinces (aka equalization payments).

ilion's picture

USD/CAD should be heading towards 1.50 shortly.

digiblader1's picture

Week too late for that comment--it's heading for 1.40 and below, especially if OPEC cuts.

pitz's picture

Housing deflation will also push the CAD$ up, as will severe demand truncation on account of rising risk premia. 

ToSoft4Truth's picture

Hey, nobody sent me cash when I was trapped in Detroit through the "Great Recession". 


Chuckster's picture

MSM would have you believe the world economy depends on the price of oil(earl-> Moe Howard).  I'm trying to come up with a plan to play off this stupidity.

silverer's picture

Of course, the hard working people of Alberta would be machine gunned at the US border unless they said they were muslims or just wanted a chance to vote for a democrat.

Albertarocks's picture

Which is one of the reasons I haven't crossed that border since 1988 when I only live 150 miles from it.  I have absolutely no interest in setting foot on US soil again until the police state mentality vanishes.  So I won't be seeing my American friends down there any time soon.  Sad as hell... but that's the decision I made 28 years ago and I'm sticking to it.

847328_3527's picture

It's sad; my friend just was promoted in her energy company last Fall and bought a new [overpriced] house up there ... then they ax a few dozen inlcuding  her. She said it's just beginning. Her plan: sell the house ASAP [or just walk away] and move out of Alberta. She said that's what 8/10 energy people are doing.

zaphire999's picture

Why did she buy instead of rent?

Or is she just a dumb fuck?  Yea, that's real sad.

If you're a dumb fucker.

Canadian Dirtlump's picture

I have my scuba diving ticket for just such a reason ( lost my silver in an accident in henderson lake ).

nidaar's picture

She can't just walkaway from a mortgage in Canada.

moonmac's picture

Got an email from an inside sales guy in Alberta. He can be reached 24/7 on his cell phone. No 35K job is worth that!

dogbreath's picture

I think that number is too low.  There are tons of people that a self employed that will not show up in that report.  

U4 eee aaa's picture

...and just think how the recreational drug economy is suffering!

TRM's picture

They don't count people who have been laid off until their severence package runs out. Usually 4-12 months. So expect a 8+% unemployment rate in Alberta by 2017 if oil doesn't get above $50/bbl.

Even at $50/bbl there is so much excess capacity in everything from downtown office space to well servicing companies don't expect the unemployment rate to go down much. Nobody will hire until they have to. Everyone will run lean until they are sure oil is staying up.


digiblader1's picture

Can't you Zero Hedge guys stop recycling articles and stories about Alberta? I mean, the economy isn't this bad outside of that province..

silverer's picture

Well, in that case, I'm on my way.

lost in the cosmos's picture

Don't feel bad, things are gonna get ugly everywhere.

Besides, a lot of the fort mac guys already moved back to their hometown here in Ontario, and elsewhere.  Don't know whether they are listed as unemployed here or in Alberta.

Vinividivinci's picture

Quebec lost it's automotive and forestry industries - 2 huge contributors to its economy. Quebec City is fine, as are all cities that are home to an overwhelming number of government offices and employees.
Montreal is a cesspoll of menial labour work. Once the call center capital of north america, it has lost more than 80% of it's well paying CSR related jobs to Morocco and the Philipines.
Toronto, where I worked for a few years in the steel and transport industries, is circling the drain, all be it more slowly than Montreal. Thanks to a still (barely) breathing automotive industry and the largest concentration of banking and finance entities.

So ya, Alberta is a big deal, to all canadians. I myself almost made the jump to the richest province years ago. It is ( or was at least until recently) our golden calf. The one place you could always find good paying work. Go West young man, no longer holds the same fascination anymore. Canada's version of the California goldrush, has sadly run dry.

Lore's picture

How will Ontario and Quebec survive without transfer payment subisdies from Alberta?  They're fucked too.  And look at all the stupid Agenda 21 greentards with their smug grins.  You'll be smiling when you can't get the services you need, assholes. 

digiblader1's picture

You're forgetting the low dollar helping exporters..

Lore's picture

You forgot the </SARC>.

Abbie Normal's picture

That is as fallacious as the low gas price helping the economy.

Even the proverbial maple syrup exporter has to pay for foreign-made bottles and processing equipment.

Unless the exported product contains no foreign parts and was not manufactured using any foreign equipment, there will be a price to pay (in US$)


Main_Sequence's picture

Alberta to continue to make equalization payments while getting fucked:

"Under the formula, "have" provinces such as Alberta and Saskatchewan will make payments to the same six "have-not" provinces that received cash in 2015-16 -- Quebec, Ontario, Manitoba, Nova Scotia, New Brunswick and Prince Edward Island.

Quebec will continue to receive the lion's share of the funding, roughly $10 billion."

And yet Quebec just torpedoed the Eastern pipeline expansion that would have benefited them.  Nothing like biting the hand that feeds you.



nidaar's picture

Since oil companies in alberta pays tax "in-kind", maybe Alberta can do the same and make its equalization payments to others "in-kind" as well. Problem solved...

U4 eee aaa's picture

With Ontar-i-owe's debt about to go parabolic this is not good

johnnycanuck's picture

Ontario and quite possibly Quebec will grow stronger with low CAD.  Alberta's miracle was based on a commodity / oil bubble, which is something that should be tempered but the trained seals who dominated the Conservative caucus had no understanding of economics beyond their amazement of being paid such an extraordiinary amount to  be able to raise their flippers on command.

Lore's picture

Nice bit of parroting, but think instead. Ontario and Quebec were the "bubble," sustained by hundreds of billions in transfer payments over the decades. That tap is dry now. Alberta's economy was ruined by too much government, an absurd sector operating-cost framework (starting salary $120K), mature geological formations (some but not all), an abusive and bloated price-regulatory regime implemented under Trudeau and previous premiers, and a price war and unprecedented competitive monetary policy.  It's amazing that the province enjoyed as much success as it did for as long as it did, despite shit like NAFTA and radical anti-pipeline, anti-shipping, anti-everything "global warming" activists. Alberta's time will come again, but only if and when the statist-collectivists and other bottom feeders get the fuck out of the way. It'll take a few years for things to get sufficiently awful for that to happen. Ontario and Quebec are long overdue for economic right-sizing, and more stubborn band-aid measures will just make the pain worse for all. Unfortunately, judging by his rhetoric, I suspect that Justin won't fail to disappoint. In fact, he might make such a mess of things that talk returns to the Western Canadian Concept. 

zaphire999's picture

Looks like it's up to the rest of us poor, non oil worker sector cunts to pick up the slack.

I'm supposed to feel sorry for Canada and Sweden that were liberal utopia where nothing could go wrong.  Enduring years of lecturing about how we should all be as great as they if only we had the intellectual capacity to understand their liberal wisdom.  Just because Canada had easy money, jobs and Sweden was booming due to their export/manufacturing success.

We were all cunts.

Well, we are still cunts just better off than them fucks.