Jobless Benefits Claims Soar 100% In Canada's Dying Oil Patch As Construction Jobs Plunge 84%

Tyler Durden's picture

2015 was not a good year for job creation in Alberta.

In fact, the net 19,600 jobs the province shed marked the worst year for job losses since 1982.

Alberta is of course suffering from the dramatic collapse in oil prices, which look set to remain “lower for longer” in the face of a recalcitrant Saudi Arabia and an Iran which is hell bent on making up for lost time spent languishing under international sanctions.

Suicide rates are up in the province, as is property crime and foodbank usage. The malaise underscores the fact that Canada’s oil patch is dying. WCS prices are teetering just CAD1 above marginal operating costs, and the BoC failed to cut rates last month, meaning it’s just a matter of time before the entire Canadian oil production complex collapses on itself.

On Thursday, a new industry report shows that crude’s inexorable decline could end up costing 84% of oilsands construction jobs over the next four years.

“The oilsands sector is in danger of losing its reputation as a job-creating machine,” The Calgary Herald writes. “A new industry report shows the sector may require 84% fewer construction workers in 2020 compared to 2015 as project cancellations pile up amid a crippling oil-price environment.” Here's more:

Overall workforce requirements for the oil and gas industry has been severely impacted by a reduction in investment,” said Carol Howes, vice-president of communications at Petroleum Labour Market Information, part of the industry-funded Enform based in Calgary.

 

As crude oil prices plunged, capital expenditures in the oilsands declined 30 per cent last year from $35 billion in 2014. Canada has led the world in project deferrals during the 16-month downturn, as oilsands projects with a combined production of three million barrels per day have been shelved, according to Tudor Pickering Holt & Co.

 

The downturn has taken the shine off Alberta’s job-creating engine and has wiped out 100,000 direct and indirect jobs according to one industry estimate.

 

Recruitment consultancy Hays estimates Canadian oil and gas workers saw a 1.4 per cent decline in their paychecks last year, compared to a cumulative eight per cent growth over the previous five years.

 

“Hiring has pretty much seized, unless it’s for a business critical position,” said Neil Gascoigne, global business development expert at Hays, based in Houston.

 

“A lot of the E&P business are going through significant restructure and looking to further reduce costs, and wages and salaries are one of their high costs.”

 

Companies have cut as much as they can without jeopardizing their actual business."

That reflects something we said back in October. Namely, there's no more "fat" to be trimmed. In other words, further cost savings will have to come from salary cuts because going forward, cutting jobs altogether will imperil companies’ ability to operate.

Meanwhile, the number of people receiving jobless benefits in Alberta jumped more than 100% in December. "Statistics Canada said 62,500 Alberta residents received job-insurance benefits in December, up from 31,200 a year earlier and accounting for most of the 7.3% increase in job-insurance beneficiaries nationally," WSJ wrote on Thursday, adding that Vancouver-based Finning International Inc., the world’s largest dealer of Caterpillar Inc. equipment, "said it would cut 400 to 500 jobs globally on top of the 1,900 positions since the start of last year."

Going forward, the outlook is bleak as underlined by Canada's Conference Board which on Thursday reported that its business-confidence index "suffered its third consecutive decline in the fourth quarter of 2015, falling 1.5 percentage points to 86.6." That's the lowest level since the crisis.

But don't worry, "the decline was modest compared with the previous quarter, when the index plunged from 105.6 to 88.1." 

So things are still getting worse in Canada. Just at a slower pace. Allahu akbar. 

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venturen's picture

Just send the numbers to the BLS and all will be good!

847328_3527's picture

View from Calgary: The bleeding continues in the oilpatch

http://business.financialpost.com/news/energy/view-from-calgary-the-blee...

knukles's picture

Waaaiiiiiiit.... Somebody said lower oil prices was gonna be good for the economy!
So that means higher oil prices must be good?
Hold on there, Dudley Doriite,  With no free after tax disposable income hanging about any increase in oil is gonna cause consumer spending to be cut back elsewhere. 

Uncle Knukies, does that mean it's a we're fucked if we do and we're fucked if we don't?
Yes, kiddies, all you get to suck on is the hairy end of the lollipop

 

Handful of Dust's picture

Unless the oil company is paying you big bucks, Calgary is a real pit and there's little reason to move to that dull dready gloomy place. That's why very few Chinese or wealthy Indians move there. Any foreigner with money [and good taste] goes to Montreal, Toronto or Vancouver.

Minions's picture

It's all going bananas I tell you.

Iam_Silverman's picture

"Calgary is a real pit and there's little reason to move to that dull dready gloomy place."

Well, there is the Calgary Stampede!

But, I guess for all of the city-dwelling metrosexuals, a real competition between men and beasts seems a tad mundane when you could be hanging out sipping lattes and bragging about your last mani/pedi/massage and how your wife doesn't understand your occasional need for male cuddling.  I guess the Chinese and wealthy Indians would feel left out too since they wouldn't understand the rodeo clown jokes and pratfalls.

Chuckster's picture

You and I should get together and make some movies.  You have a complex mind.

I can't wait to see the wheels fall off this thing.  Is it going to be WW3?  Is it going to be the financial system breaking down?  Do we have civil war?  I think any citizen that's not up to the public trough has had about all they can take.

The USA is about tapped out.  Canada has resources to develop.  I wouldn't cry to much for them.  They will aspire as we expire.

 

LordBuckFast's picture

It's all going south and the elite do not give a damn, as they will soon be looking to run and hide in those nice underground bunkers paid for with citizens taxes, after engineering a full economic collapse as well as starting WW3, plus they will make sure that there are enough Jihadi’s in the West to start a race war.

That should be enough to cover up the failed fiat ponzi scheme and take care of the ‘excessive’ population!

This lays out the elite's psychopathic agenda in minute detail......

 

http://beforeitsnews.com/global-unrest/2016/02/ww3-2016-obama-putin-isis...

Bay of Pigs's picture

Bullish for housing, right? RE never goes down.

- - - - - -'s picture
- - - - - - (not verified) Feb 18, 2016 6:21 PM

hey buddy. how are the house price conditions in canada right now? time to pop the bubbles of gum

pitz's picture

House prices have been stagnant/falling for nearly the past 3 years in Canada.  Thats why a 30%+ loss in the currency against the USD$, and near-ZIRP hasn't triggered any inflation.  Don't be fooled by the non-adjusted figures being quoted by the Realtors these days claiming increases. 

redd_green's picture

Careful!   Use common sense definition of inflation: everythign you need to live on a day to day basis.   Food, rent, mortgage clothing, car insurance, repairs on your house or apartment, prop taxes, etc.   You can't tell me prices on that stuff isn't going wild. 

Iam_Silverman's picture

"Thats why a 30%+ loss in the currency against the USD$, and near-ZIRP hasn't triggered any inflation."

With those kinds of wonderful statistics, I can see the new advertising push away from "Retire In Mexico" to the "Retire In Style, Canada Style!" ads now.  Let me check this months AARP magazine.

 

But truthfully, do you see that as an option for us Americans - retiring in Canada to take advantage of a better exchange rate, and (eventually) lower housing costs?

pitz's picture

No.  I believe the CAD$ is going to rise so dramatically against the USD$ over the next number of years that it won't really be an option for most (think:  an eventual reversion of the circumstances that have the 63 cent CAD/USD$).  Canada will basically be the new "Switzerland" of North America.  

vologogo's picture

why do you think this?

The Real Tony's picture

The all white areas of the country have been falling since March of 2012 but 40 percent of the population is in the Greater Toronto area and Vancouver. The GTA has moved sideways for the last 4 years. Toronto in general has fallen the past 4 years as everything is a rebuild or a large renovation skewing the prices. Vancouver had a second leg up where all housing there went up about 15 percent in the last 10 months. New mortgage rules will put a drag on real estate. Millennials are 100 percent clueless in this country and think if interest rates fall housing must go up. They don't realize falling interest rates usually mean a recession but they don't know the correlation between a recession and housing.

Dr. Engali's picture

Maybe we can give Obama to Canada so he can fix things by creating millions of bartender and waitress jobs.

Canadian Dirtlump's picture

Speaking of which, I was smirking to see "oil price sucks come have a half price appetizer and cheap drink" signs all over downtown where a year or 2 ago you'd be treated to shit service, grotesque pricing, and competed with easy corporate money for a table.

The Real Tony's picture

We've got enough problems up here now with Justin Trudeau at the helm. His old man bankrupted our country by giving everything to the French. We were running a surplus when he took office. He also cost Canada hundreds of billion of dollars in soft costs for all the stupid French and English crap on everything. Good news for all the border towns in America where they only use English as we have no selection of anything up here. Many buy everything in America even to this day thanks to Pierre Trudeau.

rahtidmon's picture
rahtidmon (not verified) Dr. Engali Feb 18, 2016 7:12 PM

+1 doc, he is a real job creator lol

Otraitor will go down in history and all shall Hail Caesar!

I prefer to stand on two feet, come what may! Never a knee to these jackals in DC!

TRM's picture

We take Obama and you take Bieber? We could work a deal.

SILVERGEDDON's picture

Bacon for the infidels, please.

- - - - - -'s picture
- - - - - - (not verified) SILVERGEDDON Feb 18, 2016 6:24 PM

friend, if we bring in more muslim, it means higher demand for homes. thats a good reason to rise the house prices already now, buddy

gimme soma dat's picture

Sharia compliant home loans.  no interest, infidels!

847328_3527's picture
Liberals restoring refugee health benefits cut by previous government

 

http://www.theglobeandmail.com/news/politics/liberals-cancelling-controv...

 

No need to go to heaven for paradise...just come to Trudeau's 'liberal' Canada and let the Canadian middle class workers support you.

 

"Yes we can!"

Uranium Mountain's picture

How soon until we see Canadians fleeing across the US border looking for work and housing here?  A northern immigration wave heading this time South.  

Normalcy Bias's picture

Canadians would be a vast improvement over the typical immigrant of the last few decades.

Welcome to America, eh?!

Handful of Dust's picture

We already see it. It's much easier for migrants to first go to the 'liberal' Canada and then creep down to USA. Both Paki convenience store owners told me that's how many Paki's do it. They said some go to the UK first, then Canada then immigrate to USA where their life's goal is to open the cash businesses of convenince stores and payday loans and lend money to poor Americans. Both said the UK stinks to high heaven but Canada is nice but too cold.

 

I have to admit they are smart and tenacious businessmen.

Bananamerican's picture

nonsense. They are grifting, bloodsucking, 3rd-world, slumdog millionaires and they LEFT Pakistan becuase that hell-hole is full of people just like themselves. Fuck them.

 

From yesterday.

The legislation, sponsored by Sen. Arthur Orr, R-Decatur and modeled on a Colorado law, would extend the terms of repayment to six months and limit the interest rates on the loans to 180 percent. Orr proposed similar legislation last year which won committee approval. The bill did not advance to the Senate floor.

Payday loans are short-term loans lasting from 14 to 30 days. Operators can charge up to 456 interest on the loans, and advocates of reform say they trap low-income customers in a cycle of debt. Orr told the Senate Banking and Insurance committee that information from an Alabama Banking Department database showed more than 1 million payday loans made in Alabama since August 1, worth about $355 million in total, with only 20 percent of those customers being first-time borrowers.

“People are reloaning and borrowing again to pay off old loans and continue on,” he said.

The payday loan industry says it provides a service traditional lenders are unwilling or unable to, and said the 36 percent interest rate cap reform advocates have sought would drive them out of business.

johnnycanuck's picture

"Destination Cape Breton is pitching in to help the 'Cape Breton If Trump Wins' website after it was inundated with inquiries after its launch on Monday.

The tongue-in-cheek website urges disenchanted Americans to move to Cape Breton even before the U.S. election in November, avoiding the prospect of living in a country where Donald Trump might be president.

The website was created a few days ago by Sydney radio station announcer Rob Calabrese.

 

The site has already drawn more than 30,000 visitors."

 

http://www.cbc.ca/news/canada/nova-scotia/cape-breton-if-trump-wins-nova...

 

 

Besides, lot's of waiter and bartender jobs here, no need to come take yours.

general ambivalent's picture

Germans and Americans have already ruined Cape Breton. No need for any more conliberals.

The Real Tony's picture

Many people I know have already left for America in search of work. Canada basically has zero jobs and all the oil and construction workers from Alberta will either have to work for minimum wage (if they can even get employment) or go on welfare forever. Into the future outward even decades things can only get much worst for this country. When the housing market implodes here this country will be reduced to third world status.

Insurrexion's picture

 

 

There goes the North American Capex recovery.

Normalcy Bias's picture

The World War the Neocons appear to be preparing to start should reverse this downward slide, for a short while anyway.

pitz's picture

Numbers are most likely dramatically worse than stated as lots of people formerly employed in Alberta would apply for benefits in Newfoundland where eligibility is significantly easier.

walküre's picture

Are there even benefits to the thousands of self employed subcontractors who were working like ants in the patch?

pitz's picture

No.  Just despair. 

skinwalker's picture

The existence of Canada is the strongest argument in support of the second amendment; you never know when they might launch a sneak attack. 

Canadian Dirtlump's picture

if we do you can probably just assume the shape of a canadian and be OK!

rahtidmon's picture
rahtidmon (not verified) Canadian Dirtlump Feb 18, 2016 6:46 PM

bwahahaaa, good one both of you. I LIKE humor. God Bless you Canucks, us American's are a different breed to be sure, but we are on the same side basically, eh?

BandGap's picture

I grew up a few miles from the Canadian border. They was some significant interbreeding, especially right after closing time.

rahtidmon's picture
rahtidmon (not verified) Feb 18, 2016 6:38 PM

Ya know, I almost lost EVERYTHING I had, and remade myself many times over, started new career(s) at 51, started a business, could not make enough dough on a consistent bases, now back in the cage. However, it pays the bills, barely. Two kids in school, ya I want them to have a sheepskin, coulda been a trade, it was their choice.

 

How may stories have you read like that lately? In the last 10 years? Millions....of sheeple, just like me. MONEY!

 

Man is it ever a hard fucking world out there! God bless and take care out there people!

shankster's picture

Not looking good sports fans.

starman's picture

I smell maple syrup! Lotsa new restaurant's will be opening soon and gotta,fix them road ,and bridges.

TradingTroll's picture

The Vancouver  housing bubble is a local bubble. Gold hitting $1900, silver $50, the top in oil a few years back and the dot Com bubble were global bubbles  which rose in every currency.The average Vancouver house price in 2011 in USD was $1.27m. The recent spike in  prices in Vancouver in January rose to C$1.82m or $1.34m USD. If you bought in 2011 and sold in January,  after closing costs realtor fee of 7.5% on 1st $100k & 2.5% on each $100k after, plus $100k in notary costs nets approximately $1.28m. If the purchase was a principal residence  then no taxes. Otherwise  any gain us taxable and add $1000 in expenses. After tying up US $ 1.27m in 2011, and only making $10k after 5yrs, you'd be better off in treasuries considering  the risk as well.

 

 

pitz's picture

Only problem is that individual houses stopped going up in Vancouver ~2013-ish.  Yes, the sales averages have gone up, but that's on account of the Realtors simply mostly transacting in much higher end (or more extensively renovated)  properties than they did previously.  An individual buying 1 house in Vancouver in 2013, most likely hasn't made anything.  With Realtor fees, taxes, and carrying costs, they're in the hole. 

JuliaS's picture

If Canadian RE is inflated by Asian buyers then exchange rates should also be taken into consideration. CAD appreciated 30% against Yuan since 2013, meaning in order for an Asian buyer to bail the price of a house would have to have fallen by at least that much...

Main_Sequence's picture
Main_Sequence (not verified) Feb 18, 2016 7:02 PM

You wouldn't think there was a recession by seeing queues of people in Edmonton waiting to chow down at failrly high-end steak joints like "The Keg" on Friday and Saturday nights.