Connect with us
[the_ad id="89560"]

Alberta

Have Alberta’s Skilled Workers had Enough?

Published

4 years ago

3 minute read

The Canadian oil and gas industry suffered another blow on Sunday, October 25, when Cenovus Energy Inc. announced a $3.8 billion merger with 82-year old Canadian oil and gas company, Husky Energy. Headquartered in Calgary, Alberta, Husky is projected to lose up to 25% of its workforce as a result of the merger, approximately 2,150 jobs – mainly in Calgary. 

The news, which fell on Alberta’s increasingly restless population of unemployed workers and struggling families, many of whom believe Alberta has been left out in the cold for far too long already, has fueled ongoing discussions of a provincial brain drain. 

Simply put, brain drain is defined as “the departure of educated or professional people from one country, economic sector or field, usually for better pay or living conditions”. Recent statistics show this concept is rapidly gaining traction in Alberta as residents seek to escape the increasingly grim economic landscape to pursue opportunities elsewhere, beyond the provincial borders. 

As Canada’s largest producer of oil and natural gas, Alberta is no stranger to the boom and bust nature of the industry, experiencing cyclical periods of economic prosperity influenced by global conditions followed by detrimental crashes and ensuing hard times. Prior to this year, Alberta experienced a major economic crash in 2015, with the Canadian oil and gas industry suffering a $91 billion loss in revenue and layoffs reaching 35,000 workers in Alberta alone (1).

In the last 5 years, countless Albertans have struggled to regain their footing on shaky economic and political grounds, suffering substantial losses and insecurity. In this setting, the catastrophic impacts of the global COVID-19 pandemic, coupled with pipeline delays and ongoing cuts in the Canadian oil and gas sector have left many Albertans with the feeling of being kicked while already down. 

According to the Government of Alberta Economic Dashboard, the price of oil for many Alberta oil producers fell 36.6% from September 2019, averaging $28.43 USD per barrel in September 2020, according to the Western Canada Select (WCS) price. The coinciding unemployment rate in Alberta was 11.7% in September 2020, down from its 15.5% spike in May 2020, but still 6.6% higher than in September 2019 (2).  

At this point, it seems a number of Albertans have simply had enough. According to The Alberta Annual Population Report 2019/20, “Alberta’s interprovincial migration patterns are heavily influenced by the economic conditions in the province, and as the economy cooled, the province experienced net outflows.” The report shows that 2,733 residents left Alberta between April and June 2020. 

The loss of another 2,150 oil and gas jobs as a result of the Cenovus merger comes as a disappointing yet predictable defeat for industry workers who have remained “down on their luck” for many years in Alberta. Effectively decimating industries worldwide, the pandemic has also successfully pulled the rug from beneath Alberta’s shaky footing, tanking oil and gas once more and leaving countless skilled workers with nowhere to go but out.

For more stories, visit Todayville Calgary.

Before Post

Related Topics:
More from this author
Alberta / 4 years ago

Getting the Next Generation of Alberta Youth Excited about Renewable Energy with Eavor Technologies Inc.

Alberta / 4 years ago

Community & Sustainability with Alberta Original Alley Kat Brewing

Alberta / 4 years ago

“The Planet is not an Ashtray” – It’s Time to Stop Throwing Cigarette Butts on the Ground

Alberta

Alberta’s fiscal update projects budget surplus, but fiscal fortunes could quickly turn

Published on November 21, 2024

By

From the Fraser Institute

By Tegan Hill

According to the recent mid-year update tabled Thursday, the Smith government projects a $4.6 billion surplus in 2024/25, up from the $2.9 billion surplus projected just a few months ago. Despite the good news, Premier Smith must reduce spending to avoid budget deficits.

The fiscal update projects resource revenue of $20.3 billion in 2024/25. Today’s relatively high—but very volatile—resource revenue (including oil and gas royalties) is helping finance today’s spending and maintain a balanced budget. But it will not last forever.

For perspective, in just the last decade the Alberta government’s annual resource revenue has been as low as $2.8 billion (2015/16) and as high as $25.2 billion (2022/23).

And while the resource revenue rollercoaster is currently in Alberta’s favor, Finance Minister Nate Horner acknowledges that “risks are on the rise” as oil prices have dropped considerably and forecasters are projecting downward pressure on prices—all of which impacts resource revenue.

In fact, the government’s own estimates show a $1 change in oil prices results in an estimated $630 million revenue swing. So while the Smith government plans to maintain a surplus in 2024/25, a small change in oil prices could quickly plunge Alberta back into deficit. Premier Smith has warned that her government may fall into a budget deficit this fiscal year.

This should come as no surprise. Alberta’s been on the resource revenue rollercoaster for decades. Successive governments have increased spending during the good times of high resource revenue, but failed to rein in spending when resource revenues fell.

Previous research has shown that, in Alberta, a $1 increase in resource revenue is associated with an estimated 56-cent increase in program spending the following fiscal year (on a per-person, inflation-adjusted basis). However, a decline in resource revenue is not similarly associated with a reduction in program spending. This pattern has led to historically high levels of government spending—and budget deficits—even in more recent years.

Consider this: If this fiscal year the Smith government received an average level of resource revenue (based on levels over the last 10 years), it would receive approximately $13,000 per Albertan. Yet the government plans to spend nearly $15,000 per Albertan this fiscal year (after adjusting for inflation). That’s a huge gap of roughly $2,000—and it means the government is continuing to take big risks with the provincial budget.

Of course, if the government falls back into deficit there are implications for everyday Albertans.

When the government runs a deficit, it accumulates debt, which Albertans must pay to service. In 2024/25, the government’s debt interest payments will cost each Albertan nearly $650. That’s largely because, despite running surpluses over the last few years, Albertans are still paying for debt accumulated during the most recent string of deficits from 2008/09 to 2020/21 (excluding 2014/15), which only ended when the government enjoyed an unexpected windfall in resource revenue in 2021/22.

According to Thursday’s mid-year fiscal update, Alberta’s finances continue to be at risk. To avoid deficits, the Smith government should meaningfully reduce spending so that it’s aligned with more reliable, stable levels of revenue.

Author:

Tegan Hill
Continue Reading

Alberta

Premier Smith says Auto Insurance reforms may still result in a publicly owned system

Published on November 21, 2024

By

Better, faster, more affordable auto insurance

Alberta’s government is introducing a new auto insurance system that will provide better and faster services to Albertans while reducing auto insurance premiums.

After hearing from more than 16,000 Albertans through an online survey about their priorities for auto insurance policies, Alberta’s government is introducing a new privately delivered, care-focused auto insurance system.

Right now, insurance in the province is not affordable or care focused. Despite high premiums, Albertans injured in collisions do not get the timely medical care and income support they need in a system that is complex to navigate. When fully implemented, Alberta’s new auto insurance system will deliver better and faster care for those involved in collisions, and Albertans will see cost savings up to $400 per year.

“Albertans have been clear they need an auto insurance system that provides better, faster care and is more affordable. When it’s implemented, our new privately delivered, care-centred insurance system will put the focus on Albertans’ recovery, providing more effective support and will deliver lower rates.”

Danielle Smith, Premier

“High auto insurance rates put strain on Albertans. By shifting to a system that offers improved benefits and support, we are providing better and faster care to Albertans, with lower costs.”

Nate Horner, President of Treasury Board and Minister of Finance

Albertans who suffer injuries due to a collision currently wait months for a simple claim to be resolved and can wait years for claims related to more serious and life-changing injuries to addressed. Additionally, the medical and financial benefits they receive often expire before they’re fully recovered.

Under the new system, Albertans who suffer catastrophic injuries will receive treatment and care for the rest of their lives. Those who sustain serious injuries will receive treatment until they are fully recovered. These changes mirror and build upon the Saskatchewan insurance model, where at-fault drivers can be sued for pain and suffering damages if they are convicted of a criminal offence, such as impaired driving or dangerous driving, or conviction of certain offenses under the Traffic Safety Act.

Work on this new auto insurance system will require legislation in the spring of 2025. In order to reconfigure auto insurance policies for 3.4 million Albertans, auto insurance companies need time to create and implement the new system. Alberta’s government expects the new system to be fully implemented by January 2027.

In the interim, starting in January 2025, the good driver rate cap will be adjusted to a 7.5% increase due to high legal costs, increasing vehicle damage repair costs and natural disaster costs. This protects good drivers from significant rate increases while ensuring that auto insurance providers remain financially viable in Alberta.

Albertans have been clear that they still want premiums to be based on risk. Bad drivers will continue to pay higher premiums than good drivers.

By providing significantly enhanced medical, rehabilitation and income support benefits, this system supports Albertans injured in collisions while reducing the impact of litigation costs on the amount that Albertans pay for their insurance.

“Keeping more money in Albertans’ pockets is one of the best ways to address the rising cost of living. This shift to a care-first automobile insurance system will do just that by helping lower premiums for people across the province.”

Nathan Neudorf, Minister of Affordability and Utilities

Quick facts

  • Alberta’s government commissioned two auto insurance reports, which showed that legal fees and litigation costs tied to the province’s current system significantly increase premiums.
  • A 2023 report by MNP shows
Continue Reading

Trending

X