Alberta
Pray for better days – a 3rd generation oil worker laments the end of an industry
by Sheldon Gron (published with permission)
I’ve been debating on whether or even how to write this over the last few weeks. I’m a third generation oilfield worker, a large portion of my family being involved with the oilfield in some way. Its sad to say, but I really truly honestly feel that the oilfield in Canada is officially dead. Sure there will be a little here and there, some guys will get a little work and even less will get consistent work, but all in all, to be an oilfield worker as a career is over. Nothing pains me more than to be saying this as I myself have over 20 years in the industry, an industry which I used to love and was proud to be apart of.
The industry has always worked in cycles, most of us know this. It was feast or famine. Best you could do was get the money while the gettin’ was good and save the best you could to prepare for the next slow down. Some were smart, most were not. Debt would ring up, slow down would hit and more debt would add up until bankruptcy loomed. Most slow downs lasted at most a year but usually turned around and guys would get 3 or 4 years of good times to recover and prepare for the next one. Take this most recent slow down in 2014. Writing was on the wall BUT no one expected it to hit as hard as it did. The world shook as oil prices fell to near 1998 prices. Within a few years though prices started to climb, enough so that work started to return. Not a ton, but enough that the guys left in the patch were finding work.
2018 there was finally some hope, there seemed to be some sort of light at the end of the tunnel but this whole pipe line mess loomed over us. You see Canadian Crude has always had its own value, lately a value significantly lower that everyone else due to our lack of infrastructure to get oil to market. With our current government and their apparently efforts to stop the much needed pipe line, Western Crude prices fell, investments pulled and companies lost faith… Canada is now suffering another oilfield crash, on top of the previous one. Heres the problem.
Anyone that has survived thus far is at the end of their rope. Toys are sold, saving have been spent to survive these last 4 years and now that another slow down is here, there is nothing to fall back on. Faith in the patch is gone as the hands and small businesses are in real trouble this time.
We are 8-10 year away from any of this ever turning around at the earliest, save some major event happening that sends oil to 200 a barrel. Lets face it, without a means to get our oil to market, no one wants it and who can blame them. Our government has severely let us down and 2019 is going to mean some serious trouble for Canada. I have done every thing I can to stick it out in the only career I know and don’t know how much longer I can go living pay check to pay check meanwhile being away from my family 25 days a month just to get by, and thats when I’m busy. If I was young and new to the oilfield I wouldn’t come anywhere near the oilfield as its apparent there is no future. You used to come here to make money, now, when you can actually get work, the money isn’t that great anymore.
I know some of you have very little sympathy for oilfield workers because you have always seen the money they have made but let me explain the repercussions of no oilfield in Alberta, Sask or Northern BC. Before the crash, entry level oilfield workers made over 100K a year. In order to do this they usually spent about 230-250 days a year away from their friends and families in all weather conditions working all sorts of hours. At times these conditions could be some of the most gruelling with sometimes not the nicest people. But it was a job and it paid well. That’s from their perspective. These same people that do this job pay 30% or more in taxes to our government. They pay more in taxes that many people make in an entire year, thats entry level, now take the people that are pulling in 200-250K. All that tax money is gone, no longer paying for schools and hospitals and roads and such. Now consider those lifted trucks and toys they buy with the money they earned with their oilfield money. All that money went to local businesses and local people that didn’t work in the oilfield. Salaries were paid, cloths were bought with that money those people earned from selling that truck or quad or what ever they buy.
Also consider the money they spent in the places they worked, supporting locally. Hotels, gas stations and grocery stores, restaurants and bars and so on. Alberta was successful and one of the richest provinces for one reason, OIL MONEY and now it is gone. Go to another have not province and ask them what its like to not have jobs and see what they think. Ask the number of people born across Canada that have come to Alberta for the Alberta Advantage why they came. Our Federal government had one mission regarding Alberta, and that was to bring it to its knees and we have let them do it. The oil field is dead and we let it happen. They panic cause 2500 of Ontarios people lost their jobs because GM shut down a plant yet 150K Albertans have lost their jobs and more are coming.
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.”
“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.”
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.”
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
Alberta maintains a balanced budget while ensuring pressures from population growth are being addressed.
Alberta faces rising risks, including ongoing resource volatility, geopolitical instability and rising pressures at home. With more than 450,000 people moving to Alberta in the last three years, the province has allocated hundreds of millions of dollars to address these pressures and ensure Albertans continue to be supported. Alberta’s government is determined to make every dollar go further with targeted and responsible spending on the priorities of Albertans.
The province is forecasting a $4.6 billion surplus at the end of 2024-25, up from the $2.9 billion first quarter forecast and $355 million from budget, due mainly to higher revenue from personal income taxes and non-renewable resources.
Given the current significant uncertainty in global geopolitics and energy markets, Alberta’s government must continue to make prudent choices to meet its responsibilities, including ongoing bargaining for thousands of public sector workers, fast-tracking school construction, cutting personal income taxes and ensuring Alberta’s surging population has access to high-quality health care, education and other public services.
“These are challenging times, but I believe Alberta is up to the challenge. By being intentional with every dollar, we can boost our prosperity and quality of life now and in the future.”
Midway through 2024-25, the province has stepped up to boost support to Albertans this fiscal year through key investments, including:
- $716 million to Health for physician compensation incentives and to help Alberta Health Services provide services to a growing and aging population.
- $125 million to address enrollment growth pressures in Alberta schools.
- $847 million for disaster and emergency assistance, including:
- $647 million to fight the Jasper wildfires
- $163 million for the Wildfire Disaster Recovery Program
- $5 million to support the municipality of Jasper (half to help with tourism recovery)
- $12 million to match donations to the Canadian Red Cross
- $20 million for emergency evacuation payments to evacuees in communities impacted by wildfires
- $240 million more for Seniors, Community and Social Services to support social support programs.
Looking forward, the province has adjusted its forecast for the price of oil to US$74 per barrel of West Texas Intermediate. It expects to earn more for its crude oil, with a narrowing of the light-heavy differential around US$14 per barrel, higher demand for heavier crude grades and a growing export capacity through the Trans Mountain pipeline. Despite these changes, Alberta still risks running a deficit in the coming fiscal year should oil prices continue to drop below $70 per barrel.
After a 4.4 per cent surge in the 2024 census year, Alberta’s population growth is expected to slow to 2.5 per cent in 2025, lower than the first quarter forecast of 3.2 per cent growth because of reduced immigration and non-permanent residents targets by the federal government.
Revenue
Revenue for 2024-25 is forecast at $77.9 billion, an increase of $4.4 billion from Budget 2024, including:
- $16.6 billion forecast from personal income taxes, up from $15.6 billion at budget.
- $20.3 billion forecast from non-renewable resource revenue, up from $17.3 billion at budget.
Expense
Expense for 2024-25 is forecast at $73.3 billion, an increase of $143 million from Budget 2024.
Surplus cash
After calculations and adjustments, $2.9 billion in surplus cash is forecast.
- $1.4 billion or half will pay debt coming due.
- The other half, or $1.4 billion, will be put into the Alberta Fund, which can be spent on further debt repayment, deposited into the Alberta Heritage Savings Trust Fund and/or spent on one-time initiatives.
Contingency
Of the $2 billion contingency included in Budget 2024, a preliminary allocation of $1.7 billion is forecast.
Alberta Heritage Savings Trust Fund
The Alberta Heritage Savings Trust Fund grew in the second quarter to a market value of $24.3 billion as of Sept. 30, 2024, up from $23.4 billion at the end of the first quarter.
- The fund earned a 3.7 per cent return from July to September with a net investment income of $616 million, up from the 2.1 per cent return during the first quarter.
Debt
Taxpayer-supported debt is forecast at $84 billion as of March 31, 2025, $3.8 billion less than estimated in the budget because the higher surplus has lowered borrowing requirements.
- Debt servicing costs are forecast at $3.2 billion, down $216 million from budget.
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