Job losses in the Canadian natural resources sector hit an all-time high in the second quarter, at 43,000, new statistical data has revealed, highlighting the grave impact the pandemic has had on the industry.
The loss of oil demand drove the job losses, CBC reported citing Statistics Canada, with employment in the industry falling 7.3 percent during the second quarter of the year.
"The decline was exacerbated by lower international demand for natural resources, as the economic activity of major trading partners (such as the United States, the United Kingdom and Japan) fell sharply," the country's statistical agency said.
Canada had been struggling with low prices for its oil even before this year's unforeseen events pummelled these into the ground. The industry has been facing an existential crisis driven by the recent price shocks but also by pessimistic outlooks for the long term in oil demand as well as the international decarbonization drive.
So far, besides the job losses, this has caused an expected consolidation, especially notable in the Montney region, with larger industry players absorbing the assets of smaller ones who cannot survive in the current environment.
It seems that thing won't start improving soon. One industry insider told CBC he did not expect any signs of recovery until late 2021. Mark Scholz, president of the Canadian Association of Oilwell Drilling Contractors also said not all have survived and more could go under unless the government-at all levels-throws the industry a lifeline.
In such an environment, no wonder the residents of Canada's oil heartland are the most pessimistic about their future, compared with other parts of the country that don't rely so heavily on oil income. A recent poll by non-profit Angus Reid Institute found the residents of Alberta and Saskatchewan were the gloomiest about their immediate financial future. In Alberta, as much as 30 percent said they expected to be worse off in a year than they are now, compared with a national average of 20 percent.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More