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Husky Energy Inc (OTCMKTS: HUSKF) CEO Rob Peabody said that the link the media have made between the energy giant’s layoffs this week and Canada’s federal elections results is complete “B.S”, BNN Bloomberg reported on Thursday.
The layoffs were announced Tuesday and affected over one hundred workers, mostly in Calgary. Husky said at the time that the layoffs were in line with its annual capital spending goals, which were lowered by 10% this year.
While some media were quick to point out the timing of the federal election and the layoffs, Peabody dismissed the claim, reiterating the company’s plan to belt-tighten in line with the company’s previously set goals—and had nothing to do with the federal election results.
Husky still has not confirmed how many employees it laid off, but unofficial estimates are that hundreds were let go in this round of layoffs. Husky had employed roughly 5000 people as of the last regulatory filing.
While the link between the federal election and layoffs has been emphatically denied, the New Democrats pointed at the layoffs to criticize the conservative government elected last spring, who reduced income tax for companies, which allowed Husky to put a $233 million gains in Q2 balance sheet.
Peabody was also quick to point fingers back at the government, saying that the company is not sinking as much money into Alberta because of the mandatory production cuts that the government instituted at the end of 2018 in order to shore up the widening gap between WTI and WCS. That gap was astonishing and was a direct result of Canada’s failure to push through oil pipeline projects, stymying takeaway capacity.
“We would love to spend more money in Alberta,” Peabody said, who argued that it didn’t make any sense because developing additional crude oil without being allowed to sell it was bad business.
But Husky does plan to continue its spending—just in other areas. It is investing in Saskatchewan and in the United States, and on Canada’s East Coast where it is building its West White Rose offshore project, which is scheduled to start up in 2022.
By Julianne Geiger for Oilprice
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.