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COVID-19 Takes Toll on Canada’s Oil and Gas Industry

The impact of COVID-19 is dramatic and far-reaching. It has changed everything from how we function in our daily lives to the health of the global economy. It’s no surprise, then, that the pandemic is affecting Canada’s oil and gas industry. 

As described in a report released by the Labour Market Information Council (LMiC), before the pandemic, employment in the industry had already fallen by about 23% between August 2014 and February 2020. Then, measures to prevent the spread of COVID-19—travel restrictions, stay-at-home orders and closures of non-essential businesses—were layered onto other market stressors. Globally, we saw a sharp drop in oil prices in March as the pandemic unfolded and as Russia and Saudi Arabia failed to reach an agreement to support oil prices by limiting production. The resulting decline, both in production and investment in Canadian oil and gas, translated to fewer jobs.  

Based on the latest labour force survey (LFS) data released by Statistics Canada, the industry employed 156,000 workers in June 2020, down 11.7% from February 2020 when approximately 176,600 workers were employed. The oil and gas services sub-sector was most affected, with an employment decrease of 26.2% or 20,500 jobs. The pipelines sub-sectors also decreased by 9.4% (-1,200 jobs), while the exploration and production sub-sector increased by 1.3% (-1,100 jobs). 

The Role of Oil and Gas in Canada’s Economy 

The oil and gas industry is an important contributor to the Canadian economy, particularly in Alberta. According to Statistics Canada, from the year 2000 onwards, the industry’s share in the total economy averaged about 5% of Canadian and 21% of Albertan GDP.

Canada’s direct oil and gas employment declined by more than 6,700 positions in June 2020 compared to the previous month. About 70% of the net job losses were in Alberta, which saw a 6.3% decrease (-600 jobs) in pipeline jobs and a 9.9% decrease (-4,700 jobs) in oil and gas services, while the exploration and production sub-sector (including oil sands) saw a slight increase of 0.7% (+500 jobs). 

In terms of the impact on each of the western provinces year over year from June 2019 to 2020, all three western provinces saw a decrease in oil and gas employment: 29.9% (-3,748 jobs) in British Columbia, 13.1% (-18,596 jobs) in Alberta, and 26.4% (-3,240 jobs) in Saskatchewan. 

Importance of Labour Market Information 

In this time of economic uncertainty, labour market information (LMI) is critical—particularly for a sector undergoing structural change, confronted with an aging workforce and experiencing widespread adoption of new technologies. LMI can help those in the sector understand how to adapt to these new realities. 

Monthly labour force survey data is available on PetroLMI’s Employment and Labour Force Data Dashboard. In addition to the usual labour force survey data, the dashboard now includes employment by age, type of work, class of worker and sex. 

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