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Canada’s energy services sector is experiencing a worker shortage

Low unemployment in the first quarter of 2022 and record high job vacancies are indicative of a labour market with very little spare capacity to support Canada’s energy services sector

Increased demand, high energy prices and record levels of energy production are supporting an increase in employment in the energy services sector in 2022 – however, employers are struggling to find workers.

According to Mark Scholz, President and CEO of the Canadian Association of Energy Contractors (CAOEC), the energy services sector is experiencing some of the best drilling activity in a long time. CAOEC is forecasting the sector could add as many as 30 rigs into the market – if there was enough labour available. That’s potentially 6,000 additional jobs, given that every active drilling rig requires about 220 direct and indirect workers.

Alberta and British Columbia led employment growth in Q1 2022

Hiring in Canada’s energy services sector continued to improve in the first quarter of 2022. Employment increased by 6,160 compared to Q1 2021, and the unemployment rate dropped to 4.3% (from 9.9% in Q1 2021).

Employment rose in three out of five provinces or regions in the quarter, compared to the previous year, led by increases in Alberta and British Columbia (see Figure 1). In Alberta, employment increased by 3,880 and the province’s unemployment rate in the sector fell to 2.7%, from 10.5% in Q1 2021.  In British Columbia, employment was up by 2,200 year-over-year, with the province recording the lowest unemployment rate in the energy services sector at just 1.0%. Employment in Saskatchewan, meanwhile, declined by 1,150 year-over-year, while employment in the Central region was relatively unchanged in the first quarter.

Figure 1: Number of Employed and (Unemployment Rate) in Canada’s Energy Services Sector, Q1 2022 and Q1 2021

Number of Employed and (Unemployment Rate) in Canada’s Energy Services Sector, Q1 2022 and Q1 2021

Source: Statistics Canada Labour Force Survey and PetroLMI, Energy Services Sector (NAICS 213), Quarterly Averages. Central Region includes Quebec, Ontario and Manitoba. Atlantic Region includes New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador.

Alberta regional analysis

In Alberta, employment in the energy services sector rose in five of seven regions in Q1 2022, compared to the previous year (see Figure 2). Most of the employment increase occurred in the Athabasca-Grande Prairie-Peace River region (+5,100), while employment in the Calgary region declined by about 3,340. Except for the Red Deer region, the unemployment rate in the energy services sector dropped significantly across the province in Q1 2022. The Calgary, Lethbridge-Medicine Hat and Camrose-Drumheller regions experienced the lowest unemployment rates (0% – see Note below Figure 2), while the Athabasca-Grande Prairie-Peace River region had the highest rate (4.3%).

Figure 2: Number of Employed and (Unemployment Rate) in Alberta’s Energy Services Sector, Q1 2022 and Q1 2021

Number of Employed and (Unemployment Rate) in Alberta’s Energy Services Sector, Q1 2022 and Q1 2021

Source: Statistics Canada Labour Force Survey and PetroLMI, Energy Services Sector (NAICS 213), Quarterly Averages. The Athabasca-Grande-Prairie-Peace River region includes Banff-Jasper-Rocky Mountain House.

Note: Statistics Canada provides estimates of the number of people employed and unemployed, rounded to the nearest hundred. Together, the employed and unemployed constitute the labour force.  The unemployment rate is calculated by dividing the unemployed by the labour force. Due to rounding, some regions may have a labour force equal to the number employed – resulting in the unemployment rate showing as 0%.

Did you know?

Employer Support and Resources are Available!

Employers are competing for the best and brightest. The labour pool is shrinking. Acceleration of the use of technologies and innovation across the energy sector is changing occupations, skills and the knowledge needed for employees to be successful. Check out a variety of employee attraction and retention resources or connect with our Employer Liaison.

Shrinking labour force and record job vacancies

Canada’s available energy services labour force (both employed and unemployed workers) has been shrinking since 2013 – declining 40% (-47,500) over the last eight years – from an average of 118,900 in 2013 to 71,400 in 2021. Much of the oil and gas workforce moved on during the industry downturn and have not returned.

“The pool that we relied on have moved to other occupations — trades, construction — and have found other employment elsewhere, whether in Western Canada, or have moved back home to jurisdictions that we had traditionally recruited from, like Central Canada and Eastern Canada.”

Mark Scholz, President and CEO of the Canadian Association of Energy Contractors

A labour shortage really began to materialize in mid-2021, as energy prices started to rise and industry activity picked up. The job vacancy rate in Canada’s energy services sector (which represents the number of vacant positions as a portion of all available jobs – both vacant and occupied) jumped to 5.6% in Q2 2021, then to 6.1% in Q3 before settling at 5.8% in Q4 – the highest rates recorded since comparable data became available in 2015.

A labour shortage really began to materialize in mid-2021, as energy prices started to rise and industry activity picked up. The job vacancy rate in Canada’s energy services sector (which represents the number of vacant positions as a portion of all available jobs – both vacant and occupied) jumped to 5.6% in Q2 2021, then to 6.1% in Q3 before settling at 5.8% in Q4 – the highest rates recorded since comparable data became available in 2015.

What’s ahead?

Watch for April Labour Force Survey data which will be available on Friday, May 6, 2022.

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