NEWS

Oil slump causing angst among long-distance commuters

01/06/2015 08:00 EST | Updated 03/08/2015 05:59 EDT
Tracey Penney has never worked in the oil industry in western Canada, but she estimates that she knows about 50 people who do.

She says all of them are worried about their futures.

"They're really scared," said Penney, a resident of Charlottetown, a small community nestled inside Terra Nova National Park in eastern Newfoundland.

Of the roughly 200 people who live in Charlottetown, about a dozen of them travel regularly to keep high-paying jobs in Alberta and other oil-rich western provinces, just a small slice of workers from Newfoundland and Labrador who make that long-distance commute. 

Penney also has deep connections to Robert's Arm, a community of 800 people in Green Bay, where many of her friends are now having difficulty finding work in the oil patch.

"Nobody is hiring," said Penney. 

It's unwelcome news for those who have come to depend on jobs and income from the oil industry.

Many families, especially in rural areas of Newfoundland and Labrador, have seen their living standards improve dramatically in recent years, and plummeting oil prices is the last thing they need.

Oil companies have responded by cancelling or delaying major projects in the oil sands,and capital spending for 2015 is expected to drop considerably, meaning there will be fewer jobs.

Penney said some of her friends who relocated to Alberta over the years have also fallen on hard times.

"They've bought houses and they don't know what to be doing. They can't sell them and they can't come home because there's nothing here for them to do," she said.

Oil boom cools off

The offshore oil and gas sector accounts for roughly one third of government revenues in this province, and slumping oil prices is taking a toll.

With the price of a barrel of oil plunging to five-year lows, the province's deficit for 2014-15 is expected to soar to more than $900 million, with provincial leaders hinting that some difficult decisions will be necessary as next year's budget is prepared.

And with thousands of Newfoundlanders and Labradorians — many in rural areas — either commuting to jobs or working seasonally in western Canada, a slowdown could have untold impacts on families and communities as well.

"People are starting to express a concern, yes," said Burgeo Mayor Barbara Barter. 

Burgeo is a town of some 1,300 residents on Newfoundland's southwest coast.

Since the town's fish plant closed more than two decades ago, large numbers of residents — some estimates put the number at more than 250 — have found jobs outside of the province, but continue to live in their hometown.

It's been a saviour for the town, and the signs are everywhere, including well-kept homes and new vehicles. 

Many residents start making their way out west this time of year for seasonal jobs, but now there's uncertainty.

"There certainly have been discussions of some people not being called back this year, and concerns about those who have gone back, and whether they will get the full amount of seasonal work, or if they'll be sent home earlier or have to travel to different places and so forth.

"So the warning signs are there and people are very much aware of them," Barter noted.

Camps closed, projects delayed

The benchmark prices for both Brent and West Texas Intermediate oil dropped by some 45 per cent in the second half of 2014.

Civeo Corp., an American company, announced recently that it was closing two work camps near Fort McMurray and laying off one-third of its Canadian workforce. The camps had a combined 2,500 rooms.

There are also signs of a downturn in Fort McMurray, where media reports indicate rents are going down and more and more For Sale signs are going up.

It's a reversal from the days of the oil boom, when companies were scouring the globe for workers and exorbitant housing prices were the norm.

Many are bracing for more layoffs, but not everyone is ready to press the panic button.

Torbay resident Glen Codner has been working in Alberta since the 1980s, and has witnessed several industry downturns.

He said the sector has always rebounded.

"It's just a matter of when," said Codner, who works as a superintendent with a construction company and works 18-day stretches, followed by 10 days at home.

Codner has not noticed any slowdowns at the Suncor site where he works, since many of winter projects he's involved with are essential.

However, unless the price of oil recovers, he expects a noticeable slowdown in the spring and summer, and said those who work for construction companies will feel the brunt.

"Anything that can be shelved or put on hold, whether it's small construction projects or larger ones, they'll do them when it's absolutely necessary, or never," said Codner.

Meanwhile, Codner said he's not too worried about his future.

"I'm in a management type of role and I don't see anything happening to me, and if it does, I'll cross that bridge when I come to it."

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