CALGARY- Suncor's decision to unwind its natural gas business points to what could be a permanent structural shift that highlights the decreasing competitiveness of Alberta's natural gas patch, observers said Tuesday.
Canada's largest integrated oil company expects to cut about 1,000 positions as it moves to unload about $4 billion worth of natural gas assets in Canada and the United States, the majority of them in Alberta. It formally kicked off the process last week by selling Petro-Canada's former U.S. Rockies division to Noble Energy for $495 million US to focus on oilsands.
"I'm not surprised they're overhauling and downsizing that business," said FirstEnergy Capital analyst Michael Dunn.
"Even before the merger with Petro-Canada, production was declining and they hadn't been investing in that business. The conventional assets hadn't performed particularly well over the past few years."
The development comes a day after Talisman Energy said it will sell "significant" Alberta properties and production to redeploy the proceeds into emerging shale basins in British Columbia and Pennsylvania. As part of its restructuring, Talisman last year slashed about 18 per cent of its North American workforce as it moves away from conventional exploration and production to focus on shale.
The numbers are reflected in Alberta's jobless rate, which fell to 6.7 per cent in December, but remains near decade highs.
Alberta Federation of Labour president Gil McGowan noted that oilpatch jobs are well-paying positions that support families as well as the provincial treasury.
"A thousand jobs is a pretty big hit, especially in an industry that's already lost thousands of jobs in the last six to 12 months," he said.
"It's worth noting that these are not 'McJobs,' these are not jobs we can really afford to lose," said McGowan. "We hear Alberta has turned the corner, but these types of announcements tell a completely different story. We've got a long way to go before we dig ourselves out of this hole the recession has made for us."
Industry observers said the provincial government has to address the growing competitiveness gap between Alberta and other energy hot spots if it wants to maintain a healthy gas sector.
Speaking at the Calgary Chamber of Commerce on Tuesday, Energy Navigator president Boyd Russell insisted Alberta comes dead last when comparing the rate of return of shale gas developments across five major jurisdictions in North America. Policies such as the new royalty framework and the lack of incentives for high-cost, marginal wells are costing the province jobs and investment that are shifting into places like Louisiana, Texas and even B.C.
The Calgary-based engineering firm, which counts big producers such as Talisman among its clients, released a study that shows major shale gas developments in Alberta cost twice as much as similar projects in Texas. Boyd suggested the numbers are a clear indication of why companies like Talisman are selling conventional assets in Alberta and shifting dollars and jobs south of the border.
"Alberta is the only jurisdiction that doesn't have incentives for these types of wells," he said in an interview. "It's not enough to be economic; you also have to be competitive."
To address these and other issues, the Alberta government last year struck a competitiveness review panel that is expected to report on measures to improve the province's position in North America.
In addition to the review, Premier Ed Stelmach is widely expected to announce a cabinet shuffle that could result in the appointment of a new energy minister, news of which could come as early as this week.
Alberta Energy department spokesman Jerry Bellikka said the moves show the government is aware of the problem and taking steps to address the concerns.
"There's no hesitancy on our part to look at it. We know it (shale) is a game changer and that's why we have to look at our competitive position."
Michael Tims, chairman of Calgary-based energy investment bank Peters and Co. Ltd., said he agrees that Alberta needs to take a hard look at ways to strengthen the natural gas industry. "You can judge by their (gas producers') behaviour, they're certainly willing to sell an awful lot of assets."
He's sat in on various meetings and committees related to the review panel and said he thinks the message is finally starting to sink in.
"I think they are looking at all the issues and I think it's very clear to them what the relative economics are. I think we're all expecting there will be positive change," when the report is released later this year.
Calgary Herald, Wed Jan 13 2010
Byline: Shaun Polczer
Year-end labour force numbers show Albertans are still hurting as province begins to emerge from recession
Year-end employment figures released this morning by Statistics Canada paint a picture of an Alberta labour force that is still hurting even as the provincial economy begins to show signs of emerging from the recession.
"The recovery seems to be coming, but Albertans are still hurting and the provincial labour market is still very fragile," says Gil McGowan, president of the Alberta Federation of Labour.
"The positive news in this report is enough to suggest that the Alberta economy - and along with it, provincial government revenue - will likely return to health sometime this year. But the negative news is enough to suggest that the government should think long and hard before introducing budget cuts that will throw thousands of nurses, teachers and other public sector workers out of work.
Not only are those kinds of cuts unwarranted when you look at the growing evidence of improving economic and revenue conditions, but, coming at a delicate time like this in terms of the labour market, they would only serve to make a bad employment situation worse. And they would almost certainly undermine the progress of the recovery."
The latest statistics show that Alberta had an unemployment rate of 6.7 per cent in December, down from 7.4 per cent in November. But while small month-over-month improvements are always welcome, comparison over the full course of the year - and with October 2008, which represented the top of the boom in Alberta - are much more sobering.
Just how bad have things been in the Alberta labour market since the boom went bust? Consider the following figures:
- Since December 2008, Alberta's population has grown by 71,600 - but the number of people with jobs has dropped by 28,600. The number of Albertans with jobs has fallen even more dramatically when you use October 2008 as your point of comparison (-44,700).
- The number of Albertans with full-time jobs has fallen even more precipitously. There are 52,400 fewer Albertans with full-time jobs today than there were in December 2008 - and 78,100 fewer than there were in October 2008.
- Young Albertans have been particularly hard hit by the recession. Employment for Albertans between the ages of 15 and 24 is down 22,400 since December 2008 and 34,800 since October 2008.
- Male, core-age workers (aged 25 and over) have also experienced a disproportionate share of job losses. 17,500 fewer men in this category are employed in Alberta today compared to December 2008 - and 23,600 fewer compared to October 2008.
- The hardest hit sectors include forestry, mining and oil and gas (down 29,000 jobs compared to December 2008); manufacturing (down 38,600 jobs since October 2008); professional, scientific and technical services (down 24,800 jobs since October 2008); and construction (down 17,100 jobs since October 2008).
- Over the course of the past year, Alberta is second only to B.C. in the number of jobs lost as a proportion of its provincial labour force. On a per capita basis, Alberta has lost more jobs than Ontario, Quebec, Saskatchewan, Manitoba, Nova Scotia, New Brunswick, Newfoundland and PEI.
"What all of these numbers tell is that Albertans are still hurting as a result of the recession," says McGowan. "What they also tell us is that Finance Minister Iris Evans was clearly looking through rose-coloured glasses 11 months ago when she predicted that Albertans would lose only about 15,000 jobs in 2009.
"The real job impacts of the recession have been much worse than the government predicted. But the good news is that things seem to be improving slowly. The last thing we need now is for the provincial government to smother the recovery with massive job and spending cuts before it even has a chance to take hold," McGowan concluded.
For more information call:
Gil McGowan, AFL president @ (780) 218-9888 (cell)
EDMONTON - As the latest employment figures were released Friday, government critics suggest Finance Minister Iris Evans was looking through "rose-coloured glasses" last year when she predicted just 15,000 Albertans would lose their jobs in 2009.
Instead, the economic downswing appears to have caused a net 28,600 job losses between December 2008 to December 2009.
"What all of these numbers tell is that Albertans are still hurting as a result of the recession," Alberta Federation of Labour president Gil McGowan said in an issued statement Friday.
"What they also tell us is that Finance Minister Iris Evans was clearly looking through rose-coloured glasses 11 months ago. ...
"The real job impacts of the recession have been much worse than the government predicted."
Alberta Employment and Immigration spokesman Terry Jorden could not speak to the finance department's estimates Friday morning.
Last February, Employment Minister Hector Goudreau said the prediction of 15,000 would have been based on an estimated 50 jobs lost a day.
"Throughout 2009, for the first two-thirds of the year, we had a steady increase in unemployment month to month," Jorden said Friday.
"About four months ago, we seem to have turned the corner."
In fact, Alberta's unemployment rate fell by seven percentage points in December; in the capital region, the unemployment rate fell three percentage points in the same period.
Goudreau's department is using unadjusted job loss figures throughout 2009 to come to a total 25,200 jobs lost last year, compared to 53,900 jobs gained in 2008.
Jorden said it has been a challenging year for employees and employers, but the province may now be seeing the beginning of a "slow and steady" recovery.
Last year, members of Premier Ed Stelmach's government talked publicly about needing the federal government to change its formula for distributing unemployment benefits. Workers in Alberta typically need to collect more hours on the job to be eligible for benefits than their colleagues across the country.
"That's still on the table, and we'd still like to see that more equitable," Jorden said, but the provincial government's focus remains on creating jobs rather than the "safety net of unemployment insurance."
Edmonton Journal/Capital Notebook, Fri Jan 8 2010
Posted: Trish Audette
The provincial jobless rate dropped 0.1 percentage points from October, Statistics Canada said Friday.
Edmonton's jobless rate in November was 7.7 per cent, unchanged from October. Calgary's rate was seven per cent, up from 6.9 per cent the previous month.
"It's another indication of the slow but steady economic recovery," said Terry Jorden, a spokesman for Alberta Employment and Immigration.
But the good news was tempered by the reality that 12,600 of those jobs were part-time. Alberta's largest labour group hammered the provincial government on the loss of fulltime jobs and increasing prevalence of part-time work.
"If this is what a recovery looks like, then I'd really hate to see a recession," said Alberta Federation of Labour president Gil McGowan.
"Economists and pundits may claim that the recession is over. But here in Alberta, the facts on the ground tell a different story. Working people and working families are still hurting."
The number of Albertans with fulltime jobs has dropped by 83,000 since the peak of employment in October 2008, and by 75,600 since November 2008, he noted.
While Alberta's overall employment has fallen by 52,000 jobs since November 2008, the AFL said the number would be far bleaker without 24,000 more part-time jobs created in the period.
Jorden said the provincial government would prefer to have seen more full time jobs created, but it remains optimistic about long-term employment growth. "We are still in the early stages of the economic recovery," Jorden said.
"Some of these part-time positions, particularly those in construction, could become full-time when economic conditions improve."
ATB Financial senior economist Todd Hirsch said the trend to lower-paying part-time work will affect consumer spending.
"Those jobs are better than no jobs at all, but if full-time work is preferred, it may put a crimp on some household budgets," Hirsch said.
Alberta posted the third-lowest rate in the nation, behind Saskatchewan's 5.2 per cent and Manitoba's 5.3 per cent. Canada gained 79,000 jobs, inching its rate down 0.1 percentage points to 8.5 per cent.
TD Bank economist Pascal Gauthier called it, "a stunning display of unexpected strength" with job gains in every province except New Brunswick.
"Encouragingly, Alberta--which had been lagging behind the nationwide employment stabilization seen in recent months--joined the fray," Gauthier said.
"Furthermore, this was well distributed among the province's services and goods industries."
Statistics Canada noted the bleeding of jobs in Alberta has slowed since late last year.
"Since March 2009, employment in the province has edged down by 7,000, a much smaller loss than the 48,000 observed during the five months following the peak of October 2008," said the national agency.
Hirsch said it's too early to suggest Alberta's job market has found solid footing because employment statistics lag economic trends and can fluctuate month-to-month.
"Several consecutive months of gains in full-time employment would give more compelling evidence that Alberta's labour market is growing strongly once again," Hirsch said.
Alberta's gain in jobs came despite its labour force growing by 10,900 people.
Most of the province's employment gains came in construction with 5,000 jobs; accommodation and food services with 2,900 jobs; professional, scientific and technical services with 2,800; and manufacturing with 2,300.
Edmonton Journal, Sat Dec 5 2009
Byline: Bill Mah
Labour leader in Calgary today to talk to Alberta manufacturing workers, one of the groups hardest hit by recession
Please note that, due to weather conditions in Alberta today, Gil McGowan is not able to attend the USW meeting in Calgary. He is available for comment at 780-218-9888.
CALGARY - But before anyone starts popping champagne corks to celebrate the end of the recession, Alberta's largest labour organization would like them to consider the following facts about the Alberta's labour market.
- It's true that according to the Statistics Canada survey 13,000 jobs were created in Alberta in November. But 12,600 of those jobs were part-time.
- Alberta's population has grown by 73,000 since November of 2008 - and the pool of available workers (the provincial labour force) has grown by 33,000. But the number of people who actually have jobs has gone down by 52,000.
- Even worse, the number of Albertans with full-time jobs has dropped by 75,600 since November 2009 (and by 83,000 since the peak of employment in October 2008). The only reason that overall employment is down by "only" 52,000 is because we have 24,000 more part-time jobs today than we did last year at this time.
- As a result of these troubling trends, there are 85,000 more officially unemployed people in Alberta today than there was one year ago. In other words, both the unemployment rate and the absolute number of unemployed people have more than doubled over the last year. No other province has seen such a dramatic spike in unemployment in such a short time.
- The unemployment rate in some Alberta communities hardest hit by the recession, most notably the Red Deer and Grande Prairie areas, has more than tripled since last year.
"If this is what a recovery looks like, then I'd really hate to see a recession," says Alberta Federation of Labour president Gil McGowan. "Economists and pundits may claim that the recession is over. But here in Alberta, the facts on the ground tell a different story. Working people and working families are still hurting."
"The really perverse part of the story is that the Stelmach government's response to the jobs crisis seems to be a plan to thrown thousands of additional people out of their jobs with deep cuts to public services. Given the current jobless numbers, why on earth would the government attack the one sector that's still generating stable employment?"
McGowan will be in Calgary today to speak to a western regional meeting of the United Steel Workers union (USW). The Steelworkers represent tens of thousands of workers in the manufacturing sector - which is the sector of the Alberta economy that has experienced the largest number of lay-offs since the beginning of the recession.
The USW meeting is being held at the Glenmore Inn (Foothills Room) which is located at 2720 Glenmore Trail S.E., Calgary. McGowan is scheduled to speak at 11 a.m. and will be available to answer questions from reporters afterward. A number of Alberta manufacturing workers from workplaces that have been hit hard with lay-offs will also be on hand.
For more information call: Gil McGowan, AFL President @ (780) 218-9888
The proposal was raised Wednesday by NDP Leader Brian Mason and supported by the Liberals, but Conservative politicians on the members' services committee argued an autonomous probe of MLA compensation would be a waste of taxpayer dollars. Tory whip Frank Oberle suggested an independent panel would likely recommend a substantial hike to politicians' pay, as was the case in the mid-1990s.
In addition to annual raises tied to the growth in Alberta's average weekly earnings, backbench Tories and opposition members were awarded greater compensation for attending committee meetings.
Meanwhile, Premier Ed Stelmach and cabinet granted themselves, behind closed doors, raises ranging between 30 and 34 per cent. The boost hiked ministers' salaries by $42,000 and the premier's wages by $54,000 -- an increase that, at the time, made Stelmach the highest-paid provincial leader. (In 2008-09, Stelmach earned almost $225,000 in total remuneration and benefits, while each of his 23 cabinet ministers snared about $200,000 in overall compensation.)
Proponents of an independent review of MLA pay and perks blasted the committee's decision to reject Mason's motion calling for an external probe."There's clearly a need to remove the conflict of interest that exists when MLAs set their own salaries and benefits," Liberal Leader David Swann said.
Alberta Federation of Labour president Gil McGowan contended most Albertans would favour an autonomous probe."Virtually no one has what MLAs have, which is a system that allows them to essentially set their own wages," McGowan said.
While the members' services committee voted against launching an external examination of MLA compensation, it approved extending a freeze on politicians' pay for 2010-11.Wages were frozen for this fiscal year as the Alberta government plunged into deficit, most recently projected at $4.3 billion in 2009-10.
But Scott Hennig of the Canadian Taxpayers Federation-- which is advocating the province strike up a citizens' assembly made up of randomly selected Albertans to review MLA pay -- criticized the freeze as paltry. Hennig said MLAs should have rolled back their wages to mirror modest cuts made in October to overall compensation paid to the premier and ministers (a six per cent cut for the premier and three per cent reduction for ministers).
A third of all MLAs' base salary is tax free."It's ridiculous," Hennig said of the freeze. "It's frankly not a huge sacrifice after they gave themselves huge raises in 2008."
McGowan dubbed the MLA pay freeze a "political ploy" to wrestle wage freezes from the public sector, while Ken Kobly, president of the Alberta Chambers of Commerce, called it a prudent move in light of the government's fiscal state.
The deficit-laden Conservative government is holding the line on manager salaries for two years and has said it wants public-sector workers, including teachers and medical workers, to follow suit.
"They're showing leadership" on the salary front, said Kobly, who believes the province's process for assessing politicians' pay is fair.
In lieu of an autonomous probe, Speaker Ken Kowalski, chairman of the members' services committee, is conducting an internal review of MLA compensation, comparing Alberta politicians to their provincial counterparts.
Both he and Tory MLA George VanderBurg, who represents Whitecourt-Ste. Anne, said they haven't heard a backlash from their constituents over MLA pay. "I've never once been asked in my constituency about being overpaid. Never once," VanderBurg told the committee. "Maybe it's a city thing. I don't know.
"In arguing for an autonomous probe, Mason said politicians have an obligation to address public concerns over the model used to set pay.
Government case of $2 billion in cuts is a shaky one: Cutting jobs and services isn't justified by the numbers and will inflict further pain on a labour force that's already hurting
The president of Alberta's largest union advocacy organization is baffled as to why the Stelmach government seems determined to cut public sector jobs and services even though the province's fiscal outlook has improved dramatically.
"The $6.9 billion deficit that the government announced over the summer has shrunken down to a $4.2 billion deficit today and may melt away almost entirely by the end of the fiscal year," says Gil McGowan, president of the Alberta Federation of Labour.
"And yet, the government is still talking about hiring freezes, wage freezes and outright cuts to core services. Given that our schools, hospitals and municipalities are still recovering from the damage caused by a decade or more of austerity under Ralph Klein, it simply doesn't make sense to impose deep cuts when they're not really necessary."
McGowan says the government is irresponsibly overstating the seriousness of Alberta's financial situation by using the same kind of rhetoric they used during the so-called Klein Revolution of the mid 1990s.
"Albertans have been conditioned by successive generations of Tory politicians to panic whenever the word 'deficit' is mentioned," says McGowan. "But the truth is that the sky is not falling. Alberta still has no debt and we won't be taking any on. All that's happening is that we're dipping into a rainy day fund that was set aside for exactly this purpose. There is no crisis."
McGowan says the government shouldn't hesitate to draw significant amounts from its $17 billion sustainability fund for the one or two years it might take for the province to ride out the global recession.
"Basically the whole world agrees that governments should be spending more, not less to help their citizens weather the recession," says McGowan.
"But unfortunately, it seems the Conservatives didn't get the memo - or they're allowing themselves to be unduly influenced by Danielle Smith and her fellow privatizers in the Wildrose Alliance party. This is all very troubling, because if the Tories don't wake up, the cuts that they're planning will jeopardize our province's fragile recovery and inflict further pain on an Alberta families who are already hurting as a result of job losses and pay cuts."
For more information call: Gil McGowan, AFL President @ (780) 218-9888
The comments came as the premier was making an address at the St. Albert Chamber of Commerce yesterday.
He was discussing the economy and said Alberta stands to benefit from the deep labour pool when we see an economic recovery. Then he chatted about the outlook of workers in our province.
"The A and B Crews are working and the C Crew is at home until they change their attitude," Stelmach said, according to the Calgary Sun.
The Alberta Federation of Labour is now up in arms. President Gil McGowan says workers who were laid off in these tough times don't deserve to have their attitudes questioned.
A spokesperson for the premier is clarifying Stelmach's comments. Tom Olsen says the premier was talking specifically about workers who got well-paying jobs in the boom, even though they had no proper training.
660News, Fri Nov 13 2009
During a lunch time address to the St. Albert Chamber of Commerce today, Stelmach said Alberta is poised to rebound from the economic turmoil and will benefit from a deep labour pool, but only for those with the right outlook.
"The A and B Crews are working and the C Crew is at home until they change their attitude," he said, during prepared remarks.
"This is the new reality in a time of recession."
But Alberta Federation of Labour President Gil McGowan said workers who found themselves unemployed through no fault of their own deserve a better fate than to have their attitudes questioned by their leader.
"This is a disturbing comment coming from the premier in a time of recession - he seems to be blaming the unemployed for being unemployed," he said.
"To suggest these people are unemployed because they've chosen to be or are lazy is frankly ridiculous and disrespectful."
The AFL represents 29 different Alberta unions and McGowan said the construction industry, in particular, has been hard hit in the recession, leaving many skilled workers on the hunt for only a handful of jobs.
Tom Olsen, a spokesman for the premier's office, clarified Stelmach's remarks, noting he was referring to an overabundance of unskilled workers who benefited from the boom a few years earlier, securing high paying jobs without any real training.
He said the premier's suggestion was aimed at those who lost their jobs because they didn't have the appropriate training, and believes they need to take the time to boost their skills while the economy has cooled.
"Basically, what (Stelmach) was saying was you need skills to get work and if your attitude is you don't want to go out and get those skills and get trained, then you're going to be out of luck," Olsen said.
"There have been many people laid off through no fault of their own but there are others who sit back when they were making $80,000 a year with no training and are grousing about the fact that they're out of work."
According to the latest numbers from Statistics Canada, Alberta's employment has fallen 3.3% or 68,000 workers since October 2008, the sharpest decline in Canada.
Last month alone, 15,000 jobs were lost, pushing the current unemployment rate to 7.5%.
Edmonton Sun, Thurs Nov 12 2009
Byline: Shawn Logan
Alberta Premier to reveal budget plans over airwaves: Stelmach's pre-taped speech will address strategy for balancing finances in timely fashion and touch on health care and seniors
The pre-taped speech, which will air across the province tomorrow night, comes as Mr. Stelmach faces threats both from the faltering economy, which has doubled provincial unemployment in a year, and newly emboldened political foes. With the upstart Wild Rose Alliance Party gaining traction - and, in a September by-election, a first legislative seat - and his own Conservative Party leadership up for review next month, political observers say the address is a pivotal one.
Mr. Stelmach has spent recent months "in the shadows looking bad," said Peter McCormick, a professor of political science at the University of Lethbridge. "He just has to step forward and be the guy. Mr. Alberta has to show up and reassure the party supporters that he's on top of it."
Mr. Stelmach taped segments of the 18-minute edited address at his office and home farm over the past few days, working to craft what aides promised is a "meaty" speech filled with specific new proposals.
"There's a four-point plan pointing the way forward to a balanced budget. It's clear and concise and comprehensive," said Tom Olsen, the Premier's spokesman. "Ed Stelmach's government has a plan to move forward."
With the plunge in oil and gas revenues driving the province to a nearly $7-billion deficit this year, the address will tilt heavily toward the economy. But, Mr. Olsen said, it will also touch on health care and seniors, a subject that has already generated heated debate after a leaked report pointed to the possible closing of 9,000 long-term care beds in the province.
"The Premier will underscore his commitment, as he has time and again, to a publicly funded health-care system," Mr. Olsen said.
But many expect Mr. Stelmach to use the provincewide pulpit to veer right, in hopes of using a fiscal-cutting agenda to take ground from the rising conservative Wildrose party, which elects a leader three days later.
"Mr. Stelmach grew up politically in the mid-nineties. He knows how to cut. He knows the success that can bring, or at least the perceived success," said Keith Brownsey, an associate professor of political science at Mount Royal University in Calgary. The rise in Wildrose popularity "allows him to do exactly that."
The possibility of a public-sector wage freeze or cuts to health and education, the government's biggest budget items, has already struck fear in those who lived through the austere days that former premier Ralph Klein used to wipe out the province's debt.
"We're afraid that the Stelmach government is considering a return to Klein-style cuts, even though that would clearly be a bad move, in that it would make a bad economic situation in the province much worse," said Gil McGowan, president of the Alberta Federation of Labour.
Bold moves could be risky for Mr. Stelmach, who is still half a year from unveiling the province's next budget. Yet he may be keen to take a page from Mr. Klein, who launched a tradition of annual television addresses in 1994, just days before unveiling a cost-slashing budget.
Alberta at the time was facing a bulging debt and a multibillion-dollar deficit.
"We knew that a budget was coming that was going to be explosive. And so the calculation was made to get ahead of it," said Rod Love, who served as Mr. Klein's chief of staff.
A televised address only works if it is used to explain something new, he said.
"You have to have a reason to focus the debate," he said. "You just can't go on and say what you've been saying before."
Yet Mr. Stelmach may find himself limited by the fact that any dramatic change could reflect badly on his leadership, which began during the heady, free-spending boom that ended last summer.
"Ed's used up his first couple of years in office. He's running against his own record now," Prof. McCormick said. "He can't slash without taking responsibility for the things that are being slashed."
Globe and Mail, Tues Oct 13 2009
Byline: Nathan Vanderklippe