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Canada’s direct oil and gas workforce has become much leaner, shrinking from a peak of about 226,500 jobs in 2014 to forecasted employment of 173,300 in 2019 – a 23 per cent drop over the five-year period, according to a new report released today.

The oil and gas industry saw the labour market flatten following the 2014-2016 commodity price collapse with direct employment ending 2018 at about 185,800, down slightly from the 186,300 workers at the end of 2016. In 2019, about 12,500 jobs are at risk due to several factors, including low commodity prices, a decline in capital spending and uncertainty over market access, says the 2019 Labour Market Update report from the PetroLMI division of Energy Safety Canada.  

The report provides an employment outlook for 2019 based on current spending projections for the industry’s conventional exploration and production (E&P), oil sands, oil and gas services and pipeline sub-sectors. It also looks back at what has happened since the end of 2016 and spotlights new employment and occupational opportunities for workers longer term.  

“Until such time as additional export capacity becomes available, the employment outlook for Canada’s oil and gas sector will continue to be impacted,” said Carol Howes, Vice President of Communications and PetroLMI, Energy Safety Canada. 

“Many exploration and production and oil sands companies reported only limited capital and production guidance for 2019 because of the uncertain market conditions. Given PetroLMI’s reliance on capital and operating expenditures to project workforce requirements for our proprietary modelling system, we have for the first time limited our forecast to one year,” added Howes. 

Workers in the oil and gas services sub-sector continue to be among the most impacted, facing the highest employment risk in 2019 due to lower activity, driven by lower capital investment, according to the report. The pipeline sub-sector is forecasted to be the only sub-sector to grow just slightly in 2019. Regionally, British Columbia is poised to fare the best, with Alberta expected to experience the most job losses. 

When commodity prices collapsed at the end of 2014, Canada’s oil and gas industry focused not only on reducing its workforce, but also on streamlining business processes, using innovation and introducing more technologies to reduce costs.  

Stalled progress on the development of new pipeline and liquefied natural gas (LNG) infrastructure projects, heightened uncertainty, however, and lowered investor confidence. Oil production met transportation limits in the second half of 2018, causing an oversupply of production, a sudden decline in the price of Canadian oil and a reduction in capital spending for 2019. 

Even as commodity prices began to recover in 2017 and early 2018, the industry remained focused on improving productivity and managing costs, and that is expected to continue in 2019. Going forward, technology changes are also expected to have an impact on workforce expansion, but will create new opportunities, says the report. 

PetroLMI also released a second report today, Workforce Insights: Attitudes and Perceptions of the Canadian Labour Market on Careers in Oil and Gas, a survey of more than 2,000 Canadians on the impact the prolonged industry downturn has had on the labour supply the industry relies on to attract its workforce. Of the survey respondents, almost half had been impacted by the downturn. 

Among the survey findings: More than half of the respondents believed the oil and gas industry remains a viable career option. However, a high level of uncertainty continues, with about 40 per cent of those still employed in the industry believing their jobs remain at risk. 

Survey respondents included oil and gas workers, students and new graduates, job seekers, including unemployed oil and gas workers, and those who had worked previously in oil and gas but had transitioned to another industry. 

“It was encouraging to see the number of respondents who indicated the Canadian oil and gas industry is still appealing. The industry will need to continue to attract a variety of workers, particularly young workers, for succession planning and to fuel future development. The challenge for the oil and gas industry will be remaining an attractive career option if employment continues to contract further,” said Howes.