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“It’s frustrating that it’s taken so long for them to recognize that we’re part of the solution here in Newfoundland and Labrador,” Johnson said. The province’s unemployment rate will hit 14 per cent by the end of the year, the highest level in the country, and will continue to remain in double digits until at least 2022, TD Bank Group forecasts.
O’Regan has previously said the federal government is “at the table right now, hammering out concrete steps needed to support the offshore (oil industry).”
The minister agrees the historic collapse in global oil prices this year following the pandemic and Saudi-Russian oil price war has been challenging for the industry across the country and especially on paused activity offshore Newfoundland.
But asked whether there would be support going to Husky, O’Regan said, “Certainly for the industry.”
Back West, the oilpatch is watching for signals from Ottawa, amid a deteriorating environment for the industry.
According to a report released this week by the Canada Energy Research Institute, 14,000 jobs were lost in Alberta’s oil and gas industry between March and May 2020 alone.
The majority of those jobs — 11,000 — were lost in the oilfield services industry, CERI vice-president research Dinara Millington said, adding that federal spending on reclaiming orphaned wells will help put 8,200 people back to work in the province but not fully offset the losses.
“So there’s obviously still a gap but one of the bigger conclusions we arrive at is, looking at the stimulus package, it’s still not enough to get the sector back to the pre-COVID trend line,” Calgary-based Millington said.
Looking at the stimulus package, it’s still not enough to get the sector back to the pre-COVID trend line
Whether Canada’s economy fully recovers by the end of next year “will depend on both the success in developing a solution to the health crisis and the ability of workers to return to work,” Royal Bank of Canada economists wrote in a Sept. 10 research note. The report shows that real GDP declined 13.4 per cent in the second quarter. Overall, RBC expects real GDP to shrink 6 per cent this year.
The immediate economic pressures following the pandemic are being felt across the country, with the retail, hospitality, aviation and energy sectors hardest hit and vulnerable to further declines.
“We need to focus the limited money that we have on the areas that will have the greatest impact,” Canadian Chamber of Commerce president and CEO Perrin Beatty said, adding the federal government needs to focus “less on the rainbow and more on the pot of gold.”
Beatty said he’s concerned the federal government’s focus on green spending could be at the expense of existing industries that can be provide a quicker economic rebound.
Indeed, the federal deficit is expected to climb to $343-billion this year, with the Liberals proposing another $37-billion income-support package of benefits and changes to employment insurance when the Canada Emergency Response Benefit winds down soon.