November 23, 2020

Many oil and gas jobs are not coming back, but that can’t define our future

As appeared in CBC Calgary

The recent news of the Cenovus/Husky merger, the Tourmaline purchases of Modern and Jupiter Resources, and the relocation of Suncor’s downstream office function to Calgary have generated mixed feelings.

Mergers of Canadian oil and gas companies are a sign of the times, as they need scale to compete in an ever more challenging market.

Consolidation brings with it the good news that the merged firms will have a new ability to compete in a low-cost, low-carbon world; over the long term, the consolidation leads to scale and financial resilience. Relocations generate the potential for new jobs to be created here in Calgary. More announcements are coming. 

But the net result of these trends overall will be to the downside for both near-term jobs and office vacancy rates in Calgary.

These impacts are real. My heart goes out to those who will not find a place in the newly constituted firms. And it goes out to those whose businesses — like restaurants, dry cleaners, coffee shops, etc. — need a flow of customers in the downtown to survive.

Reality is hitting home

Calgary is now fully realizing the impacts and consequences of decisions that created hiring and office space numbers that were unsustainable.

We built up for an oil price environment in the $100/barrel range. With $40-50/barrel oil, a global pandemic and long-term trends toward decarbonization and an increased use of automation and technology, the reality is it’s highly unlikely the jobs being shed now will come back. It’s equally unlikely the empty office space will be filled any time soon.

But neither of those facts need define us. In fact, we must make sure that they don’t.

We must do two things: We must build on all our strengths; and we must take care of each other. 

Our strengths are our people, our location and our vast landscape and resource base. We have natural strengths in energy, agriculture, tourism, transportation and logistics. We have a dynamic and growing technology sector, our financial services expertise is world class, and we have niche strengths in areas of manufacturing and medical sciences.

In my role, I live at the intersection of all these strengths. I say that we don’t have the luxury of chasing rainbows, but we also don’t have the luxury of dividing our community by pitting one sector or strength against another.

I am a firm believer in the “and,” not the “either/or.” As a city, we can do oil and gas, and agriculture, and technology, and renewables, and more. We build on our strengths and assets.

What’s hard for us all to manage is that these changes don’t happen quickly. We have to put the right building blocks in place now, that will pay dividends as the economic environment continues to evolve.

Calgary Economic Development’s Calgary In the New Economy provides an excellent roadmap and plan for Calgary to build on its strengths.

It will take time. The strength of the oil and gas sector took decades to develop in Alberta and Calgary. Like reputations, economic sectors take time to build, but can shift very quickly. 

As a result of these shifts, tens of thousands of Calgarians and Albertans over the past five years have lost their jobs. Thousands of our neighbours have found themselves without a future in the sector they have spent years being educated about, building skills for and working hard to succeed in.

Thousands more have built businesses to serve our growing population and workforce, only to see their dreams fall apart. Our people are our strength, and we must take care of them.

A callousness has set in

I am sad to say I find that there has been a callousness in our public discussion toward the jobs and livelihoods lost. Many suggest that Calgary and Alberta stop crying over spilled milk and move on.

For those whose jobs have been lost, and can’t easily transition to something else, this is just plain inconsiderate. I worry some of the rhetoric has lost sight of the impacts to real people and families.

The attitude of “serves you right, you had it good for a long time, and this is just the way the world is going” is divisive, unhelpful and wrong. I ask us all to stop, and to work at helping, rather than critiquing.

We cannot afford to discount the impacts on people. We must continue to invest in and support our community institutions that help those in need, like food banks, mental health services and counselling centres, as well as the programs, like post-secondary education and career transitioning, that will enable people to adapt their skills for the future.

Whether it is someone who moves from oil and gas to a geothermal or hydrogen opportunity, or turns their passion for something into an innovative business venture, these investments in people are the most important ones we can make. 

Too often we are talking about this issue but not doing enough.

What we need are purposeful investments in our people for the future, particularly those whose jobs are unlikely to come back, or whose businesses have been destroyed due to shifting economic sands. This is not a response driven just by COVID-19. This is a fundamental change in our economy and the nature of work. 

What particularly frustrates me is the lack of federal government support to help those whose jobs will be lost as our nation pursues its Paris climate commitments.

In Ottawa’s efforts to reduce emissions in Canada — a goal that should not be debated and is highly necessary — policy is being shaped and investments made in things like electric vehicles and hydrogen. Those are essential, but they are not reflective of the people-side of the equation.

With each policy decision and each investment come job and employment related consequences that I fear have not been truly calculated. Nor has there been sufficient study done to determine how we help those displaced either transition into this new opportunity or find something else.

More transition programs needed

Despite recently adding $1.5 billion for workforce development agreements, I believe that employment transition policy and programs need to take up a greater amount of time in Ottawa.

Some great work is being done in the community, such as the EDGE UP program at Calgary Economic Development, which works to retrain people displaced from the oil and gas sector into high growth digital technology opportunities. Demand is strong for this program — 1,300 applications for 100 spots — which means many people are thinking of their next chapter and trying to make a transition.

The new AltaML program Applied AI Lab saw 500-plus applications for its first cohort of eight participants, many of them retraining from other careers. And the SAIT Polytechnic Digital Hub downtown will create opportunities for more people to look at alternative skills and career paths. 

For those who are critiquing government support or investment in oil and gas, or encouraging government to accelerate activity in new or emerging sectors, I ask you to turn your focus to calls for government to work with industry and invest in people who find themselves without a job and limited prospects for the future — to help them build opportunity and security.

We can do both. Let’s build up, not tear down. We must take care of each other.

Adam Legge is president of the Business Council of Alberta.

Feature image credit: Jeff McIntosh/The Canadian Press // CBC Calgary

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