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Have Alberta’s Skilled Workers had Enough?

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The Canadian oil and gas industry suffered another blow on Sunday, October 25, when Cenovus Energy Inc. announced a $3.8 billion merger with 82-year old Canadian oil and gas company, Husky Energy. Headquartered in Calgary, Alberta, Husky is projected to lose up to 25% of its workforce as a result of the merger, approximately 2,150 jobs – mainly in Calgary. 

The news, which fell on Alberta’s increasingly restless population of unemployed workers and struggling families, many of whom believe Alberta has been left out in the cold for far too long already, has fueled ongoing discussions of a provincial brain drain. 

Simply put, brain drain is defined as “the departure of educated or professional people from one country, economic sector or field, usually for better pay or living conditions”. Recent statistics show this concept is rapidly gaining traction in Alberta as residents seek to escape the increasingly grim economic landscape to pursue opportunities elsewhere, beyond the provincial borders. 

As Canada’s largest producer of oil and natural gas, Alberta is no stranger to the boom and bust nature of the industry, experiencing cyclical periods of economic prosperity influenced by global conditions followed by detrimental crashes and ensuing hard times. Prior to this year, Alberta experienced a major economic crash in 2015, with the Canadian oil and gas industry suffering a $91 billion loss in revenue and layoffs reaching 35,000 workers in Alberta alone (1).

In the last 5 years, countless Albertans have struggled to regain their footing on shaky economic and political grounds, suffering substantial losses and insecurity. In this setting, the catastrophic impacts of the global COVID-19 pandemic, coupled with pipeline delays and ongoing cuts in the Canadian oil and gas sector have left many Albertans with the feeling of being kicked while already down. 

According to the Government of Alberta Economic Dashboard, the price of oil for many Alberta oil producers fell 36.6% from September 2019, averaging $28.43 USD per barrel in September 2020, according to the Western Canada Select (WCS) price. The coinciding unemployment rate in Alberta was 11.7% in September 2020, down from its 15.5% spike in May 2020, but still 6.6% higher than in September 2019 (2).  

At this point, it seems a number of Albertans have simply had enough. According to The Alberta Annual Population Report 2019/20, “Alberta’s interprovincial migration patterns are heavily influenced by the economic conditions in the province, and as the economy cooled, the province experienced net outflows.” The report shows that 2,733 residents left Alberta between April and June 2020. 

The loss of another 2,150 oil and gas jobs as a result of the Cenovus merger comes as a disappointing yet predictable defeat for industry workers who have remained “down on their luck” for many years in Alberta. Effectively decimating industries worldwide, the pandemic has also successfully pulled the rug from beneath Alberta’s shaky footing, tanking oil and gas once more and leaving countless skilled workers with nowhere to go but out.

For more stories, visit Todayville Calgary.

Alberta

Pembina to pocket $350 million after terminating acquisition of Inter Pipeline

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CALGARY — Pembina Pipeline Corp. will pocket a $350-million break fee after terminating its acquisition of Inter Pipeline Ltd.

The move follows Inter Pipeline’s board advising that it would no longer recommend that shareholders support the deal after rival Brookfield Infrastructure Partners LP upped its hostile takeover bid for the Calgary-based Inter Pipeline.

Inter Pipeline had resisted Brookfield’s bid after signing a friendly all-stock deal to be bought by Pembina that would have seen its shareholders receive half a Pembina share for each Inter Pipeline share they hold.

Prominent shareholder advisory firm ISS recommended that Inter Pipeline investors reject the company’s proposed sale to Pembina and instead support the takeover by Brookfield after Inter Pipeline’s largest shareholder upped its offer to $16 billion, including debt.

Pembina’s CEO Mick Dilger says he’s disappointed by the outcome as the logic of a combination with Inter Pipeline remains “unparalleled” and the value creation impossible to replicate.

He says the company will continue to seek growth opportunities through other acquisitions.

“Pembina remains optimistic about its future, including the profitability of our existing business given foreseeable sector tailwinds, as well as with tremendous flexibility to pursue an ever increasing and more diverse set of opportunities for growth, some of which we were able to highlight and advance during this process,” he stated.

Inter Pipeline subsequently said it is open to working with Brookfield to reach a “mutually agreeable transaction.”

This report by The Canadian Press was first published July 26, 2021.

Companies in this story: (TSX:IPL, TSX:PPL, TSX:BIPC)

The Canadian Press

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Alberta

Yamamoto among four players to receive qualifying offers from the Edmonton Oilers

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EDMONTON — The Edmonton Oilers extended qualifying offers to forwards Tyler Benson, Cooper Marody and Kailer Yamamoto as well as goalie Stuart Skinner on Sunday.

Benson, 23, has one assist in seven career NHL games. He was selected in the second round. No. 23 overall, in 2016.

Marody, 24,was originally drafted by the Philadelphia Flyers in 2015 and has appeared in six career NHL contests.

The 22-year-old Yamamoto had eight goals and 13 assists in 52 games with Edmonton last season. The ’17 draft pick has 20 goals and 32 assists in 105 career NHL contests.

Skinner, 22, played in one game with Edmonton last year. He was drafted by the Oilers in 2017.

This report by The Canadian Press was first published July 25, 2021.

The Canadian Press

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