Explain The Decline Of Oil And Gas Industry In Canada

Industries In Decline – Example: Oil & Gas

Given that Canada possesses the world's third largest oil reserves, its really no surprise that the petroleum industry is an important part of the Canadian economy. Across the country, the oil and gas industry directly and indirectly employs more than 500,000 Canadians – and these are often good paying blue collar jobs which are not easily replaceable.

The outlook for this large and important sector is however becoming bleaker and bleaker. Concerns about climate change coupled with low crude oil prices are making Canada’s oil industry, which is mainly dependant on the relatively higher-polluting and higher production cost oil sands of Alberta, less and less viable. The last few years have seen job

The issue they now face is three-fold. The price of oil is no longer high enough to justify drilling in the Canadian Oil Sands which have some of the highest operating costs in the world. Furthermore, the oil sands are very greenhouse-intensive and considered worse for the environment than drilling in Saudi Arabia or the Permian Basis. Finally, there is substantial public opposition to further development of the oil sands (primarily for environmental reasons) which has repeatedly hindered the development of more pipelines across Canada to increase access to markets.

Since the downturn in oil began a few years ago, the Canadian Association of Petroleum Producers estimates that 44,000 jobs were lost. One key indication of this being a long-term trend is the precipitous decline in house prices across oil towns in Alberta. In 2015, while Canada's housing market saw growth of 6.9%, the market in Calgary saw its home prices fall 3.8% from the previous year. The average home in Fort McMurray on the other hand, has lot 20% of its value, and year-to-year sales were down by 44.8 percent in

The government will partner with corporations in the affected industry and aid them in retooling their operations to something which is more economically viable. At the same time, the government, in partnership with industry, will offer retraining assistance for workers to be able to transition into the new jobs which will be available in retooled industries. An example would be a former oil and gas sector factory retooling in order to produce solar panels – which, with government assistance, can be made into a fiscally viable alternative.

The employee will be paid their employer during the training, and the government will reimburse a percentage of the wages to the employer. This will provide affected-workers with a livelihood and a means of obtaining livelihood in the future - something which would not be possible if the government were to simply provide employees with cash payments for an allocated period of time. The latter will only be done in cases where feasible retraining opportunities are unavailable.

2) Relocation