Oil patch to cut deep
Canada’s oil patch is expected to cut even further to the bone this year, capping the worst two-year period for spending in almost seven decades.
The new forecast from the Canadian Association of Petroleum Producers came today, with an “urgent” call for new rules amid the oil shock.
Capital spending in the oil and natural gas sector is projected to slump this year by $31-billion, bringing the two-year total decline to $50-billion, or a 62-per-cent plunge from 2014’s record $81-billion, according to the report.
That would be the deepest slump since spending began to be tracked in 1947, the group said.
The number of wells drilled in Western Canada, meanwhile, is projected to fall this year to 3,500, a 66-per-cent tumble from the 10,400 in 2014.
More than 110,000 workers have now lost their jobs across the country, directly and indirectly, because of the collapse in energy prices, the group said.
“Canada needs urgent action to remain an attractive market for oil and gas investment, and to be competitive relative to other oil and natural gas producing jurisdictions,” the group’s chief, Tim McMillan, said in a statement.
“The United States, our only customer and No. 1 competitor, is certainly not standing still,” he added.
“We as a country need a common effort to have a level playing field in North America, he said, calling for pipeline expansion and development of liquefied natural gas export projects.
“Connecting our resources - by all means and in all directions - to more markets is critically important to improve the prosperity of all Canadians, even with the current declines in prices and investment.”
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CMHC on condos
International buyers own one in 10 condominiums built in the last five years in downtown Toronto, new figures from Canada’s federal housing agency show.
As part of a continuing effort to track the level of foreign investment in the country’s housing market, Canada Mortgage and Housing Corp. examined how much of the recent boom in condo construction in cities such as Toronto has been fuelled by demand from international buyers, The Globe and Mail’s Tamsin McMahon reports.
Foreign buying activity varied greatly by city, but was the largest in Toronto’s condo market, where international purchasers showed a strong preference for new condo units built in the downtown core.
Jobless rate to edge up
With just three provinces creating new jobs, unemployment in Canada is forecast to tick higher still.
“The labour market tends to lag the overall economy by one to two quarters,” Toronto-Dominion Bank economists said in a recent forecast.
“As such, the job losses among resource-heavy economies are likely to continue to mount through 2016 with the recession persisting.”
Of course, it’s regional in nature and not “all doom and gloom,” said deputy chief economist Derek Burleton, senior economist Michael Dolega and economists Diana Petramala and Warren Kirkland.
The populations of Alberta and Saskatchewan, two of the provinces hit by the oil shock, are younger and more mobile than those elsewhere, according to the report.
While workers fleeing those provinces won’t be as many as during the shock of the 1980s, the number of people leaving Alberta has picked up, they said.
So far, according to the TD economists, most of those leaving the hard-hit provinces have gone to British Columbia amid a rebound in B.C. manufacturing.
But because B.C. is still churning out new jobs, the province’s unemployment rate should still hold at about 6.2 to 6.4 per cent until next year.
“Eventually, we do think that more and more people will also start to head to Ontario and Quebec, as manufacturing begins ramping up in central Canada, which could put modest upward pressure on their unemployment rates,” the TD report said.
The TD economists forecast that Canada’s jobless rate will average 7.4 per cent this year, just a touch above where it stands now, dipping back to a still-elevated 7.3 per cent in 2017.
While Newfoundland and Labrador will still suffer Canada’s highest unemployment rate, in the area of 14 per cent in each of the next two years, Alberta’s jobless rate is forecast to surge to 8.2 per cent this year, compared with just 4.6 per cent in 2013, before the collapse in oil prices.