The Alberta government’s 2015/16 budget will help keep the province’s oil and gas industry competitive in a turbulent global market, supporting jobs and investment at a challenging time, the Canadian Association of Petroleum Producers said today.
“Albertans across the province are hurting with the drop in oil prices – from rig workers and service crews, to head offices, small businesses and local corner stores,” said CAPP president Tim McMillan. “Now is not the time to put more cost pressures on industry.”
Oil and natural gas companies have announced more than 4,500 direct layoffs in 2015, with an additional 23,000 jobs expected to be lost as a result of lower drilling activity. Capital investment in the industry is forecast to decline more than $25 billion (33 per cent) this year, from $69 billion last year to $46 billion in 2015.
“The drop in oil prices has hurt our industry – and it has hurt Alberta’s public finances. It would be irresponsible to put more jobs at risk.” McMillan said.
“We all must focus on protecting jobs and keeping Albertans working as much as possible.”
According to Alberta’s budget documents, the oil and gas industry’s payments to the province are forecast to decline $5.9 billion (67 per cent) this year, from $8.8 billion last year to $2.9 billion this year.
Oil and natural gas payments represent seven per cent of total government revenue this year, a number that is forecast to grow to 15 per cent by 2020. In addition, the industry contributes about $1 billion annually in municipal taxes and has paid nearly $500 million in greenhouse gas-related levies since 2007.
The oil and natural gas industry employs one in every six Albertans, with substantial related employment created in sectors such as hospitality, transportation, food services, consultation, construction and real estate. Each dollar invested in the oil and natural gas sector creates three dollars of value in Alberta’s economy across the province, particularly in rural communities.
“The global market for oil and natural gas investment is extremely competitive. If we are going to continue to grow Alberta’s oil and gas industry – creating more jobs and increasing public revenues to improve our quality of life – then we must keep Alberta attractive for this future investment,” McMillan said.