Economic Consequences of Low Oil Prices Discussed by Labour and Energy Groups

low oil prices, economic consequences

On Tuesday a 3 day meeting that included some of the biggest labour and energy groups started to discuss the low oil prices and the economic consequences. The groups warned lawmakers in Ottawa that falling crude prices could have devastating economic consequences, especially in areas where energy operations are crucial to local economies. According to executive vice-president of strategy and corporate development Steve Reynish “There situation highlights the very real effects on the Canadian economy. The current environment has allowed us to source closer to home and we are reducing, or eliminating, higher cost fly-in, fly-out labour to our operations. Significantly lower prices have rationalized the most expensive labour option for us, which is temporary foreign workers. For us at Suncor, a lower dollar is a double-edged sword. Our earnings are in Canadian currency, but debt is largely in U.S. Dollars.”

When discussing low oil prices and the economic consequences Tim McMillan, the CEO of Canadian Association of Petroleum Producers, said “The effect of the low price will be felt across Canada through our supplier network, through the employment that is sourced from across the country and through the taxes and royalties.” Alberta Federation of Labour president Gil McGowan commented “Any company assuming the price of oil would stay at $100 per barrel was being simply unrealistic, Winston Churchill famously said you should never waste a good crisis and I think that’s what’s happening right now with some people speaking out about a lot of doom and gloom in the oilsands.”

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