Category: Economic

Categories
Economic Ft Mac Politics

Oilsands Unemployment Rate Slightly Down, Still Higher Than the National and Provincial Average

oilsands, unemployment rate

The unemployment rate for the oilsands has dropped a little, but it is still higher than the national and provincial averages according to Statistics Canada. In May the rate for the area was 8.6%, and that has gone down to 8.0%. Many of the energy companies which operate in the oilsands believe that the unemployment rate is still high because of new taxes, a drop in oil prices, and uncertainty about the future. Increases in taxes were recently passed, and government officials defend these taxes as necessary. Oil companies are less likely to hire new employees or to expand projects when oil prices are low, and that is also the case right now. Some of the major companies in the area have delayed projects and laid off workers in order to cut costs but this could leave the area unprepared if oil prices jump up again and more production is needed.

The drop in the oilsands unemployment rate is a start, but it is not a solution yet because the area still has a higher percentage of unemployed people than the province or the entire nation. Joe Ceci, the finance minister for Alberta, has defended increasing taxes and says he does not believe that the new taxes are the reason that Wood Buffalo has such a high unemployment rate. In the last few years the region has seen less revenue and higher costs, and this is an equation that must be balanced. If less is coming in and more is going out there is less available to spend on the labor pool. It is simple math.

Categories
Alberta Economic Ft Mac

Did Alberta Tax Increases Cost CNRL $405 Million in Second Quarter Losses?

CNRL, Alberta tax increases

CNRL is the second big oil company to blame an Alberta tax increase for hundreds of millions of dollars in losses during their second quarter of operations. The entire oil industry saw losses last year because of the drop in global oil prices, but some energy companies are seeing current losses that they link with Alberta tax increases as well. The corporate tax rate for Alberta jumped from 10% to 12%, and this caused CNRL to record a $405 million net loss during the second quarter. This is in comparison to a profit of $1.07 billion that was recorded just a year ago. CNRL has taken the position that the sudden increase in the tax rate for corporations played a huge part in the losses the company is experiencing.

When discussing the Alberta tax increases and the posted loss that CNRL has the chief financial officer for the company, Corey Bieber, stated “This charge effectively translates into lower future cash flows and therefore, lowers reinvestment in the business. Based upon third-party research, this lower future capital reinvestment likely equates to about 4,100 fewer person years of direct, indirect and induced employment, with follow-on impact of higher income taxes on future income streams. We expect to deliver annual oil production at the midpoint of guidance despite the forest fire impact on second quarter oil production,. We have been able to achieve significant cost savings through better effectiveness, efficiency and innovation. Both operating and capital costs were down significantly from the second quarter in 2014 to the second quarter of this year.”

Categories
Economic Ft Mac

Fort MacMurray Airport Staff Have Low Morale According to CUPE

CUPE, Fort MacMurray Airport

CUPE is saying that the Fort MacMurray Airport staff have low morale as a result of recent privatization of services that have resulted in staff layoffs and job losses. In recent months the custodial staff at the airport was laid off and replaced with outsourced workers from a private cleaning company. The wage paid to the company for the workers was less than what the hired staff was being paid, and many of the benefits previously provided were also cut when the positions were outsourced. Next the airport authority announced that the security staff would also be outsourced and this upset many people in the local community as well as the CUPE leaders. CUPE Local 1505 president Les Collins said “The morale of the employees is noticeably down. The employees are walking on eggshells. Losing a job right now could mean leaving your home and leaving town.”

CUPE is asking that the Fort MacMurray Airport stop looking at third party firms to outsource services as a way of cutting costs and saving money. There is also concern that the union has not yet seen the nw contract that was entered into with TAWS Security. Collins stated “Usually they’re quite cooperative about providing that. Anything that’s sensitive or confidential in documentation is blocked out, and we’re fine with that. To withhold all the information we’re requesting so we can do an apples-to-apples comparison, that is not cooperative.” CUPE Alberta Division president Marle Roberts explained “The Fort McMurray Airport is replacing skilled, experienced working people with people that it will economically exploit. Privatizing services always costs more in the end, as profit margins grow and working people and our communities are left with less.”

Categories
Economic Ft Mac

Additional Degree Programs Now Offered by Keyano College

Keyano College, degree programs

Keyano College has added two more degree programs in order to assist the local community and provide programs that are relevant in the area. This means that students can choose from 4 different degree programs now instead of the previous two. The school explained that the new programs were added to meet local demand. The new programs are the Bachelor of Science in Environmental Science and the Bachelor of Business Administration degrees. According to Keyano College academic affairs vice-president Catherine Koch “The employability is better with a degree level than the diploma level in our local market.” Keyano School of Arts, Science, Business, and Education Dean Guy Harmer said “We have had a diploma in Environmental Technology for a while. And all of (our advisory board) told us that they would prefer to have bachelor’s degrees.”

The advisory board of Keyano College which recommended the new degree programs is made up of industry partner representatives. This includes representatives from Syncrude, Suncor, and other oil and energy companies that operate in the area. Both of the new degree programs are offered in partnership with Alberta Universities. Harmer explained “We’ve been building this room with giant 80-inch monitors, so you’ll be able to see the professor in the class at Mount Royal and they’ll be able to see us. When you ask a question, your face fills one of the monitors…in that way, you always see whose talking, as you would in a normal classroom. We’re interested in having a set of programs that you can finish at the baccalaureate level so that you don’t have to leave town. When you’re sending people away, chances are they might not come back.”

Categories
Alberta Economic Ft Mac

Pilot Project on Tests Using Radio Frequencies Underway at Suncor Energy

Suncor Energy, radio frequencies

A pilot project on testing that uses radio frequencies instead of steam is being undertaken by Suncor Energy. The hope is that these radio frequencies will liquify bitumen deposits situated under the ground, similar to melting something in the microwave. Suncor Energy is one of several companies that have partnered together to test out this method. The testing method is being used at the Suncor Dover site. The new testing method is called ESEIEH, and these initials stand for Enhanced Solvent Extraction Incorporating Electromagnetic Heating. The process involves using the radio waves to heat up the bitumen deposits until they are liquified, and then mixing in a chemical solvent so that the mixture can be siphoned to the surface if the earth. Suncor Energy believes that this method could be less expensive and a cleaner option than traditional mining method that are currently used.

Suncor Energy spokesperson Ein Rees provided an interview through email discussing the new project and testing method that uses radio frequencies. According to Rees “If proven successful, ESEIEH is expected to result in a reduction of up to 75% in energy requirements. ESEIEH doesn’t use any steam in the in situ recovery process, so it eliminates the cost requirements for water sourcing and handling. It is important to note that establishing a baseline for the comparative costs versus traditional methods is a primary objective of this phase of the pilot. It’s still early days in testing the technology.” Steam recovery methods can mean using energy to create steam, and this method produces greenhouse gases. The new radio frequency method could revolutionize the energy industry is the project is successful.

Categories
Economic Ft Mac

Fort MacMurray Airport Authority Plans on Outsourcing Security Staff Later This Year

Fort MacMurray Airport Authority, outsourcing security staff

When the Fort MacMurray Airport Authority announced a plan to outsource the custodial staff earlier this year local residents were upset and labor groups were enraged. Now the agency has announced that the next step will be outsourcing the security staff later this year and many are upset by this decision. Airport security in the world today is critical, and some argue that the move to outsource those who provide security at the airport could put people and national security at risk. According to the Fort MacMurray Airport Authority 46 security workers will be let go after September 24, 2015, and this will be their last day on the job. The airport has chosen to contract security through Anzac based private company TAWS Security.

Scott Clements, the CEO for the Fort MacMurray Airport Authority, discussed the move towards outsourcing security staff. Clements said “We did this for the very same reason as we did with the custodial contract: to save money. It wasn’t a happy evening and not something I wanted to do, but I am not the only CEO that’s dealing with a downturn right now. It’s just custodial and security and that’s it. The rest of our union members and the rest of our trades we will keep internal,. Almost every airport in Canada contracts out janitorial and security duties.” This move is expected to save the airport around $3 million each year. Clements did confirm that the new security workers will have a lower pay and fewer benefits than the internal security staff did but the CEO refused to give specific numbers or further details. What do you think about this cost cutting move?