COVID-19 Takes Toll On Canada’s Oil And Gas Industry

The impact of COVID-19 is dramatic and far-reaching. It has changed everything from how we function in our daily lives to the health of the global economy. It’s no surprise, then, that the pandemic is affecting Canada’s oil and gas industry.

As described in a joint report released by the Labour Market Information Council (LMiC) and the PetroLMI Division of Energy Safety Canada, before the pandemic, employment in the industry had already fallen by about 23% between August 2014 and February 2020. Then, measures to prevent the spread of COVID-19—travel restrictions, stay-at-home orders and closures of non-essential businesses—were layered onto other market stressors. In March, there was a sharp drop in global oil prices as the pandemic unfolded and as Russia and Saudi Arabia failed to reach an agreement to support oil prices by limiting production. The resulting decline, both in production and investment in Canadian oil and gas, translated to fewer jobs.

Based on the latest labour force survey (LFS) data released by Statistics Canada, the industry employed 156,000 workers in June 2020, down 11.7% from February 2020 when approximately 176,600 workers were employed. The oil and gas services sub-sector was most affected, with an employment decrease of 26.2% or 20,500 jobs. The pipelines sub-sector also decreased by 9.4% (-1,200 jobs), while the exploration and production sub-sector increased by 1.3% (+1,100 jobs).


Graph Title: Oil and Gas Direct Employment in Canada by Sub-Sector

Source: Statistics Canada Labour Force Survey and PetroLMI. The data is a seasonally unadjusted 3-month moving average.

In addition, Canada’s unemployment rate in the oil and gas sector hit 16.1% in June 2020, up 4.3 percentage points from the previous month and more than triple the 5.3% unemployment rate recorded in February 2020. While the unemployment rate for all sub-sectors rose in June, it was significantly higher for the oil and gas services sub-sector (23.3%) than for pipelines (16.5%) and exploration and production (10.4%).


Graph Title: Oil and Gas Sector Unemployment Rates in Canada, by Sub-Sector

Source: Statistics Canada Labour Force Survey and PetroLMI. The data is a seasonally unadjusted 3-month moving average.

The Role of Oil and Gas in Canada’s Economy

The oil and gas industry is an important contributor to the Canadian economy, particularly in Alberta. According to Statistics Canada, from the year 2000 onwards, the industry’s share in the total economy averaged about 5% of Canada’s and 21% of Albertan GDP.

Canada’s direct oil and gas employment declined by more than 6,700 positions in June 2020 compared to the previous month. About 70% of the net job losses were in Alberta, which saw a 6.3% decrease (-600 jobs) in pipeline jobs and a 9.9% decrease (-4,700 jobs) in oil and gas services, while the exploration and production sub-sector (including oil sands) saw a slight increase of 0.7% (+500 jobs).

In terms of the impact on the western provinces year over year from June 2019 to 2020, all three saw a decrease in oil and gas employment: 29.9% (-3,748 jobs) in British Columbia, 13.1% (-18,596 jobs) in Alberta, and 26.4% (-3,240 jobs) in Saskatchewan.

The Way Forward —How Labour Market Information Can Help

“In this time of economic uncertainty, labour market information (LMI) is critical,” says Carol Howes, Vice President of Energy Safety Canada’s Communications and PetroLMI. “That’s particularly true for a sector undergoing structural change, confronted with an aging workforce and experiencing widespread adoption of new technologies. LMI can help those in the sector understand how to adapt to these new realities.”


Sidebar: Local, accessible, reliable labour market information (LMI) will provide oil and gas workers with knowledge and understanding about changing economic conditions, helping them navigate and adapt to changing conditions during these unprecedented times.


Monthly labour force survey data is available from the Employment and Labour Force Data Dashboard. In addition to the usual labour force survey data, the dashboard now includes employment by age, sex, class of worker and type of work.

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The Petroleum Labour Market Information (PetroLMI) Division of Energy Safety Canada is a leading resource for labour market information and trends in Canada's energy industry. PetroLMI specializes in providing oil and gas labour market data and insights, as well as resources for workforce and career planning.   This initiative is funded by the Government of Canada’s Sectoral Initiatives Program.