May not impact local industry too heavily
Oil prices have dropped to around $50 per barrel, and while that may not impact local industry too heavily, chances are good that tradespeople will see a decrease in pay.
This was the message from Mark Morrissey, director of Economic Development, who noted while that may see short-term perils, the long-term effect could actually be a good thing.
“One thing that a lot of industry is looking forward to, and they won’t admit this publicly, but we know from an attraction perspective, Alberta’s a high-cost environment and a big factor in that is labour,” he said.
“It costs a lot to build and operate a facility in Alberta, particularly on the construction side. Your capital investment costs are significantly higher than they are anywhere else in the world, and a lot of that is driven by labour costs.
“That’s because it is a competitive labour market and if you don’t offer a competitive wage, the next company will, and then your workers leave. So you do have to offer that competitive salary to bring in workers to get the job done.”
While he noted some oilsands projects may be deferred for a couple of years as a result of declining oil prices, while others may be cancelled or see production slowdowns, there will be an increase in the available labour pool, which will bring down labour rates.