Joblessness Seen Tripling to 25% or More in Canada Oil Heartland

(Bloomberg) -- Alberta Premier Jason Kenney said the crisis rocking the global oil industry could cause at least 25% unemployment in his province.

The dual shocks of the Saudi-Russian oil price war and reduced demand caused by the Covid-19 pandemic could put 500,000 Albertans out of work, Kenney said Tuesday during an online presentation. Alberta has a labor force of about 2.5 million people; its unemployment rate was 7.2% in February.

”This will be the most challenging period in our economy in relative terms since the Great Depression,” Kenney said

To get people back to work, the federal government needs to introduce measures to speed up the reclamation of abandoned wells and provide at least C$20 billion ($14.3 billion) in liquidity to help energy producers, Kenney said. Discussions around an orphan well program are “quite advanced” and could be released before the liquidity measures, Kenney said.

“This country cannot allow our largest industry subsector to fail or to be impaired,” Kenney said at the Scotiabank Canadian Association of Petroleum Producers Energy Symposium.

Kenney said he’s also working with the federal government on a “do no harm list” that is focused on deferring or retooling regulaions that could increase costs for the energy industry.

A spokesperson for federal Finance Minister Bill Morneau said talks on an aid package for the industry are ongoing.

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