Oil industry woes striking hard at Newfoundland economy: analyst
Published Monday, February 15, 2016 8:29AM EST
Low oil prices and job losses in Alberta are driving economic woes in Newfoundland and Labrador as well, as the eastern province spirals deeper into debt.
Many Newfoundlanders who left the province to work in the Alberta oil patch are coming back due to job losses out West, while those working Newfoundland's offshore oil rigs are also facing employment challenges. The latest job numbers from Statistics Canada show a 14.4 per cent unemployment rate in the province, and a provincial debt that has ballooned to $1.9 billion.
Craig Alexander, vice-president of economic analysis for the C.D. Howe Institute, says the province will eventually transition to relying on other industries for jobs, but it could use some assistance from the federal government in making that difficult change.
"You have to help that transition," Alexander told CTV's Canada AM on Monday. "Newfoundland's a relatively small economy, but we should pay attention to the weakness that's happening there."
He added that the province needs to focus on cutting its deficit, which continues to grow as oil prices fall.
"If the provincial government needs to focus on reducing its deficit, then there's a rationale for the federal government to provide some additional support," Alexander said.
He said skills training will be essential going forward, as unemployed oil workers learn to work in new fields.
In the meantime, Alexander said the federal government should look into extending employment insurance benefits, to give workers more time to retool their skills. "Let workers that are displaced collect benefits for a longer period of time, because it may take a little while for workers that are displaced to get re-employed in other industries," he said. "And there will be industries in Canada that will be growing."