Oil’s collapse has affected not just Western Canada, but also the economy in Atlantic Canada. With offshore oilfields near Newfoundland, and many Atlantic Canadians employeed in the Alberta oil patch, the pain of low oil has hit hard.
For example, in December of last year, even before oil dropped to its current low, Husky delayed a decision on its $2.8-billion White Rose project offshore Atlantic Canada.
The oil collapse has also caused, according to Atlantic Provinces Economic Council (APEC) senior policy analyst Fred Bergman, the region’s labour market to lose 7,000 jobs in the first four months of 2015, with about 25 per cent being full-time positions.
Bergman further added that international exports declined by 20 per cent in the first three months of 2015 because of a 33-per-cent drop in energy exports.
The Conference Board says Alberta’s oil woes create a “ripple effect” in the east.
“Depending on the reduction in this workforce, a portion of that income is at risk in 2015,” says a recent report written a pair of Conference Board economists.
In sum, low commodity prices have slowed the pace of development in the region.
APEC’s Major Projects Inventory has identified 408 major investment projects in Atlantic Canada with a record value of $129 billion. Current-year spending is expected to total $13.3 billion in 2015, which is “down about 5% compared to 2014 .”
The report also mentioned that “spending in 2015 is up slightly in the Maritime provinces, but down in Newfoundland and Labrador as mega project activity peaked last year. Investment activity is expected in grow strongly in Nova Scotia in 2016 but decline in New Brunswick and Newfoundland
and Labrador.”
The energy sector plays a major role in Atlantic Canada’s economy generating $19 billion in export sales in 2014 – almost 60% of the region’s merchandise exports. Traditionally, these energy products were destined almost exclusively for the USA, but a recently released APEC study shows that new shale production boosting US supply has Atlantic Canadian producers diversifying beyond the North American market.