Alberta, Newfoundland, Government discussed on The Current

The Current
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On the go. The bad busted describes a lot of places in Canada. These days this is Chris Andrews Newfoundland sending it a song to Fort mcmurray Alberta People. They're still cleaning up after massive flooding. His performance is from an online fundraiser. Featuring bands from Newfoundland and Labrador. There is a bond of gratitude between those two provinces. Thousands of different lenders have worked on fly in rotations in Alberta and while cove nineteen is as we know a global health crisis. It's also a major economic crisis for oil producing provinces. Let's head to Saint John's now where I'm joined by host of the local. Cbc Suppertime News. Anthony Germain Anthony. Good morning morning. Matt we were just talking about what's going on in Alberta. How serious the situation economically where you are. This morning does a great discussion Ah The price of oil was getting hammered before cove in nineteen and now that people have stopped going anywhere really no need for cars no need for gasoline so oil producing places all around the world and certainly in our country. They're all suffering and like Albert. Your province was already facing some economic headwinds and in debt Yeah not only that but the worst Denton Canada. Deep deep chasm of debt The revenue from offshore royalties. Dropped off a cliff. Government here made it spending plans based on oil mad of around sixty five dollars a barrel and as you know oil struggling to stay on this side of thirty dollars a barrel so the budget plan absolute tatters an early on in this crisis leaders. You know lenders. Rather looked at the books and said Newfoundland and Labrador's finances are are unsustainable we couldn't make payroll at one point so the premier had to get ought to step in essentially getting the federal government to cosign. Pay Our civil servants. So it's a really serious situation province of only half a million people falling short of paying our bills by just under two billion dollars a year. So the numbers are staggering and now is As we've seen you look at candidates historic job losses. Were Down Twenty. Five thousand jobs here so it's about as serious as the collapse of the of the COD. Fishery one thousand nine hundred and yet oil we know has brought what unprecedented wealth to your province from the offshore industry and as I mentioned from those who who were migrating to Alberta going back and forth and back and forth is that long in the rear view mirror. Well it's a far away far away a memory but it certainly a lasting one and for all the talk of the world weaning itself from oils. We heard in that discussion. Most most people in the industry are confident. Defense not too strong. That oil is eventually going to bounce back from covert so I met up with this Guy Andrew Ivany. He's one of these guys who's been flying in and out of Alberta for a decade now making really good money as a horticultural landscape in the oil patch and so recently he bought an old car with his buddy rocky and they drove home from red deer. Big Drive as because they were both too afraid to get on an airplane through these recessions. And these these patches we all come back. I'm extra. A were used to hurdles to get in. Get in through things and we've been just been down for years now. It's been like four four or five years since recession BERTA. So I mean. Everyone took pay cuts to another curveball. And I guess his point is when you work in oil. You have to be prepared for this. Yeah yeah that's right. I mean when times are good people again Andrew pulling the big bucks and salaries they just would not make in this Robinson and that explains why more than ten thousand people from Newfoundland and Labrador have worked in Alberta they say for mcmurray the second biggest city in Newfoundland right for reason you know like Alberta has provided a lot opportunity for newfoundlanders rate great. We don't grow up with much and we go out and we work our at or you know we we work hard and you know like Alberta's just a second home appreciate him holding his tongue there. Let's talk about Saint John's where you are How did The influx of oil salaries in royalties from oil change Provincial capital. Well it really rejuvenated the place. A experts maintain that oil and gas has the largest multiplier effect of any industry in Canada. And here it create all kinds of spin offs to service that offshore industry supply. Boats Nautical Services Mechanical Engineering Jobs. All this aimed at supporting the offshore. And that's on top of the work at the rigs and platforms and the construction of those. So when oil was between one hundred twenty five and one hundred and fifty dollars a barrel remember. That even seems like a long time ago it wasn't. It does seem like a long time ago but governments at that time spent a lot of money. They hired more public servants. The gave raises in hindsight should have saved much more than they did but nonetheless. The city's social life really flourished so had a situation where funky and high end restaurants different kinds of things on the menu sprung up and one of the owners. Is Todd Parent? He renovated this eighteenth century historic Irish dwelling. It's Mallard cottage in a place called Kitty video in Saint John's and he turned that into a restaurant that was eventually featured in magazines and cooking shows became a bit of a celebrity and what he offers a dining experience. And just it's not the kind of place math that's going to be able to cover its bills with a covert nineteen takeout menu and taught parents as it all happened because of oil dollars private saves probably the you know the catalyst it was what helped propel. Newfoundland Labrador restaurants and food kind of into Canadian cuisine. Just because we had to the culture of dining was not not quite hair due to economic and and other reason so it was a big. It was a big deal when it started to happen. You know at the very beginning of my career was it was tough. It was a tough market and then of course when oil really hit and You know Saint John's full of people who are attached to the oil industry with good salaries and expense accounts. It had a huge impact. So it's taught parent his places closed like so many other places in Canada. Is it steak? And that's really sad because again you hear about the precipice that people are living on what's at stake for the province of Labrador short term. Future looked so shaky right now a lot of fear that the big players in the oil industry are are backing off. And and just yesterday there were reports that production's going to shut down at the Terranova oilfield. Although son core says there's no final decision. What's the industry saying? Well they're looking for todd offer. Help as you've been discussing the morning. So this is Charlie Johnson. She's a CEO of the Newfoundland and Labrador Oil and Gas Industries Association. It has been a five thousand costs and we're really in crisis mode. We need help now with the other countries Announcing incentives there will be still investment dollars. Spent in this industry and this is what our members are hanging onto minister. Horno did promising announcements companies have told us that they are closing their Newfoundland and Labrador offices. They are waiting. They know discussions are ongoing with minstrel Reagan. And and I have to say he is trying very hard but we're being told. Time is running out for them. So Matt in the market. The price per barrel is really going to determine a lot about the future but one person who used to be in charge of that association here says that Norway is setting an example and Bob Cadigan says you know if you WANNA shot at keeping companies here. Governments are going to need to help offset the development costs Norway. Its in front of its problem and right now that provides assistance to companies developing new on a gas projects in. Norway. The impact based on what I hear from industries. The impact on a project could be reduced cost as much as eight dollars per barrel. Us So if we take Project to Norway versus a project offshore. You know that's eight dollars a barrel in or lowering of the The investment cost clearly going to be an all region project then moves forward under those circumstances. You talked about how shaky things are. What is the chance that Newfoundland Labrador returns to have not status as well? That's the big fear. The government here thinks the real problems that transfer payment system and it isn't fair to this province to be paying into it anymore now. That point of view ignores the fact that that complicated formulas related to how much spending a province does and this province never spending under control even before this crisis. So a lot of politicians and observers. They were talking about the need for a bailout before this crisis but at that time we were the only province facing an utter catastrophe and now everything has changed. Ottawa's got to monitor lots of provinces that are hurting financially right now so this place is going broke and depending how covert nineteen plays out elsewhere. We might be alone at any great to talk to you as always thank you all right. Anthony Germain news host in Saint John's Newfoundland and Labrador. I'm Matt Galloway. You've been listening to an extended version of the current. You can find part two of the show in your podcast. Feed for more. Cbc PODCASTS GO TO CBC DOT CA slash podcasts..

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