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Home Canadian Press Oil price plunge causes mixed results for East Coast workers, industries

Oil price plunge causes mixed results for East Coast workers, industries

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SYDNEY, N.S. — John Gnatiuk has been using his earnings from Alberta’s oilpatch to renovate his home in Sydney, N.S., and support local businesses in Cape Breton’s ailing economy.

But like many others from Nova Scotia who have commuted to Alberta, the 39-year-old truck driver and heavy equipment operator has been laid off and is cutting back on spending.

He’s not alone as the Conference Board of Canada predicts the downturn in Alberta caused by falling oil prices will also have a downside in Atlantic Canada where, last year, $375 million in income was generated from fly-in, fly-out workers.

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Finding a job in Cape Breton hasn’t been easy for Gnatiuk.

“It’s hard as hell to get back out there. There’s nothing on my union board,” he said in a recent interview.

“Now I’m watching what I’m spending because the money doesn’t last forever.”

The unemployment rate in the Atlantic provinces in December ranged from a low of 8.3 per cent in Nova Scotia to 11.3 per cent in Newfoundland and Labrador. Alberta’s jobless rate stood at 4.7 per cent for the same month.

During his last three years of working out West, Gnatiuk estimates labourers like himself could earn between $100,000 to $150,000 annually.

Other than canteen purchases and cigarettes from the work camp’s vending machines at the Kearl Lake oilsands project, the money went straight back into the economy back home, paying off a pickup truck, motorcycle and home renovations during the 72 days Gnatiuk spent in Cape Breton last year.

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 by economists Pedro Antunes and Kip Beckman.

The economists also conclude that Newfoundland and Labrador’s economy will take a sharp hit, along with Alberta and Saskatchewan, as offshore oil revenues to provincial governments drop.

However, the two economists say there are also energy intensive industries in Atlantic Canada that will benefit from falling world oil prices.

“Costs are cheaper than they were just a few months ago,” said Antunes, the board’s deputy chief economist, in an interview.

He said lower gasoline costs combined with a lower Canadian dollar increases manufacturers’ profitability and competitiveness at a time when the U.S. economy is hungrier for the lumber, paper and refined oil produced in the east.

Marc Dube, the manager of Port Hawkesbury Paper, which employs 330 people in its Cape Breton mill and 400 woodland contractors, says fuel costs are down 40 per cent over the past few months, generating monthly savings of $60,000 to $70,000.

“It contributes to our profitability and, when you’re profitable, you invest back in the facility,” Dube said in an interview.

Gnatiuk, meanwhile, says the positive side to the slowdown in Alberta includes spending more time with his six-year-old son Landon.

“I’ve seen him more in past two months since I’ve been home than I had in the last year-and-a-half.”

Still, if oil prices recover and Gnatiuk can bid on work again, he’ll happily return to the fly-in, fly-out life.

“I’m not one to sit idle for long, and sitting on my ass on unemployment is not for me,” he said.

— By Michael Tutton in Halifax.

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