BLOG: Mobile oil workers and the Cape Breton economy

Doug Lionais Follow Me

Posted this 2016-02-18 4:14 PM AST (updated 2020-08-05 12:17 PM ADT)

Cape Breton’s economy has been in crisis mode for over half century. For at least the same time, Cape Breton labour, lacking work at home, has found employment in other parts of Canada and the world. Destinations for jobs have shifted from ‘the Boston states’ in the late 19th and early 20th centuries to ‘going down the road’ to upper Canada in the mid to late 20th century.

For the past 20 years, however, Cape Breton labour has found its way West, to the resource riches of Alberta ...

Earnings from all mobile workers from Cape Breton brought in over 200 million dollars in 2011, workers in Alberta account for two thirds of that flow at $131 million. For comparison, the last time mining employed the same number of people in Cape Breton was in 1990 (with 2983 DEVCO employees) at which time the wages in salaries were (in 2011 dollars) $153 million. Mining the Alberta oil sands is as important to the Cape Breton economy now as mining coal was in the 1980s.

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Joe Ward Follow Me 2016-02-18 8:37 PM AST Reply 0 0 Doug - Do those income estimates include only earnings from employment, or also account for the resulting EIC income in the totals as well? While they may contribute 5.5% of the workforce, they probably account for perhaps 10-15% of total household incomes generated through employment? As per his blog comment, Rod Gale seems to think the numbers may have been much higher at our recent peak. What was the comparative selling price of oil sands sourced oil in 2008? Doug Lionais My Post Follow Me 2016-02-18 9:27 PM AST Reply 1 0 Hi Joe The numbers are only T4 earnings, not EI or anything else. In terms of economic impact, you are right to suggest that there would be a multiplier effect for those incomes. The incomes generated off island will flow around the local economy as well. In terms of peak levels, I would agree that the numbers likely peaked higher in 2014 than the 2008 peak. The Stats Can data could also understate the actual number. For instance, a mobile worker who does maintain a household in CB (and spend most of their income here) who also has a permanent address in Alberta could conceivably file taxes there (at a significant advantage) and would therefore be missed in this data set. I have not, so far, been able to get a good sense of how often that occurs. Joe Ward Follow Me 2016-02-18 9:34 PM AST Reply 0 0 On the volume of income flowing to CB, I was thinking: 1. The high(est) EIC earnings would be enabled by their Western work, so that's also something to quantify in the impact, 2. Since their incomes are 50 to 100%+ higher than the average income here, they contribute a higher percentage of overall income than just the 5.5% would suggest (based on # of western works / total Cape Breton employed). A Western worker contributes 1.5 to 2+ times that of an average Cape Breton worker (perhaps).
Lloyd Allan MacPherson Follow Me 2016-02-19 9:35 AM AST Reply 1 0 It's unfortunate that Canada hasn't directed as much resource and personnel into wind/solar as let's say a country like Germany. No fewer than 300,000 people are employed by the green technology sector with half of those employees being involved in citizen/community/cooperative run energy companies. One of the biggest obstacles for this technology is space. Germany employs 300,000 with a little under 400,000 km2 - Canada has 10,000,000 km2 but is run by a rather unresponsive group in Ottawa. If we can agree that 1% of our global population is wealthy to a rather unhealthy degree, can we at least support that this wealth is mostly derived from the oil industry and those leaders holding back important technological progress are perhaps not leaders at all and simply employees of the dwindling oil sector? Our energy provider in Nova Scotia should be very worried about the numbers that are coming from comparative countries in regards to their green-tech production. Could this be that special commodity we've been looking for to export from Cape Breton? We have the largest consumer in the world to the south and the German representation who already take residence to initiate the conversion of the energy industry here : be it wind, solar and tidal. Technology never offers solutions; only people do.

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Joe Ward Follow Me 2016-02-18 8:37 PM AST

Reply 0 0

Doug - Do those income estimates include only earnings from employment, or also account for the resulting EIC income in the totals as well? While they may contribute 5.5% of the workforce, they probably account for perhaps 10-15% of total household incomes generated through employment? As per his blog comment, Rod Gale seems to think the numbers may have been much higher at our recent peak. What was the comparative selling price of oil sands sourced oil in 2008?

Doug Lionais My Post Follow Me 2016-02-18 9:27 PM AST

Reply 1 0

Hi Joe The numbers are only T4 earnings, not EI or anything else. In terms of economic impact, you are right to suggest that there would be a multiplier effect for those incomes. The incomes generated off island will flow around the local economy as well. In terms of peak levels, I would agree that the numbers likely peaked higher in 2014 than the 2008 peak. The Stats Can data could also understate the actual number. For instance, a mobile worker who does maintain a household in CB (and spend most of their income here) who also has a permanent address in Alberta could conceivably file taxes there (at a significant advantage) and would therefore be missed in this data set. I have not, so far, been able to get a good sense of how often that occurs.

Joe Ward Follow Me 2016-02-18 9:34 PM AST

Reply 0 0

On the volume of income flowing to CB, I was thinking: 1. The high(est) EIC earnings would be enabled by their Western work, so that's also something to quantify in the impact, 2. Since their incomes are 50 to 100%+ higher than the average income here, they contribute a higher percentage of overall income than just the 5.5% would suggest (based on # of western works / total Cape Breton employed). A Western worker contributes 1.5 to 2+ times that of an average Cape Breton worker (perhaps).

Lloyd Allan MacPherson Follow Me 2016-02-19 9:35 AM AST

Reply 1 0

It's unfortunate that Canada hasn't directed as much resource and personnel into wind/solar as let's say a country like Germany. No fewer than 300,000 people are employed by the green technology sector with half of those employees being involved in citizen/community/cooperative run energy companies. One of the biggest obstacles for this technology is space. Germany employs 300,000 with a little under 400,000 km2 - Canada has 10,000,000 km2 but is run by a rather unresponsive group in Ottawa. If we can agree that 1% of our global population is wealthy to a rather unhealthy degree, can we at least support that this wealth is mostly derived from the oil industry and those leaders holding back important technological progress are perhaps not leaders at all and simply employees of the dwindling oil sector? Our energy provider in Nova Scotia should be very worried about the numbers that are coming from comparative countries in regards to their green-tech production. Could this be that special commodity we've been looking for to export from Cape Breton? We have the largest consumer in the world to the south and the German representation who already take residence to initiate the conversion of the energy industry here : be it wind, solar and tidal. Technology never offers solutions; only people do.

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