Tumbling oil could reverse Sask.’s population boom
The economic repercussions of low oil prices could be wide-reaching enough to reverse a recent boom in Saskatchewan’s population, according to one expert.
“We’re quite dependant on oil,” said Rose Olfert, professor emeritus at the University of Saskatchewan’s school of public policy.
High oil prices lead to investment in exploration and development, which spurs job growth. Less of that money means less jobs, which means less people, Olfert said.
Saskatchewan’s population on July 1 was 1,125,410, according to the provincial government. That number marked the 32nd consecutive quarter of population growth since April 2006, when it was 991,233.
“Saskatchewan has traditionally had very low unemployment, because mostly if people don’t have jobs here, they don’t stay here. So we would see a decrease in population if jobs fell,” Olfert said.
The extent of the economic repercussions, and when we might see more of them, are still yet to be determined.
“We don’t know how low it’s going to go or how long it’s going to stay there,” Olfert said.
Earlier this year, the Saskatchewan government forecasted $1.56 billion in oil revenues, based on an oil price of $94.25 a barrel. Oil closed at $63.22 Tuesday.
Trevor McLeod, director of the Canada West Foundation’s Centre for Natural Resources Policy, said he doesn’t think the downturn will be as bad as some are predicting.
“I don’t think this is a long-term thing,” McLeod said.
It’s unlikely Saskatchewan will see any sort of “mass exodus,” and the province is less vulnerable than its western neighbour, McLeod added.
“I would say Saskatchewan is better positioned than Alberta to weather the storm,” he said, citing a more diverse provincial economy.
So far even those who work in the oilpatch haven’t felt the squeeze too tightly.
“Right now we haven’t seen much. It will be January that will tell the story,” said Dennis Parsons, president of PR Premium Oilfield Services in Kindersley. The company hauls fluids used in drilling to the oilpatch.
December’s drilling had already been scheduled before the floor went out on prices, Parsons said.
The company won’t do any hiring until things settle, but it hasn’t had to lay anyone off, he added.
“You just kind of watch what you’re doing and don’t spend too much.”
He said people in the industry around Kindersley are not panicking yet.
“I think everybody is just kind of hanging in there, waiting. You don’t really know.”