Athabasca, Syncrude bring back project staff as wildfire risk recedes

Source: Canadian Press

Alberta oilsands workers forced to flee the ferocious Fort McMurray wildfire are returning to begin the tricky process of restarting their projects in northern Alberta, reassured by colder weather and a forecast of rain.

In a Tuesday morning update, provincial emergency officials said the Fort McMurray wildfire had grown to 523,000 hectares, almost the size of Prince Edward Island, and was still out of control but moving farther east and northeast away from the city and industrial operations.

A similar move to repopulate the projects a week ago was stymied when the fire suddenly changed direction to again threaten industry and force about 8,000 workers to flee work camps.

Syncrude Canada spokesman Will Gibson said Tuesday that his company has adopted a comprehensive evacuation plan in case that happens again.

“We’re making significant progress on our safe return to operations plan and details of when we’ll resume production will be available at a later date,” he said.

Analysts estimate more than one million barrels per day of oilsands production – nearly half their capacity of 2.5 million bpd – were offline at times over the past three weeks as the wildfire forced staff evacuations and the precautionary shutdown of inbound and outbound pipelines. None of the projects has reported substantial damage.

Athabasca Oil said May 24, 2016 that it has resumed operations at its Hangingstone project, which produces bitumen from wells using steam to melt the thick oil. It said the facility did not suffer any damage from wildfires that crept to within a few kilometres, forcing staff to scramble to safety three weeks ago.

Prior to shutdown, the thermal project commissioned last year had ramped up to 9,000 barrels per day on the way to output capacity of 12,000 bpd. Athabasca said it expects its underground reservoir to recover to normal operating levels over the next several weeks.

Meanwhile, Suncor Energy (TSX:SU) continued to bring workers back to its oilsands mining and thermal projects north of Fort McMurray after emergency officials lifted evacuation orders on the weekend.

A CIBC report published on the morning of May 24, 2016 estimated the cash flow impact of lost Suncor production will be about $760 million, while cautioning that number could be reduced by insurance coverage.

“We expect the mining operations will be up to turnaround levels later this week and in situ operations back to mid-turnaround levels next week,” CIBC analyst Arthur Grayfer said in a note to investors.

“Assuming there is no additional fire risk, we estimate the downtime from the fire and ramp to turnaround capacity to be three to four weeks, with an additional week to get production back up to full capacity with the completion of the turnaround.”

Suncor’s mining operations have a capacity of about 250,000 barrels a day but had been reduced by about two-thirds by a maintenance turnaround in its upgrader when the fire broke out. That work will have to be completed before the upgrader output returns to normal.

Suncor’s Firebag and Mackay River thermal operations, which were also closed, have combined capacity of about 235,000 bpd.

Syncrude, owned by a consortium that includes Suncor, has capacity of 350,000 bpd at its upgrader and Mildred Lake and Aurora mines.

Spokesman Rob Evans of ConocoPhillips said workers began arriving at its Surmont thermal project site on May 24, 2016 and the company expects to have 350 workers there by May 27, 2016.

The project was producing about 50,000 bpd before being shut down. Evans said its unclear when that level will be reached again.

 

Finance minister defends extra employment insurance help for parts of oil patch

OTTAWA _ Finance Minister Bill Morneau defended the Liberal government’s decision to boost employment insurance benefits for parts of Alberta and Saskatchewan while leaving some hard hit areas of the oil patch out of the budget plan.

Morneau said the government had to decide what areas across the country needed the most help with extra weeks of employment insurance benefits for jobless workers.

Left off that list were cities like Edmonton, and parts of Saskatchewan that Premier Brad Wall has said could also use the help.

Morneau told CTV’s  “Question Period” that the government picked 12 regions to help them” deal with what’s been a significant change and a harder time for those people to get re-employed.” The dozen spots included Newfoundland and Labrador, parts of northern and southern Alberta, northern British Columbia, northern Manitoba, northern Ontario, northern Saskatchewan, Calgary, Sudbury, Ont., Saskatoon, Whitehorse and Nunvaut.

Those 12 regions had what Morneau described in the television interview as  “sharp increases in unemployment that have been sustained,” or what the budget describes as a two per cent increase in unemployment rates over a three-month period over the last year  “without showing significant signs of recovery.”

The Liberals’ first budget this past week gave workers in resource-rich parts of the country like Alberta and Northern Ontario an extra five weeks of employment insurance benefits amid concerns that many are about to run out of EI payments. The budget also promised older workers in those areas an extra 20 weeks of benefits up to a total of 70 weeks so they wouldn’t have to worry about paying the bills while they looked for a new job, which usually takes them longer than younger workers.

Morneau said the government is making other changes to the employment insurance program that are designed to help the entire country, including cutting waiting times for applicants to receive their first payments.

“We made changes that are impacting everyone all across Saskatchewan, all across Alberta, and all across the country and then specific ones that are impacting Northern Ontario, parts of Alberta, parts of Saskatchewan, all of Newfoundland and Labrador,” Morneau said in the television interview.

“That was the choice we made in order to help those areas that have been particularly hard hit.”

Morneau also said the Liberals expect low- and middle-income families to spend money they receive through tax breaks and a new, income-tested child benefit unveiled in the budget and that will help the economy. He said the average payment to families from the new child benefit will be about $2,300 per child.

Morneau’s on-air appearances were his first to sell the budget on Sunday morning political talk shows marked. Morneau was pushed in his television appearances to defend the employment insurance decisions and the Liberals running a $29.4 billion deficit this year, the first of five years of deficits that total $113 billion.

He repeated the government’s new mantra that future spending decisions will be based on economic growth rather than specific, fiscal-discipline benchmarks.

canada-press

Year-over-year spike in Alberta pushes national figure up 7.1%

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Out of work Canadians waiting month or more to find out EI eligibility

The Canadian Press

Source: Global News

OTTAWA – Newly released figures show jobless Canadians are waiting days for answers to their employment insurance questions, and a month or more to find out if they are going to receive benefits.

The figures tabled in Parliament last week show 297,586 employment insurance applicants waited more than 28 days for a decision on their files between April 2015 and January of this year.

The average wait time was 39 days nationwide and in Alberta, which has been hard hit by the slumping price of oil.

Waiting to hear back from employment insurance processing agents was equally frustrating: The documents show agents returned calls within five days just under 60 per cent of the time.

The numbers also show that Canadians dialling into a federal call centre with employment insurance questions heard an automated high volume message almost 7.4 million times between April 2015 and January of this year.

Consequently, processing times and client services topped the categories for complaints lodged with the government.

The numbers were released in response to a written question from NDP employment critic Niki Ashton.

The figures are part of an ongoing trend of long wait times to speak with an agent at federal call centres, some of it attributed to an antiquated call centre system that Shared Services Canada, the government’s central information-technology department, is working to upgrade.

The government’s goal is to answer 80 per cent of calls within 10 minutes. Between April of last year and January of this year, the call centres met that service standard from a high of 64.3 per cent of time in June, to a low of 19.6 per cent in January.

Employment and Social Development Canada, which oversees the employment insurance program, is planning to spend $19.5 million on telephone services this year, and spend $18.9 million to expand services and answers available online.

Labour Minister MaryAnn Mihychuk said the government knows it has work to do on the employment insurance system and will have more to say on its plan soon.

“It’s our goal to provide services to Canadians that need help the most, when they need it. We know that is going to require improving the way we interact with Canadians, especially after years of front line service cuts by the previous government,” Mihychuk said in a statement.

“We have worked hard since our election to provide the best service possible to Canadians, and we know there is more we can do.”

Ashton said the numbers point to a need for more permanent employees at the call centres where one-third of workers are part-timers.

“The people that are meant to be handling these issues and working with the people that are distressed are completely overwhelmed,” she said.

“Some immediate action would be to staff these offices with people who are permanent employees who are supported in what they’re doing.”

Amid avalanche of lost jobs, confusion reigns about EI eligibility

DAVID GRAY AND COLIN BUSBY | The Globe and Mail

The brunt of Canada’s economic woes is falling on a few resource-based provinces. This avalanche of lost employment – Alberta lost 10,000 jobs in January – calls for a close look at our employment-insurance system, which maintains regional inequities by treating some workers much more generously than others.

As the first layer of Canada’s social safety net, EI gives recently laid-off workers some income stability and acts as an economic stabilizer. Do enough of these workers obtain access to benefits? For the most part, yes, but coverage could still improve.

EI eligibility is broadly misunderstood, which generates a fragmented, unruly policy discussion on how to improve the program. Confusion reigns partly because there are several indicators of eligibility – each of which tells a different story. We consider two of them.

The first and most widely used indicator refers to the ratio of people currently receiving EI benefits relative to all unemployed. This supposedly tells a story of drastic program cutbacks, which is very misleading. The ratio of the number of EI beneficiaries to unemployed fell dramatically in the 1990s. About 84 per cent of all unemployed persons collected EI benefits in 1990 compared with 44 per cent in 1997, and it has remained around this level ever since.

The decline only partly reflects program changes to eligibility in the 1990s. Most notably, people who quit their jobs could no longer qualify, and the minimum entrance requirements were raised in some regions. Both of these changes contributed to the decline in the number of unemployed Canadians who qualified for benefits – in fact, these changes explained almost half of the drop in the ratio.

Equally important in explaining the drop, however, is the changing nature of the labour market over that period. The number of people who didn’t pay into the plan (self-employed workers and those without work in the 12-month period prior to the job loss) ballooned. Non-contributors made up about 25 per cent of all unemployed Canadians in 1989 and rose to 40 per cent in 1997 – around the current value. These individuals would not have qualified for benefits before or after reforms.

A second, and improved, EI eligibility indicator, available since 1997, tracks the proportion of workers who paid into the program who would have obtained enough insurable hours to qualify for benefits if they were laid off. Nationwide, on average, 80 per cent to 85 per cent of all targeted workers are eligible for benefits.

Claims that cutbacks to EI are eroding the safety net for workers who pay into the program are mostly untrue. The program is working reasonably well for those it aims to cover. Nonetheless, improvements can and should be made for certain pockets of workers.

New entrants and re-entrants (NEREs) into the labour market face higher entry requirements than do other workers. They are required to have worked 910 hours in the past 52 weeks, compared with between 420 hours and 700 hours for all other workers. This more stringent requirement mainly affects young people and recently arrived immigrants. Eliminating this criterion was contained in the new federal government’s election platform.

Furthermore, EI eligibility continues to vary according to regional unemployment rates at the time of layoff. This means that most Albertans need 700 hours of work to qualify – in sharp contrast to the 420 hours of work required for most Atlantic Canadians. Our research shows that about 75 per cent of workers in regions requiring 700 hours of work qualify for benefits compared with about 89 per cent in 420-hours regions. Reducing the eligibility criteria by about 100 hours across regions should increase the overall eligibility rate by about five percentage points.

True, every regional labour market is different across Canada. This makes designing national criteria to fit every region’s needs nearly impossible. The current program fails to meet the needs of all regions because it’s designed for seasonal workers. This inequitable and inefficient aspect of the regime has not been meaningfully reformed in more than four decades.

The existence of a large proportion of unemployed Canadians without benefits doesn’t mean that EI is broken. Instead, it implies that a sizable share of today’s labour force cannot be served by an insurance-like program. Further research into the exact needs of these individuals and the labour-market challenges they face is warranted.

Dropping the NERE requirements is an easy short-term reform. In the medium term, however, a broader discussion about how EI fits into the overall social safety net is required. This would involve considering how to move away from a regionally based model, as well as discussing alternatives, such as guaranteed annual-income plans or ramped-up job retraining programs.

For decades, we’ve known an EI rethink is needed. It’s a shame that it takes massive job losses to bring this to light.

Employment insurance fraud hits $100 million

Source: Canadian Press

The collection bill for money fraudulently claimed through the employment insurance program has surpassed $100 million, but the government doesn’t expect to collect the money anytime soon.

Figures released to The Canadian Press show that debt collection is increasingly being pushed off to future years, even as the government appears to be more efficient at uncovering bad debts.

The figures show that in the fiscal year 2013-14, which ended March 31, 2014 and are the most recent figures available, the department responsible for overseeing EI Employment and Social Development Canada watched the collection bill hit almost $102.7 million.

That’s the amount the government aims to collect at some point over the next six years.

In fiscal year 2007-08, the second year of the Conservative government, the value of fraudulent claims the government expected to collect at some point in the future stood at just under $25.3 million, or about one-quarter of what was expected in 2013-14.

It’s unclear why the department is putting off more and more of its debt-collection efforts into the future. The Department didn’t explain why, nor did the minister’s office.

“Our Conservative government will not apologize for ensuring taxpayers’ money is treated with respect,” Employment Minister Pierre Poilievre said in a statement. “Our party, unlike the Liberals and NDP, is committed to keeping taxes low for Canadians, which means recouping funds when they are improperly claimed.”

The longer the debt goes uncollected, the greater the likelihood the government will have to write off millions in benefits wrongfully handed out to Canadians for a variety of reasons, including if the debtor dies or declares bankruptcy, or that the debt itself has passed the 72-month statute of limitations for its collection.

“They seem to be putting the effort in finding the fraud…but if this is actual, honest-to-goodness fraud, we have a better chance of getting it now than we would five years from now,” said Angella MacEwen, senior economist with the Canadian Labour Congress.

But even as more and more of the collection of those bad debts is being postponed for future collection, the government appears to be getting better at rooting out fraud.

The amount collected in the fiscal year 2006-07 was about $1 million of bad claims that year.

The amount collected steadily rose in subsequent years, and peaked in the fiscal year 2012-13 when the government collected $31.4 million, the same year the Conservatives faced accusations they required officials to meet quotas in the fraud hunt, a charge the government denied.

EI officials continue to keep a close eye on claims.

The amount of fraud, however, remains low about the total amount handed out. Of the more than $15 billion in benefits handed out annually, less than one percent is for fraudulent claims, MacEwen said.

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