First Nations invested in the oil industry in Alberta are starting to feel the pinch because of the glut in supply.
As of Wednesday, the price of a barrel of Western Canadian Select oil is currently a negative $3.80 U.S.
This is the bitumen that is recovered from the tar sands in Alberta.
Prices have been falling for years, but never to levels like this.
“I think things are going to get tough,” said Jim Boucher, president of SAA Dene Group of Companies and former chief of Fort McKay First Nation.
“A lot of people are going to be put out of work.”
Fort Mckay is heavily invested in the oil and gas industry.
In 2016, the Nation invested $350 million in a Suncor tank farm that stores oil.
Many in the community work in the oil industry.
Many have already lost jobs and Boucher said more will be lost.
He blames the conflict between Russia and OPEC for bringing down oil prices.
The COVID-19 pandemic was a big blow.
Storage capacity for oil is almost to zero, resulting in a glut of oil which crashed oil prices.
Vern Janvier, chief of Chipewyan Prairie First Nation is another community that is heavily invested in the tar sands and reliant on oil and gas revenue.
He said band revenues are down considerably since oil began declining years ago.
“We’ve seen the oil market since 2013 slowly degrading,” Janvier told APTN. “We used to do $200 million of work a year, we are probably down to about $40 million right now.”
Lower revenues means less money to run the nation.
“Four or five years ago, our budget was $15 million a year. We are down to $7 (million) now. We are going to probably cut that down to five and a half million now.”
Boucher said businesses will go under.
“There will be survival. But it will never be the same.”