Thank you very much, Mr. Chair and the rest of the committee, for the opportunity to be here today.
I represent Canada's drilling and well-servicing contractors from across the country. These are the hard-working women and men who help produce the energy that Canadians rely on every day.
Since 2014, over 200,000 Canadians in our industry have lost good-paying, long-term jobs, from the seismic crew to the drilling rig floor to the supply warehouse. For the past six years consistently, many Canadians have been losing their careers, their livelihoods and their small businesses.
In the drilling and well-servicing sector alone over that same period, we have lost 22 companies and nearly 600 rigs. These companies are the backbone of rural communities in many Canadian provinces. Every working rig provides direct and indirect employment for approximately 200 Canadians.
Today, Canada has only 515 drilling rigs left. Only 20 of those rigs or 3% of the entire fleet, and only five companies, are working today. However, there are 25 drilling rig companies in Canada. This means that 20 drilling rig companies, or 80%, cannot generate enough revenue to pay the bills. The future outlook for drilling activity is frightening, and the impact will be severe.
We believe that nearly 70% of our annual drilling activity was already completed in the first quarter of this year. It means that in 2020, we may have fewer rigs working in Canada than in any period of reported history.
A few weeks back, you may have seen Dennis Day, one of our members from Carnduff, Saskatchewan, talking about having to lay off nearly 250 people in a rural community of only 1,000 people. Many of these people he has known for his entire life. After walking through his local grocery store and seeing one of his former employees buying a 10-pound ham and three loaves of plain white bread, and knowing that was all this man's family would have to eat for who knows how long, Mr. Day purchased $50,000 of grocery gift cards with his family's savings and handed them out to those in need. Although Dennis's story is not uncommon, it is not shared nearly enough.
Our industry allows many Canadians to work, play and raise their children in small communities across the country, but this way of life is in jeopardy. We appreciate that the federal government is providing much-needed support through the Canada emergency wage subsidy. This means that many layoffs will be avoided, and it will help organizations withstand the sudden and hopefully short-term shock of the pandemic. However, without a quick economic recovery and rebalancing of commodity prices, the program will have to be extended to prevent future layoffs.
The government's $1.7-billion investment to remediate orphan and inactive wells will support Canada's struggling service rig sector and workforce and employ 5,200 people. However, to provide a true picture, the 5,200 jobs saved must be seen against the 200,000 jobs lost. Even amongst our association's own member companies, it's important to understand that most will receive little or no benefit from the well remediation funding, as welcome as that support is.
The damage done to Canada's energy resource services sector puts them in a category of their own. We urgently require additional government support if we are to survive. Our association has written to the Minister of Finance urgently calling on the federal government to implement the following policies to save our beleaguered industry.
Firstly, we recommend that the government introduce additional liquidity measures through unsecured and subordinate financial instruments.
Secondly, we recommend that the federal government purchase income tax losses from drilling and service rig companies, less the government's cost of capital.
Thirdly, we recommend that the federal government purchase accounts receivables from Canadian drilling and service rig companies at a discount.
Finally, we recommend that the federal government defer Canadian drilling and service rig companies' GST and payroll and remittance interest-free for six months instead of the current June 30 program.
Mr. Chair, I ask the committee to carefully understand the value of Canada's oil and gas industry to the entire country. I ask you to help us pick it up from the ashes and turn it into what it can and must be—a pillar of strength and a natural advantage for every Canadian citizen in good times and bad.
Thank you for your time today. I look forward to answering the panel's questions.