by Michael Tutton, The Canadian Press Posted Jun 19, 2013 9:40 am MDT Jobs go west as Imperial Oil converts Nova Scotia refinery to terminal operation AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to RedditRedditShare to 電子郵件Email HALIFAX – The Imperial Oil refinery in Halifax is being closed and converted to a terminal, in a move that deals the latest blow to Nova Scotia’s manufacturing sector.The company said Wednesday it expects 80 of the 200 workers — ranging from engineers to mechanics — to either retire or stay at the terminal, while 120 others will be offered jobs at Imperial refineries and oil sands operations in Ontario and the West or at ExxonMobil’s operations off Nova Scotia’s coast.The refinery’s flaming smokestack has been a familiar part of the city’s waterfront on the Dartmouth side of the harbour for 95 years. Last May, the NDP government said it remained hopeful the facility might survive under new ownership.The province also extended a five-year, tax-break deal just months before Imperial launched its year-long search for a buyer.However, Gilles Courtemanche, vice-president of refining with Imperial (TSX:IMO), said the company decided to close the refinery because it couldn’t find a buyer or see any realistic prospect of long-term profitability.He also described the factory as lacking the ability to process the heavier portions of crude oil into diesel and gasoline, and too small to compete against massive producers in Asia and elsewhere.“We have a great history. … But with the kit that’s there and the market conditions, it’s no longer viable,” said Courtemanche.He said the refinery finds itself at the edge of an ocean where up to two million barrels of gasoline are available at competitive rates each day.Meanwhile, refineries are being built in India that are capable of producing 1.2 million barrels daily, while the Dartmouth factory produces about 88,000 barrels, he said.“This is a very difficult decision for Imperial, our employees and the local community … We will make every reasonable effort to minimize the impact on our employees,” said the vice president.Courtemanche said the multinational company will continue to employ “some” of the roughly 200 contractors who work at the facility as the conversion and environmental cleanup takes place, but couldn’t provide a precise figure on how many would keep their work.The company said the conversion is planned for the third or fourth quarter of this year, depending on the progress of the modifications.Once completed, the terminal operation will continue to supply existing terminals in Sydney, N.S., Corner Brook, N.L., Sept-Iles, Que. and Cap aux Meules in the Magdalen Islands, said Courtemanche.The closure is becoming a familiar story in the province’s industrial sector, as small, aging factories close and skilled, well-paid workers head west.At one time, Nova Scotia had three refineries. Once the Dartmouth facility closes, it will have none. Other traditional industries are also exiting.In December last year, the Minas Basin Pulp and Power paper mill closed in Hantsport, N.S., affecting 135 people in the town of 1,160. That came after Montreal-based Resolute Forest Products (TSX:RFP) announced the closure of its paper mill formerly known as Bowater in Brooklyn, N.S., throwing 320 people out of work.Progressive Conservative Leader Jamie Baillie said the trend is worrying for the province.“This is a major blow to our province and my heart goes out to the families who rely on those jobs,” he said in a statement.A non-recurring, after-tax charge of between $260 million and $280 million is expected to be included in Imperial Oil’s second quarter reported financial results.Courtemanche said the majority of those charges are due to the writedown of the assets of the refinery.
“More than five years after the financial crisis, the world continues to struggle with getting the global economic engine back to running at full capacity,” said Pingfan Hong, Chief of the Global Economic Monitoring Unit for the UN Department of Economic and Social Affairs (UNDESA). “Compared to pre-crisis trends, we have not sufficiently boosted output, trade and employment to their potential levels,” he added. Global growth has been revised slightly lower from the forecasts presented in the 2014 report. Growth of world gross product (WGP) is now projected at 2.8 per cent in 2014 and 3.2 per cent in 2015, up from 2.2 per cent in 2013. However, this pace of expansion is still low compared to the growth path before the 2008 global financial crisis.The report warns that risks and uncertainties for the world economy include: international spill-overs from ongoing adjustment in monetary policies by developed economies; vulnerabilities of emerging economies; remaining fragilities in the euro area; long-term unsustainable public finance for many developed countries; and geopolitical tensions.While the report notes that economies of developed countries are likely to grow at 2 per cent this year and 2.4 per cent in 2015 – faster than in the two previous years, but still relatively weak – growth in North America, Japan and Western Europe will be impacted by trade imbalances, high unemployment, and ageing populations.The report goes on to note that the Commonwealth of Independent States (CIS) region will also face a “challenging international environment” and, in addition, many countries are confronted with domestic challenges and risks. Several large CIS economies stagnated in early 2014.For example, growth in Russia, which has a strong influence over the region, was already disappointing in 2013, and the crisis around Crimea and the possibility of economic sanctions targeting broader sectors of the Russian economy have led to a massive outflow of capital and further weakening of business and consumer confidence, says the report.Globally, according to the UN International Labour Organization (ILO), employment grew by 1.4 per cent in 2013, a similar pace as in 2012, but stubbornly slower than the rate of 1.7 per cent in pre-crisis years. The global jobs gap – comparing the number of jobs today with the number that would exist using pre-crisis trends – widened farther to 62 million in 2013.As for developing economics, the report states that Africa will continue to see solid growth of 4.2 per cent this year, although political problems in a number of countries have led to a downward revision compared to the previous forecast. In Libya, for example, disruptions to oil output and exports will be a major drag on growth, underpinning a significantly lower growth rate for North Africa than previously forecast.East Asia is expected to see robust growth as exports to developed countries strengthen and domestic demand in most economies remains firm, while in Western Asia, internal instabilities and lower oil exports continue to shape the economic picture. The report underscores that the economies of Iraq, Jordan, Lebanon, Syria and Yemen have been hampered by continuing political instability, social unrest, security incidents and geopolitical tensions. The war in Syria has been taking a “particularly heavy human toll” and led to the widespread destruction of crucial infrastructure.Economic growth in Latin America and the Caribbean is expected to continue at a subdued pace in 2014, amidst increasing difficulties in some of the largest economies. The report says the region is expected to grow moderately by 2.6 per cent in 2014, although with mixed results across sub-regions. In Mexico and Central America, economic growth is strengthening, benefiting from the pick-up in activity in the United States. By contrast, growth in South America is decelerating markedly from 3.2 per cent in 2013 to 2.1 per cent in 2014. Argentina is experiencing a noticeable slowdown, amidst decreasing business confidence and persistent inflation pressures, while Venezuela is likely to enter into recession. Brazil’s economy continues to expand at a very moderate rate of 1.7 per cent in 2014, with meagre prospects for investment demand and increasing pressure for fiscal consolidation.Long-term unemployment has been rising in developed countries, which could lead to higher levels of structural unemployment. Across developing countries, a main challenge remains the level of informal employment, which, on average, reaches between 40 and 50 per cent in Africa, Asia and Latin America and the Caribbean. In the outlook, global employment is expected to continue growing at a slow pace. “As the number of jobs lost in comparison with the pre-crisis employment trend continues to increase and structural unemployment remains a major problem, policymakers need to implement more supportive macroeconomic policies and active labour market policies,” said Matthias Kempf, the UN’s team leader for the report.