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Businesses still reeling, but remain afloat

With no end in sight from oil price collapse, some businesses are digging deep

As oil prices continue to drop, the bustling atmosphere that used to consume a local welding shop has been replaced with a calm, almost passive climate. 

Brent Gedak, president of Brent Gedak Welding in Estevan, points to a shed that's being calmly worked on by some of his employees. About 12 months ago, another project would be constructed feverishly by several workers trying to meet a deadline, knowing full-well that another item was already lined up. Today however, projects are few and far between. 

"We would have the next shed sitting outside ready to be worked on," Gedak said, referring to the near overflow of work his business had last year. 

He said about 95 per cent of their projects are tied to the oil and gas industry, and since the decline in oil prices, there's been about a 50 per cent drop in the number of projects they now work on. Gedak said they've managed to remain afloat, but their numbers are nowhere near where they were prior to spiraling oil prices. 

This is Gedak's fourth time enduring a decline in the oil patch, and he was quick to say this one has hit the business harder than before. 

"This one has lasted a lot longer," he said, adding the rebound happened much faster last time and oil prices even exceeded the amount they were at prior to the downturn. Gedak doesn't think that's going to happen this time. 

"I don't see this one being the same, so different strategies are being used to stay afloat," he said. 

Gedak's business has had to deviate from the oil patch and focus more on projects within the potash industry and new clients like SaskPower. Overtime is no longer available, and even with employee retention being top priority during difficult times, their staff has been reduced by 10. 

Gedak praised some of the businesses they work with and noted the positive relationship that's still been maintained. 

"Cuts have been made everywhere, but they're trying to help out by getting us into some new areas," he said. 

Norm Mack, operations manager for L&C Trucking said this downturn came in swiftly and created a difficult environment for everyone. 

"It hit us hard and it hit us fast," Mack said. "I don't foresee any changes until the road ban is over." 

Much like Gedak, about 95 per cent of L&C Trucking's business is tied to the oil patch, and struggling oil prices has resulted in cutbacks to its staff. 

"We topped out at 78 employees when business was good. Now we're at 38," he said, adding the majority of the workers who no longer work there were contract workers from Ontario and Manitoba, and left during the initial drop in oil prices in order to get a head start in finding jobs at home. 

In the face of all the tough decisions companies have had to make due to the struggling energy sector that surrounding businesses heavily rely on, there is no sense of panic anywhere. Jackie Wall, executive director at the Estevan Chamber of Commerce said businesses have been resilient, but the reality is settling in with many of them as they realize tough times are still ahead. 

"Everyone hoped things would turn around by the summer or early fall," Wall said. "I think a lot of businesses are now realizing that this is going to be a much longer downturn." 

Even businesses that aren't tied directly to the oil patch are feeling the pinch. 

"I don't think there is a sector that hasn't been affected," she said, referring to stores in the downtown area, restaurants and hotels. 

As a new five-year strategic plan, spearheaded by Wall, continues to be formulated at the chamber, she emphasized the importance of membership feedback, especially during the recent struggles. 

"It's even more of a focus now," Wall said, referring to the open dialogue with the chamber's clients. "We know there's a downturn, but we want to know, is there something we can do as a chamber to assist them … anything we can do to serve our membership is going to be more important now than ever." 

In addition, Wall said she wants businesses in the Energy City to know about some of the services the chamber can offer to its clients, which could potentially alleviate some of the pressures they face due to the downturn. From a comprehensive benefits program, to access to First Data, which is a leading provider of electronic commerce and payment processing services, there are various resources available for members of the chamber.