Extra Ritchie Bros. auction warns of major equipment sell-off

If it has wheels or treads and moves dirt, chances are there’s one sitting in the Grande Prairie Ritchie Brothers lot.

A notice for the auction house’s upcoming sale is a list of just about every piece of heavy equipment found in the oilpatch, including skid steers, graders, dump trucks, water trucks, vac trucks, and camp shacks.

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In mid-March, Ritchie Bros. will hold an early spring auction—a relatively rare event scheduled to meet added demand.

“Size wise, it’s not a lot different from any of the other auctions we’ve had in Grande Prairie,” said Simon Wallan, vice-president of sales at Ritchie Bros. “But it’s one of the first March auctions we’ve had in the past five or six years.”

Some worry the sale—as well as a series of massive auctions in Edmonton—are signs of a crippling sell-off of heavy equipment brought on by the oil downturn.

“It’s pretty scary,” said Dawson Creek Chamber of Commerce Executive Director Kathleen Connolly. “Anyone you talk to in industry right now, this is what they’re talking about: what’s going on at R.B.”

The sale includes equipment from Continental Pipeline, which suspended operations in Fort St. John earlier this year, as well as a “complete dispersal” of Pinnacle Services’ High Level fleet. As of Feb. 19, there were 1,766 items listed on the March auction.

Wallan said he couldn’t speculate on why companies are selling.

“We service customers for a lot of reasons,” he said. “Obviously, the economy and the amount of work that’s out there dictates that. (Sellers) have made business decisions that they don’t need the equipment anymore or they’re ceasing to be in operation.”

Ian Marchuk, a Dawson Creek resident who’s been in business in the oilpatch since the 1970s, said the next few auctions represent a once-in-a-generation loss of capital investment.

“It gives you an idea of the spread and value of the work that has, all of a sudden, gone,” he said. “These next few sales—Prince George, Grande Prairie, Edmonton—are complete game changers.”

He added that watching the auction circuit is especially frustrating amid talk of bailouts for the aerospace industry in Quebec.

Connolly said many companies that can’t make payments on loans or equipment are being forced to sell.

“If you look at the list of what’s going to auction, not only in Grande Prairie but in Edmonton, it’s a lot of the oil and gas fleet. It’s vac trucks, it’s a lot of the service equipment.”

She suspected that with the weak dollar, much of that equipment will go to the United States.

If the oilpatch rebounds, “you’re buying back against the American dollar. It’s brutal,” Connolly said.

“The bad side of that story is that when the economy does recover, is there going to be any equipment left in Western Canada?”

The Grande Prairie auction is set for March 14 and 15, with another scheduled in April. Industrial sales in Edmonton are set for this month, April and December.

Previous industrial auctions in Grande Prairie saw more than $40 million in sales.

reporter@dcdn.ca

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