Canada Extends Long-Awaited Aid to Energy Industry [UPDATE]
The Canadian government of prime minister Justin Trudeau extended a C$2.45bn (US$1.75bn) aid package to the country’s oil and gas industry on April 17 – more than a month after his finance minister promised aid for the industry was only “hours, potentially days” away.
Most of the funding – about C$1.7bn – will be earmarked for cleaning up abandoned wells in Alberta, Saskatchewan and BC. About 5,200 jobs are expected to be created in Alberta alone.
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“Our goal is to create immediate jobs in these provinces while helping companies avoid bankruptcy, and supporting our environmental targets,” Trudeau said during his daily briefing outside Rideau Hall, his residence in Ottawa.
Alberta premier Jason Kenney quickly praised the move, thanking the federal government, in a social media posting, for helping to fund the cleanup of orphaned and abandoned wells.
“This is critical to getting thousands of people in the energy sector back to work immediately,” he said in a Twitter post.
The Canadian Association of Petroleum Producers (Capp), which represents companies producing more than 80% of Canada’s oil and gas, also welcomed the funding, which will protect about 10,000 jobs across the country.
“Reducing environmental liabilities is a priority for the oil and natural gas industry and this initiative will allow important work to accelerate, while supporting thousands of jobs,” the group said in a statement.
Besides the well clean-up funding, Trudeau also announced the creation of a C$750mn emissions reduction fund, with a focus on methane – a focus which the oil and gas industry shares, Capp said.
“Canada’s oil and natural gas industry has committed to a 45% reduction of methane emissions by 2025, and the government is helping ensure that innovation and progress in this key area can continue during the economic crisis,” it said.
Trudeau also said that Ottawa was still working on a program to expand credit available for medium-sized oil and gas companies – support federal finance minister Bill Morneau had said in late March was only “hours, potentially days” away.
That support, Kenney said in a later statement, was an “important first step.”
“More support is needed to deal with the crisis in Canada’s energy sector, but this is a great first step,” Kenney said. “Our energy sector is facing its biggest challenge ever, and we need to be sure that industry can access the capital it needs to survive and thrive in future years.”
Capp also said it was encouraged to learn that the government was working with the Business Development Bank of Canada and Export Development Canada to strengthen support for those companies most at risk.
“Liquidity is a real and immediate challenge for oil and natural gas producers and Capp has been working with the federal government to identify urgent action needed to address the dire situation,” the association said. “We are awaiting additional details on the expansion of support – a critically important matter as companies try to weather the current crisis.”