OTTAWA (Reuters) – Canada will invest around C$2.5 billion ($1.8 billion) in measures to help the hard-hit oil and gas industry survive during the nation’s coronavirus outbreak that has killed 1,250 people, Prime Minister Justin Trudeau said on Friday.
The sector, which accounts for 10.6% of Canada’s gross domestic product, has urged Ottawa to free up credit and cash to help tackle the pandemic and rock-bottom oil prices.
Trudeau, saying energy sector workers faced “layers of calamity,” said Ottawa would invest C$1.7 billion to help clean up orphan and abandoned oil and gas wells in three provinces.
“Our goal is to create immediate jobs in these provinces while helping companies avoid bankruptcy and supporting our environmental targets,” he told a daily briefing, saying the measures would maintain around 10,000 jobs.
Ottawa is also setting up a C$750 million fund to provide repayable loans to companies so they can cut emissions of gases such as methane and help Canada meet its climate targets.
Alberta Premier Jason Kenney, who last week said the province’s energy sector needed up to C$30 billion in liquidity, thanked Trudeau for the aid.
Trudeau said Ottawa was working with the Business Development Bank of Canada and Export Development Canada to expand credit support for at-risk medium-sized energy firms.
Officials would study the energy industry and see whether more help was needed, he added.
- Factbox: Canada offers C$2.5 billion for hard-hit energy sector as part of COVID-19 stimulus
Finance Minister Bill Morneau told a separate briefing that companies were not interested in Ottawa taking an equity stake.
Meanwhile, environmental advocacy group Greenpeace Canada said the announcements would provide “much-needed jobs while cleaning up some of the oil industry’s existing mess.”
Funding to clean up orphan or inactive wells is welcome news for farmers who rent parts of their land to oil companies, said Todd Plandowski, owner of a company that negotiates lease agreements for farmers.
“Some are concerned about gas leaks. They’re concerned about farming around these things,” he said by phone.
Ottawa has unveiled around C$115 billion ($82.08 billion) in direct spending to help companies and individuals deal with shutdowns designed to fight the health crisis. Officials said on Friday Canada’s death toll had hit 1,250, up from 1,048 on Thursday.
Many of the 30,670 confirmed coronavirus cases have been recorded in seniors residences. Trudeau said 125 troops with medical experience would be sent to help staff in long-term care homes in the province of Quebec.
Trudeau also said Ottawa would give C$962 million to regional development agencies to help small businesses and invest C$500 million to support arts, culture and sports.
The shutdowns will extend to the July 1 Canada Day celebrations on Parliament Hill in Ottawa, which usually attract around 10,000 people, officials said.
Morneau, asked about promised aid packages for the airline and tourism sectors, said more needed to be done to ensure large businesses had access to credit and promised details soon.
Finance ministry officials told unions representing airline workers on Wednesday they are mulling whether to provide low-interest repayable loans to companies, according to two sources familiar with the matter.
Source: Read Full Article