Canada Prepares Multi-Billion Bailout for Oil Industry
The Canadian federal government is preparing a billion dollar financial aid package for the oil and gas industry and could announce it next week, reports Globe and Mail, citing unnamed sources.
Actions discussed included access to more credit, especially for smaller companies, and job creation for workers who are likely to be laid off in the price crisis.
A source told Globe and Mail that Ottawa has provided $ 10.43 billion (CAD $ 15 billion) in grants to industry already struggling with low local crude oil prices, a pipeline shortage, and a hostile investment environment Knees by the combination of weak demand caused by the Covid-19 outbreak and the oil price war that started from Saudi Arabia earlier this month.
The local benchmark, Western Canadian Select, fell to $ 5.430 a barrel yesterday, losing more than 50 percent of its value in one day. Prime Minister Jason Kenney also warned yesterday that Alberta’s oil and gas industry is “life sustaining.”
“We must begin to prepare ourselves for a time of adversity unlike any we have seen since the 1930s in this province,” Kenney told the media after announcing plans for government support for oil and gas companies earlier this month that focus on low-interest loans until the worst of the crisis is over.
The provincial government also discussed the loan support package with Ottawa. The industry also participates. The Globe and Mail reports on a letter signed by 65 industry leaders calling on Prime Minister Justin Trudeau to establish an equivalent to the U.S. Troubled Asset Relief program to buy non-performing assets. The industry is also demanding that carbon tax and all income taxes be suspended.
“Our companies collectively represent over 100,000 working Canadians,” the executive wrote. They called for “all levels of government to work together toward one goal: no Canadian, household, business or organization is left worse off than where they were when this crisis began.”