OTTAWA – Ottawa is spending $1.6-billion to help struggling energy companies stay afloat, buy new equipment and diversify as Alberta grapples with bargain basement oil prices.
Natural Resources Minister Amarjeet Sohi says $1-billion is to be set aside through Export Development Canada for oil and gas companies to make capital investments and purchase new technology.
Another $500-million is to be made available through the Business Development Bank of Canada over the next two years to help smaller oil and gas companies navigate the downturn.
Sohi says a further $150-million is to be used for clean growth and infrastructure projects.
Natural Resources Minister @SohiAmarjeet says “when Alberta hurts, so does Canada,” before confirming more than $1.6-billion to help the struggling oil and gas sector. #cdnpoli pic.twitter.com/mSlnNXK3vh
— Cormac Mac Sweeney (@cmaconthehill) December 18, 2018
The Canadian Taxpayers Federation was reacting to the announcement even before it came down. Federal Director Aaron Wudrick says the federal government is taking the wrong approach.
“We know that the energy industry can be viable, what is the reason that its not is that its not able to get it’s product to market so we think the government needs to focus for example on getting the pipeline that we’ve already bought, get that pipeline built and sold and other ways to make it easier for the industry to do business, not harder,” he said.
He says instead of throwing money at the problem, Ottawa should get pipelines built and scrap the carbon tax.
While the price for Alberta crude has rebounded slightly from just $11 a barrel late last month, it is still trading at about just half the price that Texas oil producers are getting.
“Albertans weren’t looking for a hand out,” that’s the reaction from one oil and gas expert on the announcement.
Dan McTeague with GasBuddy.com says he was disappointed by what the federal government had to say and he doesn’t think this will benefit Alberta or the country.
He says the federal government needs to figure out what side they want to take.
“Does it want to do it’s level-best at getting oil to tide-water and building pipelines, or do they want to hog tie the industry?”
McTeague adds it was unfortunate that there was no real mention of helping Alberta with rail cars which Rachel Notley’s government views as a priority. He feels the federal government should have done more in figuring out a solution considering they were a big part of the problem.