(OTTAWA) Canada will invest around $2.5 billion in measures to help the hard-hit oil and gas industry and is working to ensure vulnerable firms have access to more credit, Prime Minister Justin Trudeau said on Friday.
Canadian energy companies have urged Ottawa to free up credit and cash to help them cope with the coronavirus outbreak and rock-bottom oil prices.
Trudeau, saying energy sector workers faced “layers of calamity,” told reporters that Ottawa would invest $1.7 billion to help clean up orphan and abandoned oil and gas wells in energy-producing provinces across the country.
It will also set up a $750 million fund to cut emissions of gases such as methane.
“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.
Alberta Premier Jason Kenney said last week the province’s energy sector needed up to $30 billion in liquidity.
Trudeau said the federal government was working 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.
Ottawa will also give $962 million to regional development agencies to help small businesses and invest another $500 million to support the arts, culture and sports sector.
Morneau has also promised aid to the airline and tourism sectors.
Finance ministry officials told unions representing airline workers on Wednesday they are mulling whether to provide low-interest repayable loans to companies, said two sources familiar with the matter.
The loans would be used to protect companies from insolvency, although no final decision had been taken, the sources said.
“I think what the government is trying to avoid is a flood into insolvency court,” one of the sources said.
Air Canada, the country’s largest carrier, has said it intends to adopt a separate government wage subsidy for its 36,000 Canada-based workforce, in a bid to keep its employees on payroll.
Source: Reuters | This text was excerpted from the media outlet cited on April 17, 2020 and is provided to Noia members for information purposes only. Any opinion expressed therein is neither attributable to nor endorsed by Noia.