March 29, 2024 11:03 AM

Canada sets $1.6B aid package to help energy sector

Canada’s oil sector has been struggling for a long time but Trudeau Liberals could have the solution for it.

/ Published 5 years ago

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It has been a rough year for Canada’s Energy Industry, and signs of recovery are still far off according to experts. However, with a little help from the province of Ottawa, Canada’s energy industry could make a complete turnaround early next year.

According to reports, Ottawa will be providing a massive $1.6 billion boost for the country’s energy industry. Some say that this solution of Trudeau Liberals who are trying to control the political and economic issues being raised by concerns from the oilpatch. Natural Resources Minister Amarjeet Sohi and International Trade Diversification Minister Jim Carr are expected to present the oil and gas support package at an Edmonton college campus.

The provided funds will allegedly be spread out across several programs. Some of the funds will be allotted exclusively to companies that are trying to grow properly. The money will also be provided to those that are trying to spot new markets outside the US. In hindsight, the $1.6 billion support is geared towards helping Canada’s energy sector grow so that it will be able to support the country long-term.

Canada’s energy sector continues to struggle because a lot of the pipelines and oil refineries are down for maintenance during this time of the year. This caused oil prices to drop down even further. Alberta crude even dropped to $11 per barrel by the end of November.

The price recovered last week when it ended a trading session above $26 per barrel. That was because Alberta Premier Rachel Notley planned to buy more rail cars which helped ship additional oil. Regardless of the recovery, Canadian’s oil is still lagging behind its US counterpart and this is causing the country as much as $80 million a day.

energy
The funding from the government is hoped to help energy companies recover, but it may not be enough. (Source)

Alberta premiere not happy with the announced plan

Upon the announcement of the support package, Notley expressed her criticism of the Trudeau admin’s course of action. “There’s very little money in this, it’s mostly loans,” she told reporters last Tuesday. “We didn’t ask for the opportunity to go further into debt as a means of addressing this problem.”

She added that the package will be able to support small producers but in the end, all it does is get others deeper into debt. She believes that it will not be a viable long-term plan for the industry that is currently struggling. “This does not reflect the kind of responsiveness that we need to see,” she said.

It is hard to foresee just how well the current package plan is in terms of helping energy companies recover. It Notley’s statements are true, then the recovery in the coming weeks or months might just be temporary. Regardless of the outcome, the additional $1.6 billion budget will certainly be a big help for Canada’s energy sector.

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