The Canadian government on Tuesday said two of its financial agencies will loan up to C$1.5 billion ($1.2 billion) to the country’s beleaguered oil and gas industry for export, efficiency and environmental investments.
The offers include up to C$1 billion ($800 million) from Export Development Canada and up to C$500 million ($400 million) from the Business Development Bank of Canada.
Counting enhancements of other programs run by the federal natural resources and economic development departments for industrial technology and market innovations, the aid package adds up to C$1.6 billion ($1.3 billion).
The program is not a fossil fuel subsidy because the money will only be available as commercial loans, said Natural Resources Minister Amerjeet Sohi. For frozen sales and depressed prices plaguing the Canadian oil and gas industry, “the long-term solution is, absolutely, building more pipeline capacity.”
The aid package responds to industry complaints that the price slump has driven away private investors.
“Availability of capital is absolutely essential,” said Canadian Trade Minister Jim Carr.
Sohi and Carr in unveiling the package at the Northern Alberta Institute of Technology, a trades training campus in Edmonton, portrayed the programs as help for workers laid off from corporate head offices and oilfield services.
The announcement follows protest demonstrations across Alberta that have called for action on pipelines, investment in substitute railway delivery services, increased unemployment insurance, and changes to environmental legislation introduced by the Liberal government in Ottawa.
Alberta provincial government leaders, who have presented more formal versions of the protest demands to the national Liberal leadership and committees of Parliament, notably stayed away from the announcement.
The federal ministers emphasized a Liberal record of support for the oil and gas industry, led by their government’s C$4.5 billion ($3.6 billion) purchase of the Trans Mountain Pipeline from Texas-based Kinder Morgan Inc.
Kinder sold the line from Edmonton to Vancouver following a years-long regulatory ordeal that stalled plans to triple oil capacity to 890,000 b/d for overseas tanker exports.
The pipeline’s ordeal continues under its changed ownership, with the National Energy Board and federal cabinet again reviewing the expansion after a summer verdict by the Canadian Federal Court of Appeal overturned their 2016 project approvals.
Carr expressed hope that the new loan offers will enable the Canadian industry to export talent and technology while regulatory delays foil plans to develop overseas markets for its products.
“Alberta’s oil and gas expertise is recognized globally,” he said. The announced investments “respond to the current environment, but also demonstrate our confidence in the ingenuity and determination of Albertans to prevail in the global marketplace.”