Ottawa lends a hand to struggling oil and gas producers
The Trudeau Liberals announced $1.6 billion in loan guarantees earlier this week, to help Canada's struggling energy patch.
The funds are available to those companies needing access to working capital, as well as projects related to the development of new technologies, including clean energy, and diversification of export markets.
Most of the money will come from Export Development Canada and the Business Development Bank of Canada, with smaller amounts to be sourced from Ottawa's Clean Growth Program and National Trade Corridor's Fund. The federal government also says it is looking to minimize the impact of any pending layoffs through work-sharing programs, employment counselling and retraining.
The announcement was made in Edmonton, although representatives of the Alberta government were notably absent.
Alberta Premier Notley says the funds will be useful to help shore up liquidity among smaller producers who need day-to-day working funds, but does nothing to address the root cause of the problem - lack of access to foreign markets and a dysfunctional federal regulatory regime.
The funds cannot be used to offset Alberta’s recent $1 billion purchase of 7,000 railcars. The Bank of Montreal points out that $1.6 billion in load guarantees is small peanuts for an industry that typically spends $50 billion annually.