Federal Finance Minister Bill Morneau said today that help for Canada’s oil and gas industry is on the way in “hours, possibly days.”
Morneau said this when addressing a Senate committee. He said the energy sector has been hit hard by the oil price war between Saudi Arabia and Russia as well as the COVID-19 pandemic.
Morneau said Ottawa has been in contact daily with provincial governments to discuss how it’s impacting provincial revenues.
“I don’t have the final answer on the exact hour that that will be delivered but I’m not talking about weeks,” said Morneau. “I’m talking hours, potentially days, that we can ensure that there’s credit facilities for especially the small and medium-size firms in that sector.”
Morneau didn’t provide details on how the government would do this.
Earlier today the Liberal government won unanimous consent to pass emergency legislation to free up $82 billion to help Canadians get through the COVID-19 pandemic.
MPs debated the bill through the night.
Conservative MP for Sherwood Park – Fort Saskatchewan Garnett Genuis said the government power grabs were taken out of the legislation.
“The government power grabs were stripped out of the COVID-19 response bill, Parliament reconvened at 3:15 a.m., and we passed the bill at about 5:45 a.m. Financial relief is on the way (pending Senate approval), and we preserved and strengthened accountability mechanisms to ensure that Parliament will be fully engaged in the response to COVID-19.”
On Tuesday, Lanark-Frontenac-Kingston, Ont., MP Scott Reid stopped the original bill brought forward by the Liberals, which would have given the liberals sweeping new powers to spend money and raise taxes without getting approval from Parliament. That legislation would have granted Finance Minister Bill Morneau extraordinary new powers to spend, borrow and tax without Parliament approval until December 2021.
Dropping oil prices and the COVID-19 pandemic forced Suncor earlier this month to postpone some projects.
Suncor released a corporate update on March 23, including revised 2020 corporate guidance for capital, operating costs and production outlook, reflecting the significant decline in the crude oil price and uncertainty surrounding the economic impact of COVID-19.
“The simultaneous supply and demand shocks are having a significant impact on the global oil industry,” said Mark Little, president and chief executive officer of Suncor.
“We are adjusting our spending and operational plans to be prepared in the event the current business environment persists for an extended period of time. Our business model and financial strategy are designed to withstand volatile environments.”
During spring break-up oilsands facilities shut down for scheduled maintenance. Syncrude was expected to hire about 850 people for this maintenance work but that has been postponed indefinitely.
Precision Drilling, in a statement this week said that in response to the expected reduction in demand as customers reduce spending due to lower than anticipated commodity prices, Precision is reducing its 2020 capital expenditure plan to $48 million, down about 50 per cent from its previously set plan of $95 million. Further adjustments may be considered depending on activity levels realized as the year progresses.
Precision also said they are reducing the CEO’s salary by 20 per cent and the board of director’s compensation by 20 per cent. In addition, the executive officer salary will see a 10 per cent cut. There will also be staff and salary reductions across the board.
“We expect these fixed cost reduction measures will reduce annualized fixed costs by over 30 per cnet, including up to a $30 million reduction in G&A expense,” said Precision Drilling in their statement.
Last week the Conference Board of Canada, in their spring outlook report, said the impact to Alberta’s energy industry due to COVID-19 and the oil price war between Saudi Arabia and Russia could put Canada on the brink of recession.
“After slowing to end the year, economic growth has been weak in the first quarter and is expected to contract in the second quarter to 2.7 per cent,” said the Conference Board’s spring outlook report.
More to come
READ MORE: Alberta’s oil industry takes more hits
READ MORE: U.S. company issues $1,000 checks to all employees to support families during the COVID-19 disruption
READ MORE: Alberta has 301 cases of Coronavirus
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