Canada’s energy industry is reportedly set to receive a $1.6 billion boost from Ottawa in a bid to slow down the country’s political and economic bleeding. Amarjeet Sohi, Natural Resources Minister, and Jim Carr, International Trade Diversification Minister will be present at the Edmonton college campus to launch a support package for gas and oil companies, which are affected by record-low oil prices, cite sources.
As per trusted reports. the funds will be divided among different programs, comprising money to aid companies to invest in clean growth, loans, and other financial backing which will help companies look for new markets apart from the United States, as well invest in new technology and training.
According to the market experts, this package is similar to the one that was provided to softwood, aluminum and steel manufacturers after new import tariffs were imposed in the United States. Although Canada’s oil reserves aren’t facing that kind of pressure, the U.S. is still the reason behind much of its pain.
If reports are to be believed, since some major refineries are down for maintenance, the price for Alberta crude plunged, hitting a panic-inducing amount of $11 a barrel in November this year.
According to sources familiar with the development, Rachel Notley, Alberta Premier’s plans to acquire more rail cars to help get more oil, as well as the decision to impose a production cut from major oil producers helped increase the price by trading above $26 a barrel lately. However, even that is lower than U.S. price, while the Canadian economy is losing as much as $80 million per day due to the discount.
Reportedly, Canada’s complete reliance on the U.S. as an export market adds to the problem, as every drop of non-refined oil in Canada is exported to the U.S. Having fewer pipelines to the coast where oil tankers are able to ship oil overseas, Canada’s oil producers are at America’s mercy, claim sources.
Reportedly, Amarjeet Sohi had a review conducted by the National Energy Board to review existing pipeline capacity to ensure if it’s being used efficiently and if there’s a possibility for a temporary step that could maximize rail capacity, reported sources.