As the province and country continue their rebound efforts in the fight against COVID-19, Premier Scott Moe said the federal government’s oil and gas relief programs “missed the mark” in terms of helping the sector recover.
“I think the programs missed the mark for the energy industry in particular,” said Moe during a press conference.
“I am not sure if there are other large businesses that will be making use of what is essentially a loan program,” he added.
One of the programs Moe is referring to is the federal government’s Business Development Bank (BDC) and Export Development Canada (EDC), which is aimed at small and mid-sized producers, oilfield services and refineries. The program provides $15-60 million in loans per company from BDC, with loan guarantees up to $100 million from EDC.
The other program Moe referred to was the Large Employer Emergency Financing Facility (LEEFF). This program announced by the federal government is aimed at companies with annual revenues above $300 million, that need financing of at least $60 million.
“It just simply isn’t going to be useful for the energy industry,” said Moe.
“Thankfully prices have rebounded a bit. They are nowhere near profitable territory, but they have rebounded a bit,” said Moe.
Minister of Energy and Resources Bronwyn Eyre sent a letter to the federal government’s Minister of Natural Resources in early May calling for further supports for the sector due to the fact the requirements for the programs do not fit Saskatchewan’s needs.
The letter said Saskatchewan has only one large, vertically integrated producer which is Husky. Additionally, Saskatchewan has 10 mid-cap producers and some 160 small producers. She said only a handful of producers will qualify and added others are either unwilling or unable to take on more debt.
Moe also said the province is currently working with the oil and gas sector to help rebuild post COVID-19.
“We are working very closely with the energy industry to see if there are some opportunities for us to work together, to ensure they can get to a profitable state quicker, and then rebuild,” said Moe.
Moe said the province is appreciative for the abandoned well program the federal government put in place. They allocated $400 million to Saskatchewan for the program.
“That was asked for a number of years ago by the former premier and that is getting people to work in the service portion of that industry. We are appreciative of that segment of funding,” said Moe.