Canada’s oil and gas sector has lost billions since the pandemic spread to Canada. Alberta is losing a lot of revenue too. It’s estimated that this sector is ten percent of our GDP. The pandemic can’t be blamed for a lot of it as a price war between the United States, Saudi Arabia and Russia continues.
A federal multibillion-dollar bailout package was announced as well as a $200 million loan to Alberta’s Orphan Well Association to help fund re-mediating the land where abandoned wells are located. These loans come with certain conditions the companies must agree to, with an increasing interest rate and warrants the government can convert to cash up to 15% of the loan. They also must agree to better reporting on environmental issues and have the possibility that the government can place an observer on their board of directors.
These agreements are certainly advantageous to the government as a source of additional income and tighter controls on environmental damage and pollution. It’s noted that a system similar to this could be applied to other loans, guarantees and bailouts. Not only federally, but provincially as well.
A good example could be the Northern Pulp’s mill in Pictou Nova Scotia. The provincial Liberals have announced they will offer up to 10 million to help the company with their cleanup of the site, which includes a pond full of effluent and toxic waste. This is not the only instance.
In March 2010 the government loaned them $75 million so it could purchase 475,000 acres of land from the company that previously operated the Abercrombie Point mill, Neenah Paper. But this isn’t the only time…
- Maintenance & Capital Expenditure ($15 million) – to fund projects in the Mill including wastewater pipeline replacement
- Precipitator Replacement Project ($12 million) – to assist in installing a state-of-the-art unit to improve the removal of dust particulates from the Mill’s air emissions*
- Chip Plant Project ($5.2 million) – to assist in installing a state-of-the-art on-site chip plant to reduce operating costs
- Natural Gas Project ($4.5 million) — to enable natural gas to be available at the Mill site in order to eliminate heavy oil consumption and reduce greenhouse gases
It was estimated last year that the company owes the Nova Scotia government over $85 million. Taxpayers have been left on the hook for much of it, and with rumours of it shutting down for good, it could mean even more liability for Nova Scotia, which is owned by a family of Indonesian billionaires.
Collecting interest on these loans, as well as having an observer sitting on their board of directors, would have saved the government money and prevented such a toxic environmental mess.
The bailout packages being offered to oil and gas corporations in Alberta are referred to by the government as bridge-loans. It doesn’t stop there. These loans are being offered to all big Canadian businesses to help them stay afloat during the pandemic.
Companies receiving them must submit a climate plan and how their businesses will become more sustainable.
If these types of loans are implemented after the pandemic, it could get us closer to having corporations and the environment co-exist, and provide a solid step towards an energy transition.
