Question Period Note: Oil and Gas Competitiveness and Investment

The government is working to ensure that the oil and gas sector remains competitive and an attractive place to invest following a difficult spring and summer for the sector. Many factors contributed to the difficulties faced by the sector, including a collapse in oil prices in March, reduced demand for hydrocarbons, and the continued impacts of the COVID-19 pandemic and associated health measures.

• Canada’s energy sector is a source of well-paying jobs for Canadians across the country. The Government of Canada will continue to stand with the energy sector and the thousands of hard working Canadians it employs.
• We share the frustration of many Canadians because of the current global market challenges for oil and gas. Workers in our energy sector have and continue to face real issues and anxiety about their future.
• However, we can’t ignore the risks posed by climate change and the global trend towards investing in lower carbon energy sources.
• Canada cannot achieve its target of net-zero emissions by 2050 without the efforts of the energy sector and its talented workers.
• By supporting a strong economic recovery, particularly in the oil and gas sector, Canadian businesses will continue to attract investments in good projects that help to support environmental and social priorities.
• To support these efforts, our government has provided targeted relief across the entire economy to help Canadian businesses and workers weather the storm.
• This included almost $2.5 billion in measures to support Canada’s oil and gas industry through a new Emissions Reduction Fund, including a $75 million carve-out for the offshore, and investments in inactive and orphan well remediation.
• It also included expanding credit and liquidity supports for mid-market companies through the Business Credit Availability Program (BCAP) and the creation of a new Large Employer Emergency Financing Facility (LEEFF) to provide support for Canada’s large companies.
• In addition, on September 25, our government announced $320 million in federal support for our offshore sector and workers, which will help projects in the Canada-Newfoundland and Labrador offshore get back on track.
• Taken together, our government has announced a comprehensive set of supports, with measures to assist workers, tax relief, new regulatory flexibilities (Output-Based Pricing System, Clean Fuel Standard), and our ongoing work with provinces and territories on guidance for essential services.
• Overall investment in the oil and gas sector has fallen by 70% since the peak in 2014, and has lagged other key producers, notably the US. According to the Canadian Association of Petroleum Producers, investment is set to fall by 33% this year to $23B, the lowest level in over 10 years.
• The oil and gas sector must adapt to the increasing weight given to Environmental, Social, and Governance performance by investors. The government stands ready to support the sector as it works towards achieve a net zero target.
• Our government will continue to do the hard work necessary to attract investment and get our resources to markets, ensuring this sector continues to be an important source of well-paying jobs for Canadians across the country, including for Canada’s Indigenous communities.

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