Question Period Note: Orphaned and Inactive Wells

On April 17, 2020, the Government of Canada announced $1.72 billion in funding to the provinces of Alberta, British Columbia, and Saskatchewan to support the decommissioning and remediation of inactive wells. This included a $200 million repayable loan to Alberta’s Orphan Well Association. These measures will help retain and create thousands of jobs that will have lasting environmental benefits.

• Canada’s oil and gas sector has been particularly hard hit by the COVID-19 pandemic and the oil price war this past spring.
• Our government supported thousands of jobs in this important sector of our economy through the $1.72 billion orphan and inactive well program.
• This initiative has provided $1 billion to the Government of Alberta, $400 million to the Government of Saskatchewan, and $120 to the Government of British Columbia for abandonment (i.e. decommissioning) and remediation of inactive wells.
• The program has also provided a $200 million loan to Alberta’s Orphan Well Association.
• The Government of Alberta has committed to implement strengthened regulations to significantly reduce the future prospect of new orphan wells. This will create a sustainably funded system that ensures companies bear the costs of environmental responsibility.
• The program will be overseen by a federal-provincial committee, and will include municipal and Indigenous engagement. Additionally, landowners have the ability to nominate and prioritize wells for remediation.
• As the resource owners, provinces are responsible for regulating development related to upstream oil and gas, including potential environmental liabilities.

If pressed on the federal government providing funding to provinces, who are responsible for their own environmental liabilities
• This program will create thousands of jobs in a sector of the economy that was particularly hard hit due to COVID-19 and the Saudi-Russia oil price dispute in March 2020, while at the same time reaping environmental benefits.
• Each province maintains for managing its own environmental liability regime.
o Alberta is working to strengthen its regulations, and has released its liability management policy.
o Saskatchewan has committed to strengthen its regulations.
o British Columbia has updated its regulatory regime, establishing a maximum period of time a well can remain inactive. It is also in the process of further strengthening its regulations to ensure the polluter-pays principle is re-enforced going forward.
If pressed on why other provinces did not receive funding for their oil, gas and mining environmental liabilities
• Our government has provided a broad range of support throughout the country and for many different sectors of the economy.
• The purpose of this program is to create jobs in a sector of the economy where the impact on jobs was particularly significant.

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