CAPP offers recommendations to hasten recovery for oil and gas sector
The Canadian Association of Petroleum Producers (CAPP) has been working closely with the federal government to identify important areas for urgent action to help Canada's energy sector survive the current economic crisis, and other measures needed to support the country's recovery once the COVID-19 pandemic subsides.
Through the Government of Canada's designation of the oil and natural gas sector as an essential service, industry workers remain on the front lines to ensure Canadians have access to the energy needed to heat homes, provide feedstock and power for manufacturing, and keep trucks on the road delivering vital supplies such as groceries and medical equipment.
"We are encouraged by the actions the federal government has taken to date, and appreciate the continuous communication and consultation undertaken by the ministers and senior staff in key departments," said CAPP president and CEO Tim McMillan. "Urgent action is needed to provide a measure of certainty for Canadian energy producers during exceptionally uncertain times. Since we began our discussions with the Government of Canada three weeks ago, we have lost between $6 billion to $8 billion of investment in the Canadian energy sector. This has resulted in job losses across the country and further damage to every sector of our economy."
The federal government has expressed deep concern for the serious impact this unprecedented crisis is having on the energy sector and the people whose livelihoods rely on it. The government's rapid response and implementation of the wage subsidy program offers vital support to help keep industry workers employed.
Canada's oil and natural gas industry is a global leader in responsible energy development and operates at some of the highest environmental and safety standards in the world. The recommendations the industry has offered align with the government's goals of getting Canadians back to work, being a leader in clean technology and environmental protection, and building the foundation for a sustained economic recovery.
CAPP is awaiting additional clarity on the Government of Canada's intentions with regards to the economic stimulus plan under development. There are three specific areas of focus for the oil and natural gas industry:
1. Liquidity for companies
Access to capital and measures that will enable operators to protect jobs and invest in projects that will get Canadians working. This would include:
- Work with government agencies and financial institutions to ensure companies are provided with continued access to existing or new credit support.
- Support or incentives for the reclamation of inactive and orphan wells; creating jobs for people working for service companies and indigenous communities who are particularly impacted be the downturn.
2. Regulatory certainty
As the oil and natural gas industry looks to weather the crisis and support the future recovery, stability is required. Many of the workers who would normally be engaged in the regulatory reporting aspects of our business are not at our sites due to COVID-19 health measures. Our immediate focus is ensuring safe and reliable operations, and at this time we hope all levels of government will:
- Adopt a "do no harm" principle with respect to regulations and a temporary "tools down" approach to new policies while we all work to ensure essential services are provided during the COVID-19 pandemic.
- Adopt a flexible approach to compliance for certain low-risk regulatory requirements to enable operators to focus on critical activities to protect the health and safety of workers.
3. Essential Service
The oil and natural gas industry is an essential service and we appreciate the actions the Government of Canada has already taken by designating the industry, its workers, and the supply chain as essential. This ensures vital energy is delivered to Canadians to keep homes heated, the electricity on, and vehicles running.
CAPP appreciates the efforts made by the government to support Canadian businesses to date, and is encouraged by the productive relationship industry and the Government of Canada share.
"A strong industry creates jobs for Canadians and generates much-needed revenues for government. The oil and natural gas industry is crucial to our country's economic well-being and can help lead our recovery, as well as be the foundation for long-term resilience," McMillan said.
The oil and natural gas industry supports nearly 500,000 jobs across Canada from British Columbia to Newfoundland and Labrador, generates approximately $8 billion annually in revenues to governments, and contributes $110 billion to the country's gross domestic product.
The supply chain of oil sands producers alone is associated with close to 10,000 businesses across the country. Ontario's participation in the oil sands supply chain was valued at $1.89 billion in the two-year period from 2016-2017, supporting more than 63,000 jobs and 1,162 businesses.
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