Madam Speaker, it is an absolute pleasure for me to rise in this venerable House to speak to Bill C-221, an act to amend the Income Tax Act, a private member's bill sponsored by the hon. member for Lakeland. Not only do I appreciate the opportunity to participate in today's debate, but I would like to thank the hon. member for raising the important issue of support for Canada's oil and gas sector.
The federal government knows that COVID-19 has been a profound shock to our economy and has dramatically changed the way we go about our daily lives, especially for those working in Canada's energy sector. Right now, oil and gas workers and their families are struggling because of things that are beyond their control. Both the devastating effects of the pandemic and the low prices caused by a surge in global crude oil supplies are a challenge. As a result, companies have had to slow down or pause their operations, leaving far too many people out of work.
That is why the Prime Minister announced earlier this year, in April, that the federal government would provide up to $1.72 billion to the Governments of Alberta, Saskatchewan and British Columbia, as well as to Alberta's Orphan Well Association, to clean up orphan and inactive oil and gas wells. These wells, which are no longer in use, can be detrimental not only to our environment, but also to people's health.
Think of the farmer whose family cannot grow anything on their land because of an abandoned well a few steps away from their home. Think of the small towns or indigenous communities struggling with this issue, which has been festering for years and even in some cases for decades. Cleaning them up will bring people back to work and help many landowners who have had these wells on their property for years but have not been able to get them cleaned up and get their lands restored. By investing in the remediation of inactive oil and gas wells, our goal is to create immediate jobs in these provinces while helping companies avoid bankruptcy and supporting our environmental targets.
Alberta estimates that its share of the federal support, up to $1.2 billion, will help the province maintain 5,200 jobs and clean up 30,000 wells. The cleanup cost per well can range from $100,000 to several million dollars, but actual costs can vary significantly depending on the complexity and size of the well or facility, or the amount of contamination that is present.
As part of the funding agreement, the Governments of Alberta and Saskatchewan have committed to implementing strengthened regulatory systems to significantly reduce the future prospects of new orphan wells. The goal is that these improvements will lead to sustainably funded systems that ensure companies are bearing the costs of their environmental responsibilities. Federal-provincial monitoring committees have been established to track the progress of provincial programs as part of these agreements, and these committees will work with local governments and indigenous organizations to ensure that important stakeholders are engaged in each process.
There has been widespread support for the $1.2 billion announcement, and I want to share quotes from a few people that relate the importance of this funding and its anticipated impacts.
In a statement, the Business Council of Alberta said that the funding announcement is “welcome news for energy companies, working Albertans, and for the environment.” It said this is a “win-win that will keep thousands of Albertans working in some of our hardest-hit industries, while also improving the environment.” However, they believe “considerable support is still needed, specifically liquidity, for some of Canada’s most significant energy companies”.
We also heard from the Canadian Association of Petroleum Producers, which echoed positive sentiments. It said, “Reducing environmental liabilities is a priority for the oil and natural gas industry and this initiative will allow important work to accelerate, while supporting thousands of jobs.”
Alberta's NDP environment critic, Marlin Schmidt, said the funding will help “put thousands of Albertans back to work while supporting responsible resource development,” and added that the UCP government must use its money in a way that ensures polluters will pay for the cleanup of their sites. He said, “They must also set clear targets and timelines for well cleanup now and into the future. I also hope the UCP will ensure landowners and municipalities are compensated for wells on their land.”
As we can tell, there is widespread support for this. It is a really wonderful example of federal and provincial co-operation.
It is also important to mention that the provinces, as well as the Alberta Orphan Well Association, are responsible for the detailed design and implementation of inactive and orphan-well cleanup programming. Detailed information on these programs will be provided by the recipients. Since April, Alberta, British Columbia and Saskatchewan have all announced programs to clean up orphan and inactive oil and gas wells.
It may also interest the hon. member for Lakeland to know that the government has previously provided indirect support to the Alberta Orphan Well Association, also known as OWA. In budget 2017, the government provided $30 million as a grant to the Government of Alberta to stimulate economic activity and employment during that challenging period. Alberta used the funds to pay the OWA's interest expenses on a $235 million loan extended by Alberta to the OWA. The OWA has a good track record of generating employment in the service sector by cleaning up orphan wells. The OWA estimates that the loan has supported the cleanup of approximately 637 wells and created 225 jobs. This proves that federal support to help clean up orphan and inactive wells is helping to stimulate employment and economic activity in the energy sector, and ensures that it can continue to support middle-class families and communities.
We have listened to the concerns of landowners, municipalities and indigenous communities that want to make sure that the polluter-pay principle is strengthened and that their voices are heard. I want to thank the Government of Alberta for working with us and for listening to their concerns. Appropriately cleaning up well sites will prevent methane leakage and ensure that the sites are remediated and returned to their original state.
I should also mention that the federal government has established a $750 million emission reduction fund, with a focus on methane, to create and maintain jobs through pollution reduction efforts. This includes $75 million to help the offshore industry cut emissions in Newfoundland and Labrador. This fund will primarily provide repayable contributions to firms to make them more competitive, reduce waste and pollution and, most importantly, protect jobs. Right now, many energy firms are experiencing a cash crunch, so they do not have the funds to invest in technologies to reduce emissions or fix methane leaks. The fund will allow for this kind of work to be done and create jobs that people need during this difficult time. Through the wells and the methane initiative, we estimate that we will maintain more than 8,800 jobs across the country. Just because we are in a health crisis does not mean we can neglect the environmental crisis.
When the Prime Minister announced support to help clean up orphan and inactive wells in April, he also announced that Export Development Canada was increasing its financial capacity to support Canada's small and medium-sized oil and gas companies. This added capacity is available to eligible companies so they can access the liquidity they need to keep their operations running and support their employees during this crisis. Many businesses have already taken advantage of the program. The added business support is being provided through various financing and insurance solutions, including risk-bearing guarantees for loans obtained through the company's bank and guaranteed by the EDC, and through EDC's bonding and accounts receivable insurance products. This commercial support is aimed at bringing liquidity into the market and helping Canadian companies during the crisis.
We know that the second wave is even harder for those who get hit, and that is why our response needs to be targeted and effective. Small and large businesses create jobs, drive our economy and make our communities stronger. The government will continue to do whatever it takes to support them. These measures are part of the Government of Canada's comprehensive economic plan to help Canadians and businesses through this period of uncertainty. We will continue to monitor this evolving situation closely, and we will take additional actions as needed to protect our health and safety and stabilize the economy.
I want to thank you, Madam Speaker, and I thank again the hon. member for Lakeland for raising this important issue of support for Canada's oil and gas sector and for allowing me to comment on it.