Good morning. It’s James Keller in Calgary.
It’s been 24 days since Finance Minister Bill Morneau said help for Alberta’s struggling oil sector was “hours, potentially days” away. Things took a bit longer.
Since then, the Alberta government and the industry have been ramping up pressure to act, as oil and gas companies continued to be hammered by the combined effects of a global price war that drove down prices and the COVID-19 pandemic, which has dried up demand.
Finally, the government came forward with a $2.4-billion package yesterday that is aimed primarily at helping laid-off oil and gas workers.
Friday’s announcement includes $1.7-billion to clean up abandoned oil and gas wells in Alberta, B.C. and Saskatchewan. Most of that money is funding that will go directly to the provincial governments, with Alberta getting the lion’s share – $1-billion. Another $200-million will be a loan to the Alberta Orphan Well Association, which is financed by industry and is expected to pay that money back.
The provincial government has already announced hundreds of millions of dollars in loans to the Orphan Well Association, as cleanup has emerged as a way to get people within the industry back to work quickly while addressing a major environmental liability.
The government will also spend up to $750-million to create an Emissions Reduction Fund to support investments aimed at reducing greenhouse gas emissions.
The announcement falls far short of the $20-billion to $30-billion demanded by Alberta, including additional liquidity for hard-hit energy companies.
Ottawa also announced new loan measures for medium-sized companies, including energy firms, but declined to put a price tag on the program or provide further details. The government said further liquidity measures will be announced later.
Alberta Premier Jason Kenney praised the federal announcement as a critical step to get his province back to work. However, he argued that more must be done, notably on the liquidity issue. Mr. Kenney said $15-billion to $30-billion in added liquidity could be needed.
The mood in the province received a boost earlier this month when the members of OPEC+, which includes Russia, agreed to production cuts intended to stabilize prices.
But as Mr. Kenney noted, they have yet to have any effect on world oil prices, with West Texas Intermediate falling below US$20 per barrel on Friday. Mr. Kenney has predicted oil prices could remain depressed for as long as 18 months.
Mr. Kenney compared the situation to the 2008-2009 financial crisis, when the federal government spent billions to bail out the auto sector.
This is the weekly Western Canada newsletter written by B.C. Editor Wendy Cox and Alberta Bureau Chief James Keller. If you’re reading this on the web, or it was forwarded to you from someone else, you can sign up for it and all Globe newsletters here. This is a new project and we’ll be experimenting as we go, so let us know what you think.
Around the West
FLATTENING THE CURVE: British Columbia’s rate of COVID-19 has begun to decline, easing pressures on the health care system and raising the prospect of rolling back some restrictions aimed at flattening the curve of the pandemic as early as the end of next month, say provincial officials. During a media briefing yesterday on modelling numbers, Health Minister Adrian Dix said elective surgeries, postponed to give the health system flexibility to deal with the pandemic, will likely resume in May, with further details to come soon. However, reopening schools and businesses won’t come any time soon.
B.C. FARMERS: Like the promise of freshly planted fields, B.C.’s agriculture sector is poised for a transformation this year. It’s one that is imposed by the pandemic, but could result in lasting, positive change. There is an urgent call in the province for food security as supply chains threaten the flow of imports and exports: British Columbia’s highly developed, “just-in-time” food-supply chain requires fluid borders that are, at this time, more impermeable. At the same time, the agriculture sector is struggling with labour shortages because the migrant workers who usually arrive early in the spring by the thousands are no longer as mobile. This past week, hundreds of temporary foreign workers arrived in B.C., but they will remain in quarantine for two weeks before they can begin work. For many farmers, the measures to prevent the spread of the virus have led to a drastic decline in sales as consumers stay home. Forging a secure path between consumers and their local farmers is now critical, and many farmers are looking to online sales and contact-less delivery to create that link. The result will change what ends up on our dinner plates.
LIVING WITH MOM IN HER CARE HOME: Last month, Dale Edwards was given a choice: stay with her mother, who is 96 and living in a long-term-care centre in Vancouver’s Kitsilano neighbourhood, or leave and don’t come back – at least, not until the risks posed by the COVID-19 pandemic have lessened or disappeared. For Ms. Edwards, who is 71 and has been visiting her mother nearly every day for the past decade, it was an easy decision. “It took me about one second to say, ‘Of course, I’m going to stay,’” she said. On Thursday evening, Ms. Edwards told the Globe that management at the facility, Point Grey Private Hospital, met with her and told her she would be able to stay in her mother’s room if she paid the same rate as her mother: about $2,900 a month.
NEW RESTRICTIONS IN MANITOBA: The Manitoba government placed new restrictions on travel Thursday to reduce the spread of COVID-19. Dr. Brent Roussin, the province’s Chief Public Health Officer, slapped a temporary ban on non-essential travel to northern and remote communities until May 1. He also ordered that anyone entering Manitoba from another province during that time must self-isolate for 14 days.
OUTBREAK AT AN OIL CAMP: Alberta health officials are working with a remote Northern Alberta oil sands camp after a COVID-19 outbreak left three workers with the disease and six more in isolation as they await test results. The Kearl Lake camp, operated by U.S.-based Civeo Corp., serves Imperial Oil Ltd.'s oil-sands project, about 40 kilometres north of Fort McMurray. For months, companies associated with oil-sands camps and lodges have ratcheted up efforts to keep the coronavirus that causes COVID-19 away from the crowded living quarters.
MUNICIPAL FINANCES: Mayors of many Western Canadian cities are seeing increasingly dire financial effects from the pandemic on their budgets, but they are working on different strategies as they try to cope. New figures for Edmonton presented Wednesday estimated the losses at $168.2-million by mid-September, compared with $112-million that was expected a couple of weeks ago. In Calgary, Mayor Naheed Nenshi said Wednesday the total estimate of revenue damage in the city for the next six months is $350-million to $400-million. The solution he is emphasizing is help from the federal government, acknowledging that the province is already in a “very difficult” situation. Vancouver Mayor Kennedy Stewart said the province urgently needs to help Vancouver with a potential $189-million budget hole or face a “coming crisis.” His comments about the options available to cities if that didn’t happen – selling land or going bankrupt, in extreme cases – prompted criticism.
ALBERTA PPE: In an expansion of the work done by a centralized warehouse and distribution system, the province this week is sending personal protective equipment (PPE) to others, including midwives, first responders, pharmacists and family physicians. About 400 municipal first-responder agencies will receive one million masks and gloves. And more than 1.5 million masks are being distributed to seniors, and addiction and mental-health facilities. The availability of such supplies came into sharper focus following Jason Kenney’s announcement Saturday that the province will send shipments of N95 respirator masks, surgical masks, goggles and gloves to British Columbia, Ontario and Quebec. The Premier said the largesse was possible, without impairing Alberta’s ability to battle the virus. However, the plan irked health care professionals including family doctors and other physicians concerned with having to buy high-priced, hard-to-find supplies on the open market.
PRAIRIE PUBS: Restaurant and bar owners on the Prairies are pleading with governments for more support, arguing that loans and wage subsidies don’t go far enough to protect them from collapse during the COVID-19 pandemic. And even when they are allowed to reopen, they worry continued restrictions will cut into revenues for the foreseeable future. The industry has been almost entirely shut down as part of broad efforts to keep people separated. Some establishments have been able to transition to takeout and delivery to make up a sliver of their lost revenues, but the industry has faced mass layoffs and questions about what will be left when restrictions are lifted.
ACTING CLASSES: The Vancouver Academy of Dramatic Arts sent a message to students and teachers last week announcing that in-person classes could resume immediately, after guidance from Vancouver Coastal Health. VADA president Simon Longmore said he had spoken with VCH Chief Medical Health Officer Patricia Daly, who had outlined the guidelines. They included allowing only 10 students a class, ensuring appropriate physical distancing in the studios and offering proper hand-washing stations. Students would have to sign a waiver stating that they would not come to class if they had any symptoms. But the plan upset some of the academy’s teachers and has caused an uproar in Vancouver’s acting community. And it also raises questions about what authorities consider safe during the COVID-19 pandemic. The fallout – resistance from instructors and severe backlash on social media that Mr. Longmore called cyberbullying – prompted VADA to reverse its decision and the school remains closed for in-person classes.
PHYSICAL-DISTANCING COMPLAINTS: AHS, which is in charge of enforcing health regulations including the shutdown orders, received about 8,500 complaints or service requests in the first two weeks of April about businesses and groups of people not following those rules. Of the approximately 5,600 complaints filed online, about 530 were related to people failing to comply with self-isolation requirements. The province has issued 13 orders for businesses to comply with the public-health measures, but Dr. Deena Hinshaw, the province’s Chief Medical Officer, says over all, people are following the rules.
LA LOCHE SHOOTING: Canada’s top court has refused to hear an appeal from a young man sentenced as an adult for a mass shooting in northern Saskatchewan when he was still a teenager. The decision has brought some relief to his victims and gives residents of the remote community of La Loche a chance to move forward. Randan Dakota Fontaine was two weeks shy of turning 18 when he killed two of his cousins at a home in the Dene village in January, 2016. He then went to the high school and opened fire, killing a teacher and a teacher’s aide and wounding seven other staff and students.
Kelly Cryderman on Jason Kenney’s pandemic performance: “Through the health crisis, Mr. Kenney has been a steady supporter of Alberta’s public-health officials, who have been measured and reasonable in enforcing the province’s shutdown measures. He was early to praise truckers and quick to shame hoarders and scammers, saying, “There must be a special place in hell for people like that.” He has been frank and forward-looking regarding what he predicts will be 18 months of ultralow oil prices and the accompanying economic havoc the province faces. Yet, the Premier’s aggressive, hyperpolitical style has not been tamed by the pandemic. And at a point when doctors have never been so valued by society, there are near-daily news stories of his United Conservative Party government’s inability to find resolution in a series of financial battles with the province’s physicians. How is it possible for Mr. Kenney to be at once so right and so wrong?”
Max Fawcett on why Alberta should look to its AI sector for its economic recovery: “And unlike most potential forms of economic diversification, AI is actually an asset for the oil and gas industry – a partner, not a predator. Both Suncor and Imperial Oil have laid out their plans to incorporate AI into their business operations, with Imperial striking a two-year partnership with the Edmonton-based Alberta Machine Intelligence Institute. Artificial intelligence could also help Alberta’s farmers and ranchers increase their yields, reduce their costs, and improve their global competitiveness.”
Adrienne Tanner on social etiquette in the age of COVID-19: “COVID-19 has changed everything. It hit me full force on Week 1 of the physical-distancing order. The shelves in my local shop were almost as bare as a Cuban grocery store. There were no chickens, no frozen vegetables and only a few packages of pasta left for the taking. But there was still plenty of produce, and that’s when I saw the tomato squeezer, rifling through a bin of tomatoes with bare hands that had touched who knows what. She must have picked up and rejected at least eight back to the bin. I had a visceral reaction to her behaviour and started to think more carefully about transmission of disease of all types. COVID-19 might not spread easily on the surface of fruits and vegetables, but other viruses, like hepatitis A, sometimes do. In one month, the pandemic has rewritten the book on social etiquette, even for activities as simple as walking the dog.”
The Globe’s Editorial Board on loosening physical-distancing restrictions: “The bad news is that going all the way back to the no-restrictions world of 2019 won’t be possible any time soon, and probably not until there’s a COVID-19 vaccine. That may be a year away, maybe more. However, evidence is accumulating that Canada is beating down the growth rate of infections. It’s not yet possible to ease the economic lockdown, but it is possible to see that day, and to plan for it.”