Canadian Manufacturing

Kenney worried layoffs coming as oil and gas sector struggles with coronavirus [UPDATED]

The Canadian Press

Canadian Manufacturing
Manufacturing Oil & Gas Public Sector

He said Alberta needs the federal government to have the province's back during a time of economic crisis

CALGARY — Alberta Premier Jason Kenney flew to Ottawa on March 11 with a list of demands and a key message for the prime minister to focus on the economy.

Kenney and his fellow premiers are to meet with Prime Minister Justin Trudeau amid growing concerns about the novel coronavirus pandemic, a stock market crash and plummeting oil prices.

“We need this government to get refocused on the economy. Enough about dealing with every fashionable issue out there and the virtue signalling, the UN security council, all the rest of it,” Kenney told reporters before boarding a flight at the Calgary International Airport.

“We are facing an economic crisis in Canada and we need the national government to act accordingly with total focus on that issue.

“We need that more in Alberta, I believe, than any other part of the country.”

Alberta needs similar support to what the federal government gave the auto sector during the global financial crisis in 2008 and 2009, Kenney said.

“We’ve contributed $600 billion net to the rest of Canada over the past five decades. It’s time for Canada to have Alberta’s back.”

Kenney said he’s been talking with energy leaders as well as Ed Sims, president of WestJet Airlines, about the downturn.

“Airlines are hemorrhaging cash right now. And one thing I will take in as a very clear message to Ottawa is any benefit that Air Canada receives as the so-called flagship carrier must be equivalent to the assistance that WestJet receives.”

Kenney said it’s not a secret that the oil and gas sector is likely to see layoffs over the next few weeks, since many companies have announced plans to slash their 2020 capital budgets.

“A number of our energy companies saw their share valuation go down by as much as 90% in the last 48 hours,” he said. “Many of them have basically no cash flow.

“A lot of those oilfield workers who are on rig sites will be laid off and probably won’t be going back to work.”

Kenney said energy companies have become more lean and efficient over the last five years, but some aren’t likely to survive.

“There are a range of companies that are not well prepared for this downturn. That’s part of the problem. This is after five years of fragility, when a number of companies have been leveraging themselves in debt,” he said.

“A lot of them cannot cut operating costs any further and they cannot raise equity.”

Kenney said he will be pressing the federal government for guarantees that the Trans Mountain and Coastal GasLink pipeline projects will be completed as a way of restoring confidence in investing in Canada.

He also wants Ottawa to provide the provinces with an equalization tax rebate that could be used to help struggling industries. Kenney said in Alberta’s case that rebate would be $2.4 billion.


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