Alberta premier worried about layoffs as oil and gas sector struggles with coronavirus

Click to play video: 'Alberta premier concerned about energy sector layoffs amid impacts from COVID-19, falling oil prices'
Alberta premier concerned about energy sector layoffs amid impacts from COVID-19, falling oil prices
WATCH: Alberta Premier Jason Kenney is heading to Ottawa with a list of demands for the prime minister as falling oil prices, COVID-19 concerns and fallout from the downturn take a toll on the provincial economy. Adam MacVicar reports. – Mar 11, 2020

Alberta Premier Jason Kenney flew to Ottawa on Wednesday 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.”

Story continues below advertisement

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.”

Click to play video: 'Alberta economy grappling with coronavirus fears and oil price drop'
Alberta economy grappling with coronavirus fears and oil price drop

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

[ Sign up for our Health IQ newsletter for the latest coronavirus updates ]

“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.

Story continues below advertisement

READ MORE: What the oil plunge means for Canada and Alberta

Click to play video: 'COVID-19: Stock markets in Canada, crude oil prices collapse'
COVID-19: Stock markets in Canada, crude oil prices collapse

“A number of our energy companies saw their share valuation go down by as much as 90 per cent 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.

Story continues below advertisement

“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.


Sponsored content