Don’t forget oil sector: Wall
Talk of federal aid to help pull Bombardier Inc. out of a nosedive has caught the attention of Saskatchewan Premier Brad Wall and the tanking energy sector.
Wall says that if the federal government is thinking about a bailout package for Bombardier, it could consider helping the oil-and-gas industry, which is struggling due to falling oil prices.
“We have seen tens of thousands of jobs lost in the energy sector — obviously not as many in Saskatchewan as in Alberta — but it’s affecting Alberta, Saskatchewan, Newfoundland and Labrador and one of the most important economic sectors in the country,” Wall said Thursday in an interview with The Canadian Press.
“The message from Saskatchewan today would be (that) before another bailout — this one may be potentially a $1-billion bailout for one company — is considered by the federal government, what about the energy sector?”
Wall said the federal government could pump infrastructure money into provinces hurt by the economic downturn or support the Energy East pipeline project.
Energy East would ship Alberta crude oil to refineries in Eastern Canada and from there to international markets.
The premier also said the federal government could help with an oil well cleanup project he has proposed.
Wall pitched a plan to the federal government earlier this month for $156 million to clean up old wells that aren’t being used as a way to help create jobs for laid-off oilpatch workers.
Bombardier announced Wednesday that it plans to lay off 7,000 employees around the world, including 2,830 in Canada—most of them in Quebec.
Transport Minister Marc Garneau has said the government will decide “in due course” whether to give financial aid to Bombardier.
The federal government considers Bombardier (TSX:BBD) an “anchor firm” to Canada’s aerospace industry because it supports a supply hub that employs tens of thousands more workers, according to internal economic development documents.
Wall said the energy industry “is an anchor sector for this entire country, creating thousands of jobs directly and indirectly, right across Canada.”
“So, no, I don’t think that’s a good enough reason, at least to the extent that they’re not prepared to do something additional, something supportive for the energy sector. I don’t think they should be engaged in talks of billion-dollar bailouts to one particular company.”
The federal government has lent money to Bombardier in the past. Last fall, Industry Canada said Bombardier had received $1.3 billion in repayable contributions since 1966 and had repaid $543 million as of Dec. 31, 2014.
Bombardier CEO Alain Bellemare continued to press the federal government on Wednesday to come through once again. Bellemare said that Bombardier may have borrowed about $1 billion since the mid-1980s, but it generated more than $15 billion in government tax revenue over that period.