Canada’s trade financing bank will provide as much as C$750 million ($553 million) in emergency loans to small- and medium-sized oil and gas companies, a rare move to assist an industry struggling through a period of low energy prices.
Export Development Canada is providing the loans for companies to boost productivity, find new markets and improve environmental performance, according to a statement Thursday from Ottawa.
“There are many smaller companies across Canada with solid fundamentals that are financially stressed, and those are the companies that we can really help to make it through this period of lower oil prices,” Mark Senn, vice president for western Canada, said in a statement.
EDC, a government agency whose mandate is to help Canadian companies develop business opportunities globally, wasn’t asked by the federal government to provide the funds, spokesman Phil Taylor said by phone from Ottawa, adding most of the funds will be provided as commercial-type loans.
The new funding, most of which will probably be disbursed this year, is an extension of a C$400-million EDC program rolled out last year to the same industry, Taylor said. The agency likewise extended emergency funds to the auto industry in 2009 and lumber producers around 2005.