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Canada's federal government is expected to unveil on Thursday a budget that would channel the recent windfall from skyrocketing energy prices toward new spending on programs, including on climate.
The budget is expected to continue the track record on public spending of the Liberals of Prime Minister Justin Trudeau from recent years, Bloomberg notes. Trudeau has preferred new spending plans to shore up budget deficits since he became prime minister of Canada back in 2015.
The new spending on social and climate programs would come from considerably higher federal government revenues in recent months due to the high inflation rate and the highest oil prices since 2014.
Also as part of the budget, the federal government is expected to unveil a program for emissions reductions that would impact the oil and gas industry in the top oil-producing state of Alberta. The budget is also expected to propose more investments in the creation of jobs in the green energy sector, federal government insiders told CBC News.
Canada's federal government approved on Wednesday the proposed Bay du Nord Development Project, saying the project "is not likely to cause significant adverse environmental effects when mitigation measures are taken into account. The project is therefore allowed to proceed with strict measures to protect the environment." The project, expected to cost around $12 billion, is led by Equinor and proposes to install and operate a floating offshore oil and gas production facility in the Flemish Pass, approximately 500 kilometers east of St. John's, Newfoundland and Labrador, in the Atlantic Ocean.
Meanwhile, despite the fact that $100 oil incentivizes increased production in Canada's crude-producing province of Alberta, the ramp-up of production is being held back by an issue all too familiar to the U.S. shale patch—there are not enough skilled workers to employ. During the 2020 slump induced by the pandemic, the industry lost a lot of jobs, and many of the workers previously employed in oil and gas in Alberta have now moved on to other sectors of the economy, seeking stability, which is a rare and short-lived occurrence in today's oil market.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.