Justin Trudeau reveals bailouts for industries crippled by COVID-19 — including the energy sector

The federal government is rolling out part of its bailout package for distressed sectors today, including $1.7 billion in funding to clean up abandoned oil wells in Alberta and Saskatchewan.

In his daily address to Canadians, Prime Minister Justin Trudeau also said the government would be bolstering the capacity of two of its lending facilities, providing extra government-backed credit to help severely distressed sectors of the economy meet their payroll and pay their bills.

The prime minister also said Ottawa would provide $750 million to help energy companies comply with stricter methane regulations.

The goal is to help companies stay afloat despite the crisis in oil prices and the global economy, all without compromising on the environment.

Trudeau also put almost a billion dollars into regional development agencies and research funds - money that is meant partly to help high-tech start-up firms that have been missed by other supports.

"We recognize that certain industries are facing even more difficult times," Trudeau said, pointing in particular to oil and gas. "Those industries are particularly hard hit."

Trudeau and Finance Minister Bill Morneau have indicated repeatedly that extra help will be coming for industries that are being decimated by the pandemic: oil and gas, tourism, airlines and commercial real estate.

Trudeau said the oil wells cleanup will put more than 5,200 people back to work in a sector that was already limping before the pandemic struck. The oil-and-gas sector has suffered a double whammy because oil prices have fallen to record lows partly because of a price war between Russia and Saudi Arabia. The price war has abated but oil prices have not recovered.

The package on Friday also included some support for the oil-and-gas sector in Newfoundland and Labrador.

All told, Trudeau said up to 10,000 jobs would be supported with the new money.

All sorts of companies that have been losing large amounts of money because of the crisis are able to tap into the federal government's wage subsidy that would pay 75 per cent of a firm's payroll. But the federal government has been quick to acknowledge that some key sectors will need extra support because the damage is so deep.

"Right now, workers and families (in the energy sector) are struggling because of things beyond their control. Both the devastating effect of the pandemic and the price war driven by foreign interests are a challenge," Trudeau said.

"As a result, companies have had to slow down or pause their operations, leaving too many people out of work."

Ottawa has been talking with Alberta about funding to clean up oil wells since the last federal election.

"Cleaning (abandoned oil wells) up will bring people back to work, and help landowners who had these wells on their property for years, but haven't been able to get them taken care of and the land restored," Trudeau said.

Alberta has also suggested that the oil-and-gas sector needs access to about $20 billion or $30 billion in federally guaranteed financing because oil prices have been driven to record lows by a lack of demand and a global price war.

More details about the federal government's moves on the liquidity front will likely come later today from Morneau.

But Trudeau also pointed out that the federal government is already supporting companies and out-of-work Canadians with tens of billions of dollars in support already.

Recent forecasts for provincial economies put Alberta and Newfoundland and Labrador at the bottom of the heap.

Heather Scoffield is the Star's Ottawa bureau chief and an economics columnist. Follow her on Twitter: @hscoffield