Brian Zinchuk is editor and owner of Pipeline Online
Stampede Drilling Rig 17 north of Lampman
The Canadian Association of Energy Contractors (CAOEC) said it is disappointed with the federal budget, referring to it as a lost opportunity to support energy workers on the frontlines of Canada’s energy transformation.
“The federal Liberal government has turned its back on thousands of energy workers by not extending the Clean Technology Manufacturing investment tax credit to include carbon technology innovations in the drilling and service rig sector, such as electrification, fuel switching, battery technology, and hydrogen blending,” said Mark Scholz, president & CEO of CAOEC. “This was a lost opportunity. The government wants to reduce carbon emissions, develop critical minerals, support Indigenous peoples, and create sustainable jobs, but they are not prepared to walk the talk and help the industry meet those goals.”
The Association has advocated to the federal government for over two years that Canada cannot extract critical minerals such as lithium and helium, produce heat from geothermal formations, or store carbon underground without a drilling or service rig. Unfortunately, the federal government has chosen to write off the sector, the CAEOC said, because it also helps develop Canada’s oil and natural gas resources. This short-sighted decision will impact Canada’s ability to decarbonize its traditional hydrocarbon sector and accelerate the development of new energy systems.
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CAOEC members are active in all sectors the federal government considers part of the clean energy transformation. Scholz explains, “One month, we are drilling for helium, lithium, geothermal, or carbon storage; the next, we are developing Canada’s responsible oil and gas. Our industry can significantly reduce emissions through simple equipment modifications, but the government will not extend the ITC because we also operate in the oil and gas industry. In reality, there is no business case to dedicate a rig ‘primarily’ to these new and emerging sectors.”
“It is ironic that the day after the House of Commons passed the Sustainable Jobs Act, which pledged to support our energy workforce, it failed to translate those promises into concrete tools and resources within the Budget. Our Association will continue to fight to save this key Canadian industry, and we call on the Standing Committee on Finance to extend the ITC as the budget goes through the legislative process,” stated Scholz.
Scholz concluded by saying, “Budget 2024 was a chance to show that the Government of Canada is committed to protecting middle-class jobs, furthering economic reconciliation, reducing emissions, and setting us up for a mixed energy future. We call on the federal government to do the right thing and support Canadian energy workers.”
For additional information on the Association’s recent policy submissions to the federal government:
- Written Submission for the Budget Consultation in Advance of the 2024 Federal Budget
- Supplementary Note to the Submission for the Consultation on the Legislative Proposals to the Income Tax Act – Clean Technology Manufacturing Investment Tax Credit
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