Meanwhile, the Trudeau government continues to sit back and do nothing except make things worse.
The Canadian energy industry is now facing possible credit rating downgrades, as the damage from the oil price discount for Canadian oil continues to spread.
According to Victor Vallance, the energy senior VP for the DBRS credit rating agency, “Currently the differential is very high on heavy, it’s very high on light, it’s very high on synthetic, so that’s putting a lot of pressure on cash flows and, obviously, credit metrics as a result. It’s very unusual. I’ve never seen … this disconnect between Canada and the rest of the world, unfortunately, because of the increase in supply and not sufficient enough expansion of takeaway capacity.”
A credit downgrade would only add to the woes being faced by the Canadian energy sector.
And those woes are being worsened by the Trudeau government, who have sent a clear message that the energy sector will be left to fend for itself, while also being shackled by regulations and legislation that makes pipeline approvals almost impossible.
The contrast between how the Trudeau government is handling the crisis in the energy sector, and how they handle problems in other industries couldn’t be clearer. When other sectors struggle, the government talks about offering immediate help and bailouts. Yet with oil, the Trudeau government merely says they’re “watching carefully.”