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Ottawa is spending $1.6 billion to help struggling energy companies stay afloat, buy new equipment and diversify as Alberta grapples with bargain basement oil prices.

Natural Resources Minister Amarjeet Sohi says $1 billion is to be set aside through Export Development Canada for oil and gas companies to make capital investments and purchase new technology.

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We understand that when Alberta hurts, so does Canada Natural Resources Minister Amarjeet Sohi

Another $500 million is to be made available through the Business Development Bank of Canada over the next two years to help smaller oil and gas companies navigate the downturn.

Photo by Canadian Press/Jason Franson

Sohi says a further $150 million is to be used for clean growth and infrastructure projects.

The package does not include money for more rail cars that Alberta is planning to purchase to help move a glut of oil behind the low price of Canadian oil.

Sohi says the money, largely in the form of commercial loans, is available immediately.