Fossil fuel subsidies have more than doubled in British Columbia since the Premier John Horgan’s NDP government took office in 2017, with oil and gas fracking companies the biggest winners, according to an analysis released this week by Stand.earth and Dogwood.
The total hit C$1.3 billion for the province’s 2020-21 financial year and is on track to exceed $1.8 billion in 2023-24, Stand states, on the landing page for the report. That’s more than triple the annual largesse the industry took away from the previous Liberal government led by then-premier Christy Clark.
“In 2020-21, the NDP government gave the oil and gas industry almost five times as much money in subsidies as it earned in oil and gas royalties ($282 million), a higher ratio than it did in 2019-20,” the organization writes. “The NDP government spent more subsidizing fossil fuels ($1.3 billion) than it did on its climate change program ($1.1 billion),” and will be boosting its fossil funding over the next three years “while simultaneously reducing investment in energy efficiency and clean energy alternatives.”
That path, Stand warns, “is not only short-sighted, it threatens the future of B.C.’s economy.”
The report shows the province’s fossil subsidies rising from $555 and $557 million per year in the last two years of the Clark government to $922 million in 2018-19, $1.2 billion in 2019-20, and $1.3 billion in 2020-21, then escalating from there. The landing page says B.C. “is second only to Alberta in the generosity of subsidies it gives to the fossil fuel industry,” mostly to support the province’s faint hope of an economic boom driven by liquefied natural gas.
In a release, Stand says the biggest subsidy hike “comes in the form of Deep Well Royalty Credits, a tax credit for fracking wells, which is budgeted at $421 million this year. However, more troubling is the fact that for at least five consecutive years, the government has given out more royalty credits than the companies can claim, leading to surplus of credits totaling $3.1 billion.” Because the companies will be able to claim those credits in future years, the surplus “means lost revenue for future governments.”
“Premier Horgan was elected on a promise that he was working for us, but looking at these numbers makes it seem more like he works for big fracking corporations,” said Sven Biggs, Stand’s Canadian oil and gas program director. “What other explanation can there be for allowing subsidies to double on your watch, or to give out tax breaks and incentives totaling five times the amount this industry contributes to provincial treasury through royalties?”
“British Columbians who put their trust in John Horgan to deliver an effective climate plan are going to be incredibly disappointed to see handouts to oil and gas companies ballooning while clean energy investments get slashed,” said Dogwood Campaigns Manager Alexandra Woodsworth. “As long as the government keeps funding the main industry fuelling emissions, B.C.’s climate plan will keep failing—it’s like trying to get a smoker to quit by giving them more packs of cigarettes every day.”
The report calls on the Horgan government to phase out all fossil fuel subsidies by 2025, cancel the Deep Well Royalty Credit and other loopholes in the province’s royalty regime, and redirect fossil fuel tax breaks to invest in renewable energy and low-carbon infrastructure.