Eliminating subsidies to the oil, gas, and coal industries could be worth almost $100 in the pocket of every Canadian every year, the Winnipeg-based International Institute for Sustainable Development calculates. Or it could do something with a more focussed public benefit, like paying for 16 million overnight hospital stays.
The illogic of subsidizing the production of a fuel source known to destabilize the global climate, in addition to inflicting large costs in other environmental damage, has long preoccupied policy-makers. “It’s like raising taxes on cigarettes to discourage smoking, while also giving tobacco companies a tax break so they can make more cigarettes,” the Institute writes.
Leaders of the G-20 group of economies first declared the desirability of ending “inefficient” subsidies in 2009, but as recently as last month declined to set a target date to do so.
During the 2015 election, the IISD recalls, the Liberal Party campaigned on a promise to “fulfill Canada’s G-20 commitment to phase out subsidies for the fossil fuel industry.” And earlier this year, Prime Minister Justin Trudeau agreed with other G7 leaders to eliminate “most” Canadian subsidies by 2025.
Exactly how much money that amounts to is open to debate, with some figures reaching $46 billion a year. The IISD reaches more conservative numbers, estimating that the federal and provincial governments together hand the fossil industry about $3.3 billion a year in direct tax breaks, reductions in royalties, and “direct infusions of cash from the government.”
Even on its lowball estimate, however, the Institute calculates that foregoing fossil subsidies could free up enough public money to pay for “education for 260,000 students,” or “provide Canadians a hospital bed for 16,000,000 days,” or fund “job training for 330,000 workers.” Or it could just put “$94 dollars in the pockets of every Canadian each year.”
But despite Trudeau’s commitment with other G7 leaders in May to abandon most subsidies by 2025, IISD notes that “the federal government’s latest budget actually locked in some fossil fuel subsidies for another 10 years.”
