Fossil fuel subsidies from the Canadian government over the last four years would have been enough to fund all the country’s wind and solar projects 12 times over between 2019 and 2021, and twice as much as it would take to double transit ridership over the next dozen years, Environmental Defence Canada concludes in an analysis released last Wednesday.
The Toronto-based advocacy group is calling [pdf] on Finance Minister Chrystia Freeland to eliminate all oil and gas financing in her April 16 budget, as the government promised to do in 2021.
“In 2023, as people across Canada faced a fossil-fuelled affordability crisis and climate disasters continued to ravage the country and the world, the Government of Canada continued providing financial support to an industry that we need to be winding down in order to avoid catastrophic levels of warming,” Environmental Defence’s associate director, national climate, Julia Levin, said in a release.
“Taxpayer handouts to Canada’s wealthiest companies mean that less money is available for the types of investments that could actually help people across the country who are deciding between food and energy bills.”
The tally shows fossil fuel subsidies totalling C$18 billion in 2020, $8.6 billion in 2021, $20.2 billion in 2022, and $18.6 billion in 2023. Last year’s figure included $8 billion in loan guarantees to the financially troubled Trans Mountain pipeline expansion, $7.3 billion in public financing through Export Development Canada, and more than $1.3 billion to carbon capture and storage (CCS) projects.
“Although the Government of Canada has taken some important steps towards eliminating fossil fuel financing—including new rules ending international public financing as well as inefficient fossil fuel subsidies—this has not translated into lower levels of financial support,” the Environmental Defence release states. “This is because most of Canada’s financial support is provided by Export Development Canada (EDC) for domestic oil, gas, and petrochemical companies, and therefore has not been addressed by new policies.”
In 2020, a blistering analysis showed Canada leading the G20 countries in per capita public financing to oil and gas. Last summer, Oil Change International placed the total at $50 billion since 2019.
The report also calls for a windfall tax on oil and gas profits that are “driving the inflation crisis that is making life unaffordable for people across this country.” Citing a Parliamentary Budget Office estimate, it says the federal treasury could have recovered $4.2 billion in 2022 if the Canada Recovery Dividend, a tax on excess profits in the banking and insurance sectors, had been extended to the seven big oil and gas companies that would have qualified.
Environmental Defence says many European countries have already adopted similar measures, at tax rates ranging from 25% in the United Kingdom to 75% in Ireland (though the UK’s windfall profits tax was bundled with new tax incentives for oil production).
