Prime Minister Justin Trudeau’s vow to phase out ‘inefficient’ subsidies for coal, oil and gas still hasn’t happened — despite the escalating costs of the climate emergency
According to a new International Monetary Fund (IMF) report, Canada subsidized the fossil fuel industry to the tune of almost $60 billion in 2015 — approximately $1,650 per Canadian.
Yet subsidizing one of the world’s wealthiest industries is folly.
Such subsidies not only hurt Canadian taxpayers and the economy — they also exacerbate the climate emergency.
Indeed, the G20 countries have already agreed that subsidizing fossil fuels is irrational in a warming world — and have called for action to eliminate inefficient fossil fuel subsidies that distort markets.
The problem is that subsidies encourage the production and wasteful consumption of fossil fuels all while impeding the shift to cleaner renewables.
For these reasons, during the last election campaign Justin Trudeau sensibly committed to “phase out inefficient fossil fuel subsidies.”
The problem is that government has not yet delivered on this promise.
A new 2019 report by Canada’s Auditor General reveals government’s review of such subsidies is “incomplete and not rigorous,” is “not based on all relevant and reliable information” and “did not consider economic, social and environmental sustainability over the long term.”
Canada continues to subsidize the fossil fuel industry in myriad ways. First, it provides tax breaks under the federal Income Tax Act. For example, in 2015 the federal government introduced a new accelerated depreciation rate for equipment used in LNG facilities, which was a change proposed by the Canadian Association of Petroleum Producers.
A natural gas well pad with numerous wells for fracking near Farmington, B.C. The LNG industry in British Columbia is the recipient of numerous tax breaks and exemptions. Photo: Garth Lenz / The Narwhal