Canada Fossil Fuel Subsidies Total $3.3 Billion


When it comes to environmental policies and support for the Paris climate accords, Canada talks the talk. Prime Minister Justin Trudeau has pledged to enact a national carbon tax by 2018. After meeting with US president Donald Trump last week, he said that Canada would aggressively pursue its climate change goals  and would “show leadership that quite frankly the entire world is looking for.” But does Canada walk the walk? According to a study by four leading environmental groups, national and provincial fossil fuel subsidies in Canada totaled $3.3 billion last year.

Canada fossil fuel subsidies benefit tar sands.

Those subsidies include extraction incentives as well as funds to support fossil fuel research and development. The climate groups say they amount to paying oil and gas producers $19 a ton to create carbon emissions. The carbon tax proposed by the Trudeau government would ramp up to $50 a ton by 2022. “This system is like taxing consumers when they buy cigarettes while giving massive tax breaks to tobacco companies that encourage them to produce more cigarettes. It doesn’t make sense,” said Alex Doukas of Oil Change International.

Dale Marshall of Environmental Defense added: “Unless Canada phases out massive subsidies to oil and gas companies, Trudeau’s carbon price will do little to encourage polluters to cut carbon emissions. The $3.3 billion in annual subsidies could be put to much better use by investing in climate action, healthcare or other initiatives.”

The critique from environmental activists highlights the difficulty of reconciling policy with reality. Like its neighbor to the south, Canada is not a homogeneous society. Attitudes toward fossil fuel and environmentalism vary widely from province to province. Alberta is heavily committed to fossil fuel extraction, especially tar sands operations that employ many of its citizens and provide much of its income.

British Columbia to the west is far more environmentally minded. Earth justice groups there are outraged the national government has recently approved a $27 billion liquefied natural gas facility within the province. Nationally, Conservative Party leaders have dismissed the national carbon tax proposal as  “complete insanity.” They say it will take a “sledgehammer” to the Canadian economy.

Should we applaud Canada for attempting to lead on climate issues or disparage it for being somewhat two faced about how it moves forward? In the age of Trump, Americans may wish to be cautious about throwing the first stone.

Source: The Guardian


About the Author

I have been a car nut since the days when Rob Walker and Henry N. Manney, III graced the pages of Road & Track. Today, I use my trusty Miata for TSD rallies and occasional track days at Lime Rock and Watkins Glen. If it moves on wheels, I'm interested in it. Please follow me on Google + and Twitter.
  • kevin mccune

    Isn’t that Tar sand debacle a mess ?

    • Steve Hanley

      And it its oil from tar sands that will flow through the Dakota Access pipeline.


      • Jim Smith

        as opposed to Buffet’s oil trains?

      • Eco Logical

        I wouldn’t call it ‘oil’, it’s actually ‘DilBit’ (Diluted Bitumen) that contains numerous toxins from the tar sands Bitumen and the diluent (unwanted/toxic byproducts from oil refineries) that are used to thin out the tar sands Bitumen. Alberta’s Premier Notley was pushing for ‘upgraders’ that would remove the toxins and make the tar sands bitumen the equivalent of ‘light sweet crude oil’ but the oil companies don’t want to pay for the facilities … they’d rather ship that toxic DilBit to the USA and the rest of the world … I personally believe the oil industry executives should be criminally charged because they know the DilBit is toxic and poisons the air and water.

  • Eco Logical

    We had a climate denier Prime Minister (Steven Harper) for ten years who muzzled climate scientists (threatened to fire them) and instigated the oil industry subsidies. Now we finally have a leader (Justin Trudeau) who has to undo all the havoc wreaked upon us by Harper. It’s similar to what Obama inherited from the Bush administration, the USA was in recession and tangled up in endless oil wars in the middle east. Trudeau has to walk a fine line by promoting renewable energy while assisting Alberta’s jobless oil workers by approving some very controversial pipelines while going on record that the tar sands need to be phased out (eventually … ). This has sent a strong signal to tar sands developers that their hundreds of $Billions investment may become stranded. That and the fact that the price of oil needs to be > $95/barrel has resulted in ‘Zero’ new tar sands development in the past 2 years … the tar sands companies continue to produce bitumen at a loss to protect their existing investments, hoping the price will go back up to $100/barrel. I personally believe that oil demand (and price) will never go back up to $100/barrel due to electrification and higher fuel economy.