Global Courant
Ottawa today published its plan to eliminate inefficient fossil fuel subsidies, making Canada the first country among wealthy, heavily emitting nations, according to the federal government.
In 2009, the G20 countries publicly pledged to “phasing out and rationalizing inefficient fossil fuel subsidies” in the “medium term”.
Such subsidies “encourage wasteful consumption, reduce our energy security, hinder investment in clean energy sources and undermine efforts to address the threat of climate change”, said the G20 communiqué.
Environment and Climate Change Minister Steven Guilbeault announced the plan Monday in Montreal as Canada continues to grapple with one of the worst wildfires on record and devastating flooding in Nova Scotia.
“We’re cutting subsidies for fossil fuel production in Canada unless those subsidies are aimed at decarbonising the sector’s emissions,” Guilbeault said.
Environment Secretary Steven Guilbeault says there are some exceptions to the plan to eliminate what the government calls “inefficient” fossil fuel subsidies. (REUTERS/Jennifer Gauthier)
Environment and Climate Change Canada and the Department of Finance developed the guidelines.
Guilbeault said there are exceptions to the government’s new guideline. Federal dollars can still flow to fossil fuel projects if they:
Enable significant reductions in greenhouse gas emissions
Support clean energy, clean technology and renewable energy
Support Indigenous economic participation in fossil fuel activities
Provide essential energy services to remote communities
Provide short-term assistance in emergencies
Support reduced fossil fuels – oil and gas projects that capture production emissions through carbon capture.
Phase-out plan is a ‘half-measure’: NDP
A plan to phase out government funding from the fossil fuel sector, including crown companies, was a key requirement of the trust and supply deal the Liberals made with the NDP to support their minority government.
MP Laurel Collins, NDP critic for climate change and the environment, said in a media statement that she is “frustrated” by a Liberal plan she described as a “half-measure”.
“The NDP will continue to push for the immediate elimination of specific fossil fuel subsidies that liberals have omitted — such as the deduction of oil and gas exploration and development costs — and for a plan to end government funding of the fossil fuel sector,” Collins said.
The environmental advocacy group Environmental Defense said today’s guidelines set a “high benchmark” for other countries in the G20 to follow.
But Julia Levin, deputy director of Milieudefensie, said more work needs to be done to close loopholes in the guidelines. She said the government’s investment tax credit for carbon capture will continue to fund oil and gas directly.
“There are exceptions that continue to show the influence of big oil on climate policy decisions,” Levin said.
Energy for a Secure Future, which promotes the natural gas sector, said it does not believe Canada has any inefficient oil and gas subsidies to do away with.
“These projects are economic, so people invest their private capital in them,” said Shannon Joseph, a member of the organization’s advisory board.
Joseph said tax incentives offered to other types of businesses in Canada should also go to the oil and gas sector. She also called on Canadians to remember the role of fossil fuels in our economy and the funding of our social safety net.
“What Canadians need to know about Canada’s energy sector is that it’s a major source of investment and innovation, it’s a major source of jobs and GDP, and the world continues to ask us for its energy,” she said.
