Oil And Gas Industries vs. International Climate Agreements

Which Is It? Subsidies For The Oil And Gas Industries, Or A Commitment To Confirmed International Climate Agreements?  Will The Real Canada Please Stand Up?

Presenter: John Pope

October, 2018

The International Institute for Sustainable Development has released a report on Canada’s subsidies to the oil and gas industries.  This report lists the fiscal supports for the oil and gas industry provided through public revenues. https://www.iisd.org/publications/canadas-federal-fossil-fuel-subsidies-2020

This briefing lists 1. Several Income Tax Act provisions and income tax regulations that allow fossil fuel companies to deduct certain expenses from their income.  2. Natural Resources Canada (NRCan) programs that support innovation in the oil and gas industry, Energy Innovation Program, namely the Clean Energy Technology component’s Carbon Capture, Use and Storage Stream, and the Oil and Gas Clean Technology component.  3. Sustainable Development Technology Canada (SDTC), an arm’s length government agency, also supports innovation in the fossil fuel industry.

The report concludes: “[These costs] should be paid for by market participants rather than the government. Government taking on costs that should be borne by industry provides an incentive for industry to increase activities [and increase emissions] as it reduces industry’s costs.”

“…these subsidies total several hundred million dollars over 2016–2018 based just on those that can be immediately quantified. Additionally, there are many more subsidies that cannot be quantified due to a lack of available data but could drive this figure much higher. The inability to quantify these subsidies underscores the need for greater transparency and policy coherence from the federal government as it advances its stated commitment to reduce GHG emissions.” [my emphasis]

In Canada, the oil and gas sector accounted for more than a quarter of national emissions in 2016.  Since 1990, the sector’s emissions have increased by 70 per cent.

At the same time, Canada is committed to fulfilling its obligations to the Paris Climate Agreement in 2015.  Canada needs to lower emissions by 187 million tonnes to meet the Paris Agreement targets.  https://www.cbc.ca/news/politics/canada-paris-targets-2016-1.4624480 [Apr 18, 2018].  In addition, Canada adopted the Pan Canadian Framework for national carbon pricing in 2016.

The Trudeau government is well aware of the environmental commitments it has made:  “We confront an urgent challenge—a challenge that requires us to act quickly. Without immediate action, it will affect how and where we live, our quality of life, and our collective prosperity.”  -The Honourable Catherine McKenna, P.C., M.P., Minister of Environment and Climate Change: “Canada And The Clean Growth Century”  https://www.canada.ca/en/services/environment/weather/climatechange/climate-action/federal-actions-clean-growth-economy/introduction.html

The Canadian government’s subsidies to the oil and gas industries, and Canada’s firm commitment to national and international agreements to reduce carbon emissions are in direct conflict with each other. 

Let’s discuss.


How will this ultimately be resolved? 

Does owning a pipeline make it harder for the government to reduce emissions and meet commitments?

Will the government meet its emissions targets?

Why don’t we hear more about these subsidies from main stream Canadian reporting?  (See the Huff Post article below)
Has the Canadian government ever said ‘no’ to the oil and gas industry when they have asked for ‘help’?

If the tar sands are to be closed by federal decree, will Alberta sue the feds, and/or secede from Canada?

What are the consequences of withdrawing from or not meeting commitments to an international agreement such as the Paris Agreement?

Additional Information
The International Institute for Sustainable Development (IISD)“Our mission is to promote human development and environmental sustainability. We do this through research, analysis and knowledge products that support sound policy making. Our big-picture view allows us to address the root causes of some of the greatest challenges facing our planet today: ecological destruction, social exclusion, unfair laws and economic rules, a changing climate.  IISD’s staff of over 120 people, plus over 50 associates and 100 consultants, come from across the globe and from many disciplines. Our work affects lives in nearly 100 countries.”  https://www.iisd.org

The Federal Liberal Party’s campaign message in 2015:  “[T]he environment and the economy, they go together like paddles and canoes. Unless you have both, you won’t get to where you are going, because you can’t have a strong economy without a healthy environment.”  -Justin Trudeau  https://www.liberal.ca/realchange/real-change-a-new-plan-for-canadas-environment-and-economy/

Canada’s carbon pricing plan (2016): “[The] plan includes a pan-Canadian approach to pricing carbon pollution, and measures to achieve reductions across all sectors of the economy.”  https://www.canada.ca/en/services/environment/weather/climatechange/pan-canadian-framework/climate-change-plan.html

“Today, we confront an urgent challenge—a challenge that requires us to act quickly. Without immediate action, it will affect how and where we live, our quality of life, and our collective prosperity.  That challenge is climate change.”: https://www.canada.ca/en/services/environment/weather/climatechange/climate-action/federal-actions-clean-growth-economy/introduction.html

“The Overseas Development Institute, a U.K. think tank, published a report last month showing Canada leads the G7 in subsidies for oil and gas industries as a share of the country’s economy.”  https://www.huffingtonpost.ca/2018/07/03/canada-oil-gas-subsidies-g7_a_23473843/