THE FALLACIES OF FOSSIL FUEL SUBSIDIES

Report lists Indigenous inclusion and funding for clean technology as support for ‘fossil fuels’

Once a month, an activist group comes forward with a report, grasping at straws, trying to prove that somehow Canada’s natural gas and oil industry is heavily subsidized. They bundle in all sorts of government spending and call it a ‘subsidy’.

 

This month, we have noted anti-development organization, Environmental Defense, releasing a ‘report’ claiming t the government subsidized the natural gas and oil sector to the tune of $18 billion in 2020.

 

This eye-popping number caught the attention of national media outlets. Unfortunately, it looks like no one bothered to read past the headline. Because if they did, they would realize.

 

Most of the included items are tax measures designed to create jobs and opportunities and are only available when companies spend significant amounts of money in a province. These are not subsidies. True subsidies are designed to confer an unfair advantage or benefit that other sectors do not have.

 

It’s worth breaking down the types of funding this group counted to get to $18 billion.

 

First off, this report labels funding for Indigenous electrical generation in remote communities.

 

They also counted $6 million for Indigenous economic participation in oil and gas related infrastructure projects in Alberta and BC and $2.37 million in funding for a diesel generating station in Nibinamik First Nation – that provides essential electrical generation for their community.

 

The group also counts $300 Million for the Canadian Emergency Wage Subsidy (CEWS) into the figure. This is a program that directly funded workers and kept many people employed through the worst part of the pandemic in industry. The federal government recently commented on this saying that CEWS is “a pandemic policy measure meant to keep unemployment down — doesn’t target a specific sector.”

 

Environmental Defense also made sure to include programs that support direct emissions reductions in the upstream and in Newfoundland’s offshore industry. The report claims that funds used for hydrogen or carbon capture are illegitimately spent, meaning that Environmental Defense is now calling for a decrease in spending on vital technologies and projects that reduce emissions in Canada.

 

Ironically, they are campaigning against emissions reductions, in favour of the status quo.

 

This report is nothing but another attempt by anti-development organizations to cast aspersions on Canada’s natural resource industries, and advance Environmental Defense’s own anti-development goals.

Reports like this aren’t looking for pragmatic solutions. They’re simply throwing everything they can at the wall and hoping that the big number associated sticks.

 

In fact, the entire narrative activist groups have created on oil and natural gas production being heavily subsidized does not exist – which has been recently confirmed by our own federal government.

 

According to a briefing note from Natural Resources Canada (NRCAN): “Given the nature of NRCAN’s direct spending (i.e. innovation and environmental performance), the department does not provide any inefficient fossil fuel subsidies that encourage wasteful production or consumption of fossil fuels.”

 

And, in recently speaking with the National Observer, Federal Minister of Infrastructure and Communities, Catherine McKenna stated “we eliminated all of the fossil fuel subsidies at the federal level.”

 

Organizations like Environmental Defence, have every right to advocate for their cause, but we would encourage them to do so with the facts.

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