Paying to Poison the Planet

By Ray Rivers

August 6th, 2019

BURLINGTON, ON

Ever since I can remember environmentalists have been demanding an end to government subsidies for the oil and gas sectors. And ever since I can remember governments have been ignoring the issue, or have been in denial. And those not in denial keep making promises to end the flow of cash to the energy giants, but never actually do.

Sustainable for who?

Canada by everyone’s calculations leads the G7 when it comes to doling out cash to the fossil fuel industry. And while the International Institute for Sustainable Development (IISD) puts the direct value of Canadian generosity to big fossil at $3.3 billion per year, the International Monetary Fund calls it more like $50 billion after all the externalities are included.

Mr. Trudeau, recognizing the inappropriateness of these subsidies, and echoing long standing Liberal policy, promised during the last federal election that he would eliminate this gravy train. Then he made a similar promise when his government purchased the TransMountain (TMX) pipeline. The NDP, like the Liberals, utter wishful thoughts on the matter, but the national reality just won’t let that happen – at least not yet.

Canada’s is a diverse economy, and three or four provinces rely heavily on the oil and gas sector for their standard of living. And demand for petroleum is still strong. So ending the subsidies would appear as an attack on those provinces and the national economy. Besides there is still some small chance that the Liberals or NDP might win some seats in the prairies.

The Greens are probably the only party which could be counted on to end the freeload, though the probability of them becoming government in the near future is pretty slim – so it’s an easy promise to make. Maxime Bernier’s fledgling People’s Party shuns all subsidies and has criticized the most recent federal gift to the oil execs. But then given current polling he has even a lesser chance of forming government than the Greens, let alone keeping his own seat.

The sign says it all.

Andrew Scheer’s Conservatives are the outliers. Despite criticism of Trudeau on the latest handout to the industry, nobody should doubt where Scheer stands. He represents oil producing Saskatchewan, after all, and like his former boss, Alberta’s Harper, can be counted on to do the bidding of the oil giants.

In fact his recent policy paper on climate change and the environment would see even more subsidies go out to fossil fuel firms presumably looking for cleaner ways of burning even more fossil fuels. He stands shoulder to shoulder with big oil, regurgitating their positions on the new fuel standard and environmental assessment. And his opposition to the carbon tax is all about protecting the oil producers.

But if climate change is the most important issue facing humanity this century, then fossil fuels will have to go, and fossil fuel companies will have to shut down eventually. And alternatives need to be available and put on an even footing financially. According to the IISD, globally, the fossil fuel fellows get four times as much in handouts ($400 billon) as does the worldwide renewable energy sector.

Bernier is dead wrong. Subsidies are an essential part of modern government. They are as essential as fair taxation. If government’s role in society is to provide leadership then it must use all of its tools to tip the scales and nudge us in the right direction. For example, the recently announced federal electric vehicle rebate program helps to level the costs of purchasing a non-polluting vehicle.

The Hamilton skyline on a difficult day.

Subsidies to the oil industry are wrong headed and must and will end. Otherwise how do we move society off oil and gas and onto cleaner electric or hydrogen. The federal carbon tax is expected to raise $2.3 billion this year, all of which will be returned to the public. And that is still at least a billion shy of what the Canadian taxpayers are giving to the oil companies, so they can compensate their oil exec’s with fat salaries, bonuses and stock options. And their product is the poison changing our climate.

Ray Rivers writes regularly on both federal and provincial politics, applying his more than 25 years as a federal bureaucrat to his thinking.  Rivers was once a candidate for provincial office in Burlington.  He was the founder of the Burlington citizen committee on sustainability at a time when climate warming was a hotly debated subject.   Ray has a post graduate degree in economics that he earned at the University of Ottawa.  Tweet @rayzrivers

Background links:

Subsidies for Fossil Fuels –    More Subsidies –    Canadian Subsidies –    Highest Subsidizes in G7 –