We often hear that we need to extract oil and ship it overseas in order to support “Canadian jobs and the Economy”  I thought I would provide in this post a few links here to some references worth noting on the subsidization of the fossil fuel industry in Canada . GF

1. In July 2014, The Pembina Institute published a report titled: Fossil Fuel Subsidies: An analysis of federal financial support to Canada’s oil sector.
Published July 10, 2014 by Sarah Dobson, Amin Asadollahi

“The oil industry provides economic benefits in the short and medium term, but more permanent external benefits are less certain and are countered by the sector’s environmental impacts. This paper provides an analysis of federal financial support for the oil sector as well as recommendations on policy options. It recognizes progress made by Canada in phasing out certain subsidies, while noting that remaining federal direct and indirect support measures are largely inefficient and unnecessary.”

2. Fossil Fuels – At What Cost? Government Support for Upstream Oil Activities in Three Canadian Provinces: Alberta, Saskatchewan and Newfoundland & Labrador

Abstract:   

“The study finds that Canadian federal and provincial governments provided $2.84 billion to support oil production in 2008. The comprehensive report uses an internationally agreed definition of subsidy adopted by the World Trade Organization to determine the value of oil production subsidies in Alberta, Saskatchewan and Newfoundland & Labrador. This detailed analysis is the first of its kind in Canada and allows appropriate comparisons of subsidies with other countries.

The report estimates the impact of existing subsidies over the next 10 years. The study forecasts the cost of subsidies to governments would double by 2020. The report estimates a 2 per cent rise in Canada’s greenhouse gas emissions by 2020 and a projected rate of growth for the oil production industry.

As a member of the G20, Canada has recognized that efforts to deal with climate change, wasteful energy consumption, market distortions and barriers to clean energy investment are undermined by inefficient fossil-fuel subsidies and has pledged to phase out its inefficient fossil-fuel subsidies over the medium term. The federal and provincial governments have already made progress in reducing the level of subsidies and incentives to the oil production industry, though a number of significant subsidies remain and new ones have emerged.

According to the study, the federal government’s share of subsidies in 2008 was $1.38 billion. Within the provincial governments, Alberta was estimated at $1.05 billion, Saskatchewan at $327 million and Newfoundland & Labrador at $83 million. A total of 63 subsidy programs were identified. In most cases, the subsidies were intended to increase exploration and development through a mix of tax breaks and royalty reductions.”

3.  2012 Fall Report of the Commissioner of the Environment and Sustainable Development ( Office of the Auditor general of Canada)

What we found

• The government has a broad range of programs that provide support to the fossil fuel sector. That support can be grouped into two main types: direct spending through various programs; and tax expenditures under the Income Tax Act, which represent the majority of financial support.
• Based on the data that the government provided to us, the majority (97 percent) of direct spending to support the fossil fuel sector was for research and development, more than half of which related to clean technology. Other direct spending went to economic development activities. Total direct spending amounted to $508 million over the fiscal period 2007–08 to 2011–12. Extended over 30 years, this would represent a significant decline in direct spending support to the sector since the 30 years preceding our 2000 study of government support for energy investments.
• The costs of tax expenditures are not as easily determined as are direct expenditures, due to limitations in data availability and the methodological challenges of developing cost estimates.
• The estimated costs of tax expenditures that Finance Canada was able to attribute specifically to the fossil fuel sector amounted to $1.47 billion over the fiscal period 2006–07 to 2010–11, primarily relating to the accelerated capital cost allowance for oil sands projects. This tax expenditure is being phased out over four years. A number of other tax expenditures are also being phased out over varying time periods. The estimated costs of tax expenditures attributable to the oil and gas, mining, and clean energy sectors as a whole amounted to about $2 billion, accounted for largely by deductions for flow-through shares. Finance Canada was unable to estimate the proportion of this support that was attributable specifically to the fossil fuel sector. For other tax expenditures, such as the accelerated capital cost allowance for mining and Canadian exploration expenses, the Department was unable to provide an estimate of the costs.”

5. Let’s cut government fossil fuel subsidies and free up billions for more productive investment ( from the Vancouver Observer, November 18,  2014)

This week in London, the Overseas Development Institute launched a new report on fossil fuel subsidies in G20 countries. The report encourages national and sub-national governments to stop subsidising wasteful and inefficient fossil fuel extraction and use, and to move towards more sustainable sources of long-term economic growth. It describes federal and British Columbia government subsidies to the fossil fuel sector as a “reckless use of public funds.” In addition to significant tax subsidies for domestic natural gas and coal exploration, Canadian taxpayers are also subsidising fossil fuel exploration abroad, via financing from Export Development Canada which provided approximately $3.2 billion in financial support for overseas fossil fuel exploration projects between 2012-14.