The Fantasy of Fossil Fuel Subsidies – Greg McLean, MP – Government of Canada

On July 24, Environment Minister Steven Guilbeault announced his intention to eliminate so-called inefficient fossil fuel subsidies.

This Government never takes a break on their misinformation narrative. Like many of you, the first question that came to mind when I heard Canada’s Minister of the Environment proclaim ‘the end of fossil fuel subsidies’ was – “what are you talking about?”

We’ve seen repetitive misinformation from this Government and their parliamentary allies for some time – and I have been punching big holes in these absolute fantasies put forth by the Liberals on this matter in the House of Commons.

With the billions of dollars of taxation paid to governments by the oil and gas industry, and its contribution to government revenues exceeding any other industry – make sure you raise an eyebrow when any charlatan tries to string together a narrative that this industry is ‘subsidized’.

Here are some highlights:

• Canada’s social safety net would be much less robust without the direct contribution of our resource industries. Last year, this direct contribution to government (through corporate taxes, royalties, and licensing alone) amounted to approximately $22 Billion. That’s not including the income taxes workers in the industry paid the government, nor the taxes collected from carbon, excise and sales taxes.
• Canadians also benefit from a currency that is supported by an export commodity that alone accounts for over $100 Billion of trade surplus with our largest trading partner. Without this balance, our dollar would trade far below its current rate. That means that everything we import – and we import about half of what we buy – would cost a lot more Canadian dollars, so – everything would cost more, and our inflation rate would be much higher.
• I asked for disclosure of the government funding received by the ten witness groups that the governing coalition relied upon when we studied this report. Much of that witness input is completely specious. These groups have been granted over $150 million from this government over the past eight years. Some groups were created just for this input; others have seen their grants increase markedly. Let me point out clearly that this government has their well-paid propagandists working hard for them. It’s a circular economy!

Luckily for the government, we just studied this very matter at the House of Commons Standing Committee on the Environment. But I punched holes in the Committee deliberations on the propagandized witness testimony they did receive. As much as I try to add value to these parliamentary committee reports – with, you know, things like data that corroborates or ridicules what some witness may boldly state – the other parties would have little of that input.

The report from the Standing Committee on Environment and Sustainable Development:  “The Government of Canada’s Planned Phase-Out of Fossil Fuel Subsidies and of Public Financing of the Fossil Fuel Sector.”

• I direct you to the government members’ 20 recommendations. I advise that you will find them ‘mealy-mouthed’.  Frankly, the report would have been marginally productive if parliamentarians could have arrived at definitions of ‘fossil fuel subsidy’ and ‘inefficient’.
• Second, read the Conservative Party of Canada’s dissenting opinion, the data for which comes from my office. We make substantive recommendations – the most pertinent being that the volume of oil consumed in Canada that is not produced in Canada (we import 674,651 barrels/day, of the roughly 1.6 million barrels/day that we use, or about 42%) provide very little ‘economic rent’, as opposed to Canadian-produced oil and gas. It seems as though the foreign-supplied resources have the actual subsidy.

Also read Tristin Hopper’s story in the National Post: ‘Oil and gas subsidies’ aren’t really a thing.

The Silver Lining

Let me put a silver lining on this cloudy announcement from the Minister of the Environment. For the first time – he has acknowledged that the government will be applying for international credits under Article 6 of the Paris Accord, a common sense solution that we have pushed and the government has avoided until now. This should open the door to our LNG developments – if we can get the regulatory roadblocks out of the way. It’s always been obvious that Canada was not going to meet any climate commitments without this measure, and – worse still – the world would continue to produce more CO2 while Canada sat on its hands.

 

But, Minister – what took you so long to figure it out?

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