As I celebrate Earth Day my thoughts turn to the oil and gas industry.
Despite repeated promises since 2009 by successive prime ministers to
phase out fossil fuel subsidies, the oil and gas industry continued to be subsidized in 2020 by the Trudeau government to the tune of $18 billion. By contrast, the government has allocated just $1.5 billion per year over 10 years to curb carbon emissions as part of the federal Climate Action Plan. The government cannot continue with this schizophrenic policy of supporting an industry that is by far the largest
emitter of greenhouse gases of any sector in the Canadian economy while at the same time, expect to meet their emission reduction targets in 2030 and beyond. Perversely, some of these taxpayer subsidies cover costs that should be borne by the industry. As an example, the government will spend $1.7 billion dollars to seal some of the thousands of abandoned oil and gas wells that are scattered across Saskatchewan, Alberta and B.C. This relieves the companies of the environmental liabilities and costs that drilled them which are contrary to the “polluter should pay principle”.
Subsidies also allow the industry to lower the costs of doing business through government intervention without the effort of industry-driven initiatives. This is not a sustainable business model that justifies continued injection of taxpayer dollars, especially for something that is both more expensive to produce (even with subsidies) and deemed to be more polluting, compared to global competitors. The oil and gas industry should be left to stand on its own and have its fate determined by market forces. Having said that, the government should ensure that adequate and sustainable funding is in place to support oil and gas workers that are either laid off or choose to leave due to an uncertain future, as the world transitions to a low carbon economy.
Gary Markotich
Napanee