On Monday, Environment Minister Steven Guilbeault released the Liberal government’s framework to end public funding for the oil and gas sector based on a number of criteria.
The government’s framework comes as some argue that Canada does not subsidize oil and gas companies.
The framework claims to deliver on a major climate milestone first pledged by G20 leaders at the 2009 summit to phase out “inefficient fossil fuel subsidies.”
According to the Liberal government, a fossil fuel subsidy is determined to be “inefficient” should it disproportionately benefit the oil and gas industry and if it meets the World Trade Organization (WTO) definition of a subsidy.
The WTO defines a “subsidy” as a “financial contribution by a government or any public body within the territory of a member which confers a benefit.”
The Macdonald Laurier Institute’s Senior Fellow and Director of the Energy, Environment and Natural Resource Program, Heather Exner-Pirot, told True North that the government’s definition was overall a “balanced framework.”
“In general, this a balanced framework that rejects some of the most ideological approaches to defining fossil fuel subsidies advanced by eNGOs, such as disallowing supports that support remote communities to access affordable energy,” said Exner-Pirot in an emailed statement.
However, some have not taken kindly to the federal government’s proposal. Last week, Conservative Energy Critic MP Shannon Stubbs argued that any proposed regulation by the Liberal government would harm the viability of hundreds of thousands of jobs and that Ottawa failed to provide any viable definition of what an “inefficient subsidy” means.
True North reached out to Stubbs’ office to get her reaction to today’s framework but did not receive a response by the deadline given.
The Canadian Association of Petroleum Producers also hit back at the federal government, saying that tax deductions did not meet the definition of subsidies.
Guilbeault’s announcement also laid out a series of exemptions for the framework, including supporting Indigenous economic participation in fossil fuels.
“The fact that they explicitly mention they can support Indigenous participation in fossil fuel activities is very positive as that industry has been a huge driver of economic reconciliation. It also sets the stage for a national loan guarantee program to support oil and gas projects, whereas the Canadian Infrastructure Bank currently excludes such opportunities,” said Exner-Pirot.
