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The 10-billion dollar elephant in the room

A report released this week ranked Canada lowest among G7 nations in phasing out support for oil and gas production.

As leaders of the world’s richest countries gather at the G7 summit today, Canada’s prime minister intends to push for a commitment on climate change in the meeting’s final statement.

But the government’s decision to buy the Trans Mountain pipeline project, which will allow for accelerated expansion of the emissions-heavy oil sands industry, and its slow progress on a 2009 pledge to eliminate fossil fuel subsidies raise questions about Canada’s own commitment to cut emissions.

Meanwhile, an elephant occupies the room wherever Canada’s fossil fuel subsidies are discussed: the support provided by Export Development Canada (EDC) to the oil and gas sectors.

The scale of this support is impressive – EDC’s reported total business volume in oil and gas was $10.4 billion in 2017, $12 billion in 2016 and $8.4 billion in 2015.

This outweighs by far the other forms of federal support routinely included in estimates of Canadian fossil fuel subsidies. An oft-cited estimate made in 2015 by the International Institute for Sustainable Development (IISD) put that support at $1.6 billion a year.

The IISD and several environmental organizations released a scorecard this week, examining G7 nations’ progress on ending fossil fuel subsidies. It ranked Canada lowest among all G7 nations in phasing out public support for oil and gas production. It also found that Canada is one of the least transparent nations on fossil fuel subsidies.

The government is currently conducting a review of non-tax measures benefiting fossil fuel companies. It began the study last year, after the Auditor General reported that the government had yet to define fossil fuel subsidies or identify qualifying measures. This March, the trade minister confirmed that EDC support is included in the review, which was scheduled to conclude in the spring.

We’ve since learned that the results of that review may not be published. A government spokesperson informed Above Ground this week that the review is not yet complete, and that a decision has not been made whether the results will be made public.

It’s critical that Canadians be informed about the steps our government takes to fulfill its international commitment on fossil fuel subsidies. The government should promptly conclude its review, publish the results and begin the work of phasing out all forms of financial support to companies directly implicated in the climate crisis.