Report says it's time to end subsidies to fossil fuel companies

An oil pipeline stretches across
the landscape

Last week the Climate Action Network released a report on the billions of dollars in tax breaks that the Government of Canada hands out to oil, coal and gas companies each year -- and the problems this poses for attempts to address our changing climate and transition to a greener economy.

From the report, Fuelling the Problem:

By subsidizing fossil fuel producing companies the government is encouraging faster production and facilitating the rapid expansion of large fossil fuel projects such as the Alberta tar sands, Canada’s fastest growing source of greenhouse gas pollution.

Globally, artificially low costs of fossil fuels have been shown to encourage wasteful consumption, distort energy markets, and allow for increased greenhouse gas pollution, thereby fueling the climate crisis. Subsidizing oil extraction also makes investments in oil more attractive compared to lower carbon, lower risk alternatives, thereby increasing the lock‐in of economies into fossil fuels.

In a time of fiscal constraint, the federal government could generate hundreds of millions of dollars in extra revenue by ending unfair tax breaks to some of the richest companies in the world. Eliminating handouts to oil and gas corporations operating in Canada would also help the country take a step towards a cleaner energy economy.

So why no action? Using leaked government memos, the report outlines a months-long strategy to downplay its responsibility to phase out fossil fuel subsidies, something all G20 countries agreed to do in 2009. According to the report, the Green Budget Coalition (in which Nature Canada is a member) has identified over $900 million in tax breaks to the fossil fuels industry that could be eliminated in the March 2011 federal budget.

Changes Weakening Environmental Protection Laws Passed

On July 8, Liberal and independent senators voted for the removal of changes weakening environmental protection laws, namely the Canadian Environmental Assessment Act (CEAA), amongst other sections of Bill C-9 they believed did not belong in the bill. Unfortunately, yesterday, Bill C-9 was passed after a 48 to 44 vote - bad news for environmental protection because the sections, that were removed by the Senate finance committee, have now been reinstated and the bill received royal assent last night.

On a more positive note, 'turning the CEAA amendments into a public and political issue is a great achievement which demonstrates the collective influence environmental organizations are capable of' said Mr. Stephen Hazell of Ecojustice. And this work will, of course, continue!!

Liberal Senators Vote against Amendments to Weaken Environmental Protection Laws

The 2010 budget implementation bill, the Jobs and Economic Growth Act (Bill C-9), proposes changes that would gut Canada’s environmental protection laws. If passed, Bill C-9 would significantly weaken the Canadian Environmental Assessment Act (CEAA) in various ways - one of which allows projects to be exempted from environmental assessments!

After months of concern and efforts to remove these changes from the bill, yesterday, some Liberal and independent senators in the senate finance committee voted to remove some of the sections included in the budget. It was agreed amongst them that these sections did not belong in the bill because they are not related to implementing the 2010 budget. Besides weakening the CEAA, other sections proposed for removal dealt with Canada Post, Atomic Energy of Canada Ltd. and how financial services are taxed.

The bill has now been passed onto the full senate for a vote that will likely take place on either Monday or Tuesday. It is likely that the Conservative senators will vote to have the removed sections re-installed. And although Liberal and independent senators outnumber the Conservatives, it seems as though they haven’t been able to get enough senators to stop the bill from being passed.

Still, these senators have given us some hope that Bill C-9 will do what it is meant to - which does not include weakening Canada's environmental protection laws. We hope that all senators will attend this vote and consider the true impacts of their decisions on our wildlife, our natural legacy and our country.