Federal subsidies to oil and gas companies tripled in 2020, report finds

Though PM Trudeau promised to end oil and gas subsidies, taxpayer payouts to the industry more than tripled last year, rising from $600 million to $1.9 billion, says a report by the International Institute for Sustainable Development.

CNC news with Canadian Press files

OTTAWA — A new report suggests federal subsidies to Canada's oil patch has tripled last year from the year before.

Canada first promised to eliminate the subsidies as part of a G20 commitment in 2009, and Prime Minister Justin Trudeau more recently set a target date of 2025 to do it.

But a report from the International Institute for Sustainable Development shows the Trudeau government spent at least $1.9 billion in direct aid to the traditional energy sector last year, up from $600 million in 2019.

More than three-quarters of that — $1.5 billion — was to pay for abandoned oil wells in Alberta, Saskatchewan and British Columbia.

Abandoned wells are a significant source of methane emissions. Canada's most recent emissions inventory suggests in 2018 270,000 tonnes of greenhouse gas emissions came from them. However several studies suggest there are more abandoned wells than we think, and they emit more methane than we count.

Another $320 million was aid to Newfoundland and Labrador's offshore oil industry, which was hit hard last year by the pandemic and the oil price collapse in the spring.

The IISD report doesn't include federal loans to oil and gas companies because it's not clear how much they will ultimately cost taxpayers. It also excludes a $750-million subsidy to pay oil and gas companies to meet new federal methane standard because a lot of that funding is supposed to repayable.

Environment groups welcomed the orphaned oil well program last spring, believing it to be a better way to help the sector than subsidizing oil production. But Corkal said taxpayers shouldn't be on the hook for cleaning up orphaned wells permanently.

 

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