Time is running out for the reckless and inefficient $8.6 billion Canadian oil major support

The clock is ticking on two of the federal government’s promises to make tangible progress in desubsidizing and financing fossil fuels by the end of 2022. But the government continues to provide heavy support to the industry, and while it’s lower than the year above, it’s still finished $8.6 billion.

So what is the delay? Much of it comes down to one tricky word: inefficient.

In 2009, canada promised end so-called “inefficient” fossil fuel subsidies, stating last year that it would 2023.

And yet, six months into 2023, Canada still hasn’t clarified what “inefficient” really means, a term first introduced in the G20 compromise in 2009. Canada too fiance end public funding of fossil fuels, including ending all new support for offshore coal, oil, and gas projects at the end of 2022. But can public financing of fossil fuels within Canada be considered “efficient”?

While some industry players are banding together to profit from the current energy crisis, Canada must not give in to pressure from oil and gas companies to increase production. Instead of using “inefficient” as a loophole to water down commitments, Canada should move quickly to move money from fossil fuels to renewables and head to COP27 in Egypt this November with something to show for it.

A starting point would be for the government to define inefficiency and align all spending with four key directives: support a sustainable economy, create good long-term jobs, respect climate commitments and use taxpayer money in the most efficient way. The Canadian Climate Institute has also called for public spending to reflect climate imperatives.

Support a sustainable economy

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As global economies transition away from fossil fuels, the government must keep Canada’s economy competitive by focusing on industries with strong long-term economic prospects, such as renewable energy.

From 2018 to 2020, Canada provided 14.5 times more financing for fossil fuels than renewables. Investing public money in fossil fuels diverts it from other priorities and risks creating stranded assets that taxpayers may be on the hook for, along with the rising costs of climate change.

The Trans Mountain Pipeline Expansion Project is an example of how these liabilities can take shape. Since the federal government bought the project and replaced it $11 billion on loans to him, construction costs have skyrocketed to $21.4 billionwhich led the Parliamentary Budget Officer to declare it “clearly not profitable.” Despite this, the government approved a new $10 billion loan guarantee for the project, putting even more public money at stake.

Create good long-term jobs.

Instead of supporting the oil and gas companies that are doing record profitsCanada’s government must be people-centric. Almost 200,000 workers are used directly in oil and gas. Many more depend indirectly on the industry. All these workers deserve support so that the energy transition opens more doors than it closes.

A 2021 survey found that 88 percent of oil and gas workers they want training for jobs in the clean economy. And it would only cost half of what the government spent on fossil fuels. in 2020 a train a million workers more than 10 years. Job growth in renewables is far outpacing oil and gas and is expected to rise grow by almost 50 percent over the next eight years as the fossil fuel industry shrinks.

Respect our climate commitments

The government’s climate goals, which include reaching net zero by 2050, are another yardstick by which to assess federal support.

Supporting fossil fuels takes us away from climate goals. Subsidies to reduce emissions from oil and gas production, such as the new Investment tax credit for carbon capture and storage with an estimated cost of $7.2 billion by 2030, it may look positive. But allocating public funds to expensive and unproven technologies is economically risky. These types of measures could prolong the production of fossil fuels, increasing total emissions.

Get the best value for taxpayer money

Given the scale of the climate challenge, every dollar counts. The government must ensure that taxpayers’ money is used in the most effective way to meet social, environmental and economic goals. If a subsidy or tax break is intended to create jobs, those funds should be directed toward promising opportunities in clean, fast-growing industries, rather than jobs, for example, in the oil and gas industry, which are likely to be short-lived. .

With less than six months remaining in the key deadlines to end support for fossil fuels, there is no time to waste. Canadian taxpayers can no longer subsidize the problem: they deserve to fund the solutions.

Laura Cameron is a Policy Analyst in the Energy Team at the International Institute for Sustainable Development working in the areas of fossil fuel subsidies, just transition, and oil and gas policy in Canada. With a master’s degree in indigenous governance and a bachelor’s degree in biology, her interdisciplinary interests focus on environmental justice, participatory filmmaking, and community-led climate action.

emily Boisseau-Bouvier is a climate policy analyst at equiterre. It focuses on climate and energy issues at both the federal and Quebec levels. She has a master’s degree in environmental management and a bachelor’s degree in business administration, specializing in economics and sustainable development. Boisseau-Bouvier it is also involved locally in the preservation of urban biodiversity and in environmental education for young people.