For Immediate Release: June 14, 2018

Statement on Canada’s commitment to enter into a peer review of its fossil fuel subsidies

Ottawa, Ont. – Sunlight really is the best disinfectant. We welcome Canada’s decision to enter into a peer review process of its fossil fuel subsidies with Argentina.

This is a required step in fulfilling Canada’s G7 commitment to eliminate inefficient fossil fuel subsidies by 2025, and Canada has a long way to go. Canada must ensure that this review allows sunlight to reach the darkness that shrouds Canada’s fiscal supports for fossil fuel companies. This is particularly true given Canada’s recent decision to buy-out Kinder Morgan’s Trans Mountain Expansion Project, opening the door to billions in additional, undisclosed subsidies for oil and gas companies.

Finance Minister Bill Morneau and Environment and Climate Change Minister Catherine McKenna have a clear mandate to phase out Canada’s fossil fuel subsidies. In a recent scorecard comparing G7 progress on ending government support for fossil fuels, Canada ranked second last on transparency. Canada does not publish specific reports on fiscal supports for fossil fuels and has not defined what it considers to be an inefficient subsidy. Last year the federal government stonewalled Canada’s Auditor General when he attempted to audit Canada’s progress in reforming fossil fuel subsidies.

To ensure real transparency, the peer review should:

  • Include a commitment from Canada to not introduce new supports to fossil fuels
  • Adopt a definition for “subsidy” consistent with that of the OECD
  • Include all federal tax provisions available to fossil fuel ventures
  • Include a record of past reforms and a specific roadmap for achieving the 2025 phase-out deadline
  • Disclose the negative externalities, such as the growing costs of climate change to the economy and public health, of existing tax provisions
  • Define “inefficient” subsidies, as per the Finance Minister’s mandate letter
  • Include a timeline and the sequencing for phasing-out specific  federal fossil fuel subsidies, starting with subsidies with particularly negative social and/or environmental impacts
  • Ensure that mechanisms with the stated aim of assisting the energy transition do not support fossil fuel production and consumption, including a catalogued list of federal research and development funding that supports the oil and gas industry (such as clean innovation funding and energy efficiency measures for oil and gas companies); and
  • Include an explanation of how fossil fuel subsidy reform will contribute to the Paris Agreement’s goals

Canada should use its position as chair of the G7 to encourage all G7 nations to complete peer reviews of their fossil fuel subsidies by no later than 2019 and produce a roadmap to ensure the phaseout of fossil fuel subsidies by 2025. Minister of Natural Resources Jim Carr should also establish a standing agenda item in G7 Energy Ministerial meetings to share lessons learned on the fossil fuel subsidy phase-out and to track progress towards the 2025 deadline, with support from the OECD, IEA and IMF.

#StopFundingFossils is a coalition of environmental groups that have come together to ensure Canada fulfills and accelerates its commitment to phase out fossil fuel subsidies by 2025.

About CLIMATE ACTION NETWORK (CAN-Rac) (climateactionnetwork.ca): Canada’s primary network of organizations working on climate change and energy issues, CAN-Rac is a coalition of more than 100 organizations operating from coast to coast to coast. Our membership brings environmental groups together with trade unions, First Nations, social justice, development, health and youth organizations, faith groups and local, grassroots initiatives.

About ENVIRONMENTAL DEFENCE:(environmentaldefence.ca): Environmental Defence is Canada’s most effective environmental action organization. We challenge, and inspire change in government, business and people to ensure a greener, healthier and prosperous life for all.

About ÉQUITERRE (equiterre.org): In 2018, Équiterre is the largest and most influential environmental organization in Quebec, with over 180,000 supporters, 22,000 membres, 200 volunteers and 40 employees. Équiterre offers concrete solutions to accelerate the transition towards a society in which individuals, organizations and governments make ecological choices that are both healthy and equitable. By 2030, Équiterre, in partnership with local communities, will have contributed to the development of public policies as well as civic and business practices that lead to a low-carbon economy and an environment free of toxic substances.

About INTERNATIONAL INSTITUTE FOR SUSTAINABLE DEVELOPMENT (iisd.org): The International Institute for Sustainable Development (IISD) is an independent think tank championing sustainable solutions to 21st century problems. Our mission is to promote human development and environmental sustainability. Through research, analysis and knowledge sharing, we identify and champion sustainable solutions that make a difference.

About OIL CHANGE INTERNATIONAL (priceofoil.org): Oil Change International is a research, communication, and advocacy organization focused on exposing the true costs of fossil fuels and facilitating the coming transition towards clean energy.


For more information or to arrange an interview, please contact:

Barbara Hayes, Environmental Defence; 613-255-5724; bhayes@environmentaldefence.ca