Canadian oil & gas companies just posted huge profits. Let’s recap what was announced, and why it matters. (Hint: we’re in a climate emergency!)
Canada’s four biggest oil and gas companies, accounting for nearly all production in the oilsands, recently released their second quarter financial results, known as “Q2,” which looks at April through June.
Profits, or “net earnings,” of the four were as follows:
- Suncor with $3.996 billion
- CNRL (Canadian Natural Resource Limited) $3.502 billion
- Cenovus $2.432 billion
- Imperial Oil $2.409 billion
Those are huge numbers, totalling over $12 billion altogether!
It’s a major increase from a year ago. In Q2 of 2021, Suncor net earnings were $868 million, CNRL’s were $1.551 billion, Imperial Oil with $366 million, and Cenovus at $1.365 billion.
Those are still huge profits, totalling $4.15 billion, but that pales in comparison to this year, as the war in Ukraine and increased energy demand have driven prices way up.
Record oil profits, and giant hand-outs
At the same time, these companies are blocking action on climate, arguing with the federal government over their claims they can’t meet their 2030 emissions reduction targets, and that they need more money from government to meet those targets at a later date.
Governments in Canada already give huge subsidies to the oil & gas industry (see our running list of federal subsidies). And even while raking in profits, the industry is asking for even more.
Is this fair? Does it make any sense during a climate emergency? Should investors in an industry that is a primary driver of the climate crisis be raking in the dough, while heatwaves wreak havoc around the world, from North America, to Europe, to the Middle East?
A windfall tax for Canada
This is why we have been calling for a windfall tax on oil & gas profits. A windfall tax is a higher tax rate applied to profits made as a result of a sudden unexpected change, often due to geo-political disturbances like war, regime change, or a natural disaster.
Other countries, notably in Europe, have implemented windfall taxes on energy companies.
And the Government of Canada? They say they don’t plan on it. Instead, they are open to giving the industry more time to meet their climate targets, and the government still hasn’t followed through on its very old promise of eliminating subsidies to the industry.
This is not okay. A windfall tax could be collected to help pay for climate investments and reduce cost of living (through improvements like energy efficiency upgrades and public transit). Canada could also eliminate subsidies, and a binding cap on emissions from the oil & gas industry can be implemented without delay.
Oil & gas companies are lobbying hard and launching campaigns to convince us that they can’t change quickly, that we’d be lost without them. But the truth is we can rapidly reduce our reliance on fossil fuels, and have thriving, low-emissions communities with good quality of life.