Statement by Emilia Belliveau, Energy Transition Program Manager, on findings from a new Parliamentary Budget report
Ottawa | Traditional, unceded territory of the Algonquin Anishinaabeg People – New analysis from the Parliamentary Budget Office shows that putting in place a tax on the massive profits of oil and gas companies could bring in billions of dollars. At a time when people across Canada are struggling with the cost of living and communities are dealing with the impacts of climate disasters, governments must hold big polluters accountable for the damage they are causing.
Today, the Parliamentary Budget Office (PBO) released its assessment that a windfall profits tax on fossil fuel companies could generate $4.2 billion, based on 2022 profits. Modeled on the Canada Recovery Dividend that the federal government applied to the banking and insurance sectors’ excess profits in 2022, the PBO’s analysis extends the 15% tax on profits over $1 billion to seven qualifying oil and gas companies.
From the housing crisis to inflation, most people living in Canada are feeling the pinch, but not the fossil fuel companies and their executives, who are benefitting from inflationary prices.
Fossil fuels are by far the largest contributor to climate change. The oil and gas industry bears disproportionate responsibility for causing the climate crisis, which has already cost communities and the economy billions. As the impacts of climate change become increasingly severe, the cost of addressing the crisis will skyrocket. From recovery and rebuilding efforts in the wake of extreme weather events, to the additional burden climate change adds to healthcare and other systems, it’s evident that immediate and decisive action against these major polluters is not only a moral imperative but an economic necessity.
It’s time to make polluters pay. The Government of Canada should move ahead with the proposal to implement a windfall tax on the fossil fuel industry’s excess profits.
- The PBO analysis was prompted by Motion-92, Climate Crisis and Affordability, introduced by Member of Parliament Mike Morrice.
Only seven oil and gas companies would qualify for the tax, reflecting the concentration of wealth within a small segment of the oil and gas industry. Though the PBO analysis does not name the specific companies, based on last year’s profits this list would likely include Canadian Natural Resources Ltd., Suncor Energy Inc., Imperial Oil Ltd., Cenovus Energy Inc., and Enbridge Inc.
Of every dollar of inflation over the last two years in Canada, 25 cents of that has gone to oil and gas and mining extraction profits. In 2022, the five biggest Canadian oil and gas companies made combined profits of $38.3 billion. And that’s after they paid shareholders $29 billion in increased dividends and share repurchases.
Larger windfall taxes have been applied to excess profits of oil and gas companies operating in the United Kingdom, at a rate of 25% generating 5 billion pounds in the first year (approximately $8.4 billion), and in Europe, at a rate of 21% generating 140 billion euros (approximately $203 billion)
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