New analysis from Environmental Defence reveals that in 2025, the Government of Canada provided over $10 billion in subsidies and public financing to oil and gas companies and projects.
New analysis from Environmental Defence Canada reveals that the Government of Canada provided over $10 billion to the oil and gas industry in 2025, and over $85 billion since 2020. This ongoing support to the fossil fuel industry exposes Canadians to growing financial and climate risks while the global economy shifts towards clean energy.
“The federal government continues to pour billions into fossil fuel companies, even as the industry stands to make massive windfall profits, with billions more on the table through the MOU’s proposed pipeline and Pathways CCS project,” said Aly Hyder Ali, Senior Program Manager at Environmental Defence. “Ongoing fossil fuel subsidies further undermine already weakened industrial carbon pricing, effectively twisting the polluters-pay principle into a plan to pay polluters.”
Key Findings:
- The Government of Canada provided at least $10.2 billion in fossil fuel subsidies and public financing in 2025. Most of that support was provided by Export Development Canada.
- Since Environmental Defence began tracking fossil fuel subsidies in 2020, the federal government has provided at least $85.2 billion to the fossil fuel industry.
- The proposed Canada-Alberta MOU could put Canadians on the hook for up to $35 billion for the new oil pipeline and the Pathways carbon capture project – both of which would not proceed without massive public funding.
- The Government of Canada provided $340 million for Liquified Natural Gas (LNG) in 2025. This brings the total federal subsidies for LNG since 2019 to $2.4 billion.
- The Government of Canada provided at least $405 million dollars in subsidies for carbon capture and hydrogen projects in 2025. These technologies have failed to deliver on their promises to reduce emissions and have instead locked in further fossil fuel production. This figure excludes the carbon capture investment tax credit, which is estimated to cost Canadians up to $5.7 billion by 2028, and up to $12.4 billion by 2035. The changes introduced in the Budget 2025 could increase those costs by an additional $3.75 billion.
- In 2025, the cost of pollution from oil and gas companies operating in Canada was an estimated $56.4 billion. Climate pollution created by oil and gas companies has massive costs, including health costs, property damage from extreme weather events, and decreased agricultural productivity due to changing weather patterns.
Notably, Canada has already committed at least $3.5 billion in fossil fuel subsidies in 2026, through the promise to pay $1 billion in fees associated with the Bay du Nord offshore oil project, as well as by cancelling the excise tax on gasoline and diesel at the cost of $2.4 billion to Canadians. This comes at a time when oil and gas companies are expected to make $90 billion in profits due to the war in Iran.
“The federal government topped off the pot of money for LNG by $340 million this year,” according to Alex Walker, Energy Analytics Program Manager at Environmental Defence. “As Canada looks to expand its output into the oversupplied and volatile global LNG market, this number is set to get bigger in the coming years. This is a clear case of wasting taxpayer money on an industry with an uncertain future. As conflict in Iran reshapes global energy demand and more countries invest in renewables, the government risks pouring even more public money into a declining industry. Canadians deserve better than this.
“Canada’s climate math does not add up,” said Hyder Ali. “The federal government keeps promising to end fossil fuel subsidies, but it continues to bankroll the oil and gas sector – the largest source of pollution in the country – while weakening policies meant to cut emissions. More fossil fuel expansion means more pollution locked in, more climate targets missed, and more costs pushed onto Canadians.”
