International Best Practices: Estimating tax subsidies for fossil fuels in Canada
-
Tax expenditures and other types of fossil fuel subsidies must be measured and reported transparently by Canadian governments.
-
Of the 128 revenue foregone policies we identified in the fossil fuel sector in Canada, only 50% were quantifiable.
-
Quantifiable revenue foregone policies in the fossil fuel sector in Canada account for around CAD 3.2 billion in fossil fuel subsidies.
Canadian governments provide financial support for fossil fuels through a variety of measures, including direct transfers to fossil fuel producers. Much of this support is provided through the tax system. Tax expenditures reduce government revenue and create incentives for the production and consumption of fossil fuels. A clear understanding of the extent of tax subsidies is necessary to assess their impacts on government budgets—particularly important in the context of the COVID-19 economic recovery—as well as on air pollution and climate change. But the transparency of the cost of Canada’s tax subsidies for fossil fuels is poor. We recommend that all tax expenditures and other types of foregone revenue be measured and reported in line with international guidelines and best practices.
Participating experts
You might also be interested in
Unpacking Canada’s Fossil Fuel Subsidies
Fossil fuel subsidies hold us back and incentivize pollution. How much do Canada's governments subsidize fossils and why does it matter?
North America about to turn into a graveyard of mega pipeline projects
The U.S. built the equivalent of 28 Keystone XLs over the past decade, but continent expected to become an increasingly inhospitable place for new projects, says a new report.
Front Burner Podcast ep. 209: Have the Liberals met the climate change moment?
The Liberal government has been criticized for not acting substantially enough on the climate crisis. Former environment and current Infrastructure Minister Catherine McKenna defends her party’s actions on the issue.
Canadian government risks $18.5 billion backing fossil fuels
A report just out from IISD shows that regional and federal Canadian government organizations collectively subsidized some CAD 23 billion in tar sands, oil and gas pipelines in the last three years.