Did you notice how the federal government in Canada characterized their carbon tax as a tax on pollution when it introduced the tax. I thought that was smart actually. After all it was true.
Then did you notice how last year (2018) the government quietly, without much fanfare, delivered a $1.6 billion bailout to oil firms in Canada! Some people keep telling me how Indigenous people are always standing with their hands out waiting for money from the government. Well, if that’s true they are not the only ones. You could buy a lot of water treatment plants on Canada’s Indian Reserves for that amount of money.
Here is how Mia Rabson reported on this in the Winnipeg Free Press reported quietly on it in the business pages of the paper:
“Canada’s $1.6 billion bailout package for Alberta’s battered oil industry is well underway, but with little transparency about who is getting the money and for what.
Almost $1billion of the package of loans, guarantees and government grants is in the hands of companies, but details are available for a small fraction of the spending.’
So just as Canada has been falling behind its international commitments to reduce greenhouse gas emissions, as international agencies recently announced, we are paying the oil and gas industry $1.6 billion to pollute more! Makes a lot of sense doesn’t it? Paying to pollute.
A subsidy is a financial benefit that the government gives, to businesses or industries or even consumers. Oil and gas subsidies support oil and gas production (and even coal production). Subsidies can be paid directly in cash or indirectly in tax breaks. Either way its 6 of one or half a dozen of the other. Either way the tax-paying public pays. The fossil fuel companies take. You could call it socialism for the rich.
It is not well known that Canada already subsidizes its oil and gas industry by about $3.3 billion. Canada is the largest subsidizer of financial support to its oil and gas industry in the G7 per unit of GDP. Countries around the world have criticize us for it too. That money could instead be used to pay for 44,000 hospital beds, or put 260,000 high school students through high school or pay for a lot of transition to cleaner energy. So instead of using that money to pay things like that, we pay industries to pollute and we do it at the cost of our international reputation.
Such subsidies also help to lock in our dependence on fossil fuel in the country and continue to supporter the competitor to clean energy provides by making oil and gas seem cheaper.
European countries are already protesting Canada’s position. As Rabson reported,
“Sweden’s central bank, the Riksbank, said Wednesday it had sold its Alberta-government issued bonds because it will no longer invest in assets held by governments or companies with large climate footprints.
A day later, the European Investment Bank (EIB), the non-profit lending institution of the European Union, announced it will no longer invest in any fossil fuel projects after 2021.”
I know that the Canadian oil and gas sector is already hard hit by the withdrawal of $30 billion in capital in the last 3 years and it is still an important industry in Canada, but isn’t it time that we stop paying people to pollute? Can’t we find better ways to invest our money?