Ottawa took a step toward ending “inefficient” subsidies for fossil fuels on July 24 by making Canada the first country to publish an assessment framework and guidelines on how it will be done. But critics say Ottawa is misguided and just blustering, and the industry is requesting a predictable policy environment.
Ottawa’s move is a follow-up to Canada’s commitment to the 2021 United Nations “Glasgow statement,” which requires signatories to “end new direct public support for the international unabated fossil fuel energy sector,” among other promises.
The framework aims to ensure that any support from Ottawa won’t delay the transition to green energy and will comply with the Paris Agreement to limit the increase in global average temperature to 1.5 C above pre-industrial levels.
“Healthy competition” among G20 nations to make a mark in environmental policy emerged as motivation for Minister of Environment and Climate Change Canada (ECCC) Steven Guilbeault.
“So I think Canada’s showing up to the G20 and saying, ‘Hey, folks, you know, remember in 2009, we made that collective agreement that we were going to phase out fossil fuel subsidies? Well, here’s what we did in Canada,’” the minister said on July 25.
But University of Calgary economics professor Trevor Tombe told The Epoch Times that he views Ottawa’s announcement as “empty political rhetoric” and that not enough details are available to know what it means for any sector.
Ottawa has been moving to end what are deemed as inefficient subsidies for fossil fuels, but only just now defined “inefficient,” nearly 15 years after G20 leaders initially pledged, in 2009, to phase out these subsidies.
What matters, Mr. Tombe says, is whether specific future programs are eliminated or changed.
Pinning Down a Definition
The difficulty in pinning down what “inefficient” means regarding fossil fuel subsidies is reminiscent of a similar situation with the term “sustainable” as it pertains to jobs.
“Inefficient fossil fuel subsidies encourage wasteful consumption, reduce our energy security, impede investment in clean energy sources, and undermine efforts to deal with the threat of climate change,” ECCC spokesperson Samantha Bayard told The Epoch Times in an email.
Ottawa’s new “definition“ of “inefficient” is met unless a subsidy meets one or more of six criteria—specifically, enable significant reductions in greenhouse gas emissions, support clean technology or renewable energy, provide essential service to a remote community, providing short-term support for an emergency response, support indigenous economic participation in fossil fuel activities, or support abated production processes or projects with credible plans to achieve net-zero emissions by 2030.
“The country doesn’t need tinkering from people who can’t pinpoint a problem and who use a dishonest characterization to advance an economically and politically damaging solution to a non-existent problem produced from their woke imagination,” Dan McTeague, president of Canadians for Affordable Energy, told The Epoch Times.
“There’s a reason no other G20 nation would attempt such an obtuse policy,” he said.
