If you’ve heard the unbalanced rhetoric from anti-Canadian energy activists, you may think our governments heavily subsidize oil and natural gas companies.
But that’s not the case, as outlined in a new report by the International Monetary Fund (IMF), sourced through the National Bank of Canada’s economics and strategy division. The report shows that our country has the lowest fossil fuel subsidies in the G20 – at just 2 per cent of gross domestic product (GDP).
If you aren’t familiar with the G20 nations, see the list below. Please note each country’s associated fossil fuels compared to the percentage of annual GDP in 2022.
- Argentina - 8.9%
- Australia - 2.9%
- Brazil - 3.2%
- Canada - 2.0%
- China - 12.5%
- France - 2.1%
- Germany - 3.0%
- India 10.6%
- Indonesia - 15.4%
- Italy - 2.8%
- Japan - 5.8%
- Mexico - 7.6%
- Republic of Korea - 8.1%
- Russia - 23.6%
- Saudi Arabia – 27.0%
- South Africa - 13.9%
- Turkiye - 15.2%
- United Kingdom - 2.3%
- United States of America - 3.2%
- European Union (N/A)
The G20 is by no means devoid of major energy producers (bolded above). Australia, Brazil, China, Mexico, Russia, Saudi Arabia and the United States are all top global oil and/or natural gas producers.
For Canada to have the lowest amount of fossil fuel subsidies among the G20 is no small accomplishment. This important fact should be included in all conversations about Canada’s job-creating and wealth-generating energy sector.
Unfortunately, opponents want us to think otherwise in an attempt to tarnish our image as a world-class oil and gas supplier.
Energy Sector Not Aware of Subsidies
Jon McKenzie, Chief Executive Officer of Cenovus, touched on the topic this past July after the federal government released conditions under which it would allow subsidies to the oil and gas sector.
“I’ve been in this industry for a lot of years, and many of those years have been spent in finance. And I certainly remember writing a lot of cheques to the provincial and federal governments, but I don’t remember receiving a lot of cheques in return,” McKenzie said, according to reporting by The Globe and Mail.
“We certainly hear political rhetoric with regard to oil and gas subsidies, we’re just really not sure what it means because, again, we’re not really aware of any oil and gas subsidies for the industry.”
Declining Subsidies and Emissions
The IMF’s analysis also found that Canadian oil and natural gas subsidies are declining. Since 2015 – the same year that the Globe and Mail reported that oil and gas sector’s emissions peaked – Canada’s subsidy levels have dropped from 2.8 per cent down to 2 per cent in 2022.
Not only are Canadian oil and gas subsidies decreasing, but so are the sector’s total emissions.
The debate on reducing energy subsidies to promote more efficient capital spending while continuing to reduce environmental impacts is an important one to have. However, perhaps next time, we can be more honest about Canada’s record on fossil fuel subsidies.
The IMF’s data just doesn't match the tiresome and heated rhetoric we hear from anti-Canadian oil and gas activists regularly.
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— Canada Action (@CanadaAction) September 15, 2023