Responding to Canada’s Assessment Framework of Inefficient Fossil Fuel Subsidies
According to the Climate Emergency motion passed by the House of Commons on June 17, 2019, the urgency of the climate crisis requires that “Canada commit to meeting its national emissions target under the Paris Agreement and to making deeper reductions in line with the Agreement’s objective of holding global warming below two degrees Celsius and pursuing efforts to keep global warming below 1.5 degrees Celsius.” (emphasis added)
It is in the context of this emergency that Citizens for Public Justice is contributing to the Environment and Climate Change Canada (ECCC)’s assessment of fossil fuel subsidies.
Based on the draft assessment framework provided, CPJ recommends that a subsidy be defined as, “Any financial contribution provided by the government either directly or indirectly (including direct budgetary transfers and tax expenditures) that benefits a business or industry, for example by lowering the cost of fossil fuel production or raising the revenues of fossil fuel producers.”
We further recommend:
- That, following the lead of ECCC, Finance Canada publish a list of all tax measures that (a) it identifies as subsidies to the fossil fuel sector, and (b) may also be considered fossil fuel subsidies according to the definitions provided by international agencies, including the World Trade Organization, the International Energy Agency, and the Organization for Economic Co-operation and Development.
- That ECCC, and the whole of the Government of Canada, adopt a clear and comprehensive definition of “fossil fuel subsidy” that more fully accounts for climate considerations. And, that any qualifiers, such as “inefficient” be clarified and rationalized against Canada’s climate commitments in order to ensure a policy approach that aligns with the principles of the Paris Agreement and global climate science.
- That ECCC and Finance Canada establish a list of key questions against which federal government funding decisions must be tested. For example,
- Will the subsidy contribute to an increase or decrease in GHG emissions?
- Is the subsidy compliant with the principles of the Paris Agreement, namely articles 2.1 and 4.1?
- Is the subsidy consistent with the International Energy Agency assessment that upwards of 75 per cent of known fossil fuel reserves must stay underground in order to avoid catastrophic climate change? Or with emissions-reduction recommendations identified by the IPCC?