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Here’s the question on everyone’s lips: as oil prices slide to their lowest point in decades, what’s Stephen Harper going to do about it?

Our government has a habit of propping up giant oil companies with generous subsidies and cushy tax cuts — a habit that’s cost Canada billions of dollars every year. We’re talking big money – in 2011, the International Monetary Fund pegged Canada’s oil subsidies at $34 billion per year. 1

As oil craters again, people across Canada are calling for a new way forward: a stronger, cleaner economy, support for workers, and funding for critical services. But Harper’s habits die hard – and you can be sure that giant oil companies are lobbying hard to get a bailout in the next budget.

The Harper Conservatives are under huge pressure to bail-out giant oil companies and show a balanced budget. Something’s gotta give. With the budget coming soon, and the parties releasing their platforms in an election year, this is the moment to speak out for a better future.

Let’s think about it this way for a minute: in each of the last nine years, the Harper government has gifted billions in tax breaks for oil companies. Now imagine if that same money was spent on renewable energy power sources — or re-training oil industry workers for the jobs of the future.

In this critical moment, let’s make our message clear to Canada’s leaders: Canadians expect more, and expect better, of our government. We expect them to:

  1. Ensure federal funding is going towards our future, not our past. Harper’s government has spent nine long years giving subsidies and cushy tax breaks to global oil companies. It’s time to turn the page.
  2. Prioritise funding for Canadians, not giant oil companies. We know our government can’t afford to fund everything – and when there’s a choice between corporate welfare for big oil companies or services that will directly benefit Canadians, we pick the latter.
  3. Invest in a strong clean energy economy. If anything has become clear over the last few months, it’s that Canada can’t afford to have all our eggs in the risky oil basket. We need an economy that’s built around resources that are abundant, safe, and clean – and will ensure a safe environment and climate for our kids. Let’s invest now, and support workers to make the transition.

With the oil price on the slide and a budget and election fast approaching, we could have a game-changing moment on our hands for both government and business – if we play our cards right. Right now, Joe Oliver and Stephen Harper are deciding what to fund – and what not to fund – in the 2015 budget. Let’s make the choice easy for them.

FAQ

Are bail outs always a bad idea?

No. Government investments in strategic industries, and the occasional bail-out, can make sense with the right conditions. But why give billions to the most destructive group of companies on Earth, especially when their boom always goes bust?

What does the total cost of Canada’s subsidies and tax breaks for fossil fuel companies come to?

Unfortunately, this isn’t a simple question, nor is there a simple answer. The total cost on government support for big oil companies depends on how you define “subsidies”, how you define “tax breaks”, and how you do the maths from there. An exact number is difficult to settle on, and only more-so given that Statistics Canada stopped compiling numbers on federal subsidy distributions in 2009.

But the estimates and analysis we do have access to suggests that the total cost of subsidies and tax credits is enormous. In 2013, the IMF estimated that the Canadian government spent $34 billion each year in “direct support to producers and uncollected tax on externalized costs” to support the coal, natural gas and oil industries. Other estimates are somewhat more conservative: in a 2010 report prepared by EnviroEconomics for the International Institute for Sustainable Development, it was estimated that the federal government was providing about $1.4 billion annually in subsidies to the oil sector – in just three provinces.

Even if you disinclude more controversial benefits from governments — like uncollected taxes on burning transportation fuels like gasoline and diesel — the total estimate of Canadian government’s subsidies and tax breaks for the industry remains well into the billions.

Interested in reading more? Check out CBC newsPembinaAlberta oil magazineIMF.

Notes:

  1. Energy Subsidy Reform: Lessons and Implications. International Monetary Fund, January 28 2013 – http://www.imf.org/external/np/pp/eng/2013/012813.pdf

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