BC Government continues to subsidize the oil and especially the gas industry

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By DanSchubart
The following notes are from a Webinar lead by Tzeporah Berman (Stand Earth), along with Vanessa Corkal – IISD; Marc Lee–CCPA; and Kai Nagata—Dogwood Institute, that was attended by our very own Dan Schubart.

The Abstract:

  • BC is heavily involved in schemes to support the oil and gas industry in BC. This is taxpayer money that is hived off to the industry to pursue the extraction, distribution, transformation and export of a publicly-owned resource. The level of subsidies is such that the citizens of BC are paying to get rid of the commodity and contributing substantially to the atmospheric greenhouse gases.
  • Not listed is the low-cost-to-industry electricity planned, along with transmission infrastructure, from Site C, federal tariff forgiveness for steel for LNG project structures being built overseas, federal support programs to corporations directly involved in oil and gas ventures.
  • There was also some discussion about damage done to First Nations traditional resources, inhibiting to ability to harvest traditional foods, along with damage done to all life forms by climate disruption. The lack of meaningful consultation with First Nations is also a blow to any efforts to effect real reconciliation.The Tidbits:
    • BC’s fossil fuel subsidies reached CAD $830 million in 2017–2018. New subsidies continue to be created, including significant support for the liquefied natural gas (LNG) industry.
    • Provincial fossil fuel subsidies undermine the CleanBC plan introduced by the government in 2018 and hold the province back from meeting its targets for greenhouse gas emissions reductions.

    British Columbia (BC), which has a reputation as the most environmentally friendly Canadian province, is in fact one of the nation’s biggest supporters of the fossil fuel industry. Each year, the province provides hundreds of millions of dollars in subsidies for fossil fuels.

    The majority of BC’s fossil fuel subsidies go to fossil fuel producers, with hundreds of millions provided each year in royalty credits. Since not all royalty credits are used in the year they are granted, the province has amassed at least CAD $2.6 billion to CAD $3.1 billion in outstanding royalty credits from fossil fuel producers.

    BC is also providing significant support for the liquefied natural gas (LNG) industry. The new BC-LNG Canada Agreement is just one example of support that serves to lock in high-carbon investments at the expense of sustainable energy alternatives.

    BC is on the front lines of climate change. The past few years have been record years for wildfires, and the province is already seeing the impacts of coastal erosion and sea level rise. Though the province has introduced policies such as the CleanBC plan and carbon pricing regime, fossil fuel subsidy reform must be part and parcel of BC’s efforts to address climate change.

    Premier John Horgan’s Record on Fossil-Fuel Subsidies

    In 2019-20, BC’s NDP-led government will spend 79% more on oil and gas subsidies ($998 million) than the BC Liberals did the last year they were in power ($557 billion). fossil fuel subsidies are estimated to increase to $1.1 billion in 2022-23, more than double what the BC Liberals spent.

    Unlike the BC Liberals, the NDP government has given the oil and gas industry hundreds of millions of dollars in direct support (capital expenditure, project financing, cash payments), and upwards of a billion dollars in indirect support (tax incentives, refunds, and royalty waivers).

    In 2019-20, the NDP government gave the oil and gas industry four times as much money in subsidies ($998 million) as it earned in oil and gas royalties ($198 million).

    In 2019-20, the NDP government spent more than twice as much subsidizing oil and gas development ($998 million) than it did on its climate change program ($484 million), a trend that is predicted to continue through 2023.

    Meanwhile, budgets for the Ministry of Environment and Climate Change and BC Parks will decline from 2019-20 through 2022-23, while O&G subsidies will, for the first time ever, top $1 billion in 2022-23.

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