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Trudeau & Trump must act on the G20 pledge made in 2009 to end fossil fuel subsidies

When Prime Minister Justin Trudeau announced his priorities for the G7 summit in Charlevoix, Quebec this June, he said it was urgent “that the world comes together to fight climate change”, but there was no specific mention made of the promise to eliminate billions of dollars of public subsidies to the fossil fuel industry.

The National Observer has reported, “In 2009, Canada, and 19 other countries, committed to ‘phase out and rationalize inefficient fossil fuel subsidies while providing targeted support for the poorest’. …The federal government has reaffirmed its commitment to reduce support for the industry every year since then, including at the 2016 G20 summit in China.”

And yet, the Guardian reported in November 2016, “The burning of oil, gas and coal is still supported across the world by subsidies amounting to $5.3 trillion a year, equivalent to $10 million a minute every day, according to the International Monetary Fund.”

In October 2017, Oil Change International stated, “The United States federal and state governments gave away $20.5 billion a year on average in 2015 and 2016 in production subsidies to the oil, gas, and coal industries, including $14.7 billion in federal subsidies and $5.8 billion through state-level incentives. And this is likely to be a conservative estimate at the state level, due to limited data.”

Estimates of fossil fuel subsidies in Canada appear to vary from $1 billion to more than $3.3 billion a year. The Liberals promised in the last election that, “We will fulfill our G20 commitment and phase out subsidies for the fossil fuel industry over the medium-term.” US President Donald Trump has made no such promise and is unlikely to do so. But even in Canada there has been little movement on this promise.

In March 2016, Natural Resources minister Jim Carr stated now is “not the moment” to ramp back subsidies given a global glut in supply and a drop in per barrel price.

Then in May 2017 the National Observer reported, “Finance Canada has no plan to keep Canada’s international promise to phase out inefficient oil and gas industry subsidies by 2025. The department has had eight years to come up with a list of actions and timelines to deliver on the commitment made by former prime minister Stephen Harper at the 2009 G20 summit in Pittsburgh. But a new report on fossil fuel subsidies, released by Canada’s auditor general, Michael Ferguson, revealed that little was done to make good on Harper’s promise.”

That article highlighted, “In addition to failing to adequately define the terms of Canada’s commitment to phase out fossil fuel subsidies, Finance Canada declined to provide auditors with the internal documents required to complete their analysis.”

At that time Ontario NDP MP David Christopherson stated, “The department seems to have no plan with regard to this commitment, which is a problem for a government that has made big commitments to climate change. The Liberals’ refusal to provide information to the auditor general strikes at the very heart of accountability and makes a farce out of the Liberals’ promise of openness and transparency.”

Also at that time, the CBC reported, “Ferguson’s audit found that while Canada has recognized that inefficient subsidies for fossil fuels undercut efforts to reduce greenhouse gases, the government has not yet implemented its plan to end subsidies by 2025.”

The Council of Canadians supports:

1- the Alternative Federal Budget 2018 call to eliminate all fossil fuel subsidies, create a Just Transition Fund, and invest in training, apprenticeships and green infrastructure.

2- the Green Economy Network call to invest up to 5 per cent of the annual federal budget in renewable energy, energy efficiency, and public transportation so that one million new jobs could be created over a five year period.

3- the Canadian Labour Congress call to spend $80.9 billion over five years on renewable energy, energy efficiency, public transit and higher speed rail.

We have also provided this analysis on the upcoming G7 summit.