Report estimates value of subsidies to Canada's oil industry

IISD report estimates value of
subsidies to Canada’s oil industry at $2.84 billion in 2008.
Findings can assist with the development of an energy strategy for

Winnipeg - Canadian federal and provincial governments
provided $2.84 billion to support oil production in 2008, according
to study by the International Institute for Sustainable

The href=””
comprehensive report uses an internationally agreed
definition of subsidy adopted by the World Trade Organization* to
determine the value of oil production subsidies in Alberta,
Saskatchewan and Newfoundland & Labrador. This detailed
analysis is the first of its kind in Canada and allows appropriate
comparisons of subsidies with other countries. 


“The data in this study will help
Canadian and provincial governments as they develop an energy
strategy for Canada over the next year,” said IISD president and
CEO target=”_blank”
.  “The report is a constructive input to
that process.

“It sets out the financial,
economic and environmental trade-offs implied by these subsidies at
the federal and provincial level. This is invaluable to
decision-makers as they seek to integrate economic development with
options to improve public finances and lower greenhouse gas

The report estimates the impact of
existing subsidies over the next 10 years. The study forecasts the
cost of subsidies to governments would double by 2020. The report
estimates a 2 per cent rise in Canada’s greenhouse gas emissions by
2020 and a projected rate of growth for the oil production

As a member of the G20, Canada has
recognized that efforts to deal with climate change, wasteful
energy consumption, market distortions and barriers to clean energy
investment are undermined by inefficient fossil-fuel subsidies and
has pledged to phase out its inefficient fossil-fuel subsidies over
the medium term. 


The federal and provincial
governments have already made progress in reducing the level of
subsidies and incentives to the oil production industry, though a
number of significant subsidies remain and new ones have

According to the study, the
federal government’s share of subsidies in 2008 was $1.38 billion.
Within the provincial governments, Alberta was estimated at $1.05
billion, Saskatchewan at $327 million and Newfoundland &
Labrador at $83 million. A total of 63 subsidy programs were

In most cases, the subsidies were
intended to increase exploration and development through a mix of
tax breaks and royalty reductions.

The report, href=””
Fossil Fuels: At What Cost? Government support for
upstream oil activities in three Canadian provinces: Alberta,
Saskatchewan, and Newfoundland and
, is part of a
series of sector-specific studies that survey government subsidies
by IISD’s title=””>Global Subsidies
Initiative (GSI)
, a Geneva-based

You can return to the main Market News page, or press the Back button on your browser.

Market News