Ottawa is implementing restrictions on subsidies to the fossil fuel industry, while leaving untouched the industry’s largest source of public financing. Environment Minister Steven Guilbeault has announced six rules that will shape Canada’s support for the industry and ensure government programs align with federal climate targets. Subsidies will only be allowed if they support clean energy, reduce greenhouse gas emissions, or have a credible plan for achieving net zero by 2030. Indigenous involvement, service to remote communities, emergency response, and subsidies in line with Article 6 of the Paris Agreement are exempt. The guidelines will affect around $1 billion in public money and do not impact generally available subsidy programs or funds provided through Crown corporations like Export Development Canada. Guilbeault has promised further restrictions on Crown investments in fossil fuel development next year. Environmental groups praised the announcement but raised concerns about funding for carbon capture and storage projects, which they argue are costly and ineffective at addressing climate change. The Canadian Association of Petroleum Producers welcomed the exemptions for emission-reducing programs and called for regulations to fund and deploy decarbonization technologies. Guilbeault stated that net-zero plans from companies will be evaluated on a case-by-case basis. This announcement makes Canada the first G20 country to release a framework for phasing out inefficient fossil fuel subsidies.
Ottawa Unveils Requirements for Potential Fossil Fuel Subsidies
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