G20 countries are spending $452 billion U.S. a year subsidizing their fossil fuel industries and are undermining the world's effort to combat climate change in the process, according to a new international report by an environmental advocacy group.
It's the first time annual subsidies from all G20 countries have been added up and individually analyzed.
It shows that Canada's total federal and provincial support for the petroleum industry was close to $2.7 billion U.S. ($3.6 billion Cdn at current exchange rates) in the 2013-14 fiscal year, with federal subsidies accounting for roughly $1.6 billion U.S. of that.
The report says at least another $2.5 billion US of taxpayers' money also goes to petroleum companies working in other countries through Export Development Canada "and may be significantly higher."
Despite that, the report calls Canada one of the leaders in efforts to end subsidies for fossil fuels — sort of.
It points out that a number of subsidies to oil, gas and mining companies are in the process of being phased out, including special help for the oilsands that ended in January 2015.
On the other hand, this country has ramped up taxpayer help for the fledgling liquefied natural gas (LNG) industry.
Canada has removed some producer subsidies and they've added new subsidies for fossil fuels ... that's why we see Canada as having both a leader and a laggard position, experts say.
The document, titled "The Fossil Fuel Bailout," was produced jointly by Oil Change International, an advocacy group focused on moving the world away from fossil fuels, and the Overseas Development Institute, the U.K.'s leading independent think-tank on international development and humanitarian issues.
The report uses government documents and research by independent think-tanks to look at the scale of fossil fuel production subsidies and how much taxpayers' money plays a role.
All G20 countries financially support their petroleum industries to some extent. Subsidies include everything from tax breaks for exploration and purchasing equipment, to royalty breaks and direct spending on projects from government-owned banks and financial institutions.
Canada's petroleum and mining companies have long argued they need subsidies to stay competitive in a high-risk exploration industry.
The Canadian Association of Petroleum Producers echoed those sentiments when presented with the findings of the Oil Change report, and defended government support as crucial to the industry's continued success.
Subsidies can also play a big part in helping junior oil and gas companies get off the ground or to help them invest in developing countries.
In 2009, G20 countries promised to phase out "inefficient" fossil fuel subsidies.
The report recommends that G20 countries set hard phase-out targets at the leaders' conference in Turkey next week. It's also being released to coincide with the start of the UN climate conference in Paris Nov. 30.
In his election platform, Prime Minister Justin Trudeau pledged his government would end fossil fuel subsidies, and one expert hopes Trudeau sticks to his promise.
"It's a huge opportunity for Canada to regain its position in the world as a leader on climate and environmental issues."
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