Posted on January 13, 2010 (updated: January 13, 2010)

Groups challenge billions in subsidies for Canada’s oil and gas companies

Church and environmental groups today called on the federal government to justify giving billions of dollars in tax breaks to Canada’s oil and gas corporations, while having scrapped a key climate change program designed to assist low-income Canadians.

In formal petitions filed with Canada’s Auditor General the groups also demanded that the government publicly respond to the obvious contradiction between subsidies that encourage fossil fuel production and spending on measures aimed at reducing greenhouse gas emissions (GHGs).

The petitions were filed by Ecojustice (formerly Sierra Legal), a national environmental law group, and by KAIROS: Canadian Ecumenical Justice Initiatives, a church-based nongovernmental organization that works on a wide range of social justice issues in Canada, Africa, Asia, Latin America and the Middle East.

Between 1996 and 2002 the federal government spent approximately $8 billion on tax subsidies for Canada’s oil and gas industries. The groups want the government to provide current figures, given the huge increase in tar sands developments.

“We know from experience and UN reports that climate change impacts like hurricanes, drought and heat waves harm poor people first, and most seriously,” said Paul Hansen, KAIROS Board Chairperson. “We want to know why keeping such a huge tax break for corporations making billions in profits is a higher priority than reducing greenhouse gas emissions.”

Soon after coming to power in 2006, the Harper government abruptly eliminated the $500 million EnerGuide Program for Low Income Households, designed to help vulnerable Canadians reduce energy bills – and GHG emissions. Meanwhile, much of the approximately $1.4 billion in annual tax breaks to the oil and gas industry will continue until at least 2015, long after the first Kyoto Protocol period ends.

As well, corporate tax cuts announced just last month will start kicking in next year while the phase out for just one of the many tax breaks to oil and gas (the Accelerated Capital Cost Allowance) will take eight years.

Tax breaks to the oil industry also far outweigh the $960 million that will be spent on renewable energy and energy efficiency programs in 2007-08. The Harper government, however, continues to claim it cannot meet its Kyoto commitments because of the cost.

“In fighting climate change we talk about the easy measures we can take to cut emissions quickly — the so-called $20 bills lying on the street,” said Albert Koehl, a lawyer with Ecojustice. “Here we have a brief case with $1.4 billion on the street. We just want the Finance Minister to reach down and pick it up.”

Ecojustice filed its petition on behalf of Friends of the Earth and Charles Caccia, Senior Fellow, Institute of the Environment, University of Ottawa. The KAIROS petition was filed in its own name. The government must respond within 120 days.

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