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

KAIROS study reveals billions in Canadian tax subsidies to Big Oil come at the expense of conservation and climate

TORONTO – The federal government has confirmed that it will spend $1.5 billion dollars in additional subsidies to tar sands companies as a result of its slow phase out of tax breaks for one of Canada’s largest greenhouse gas emitting (GHG) industries. And Pumped Up, a new KAIROS study, concludes that by 2012 GHG emissions from the tar sands alone may wipe out all anticipated reductions in GHG emissions from all federal government programs.

The government confirmed the tax break figures in its responses to a formal petition filed with the Auditor General of Canada by KAIROS: Canadian Ecumenical Justice Initiatives, a church-based social justice organization. KAIROS’ analysis of likely GHG emission reductions is based on the federal government’s own figures.

The petition was filed last November and the government was legally required to respond within 120 days. While the government provided answers to some questions, it failed to respond to the key question at the heart of the petition.

“Why does Canada spend millions of dollars on subsidizing oil and gas industries – a prime cause of climate change – and so little money on green alternatives when the majority of Canadians want action to reduce greenhouse gas emissions? That was the essential question we asked the government,” says John Dillon, a KAIROS Program Coordinator and co-author of Pumped Up: How Canada
subsidizes fossil fuels at the expense of green alternatives. “The
government didn’t answer that core question.”

The KAIROS study calls for redirecting subsidies from fossil fuels to energy efficiency, conservation and renewable alternatives. In addition, Canada must put firm caps on emissions from large industries and mandate stricter vehicle emission standards and energy product efficiency standards.In letters from the ministers of finance, environment, foreign affairs, international trade, natural resources and international cooperation, the government gives no indication that it plans a major shift in spending away from tax breaks for big oil towards spending on green, renewable energy sources.

“The government seems to be taking a business as usual approach in
terms of its energy policy,” says Ian Thomson, of KAIROS and a co-author of Pumped Up. “What’s revealing about these responses is how much the government was unable or unwilling to tell us. For instance, it failed to quantify the total size of subsidies in dollar amounts going to the oil and gas sector, as requested.”

Ecojustice, the environmental law group formerly known as Sierra
Legal Defence Fund, also filed a formal petition on the subsidies issue last November. It isn’t satisfied with the government’s responses

“The Harper government gives almost $1 million of taxpayer money to the tar sands industry every day with this single subsidy. Leaving aside the absurdity of this spending, imagine the great opportunities the federal government is squandering by not dedicating this money to renewable energy, mass transit, and energy conservation,” says Albert Koehl, an Ecojustice staff lawyer.

Between 1996 and 2002 the federal government spent approximately $8 billion on tax subsidies for Canada’s oil and gas industries. KAIROS and Ecojustice wanted the government to provide current figures, given the huge increase in tar sands developments. However, the government did not provide
enough information to allow an assessment of the impact of subsidies on GHG emissions.

The Ministers did provide some useful information about some government activities. For example, the Department of Foreign Affairs is monitoring the negative impact of biofuel production on world agricultural production and access to food. However, given the significant gaps related to the petitions’ key questions,
KAIROS and Ecojustice are contacting the Commissioner of the Environment in the Auditor General’s office to request that answers be provided.

The groups say they will continue to press government to redirect subsidies from the hugely profitable oil and gas companies into green alternatives. For KAIROS, the petition and Pumped Up are part of
Re-energize, its public engagement and advocacy program aimed at getting individuals, communities and government to reduce their carbon footprint.

“The serious energy questions we are facing are, at their heart,
spiritual in nature for the churches,” says Dorothy McDougall, KAIROS Ecological Justice Program Coordinator. “We need to understand our deep interconnections with the rest of creation.”


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