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Environment Minister Steven Guilbeault isn't warming to the idea of combating climate change by imposing a windfall tax on the massive profits being posted by some Canadian oil and gas producers.
During the annual UN General Assembly in New York City this week, Secretary-General António Guterres said fossil fuel companies are making massive profits and should be taxed extra to pay for climate action and deliver help to people struggling with their energy and food bills.
Guterres said the poorest and most vulnerable people in the world have contributed the least to the climate crisis but are bearing the brunt of "its most brutal impacts."
"The fossil fuel industry is feasting on hundreds of billions of dollars in subsidies and windfall profits while household budgets shrink and our planet burns," he said.
When asked if Canada would follow Guterres' request during a call with reporters Thursday, Guilbeault did not directly say yes or no. Rather, he said Canada is already ensuring fossil fuel companies pay their fair share toward climate action through carbon pricing and regulations.
"I think the secretary-general was also talking about the fact that fossil fuel companies need to be paying for climate change pollution and that's exactly what we're doing in Canada with carbon pricing," Guilbeault said.
He said the government is also putting in place regulations beyond just carbon pricing that force oil and gas companies to cut their carbon footprints.
That includes an overall cap on oil and gas sector emissions and specific regulations on methane from oil and gas production, and on overall emissions from producing and using gasoline and diesel.
Global oil prices surged last winter following the Russian invasion in Ukraine, driving up profits for oil and gas companies worldwide.
In the first six months of this year, Canada's four biggest oilsands producers reported more than $21 billion in profits, more than three times their profits in the same period last year.
This report by The Canadian Press was first published Sept. 22, 2022.
Comments
"When asked if Canada would follow Guterres' request, Guilbeault did not directly say yes or no. Rather, he said Canada is already ensuring fossil fuel companies pay their fair share toward climate action through carbon pricing and regulations.
"'I think the secretary-general was also talking about the fact that fossil fuel companies need to be paying for climate change pollution and that's exactly what we're doing in Canada with carbon pricing.'"
More Liberal lies. And government watchdogs are asleep. It's outrageous that the media fails to hold Minister Guilbeault and his govt to account. Why is it up to citizens to point out the falsehoods and errors?
The federal backstop Output-Based Pricing System (OBPS) for large industrial emitters does not apply to large emitters in Alberta. Under Alberta's Technology Innovation and Emissions Reduction Regulation (TIER), O&G companies pay pennies on the dollar in carbon costs.
Carbon pricing for consumers is economy-wide. Large industrial emitters, including in AB's oilsands, pay a fraction of consumer rates.
The purpose of the OBPS and its provincial counterparts is not to expose heavy emitters to the carbon price, but to shield them from it. Federal and provincial carbon pricing systems do not impair their profits — or reduce their emissions.
The federal OBPS is a joke, but AB's system is even worse. TIER dollars are effectively recycled back to industry to fund carbon capture technology and research. Projects industry should be paying for in the first place.
Fossil-fuel subsidies undermine carbon pricing, making it cheaper and more profitable to produce fossil fuels instead of more expensive.
"There's a patchwork of OBPS policies across the country, and some provinces have implemented 'weak' or 'non-existent' systems that have let many big polluters off the hook."
"Federal watchdog warns Canada's 2030 emissions target may not be achievable" (CBC, Apr 26, 2022)
https://www.cbc.ca/news/politics/environment-commissioner-emissions-red…
"Biggest industrial emitters don't pay fair share for pollution, critics say" (April 14th 2022)
https://www.nationalobserver.com/2022/04/14/news/biggest-industrial-emi…
"Canada's biggest emitters are paying the lowest carbon tax rate" (January 17, 2022)
https://www.corporateknights.com/climate-and-carbon/canadas-biggest-emi…
"Oil and gas producers pay among the lowest average carbon costs of any sector…
"But although Canada is heralded as having one of the most ambitious prices on carbon in the world, rising from its current $40 per tonne to $170 by 2030, Suncor and other large industrial emitters pay only a tiny fraction of it.
"That's because Ottawa and most provincial govts grant heavy exemptions to a number of sectors, including O&G, chemicals, cement, steel and mining.
"… experts say the degree to which Canada … shields companies is threatening its climate targets.
"… every province in Canada has levied a carbon price through both a fuel charge and an output-based pricing system for large industries. Provincial govts can implement their own or, if they fail to do so or are found to lack ambition, resort to a federal backstop regime instead.
"But generous exemptions mean that how much of a firm's actual emissions are taxed varies widely by province, and, on average, companies end up paying for only 16% of the carbon actually produced. In an analysis prepared for the govt in 2020, the Canadian Institute for Climate Choices (CICC), an influential Ottawa-based research group, found that the rate companies are charged as a result – the so-called average carbon cost – ranges from as high as $25.60 to as low as $1.80 per tonne, depending on the province – a far cry from the full carbon price.
"[In 2020, Suncor's] average carbon cost was roughly $2.10 per tonne, about one-14th of the full carbon price.
"… Alberta's oil sands operations face lower trade exposure than virtually every other industry in the province. Nevertheless, the CICC found that Canada's O&G producers have among the lowest average carbon costs of any sector."
https://www.corporateknights.com/climate-and-carbon/canadas-biggest-emi…
"The [oilsands] industry already faces a carbon price that is due to rise from $50 a tonne currently to $170 in 2030. However, the impact of a carbon price is greatly lessened by the relatively small proportion of emissions that are actually covered by the price.
"The federal OBPS and AB's TIER (Technology Innovation and Emissions Reduction) system levy the carbon price on roughly 10% of a large emitter's GHGs. That marginal price provides incentives for companies to invest in step-change progress but not in across-the-board innovation. At a $50 marginal price, producers pay less than $1 per tonne of CO2 equivalent on their total production."
Canadian Institute for Climate Choices 2021 report: "The current large emitter programs provide a perverse long-term incentive. They are explicitly rewarding the most emissions-intensive facilities in the country to not make the major investments needed to be prepared to compete in a carbon-constrained market."
"Canada needs to make Big Oil pay their fair share" (Corporate Knights, March 7, 2022)
https://www.corporateknights.com/climate-and-carbon/canada-needs-to-mak…