CUTTING TO THE CHASE ON FOSSIL FUEL SUBSIDIES

The paper argues that Canada should move beyond textbook definitions of fossil fuel subsidies to evaluate policies based on their consistency with a low-carbon transition, value for money, employment outcomes, and policy fit. It highlights that public investment in long-lived fossil fuel assets now carries significant risk of becoming stranded as global demand for coal, oil, and gas inevitably declines. The authors recommend that Canadian governments pivot economic strategies toward transition-consistent business lines and prioritize the reform of new or highly obstructive measures, such as British Columbia's support for oil, gas, and coal development.

• The authors argue that strictly adhering to textbook definitions of subsidies is less important than ensuring policies align with Canada's economic, social, and climate goals. They propose four specific criteria for assessment: transition-consistency (competitiveness in low-carbon scenarios), value for money (avoiding stranded assets and mobilizing private investment), employment outcomes (reducing worker and community vulnerability), and policy fit (availability of better alternative tools).
• Public investment in the fossil fuel sector is increasingly risky because global demand for coal, oil, and gas will inevitably decline. This creates a risk of 'stranded assets,' where public funds may generate fewer economic and job benefits than investments in growing transition-opportunity markets.
• Provincial and territorial governments have largely been excluded from fossil fuel subsidy phase-out commitments, yet many of their current measures actively work against the market and policy signals needed for economic transformation.
• The document recommends a prioritized approach to policy reform: first ensuring new measures (such as the federal carbon capture, utilization, and storage investment tax credit) support transition success, then tackling measures that significantly hinder it (such as British Columbia's support for oil, gas, and coal development), and finally addressing more difficult measures like agricultural fuel and carbon tax exemptions.

APA

Samson, R., Phillips, P., & Drummond, D. (n.d.). CUTTING TO THE CHASE ON FOSSIL FUEL SUBSIDIES. Canadian Climate Institute. https://climatechoices.ca/wp-content/uploads/2022/02/Fossil-fuels-ES-English-FINAL-no-WM.pdf

Chicago

Samson, Rachel, Peter Phillips, and Don Drummond. CUTTING TO THE CHASE ON FOSSIL FUEL SUBSIDIES. Canadian Climate Institute, n.d. https://climatechoices.ca/wp-content/uploads/2022/02/Fossil-fuels-ES-English-FINAL-no-WM.pdf.

Wikipedia

{{cite report |last1=Samson |first1=Rachel |last2=Phillips |first2=Peter |last3=Drummond |first3=Don |title=CUTTING TO THE CHASE ON FOSSIL FUEL SUBSIDIES |publisher=Canadian Climate Institute |url=https://climatechoices.ca/wp-content/uploads/2022/02/Fossil-fuels-ES-English-FINAL-no-WM.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{samsonndcutting, author = {Samson, Rachel and Phillips, Peter and Drummond, Don}, title = {{CUTTING TO THE CHASE ON FOSSIL FUEL SUBSIDIES}}, institution = {Canadian Climate Institute}, url = {https://climatechoices.ca/wp-content/uploads/2022/02/Fossil-fuels-ES-English-FINAL-no-WM.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }