Canada’s Fossil Fuel Subsidy Framework Is a Big Step Forward, but Gaps Must Be Closed to Align With Climate Commitments

The International Institute for Sustainable Development (IISD) evaluates Canada's new framework for identifying fossil fuel subsidies, praising its alignment with World Trade Organization definitions and its transparency regarding 'inefficiency,' while warning that exemptions for 'abated' production and carbon capture and storage could undermine climate targets.

• Canada has released a framework to identify fossil fuel subsidies, following a commitment made 14 years ago with G20 peers. The government has also announced a timeline to produce a plan in 2024 to end domestic public financing for fossil fuels, which constitutes the majority of Canada's financial support for the sector.
• The framework's strengths include adopting the World Trade Organization's definition of fossil fuel subsidies—covering direct transfers, foregone revenue, transfer of risk, and provision of goods and services—and providing a detailed, transparent definition of 'inefficiency'.
• The IISD identifies critical gaps in the framework, specifically that the definition of inefficiency allows continued support for 'abated' fossil fuel production, including fossil-derived hydrogen and carbon capture and storage in the oil and gas sector. IISD asserts that carbon capture and storage in this sector is not a net-zero solution and that such support is expensive and inefficient.
• To ensure the framework aligns with climate commitments, the IISD recommends that the government publish a full inventory of identified subsidy measures and the rationale for any exemptions this year, while establishing standardized enforcement and accountability mechanisms across departments.

APA

International Institute for Sustainable Development (2023). Canada’s Fossil Fuel Subsidy Framework Is a Big Step Forward, but Gaps Must Be Closed to Align With Climate Commitments. https://www.iisd.org/articles/statement/canadas-fossil-fuel-subsidy-framework-big-step-forward-gaps-must-be-closed-align

Chicago

International Institute for Sustainable Development. Canada’s Fossil Fuel Subsidy Framework Is a Big Step Forward, but Gaps Must Be Closed to Align With Climate Commitments. 2023. https://www.iisd.org/articles/statement/canadas-fossil-fuel-subsidy-framework-big-step-forward-gaps-must-be-closed-align.

Wikipedia

{{cite press release |author=International Institute for Sustainable Development |title=Canada’s Fossil Fuel Subsidy Framework Is a Big Step Forward, but Gaps Must Be Closed to Align With Climate Commitments |date=24 July 2023 |url=https://www.iisd.org/articles/statement/canadas-fossil-fuel-subsidy-framework-big-step-forward-gaps-must-be-closed-align |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@misc{internationalinstituteforsustainabledevelopment2023canadas, author = {{International Institute for Sustainable Development}}, title = {{Canada’s Fossil Fuel Subsidy Framework Is a Big Step Forward, but Gaps Must Be Closed to Align With Climate Commitments}}, publisher = {International Institute for Sustainable Development}, year = {2023}, month = jul, url = {https://www.iisd.org/articles/statement/canadas-fossil-fuel-subsidy-framework-big-step-forward-gaps-must-be-closed-align}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }