Submission to Environment and Climate Change Canada’s Consultation on Non-Tax Fossil Fuel Subsidies

The International Institute for Sustainable Development (IISD) submitted a response to Environment and Climate Change Canada (ECCC) regarding the draft assessment framework for non-tax fossil fuel subsidies. IISD argues that the current framework is too restrictive and risks excluding many subsidies, thereby undermining Canada's G7 commitment to phase out inefficient fossil fuel subsidies by 2025 and its Paris Agreement emissions targets for 2030.

• IISD recommends that Canada adopt the World Trade Organization (WTO) definition of subsidies from Article 1.1 of the Agreement on Subsidies and Countervailing Measures (ASCM) rather than creating an alternative definition. The institute specifically advises removing the criteria of "specificity" and "normality" from the ECCC framework, arguing that these terms are unnecessarily restrictive and could lead to the exclusion of subsidies that support greenhouse gas mitigation or apply to multiple sectors.
• The current ECCC criteria for determining "inefficiency" are described by IISD as neither clear nor practical. IISD proposes a more rigorous methodology where a subsidy is deemed inefficient unless it is the "best, least costly option to achieve stated policy objectives," taking into account economic, social, and environmental costs, including contributions to climate change.
• IISD highlights a significant lack of transparency in Canada's reporting of fossil fuel subsidies. It notes that Canada has the highest fiscal support to fossil fuel production per unit of GDP in the G7, yet fails to publish specific reports documenting these supports. IISD calls for the public release of data on existing subsidies and the methodology used for the G20 peer review.
• The document identifies several specific federal non-tax subsidies provided to the fossil fuel sector as of Fall 2018. These include the Energy Innovation Program (with projects such as the Alberta Carbon Conversion Technology Centre receiving 9.8 million CAD), Sustainable Development Technology Canada (funding unconventional oil and gas projects), and the Electric Vehicle and Alternative Fuel Infrastructure Deployment Initiative (funding natural gas and hydrogen refuelling stations).
• IISD urges the federal government to engage provinces and territories in the G20 peer review process. Because many producer and consumer subsidies occur at the subnational level and federal reforms have subnational impacts, IISD suggests that the government invite these jurisdictions to participate in the federal review or conduct their own voluntary reviews.
• To meet the G7 2025 phase-out deadline and the 2030 Paris Agreement targets, IISD recommends that Canada complete its G20 peer review within 12 to 18 months, following the precedent of other G20 countries. This is contrasted with suggestions from government representatives that the process could take 2 to 3 years.

APA

International Institute for Sustainable Development (2019). Submission to Environment and Climate Change Canada’s Consultation on Non-Tax Fossil Fuel Subsidies. https://www.iisd.org/system/files/publications/iisd-submission-eccc-non-tax-subsidies.pdf

Chicago

International Institute for Sustainable Development. Submission to Environment and Climate Change Canada’s Consultation on Non-Tax Fossil Fuel Subsidies. 2019. https://www.iisd.org/system/files/publications/iisd-submission-eccc-non-tax-subsidies.pdf.

Wikipedia

{{cite report |author=International Institute for Sustainable Development |title=Submission to Environment and Climate Change Canada’s Consultation on Non-Tax Fossil Fuel Subsidies |date=August 2019 |url=https://www.iisd.org/system/files/publications/iisd-submission-eccc-non-tax-subsidies.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{internationalinstituteforsustainabledevelopment2019submission, author = {{International Institute for Sustainable Development}}, title = {{Submission to Environment and Climate Change Canada’s Consultation on Non-Tax Fossil Fuel Subsidies}}, institution = {International Institute for Sustainable Development}, year = {2019}, month = aug, url = {https://www.iisd.org/system/files/publications/iisd-submission-eccc-non-tax-subsidies.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }