Identifying Inefficient Fossil Fuel Subsidies in Canada

Canada committed in 2009 to phase out inefficient fossil fuel subsidies, a goal it recently accelerated to 2023. However, the lack of a clear, shared definition of 'inefficient' remains a barrier. The International Institute for Sustainable Development (IISD) argues that Canada should adopt the World Trade Organization's definition of subsidies and apply four specific criteria—alignment with climate commitments, support for the low carbon economy, just transition consistency, and the effectiveness of the policy goal—to identify which subsidies are inefficient. The brief highlights that federal subsidies totaled at least CAD 1.91 billion in 2020, with additional billions provided at the provincial level.

• Canada has accelerated its commitment to eliminate fossil fuel subsidies, moving the target date from 2025 to 2023, alongside a goal to phase out coal-fired power by 2030.
• Substantial financial support for fossil fuels persists in Canada; federal subsidies were at least CAD 1.91 billion in 2020, while Alberta, British Columbia, Saskatchewan, and Newfoundland and Labrador combined provided at least CAD 2.5 billion in the 2020/2021 fiscal year.
• The absence of a universally endorsed definition for what constitutes a fossil fuel subsidy, what makes it inefficient, and what is considered wasteful consumption hinders the phase-out process.
• To identify inefficient subsidies, the document recommends Canada apply four criteria: alignment with climate commitments, support for the low carbon economy, just transition consistency, and the best way to achieve the overall policy goal.
• The author recommends that Canada adopt the World Trade Organization definition of fossil fuel subsidies, which encompasses direct transfers, foregone revenue, transfer of risk, and the provision of goods and services.

APA

Cameron,, É. B.-B. (2022). Identifying Inefficient Fossil Fuel Subsidies in Canada. International Institute for Sustainable Development. https://www.iisd.org/publications/brief/identifying-inefficient-fossil-fuel-subsidies-canada

Chicago

Cameron,, Émile Boisseau-Bouvier,Laura. Identifying Inefficient Fossil Fuel Subsidies in Canada. International Institute for Sustainable Development, 2022. https://www.iisd.org/publications/brief/identifying-inefficient-fossil-fuel-subsidies-canada.

Wikipedia

{{cite report |last1=Cameron, |first1=Émile Boisseau-Bouvier,Laura |title=Identifying Inefficient Fossil Fuel Subsidies in Canada |publisher=International Institute for Sustainable Development |date=28 July 2022 |url=https://www.iisd.org/publications/brief/identifying-inefficient-fossil-fuel-subsidies-canada |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{cameron2022identifying, author = {Cameron,, Émile Boisseau-Bouvier,Laura}, title = {{Identifying Inefficient Fossil Fuel Subsidies in Canada}}, institution = {International Institute for Sustainable Development}, year = {2022}, month = jul, url = {https://www.iisd.org/publications/brief/identifying-inefficient-fossil-fuel-subsidies-canada}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }