Canada's Federal Fossil Fuel Subsidies in 2020

The report finds that federal fossil fuel subsidies in Canada for FY 2019/20 totaled nearly CAD 600 million, though this is a conservative estimate due to missing data on tax-related subsidies and specific projects. It highlights a shift in government support from exploration toward infrastructure and exports, particularly for the natural gas sector. Key examples include a CAD 275 million transfer to LNG Canada and ongoing support for the Trans Mountain pipeline. The document also identifies carbon pricing exemptions as effective subsidies for fossil fuel consumption and notes that provincial subsidies generally outpace federal ones. It recommends that Canada include subsidy reform in its next Nationally Determined Contribution (NDC) and complete its G20 peer review by 2020.

• Federal fossil fuel subsidies for consumption and production in FY 2019/20 totaled nearly CAD 600 million, an increase from 2018 driven by investments in oil and gas infrastructure.
• The total subsidy figure is considered a conservative estimate because it excludes tax-related subsidies, credit support from Export Development Canada (EDC), and subsidies for the Trans Mountain project due to a lack of publicly available data.
• There has been a strategic shift in federal subsidies, moving away from exploration—aided by the rationalization of the Canadian Exploration Expense—toward the development of infrastructure and exports.
• The natural gas sector has seen increased support, notably through a CAD 275 million direct transfer to the LNG Canada project in British Columbia and a steel tariff exemption for imported steel modules valued at at least CAD 1 billion.
• Exemptions within the Greenhouse Gas Pollution Pricing Act, such as those for registered fuel carriers, farmers, and fishers, function as fossil fuel subsidies for consumption.
• The federal government's ownership and support of the Trans Mountain pipeline and expansion likely involves multiple subsidy elements, including coverage of operational deficits and assumed liability for environmental risks, though the total value is difficult to quantify.
• Provincial fossil fuel subsidies are reported to be significantly higher than federal subsidies, accounting for billions of dollars annually.

APA

Corkal, V., Levin, J., & Gass, P. (2020). Canada's Federal Fossil Fuel Subsidies in 2020. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/canada-fossil-fuel-subsidies-2020-en.pdf

Chicago

Corkal, Vanessa, Julia Levin, and Philip Gass. Canada's Federal Fossil Fuel Subsidies in 2020. International Institute for Sustainable Development, 2020. https://www.iisd.org/system/files/publications/canada-fossil-fuel-subsidies-2020-en.pdf.

Wikipedia

{{cite report |last1=Corkal |first1=Vanessa |last2=Levin |first2=Julia |last3=Gass |first3=Philip |title=Canada's Federal Fossil Fuel Subsidies in 2020 |publisher=International Institute for Sustainable Development |date=February 2020 |url=https://www.iisd.org/system/files/publications/canada-fossil-fuel-subsidies-2020-en.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{corkal2020canadas, author = {Corkal, Vanessa and Levin, Julia and Gass, Philip}, title = {{Canada's Federal Fossil Fuel Subsidies in 2020}}, institution = {International Institute for Sustainable Development}, year = {2020}, month = feb, url = {https://www.iisd.org/system/files/publications/canada-fossil-fuel-subsidies-2020-en.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }