Public Cash for Oil and Gas

The report identifies that Canada remains a significant provider of oil and gas subsidies within the G7. It details various federal tax deductions and direct funding programs for the industry, noting that while some subsidies appeared to decrease between 2015 and 2016, this was largely due to low oil prices and accounting practices rather than complete elimination. The authors argue that these fiscal supports create a risk of stranded assets and undermine the transition to renewable energy.

• Canada is identified as the largest provider of subsidies to oil and gas production among G7 nations when measured per unit of GDP.
• Federal support for the oil and gas industry is delivered through direct transfers and specific tax provisions. Direct transfers include programs administered by Natural Resources Canada (NRCan) and Sustainable Development Technology Canada (SDTC), as well as other budgetary transfers. Tax provisions include deductions for Canadian exploration expenses (CEE), Canadian development expenses (CDE), Canadian oil and gas property expenses (COGPE), and foreign resource expenses (FRE).
• The apparent decline in subsidy values during 2015 and 2016 was primarily driven by low international oil prices and the ability of companies to pool and carry forward tax deductions to future years, rather than a total elimination of subsidies.
• The federal government's purchase of the Trans Mountain pipeline for CAD 4.5 billion is viewed as a likely fossil fuel subsidy due to potential indemnification against 'politically motivated' delays and the possibility of selling the asset below market value.
• The Canadian oil and gas sector faces significant economic risks, including high break-even costs and the potential for stranded assets valued at up to USD 110 billion, as the global economy shifts toward decarbonization.
• The report argues that maintaining these subsidies is inconsistent with Canada's climate targets and carbon pricing, as they incentivize production while carbon pricing targets demand.

APA

Touchette, Y., & Gass, P. (2018). Public Cash for Oil and Gas. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/public-cash-oil-gas-en.pdf

Chicago

Touchette, Yanick, and Philip Gass. Public Cash for Oil and Gas. International Institute for Sustainable Development, 2018. https://www.iisd.org/system/files/publications/public-cash-oil-gas-en.pdf.

Wikipedia

{{cite report |last1=Touchette |first1=Yanick |last2=Gass |first2=Philip |title=Public Cash for Oil and Gas |publisher=International Institute for Sustainable Development |date=September 2018 |url=https://www.iisd.org/system/files/publications/public-cash-oil-gas-en.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{touchette2018public, author = {Touchette, Yanick and Gass, Philip}, title = {{Public Cash for Oil and Gas}}, institution = {International Institute for Sustainable Development}, year = {2018}, month = sep, url = {https://www.iisd.org/system/files/publications/public-cash-oil-gas-en.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }