Federal fossil fuel subsidies have dropped sharply, but Statistics Canada says the decline is due to the expiration of pandemic wage subsidies, not specific actions by Environment Minister Steven Guilbeault or federal policies.“The sector received slightly over $1 billion in federal subsidies in 2021, the latest year for which we have this detail,” said Jennifer Withington, assistant chief statistician, in testimony before the Senate energy committee. “Over 91% was from the Canada Emergency Wage Subsidy program. Provincial subsidies totaled $554 million.”Blacklock's Reporter says Statistics Canada noted that federal subsidies across all industries have fallen as pandemic aid programs ended. “We don’t have data for just oil and gas, but we do know that in 2023 subsidies for all industries were $43.6 billion compared to $119.4 billion in 2020 and $67.5 billion in 2021,” said Withington.“Given the program is complete because of the pandemic, it is going to go down significantly?” asked Sen. Paul Massicotte (Que.), committee chair. “Yes, that is a safe assumption,” Withington replied.Since 2016, cabinet has pledged to eliminate “inefficient” fossil fuel subsidies, with Guilbeault setting a 2025 deadline. “By eliminating inefficient fossil fuel subsidies, we are encouraging smart and efficient government investment,” Guilbeault said on July 24, 2023.However, the term “inefficient” remains undefined. “At Statistics Canada, we do not categorize inefficient or efficient subsidies,” Withington said in response to Sen. Josée Verner’s (Que.) question about its meaning. A 2023 briefing note from the Department of Environment acknowledged the lack of clarity, stating: “The term ‘inefficient’ fossil fuel subsidy lacks a commonly accepted definition.”Despite subsidy reductions, the petroleum sector remains a significant part of Canada’s economy. “In terms of economic importance, the petroleum sector accounted for 7.7% of GDP in 2023 or $209 billion,” Withington said. The industry directly and indirectly employed about 446,000 people in 2023, including 10,800 Indigenous workers.“Production of crude oil continues to increase each year, and natural gas volumes are currently at record high levels of production, consumption, and storage,” Withington added. Canadian exports of oil and gas reached $177 billion in 2023, with 97% going to the United States.
