Canada’s fossil fuel industry exports much of its output to the US. As the Trump administration intends to relax environmental laws and eliminate provisions requiring reduced GHG emissions, the US industry will enjoy a favourable legislative and regulatory climate over the next four years -to the possible disadvantage of Canada’s exports.
In our January discussions with GTA MP’s, we inquired when the Government would phase out fossil fuel subsidies in various forms. The response was that the Government was studying this issue and would be taking action in the medium term.
4RG recognizes that the Government is in a political “tight spot”. Any steps to eliminate fossil fuel subsidies now would be criticized by the Federal Conservative Party and Provincial Governments in the West. Naturally the Federal Government also would prefer to wait until US policy is known and assessed.
The fossil fuel industry and its supporters would certainly object to the timing of the phase out. They would complain that, coming on top of a carbon tax, elimination of these subsidies would put the industry at a competitive disadvantage.
Yet Canada – and also the Liberal party when in opposition – has a long standing commitment to phase out these subsidies. A re-affirmation that a “phase out” in the near future is an essential component of Canada’s climate change strategy. You can read more about the reaction of Environmentalists – these linked comments from the Equiterre Website are typical.
The Liberal Party generally enjoys the backing of supporters of Climate Change policies. Eliminating subsidies in the 2018 budget would assist in maintaining that support.