Activist Claim: EU wants to implement a windfall tax on energy producers to offset high energy prices.
The Facts: A windfall tax does not solve the problem. High energy prices in the EU and Canada are self-inflicted through cutting investments in the energy industry over decades.
EU eyes levy on fossil fuel firms to help consumers survive energy crisis
Here are some facts and sources to have a reasonable conversation about windfall taxes:
- Canada’s oil and gas royalty and tax regime already provides for windfall taxes on profits. According to RBC, oil and gas companies will pay $48 billion to governments in 2022, a 200% increase from 2021. Royalties and taxes are estimated to reach $64 billion in 2023.
- Canada’s energy industry paid over $505 billion in federal, provincial and local taxes, and royalties, since 2000.
- This year of “windfall” profits follows half a decade of losses. Between 2015 and 2020, the oil and gas industry lost a collective $137.6 billion.
- Not only is the oil and gas industry a major driver of tax and royalty revenue for the government, it is also a major driver for trade. Oil and gas has driven over $1.9 trillion worth of exports and much needed foreign exchange between 1988 and 2019.
- On average, 44% of the cost of a fill-up will go to government pockets by 2030.
- The federal government is expected to bring in a second carbon tax called the Clean Fuel Standard. This could add up to 13 cents per litre of gas by 2030, in addition to the 40 cents per litre expected from the carbon tax in 2030 at $170 a tonne.
Stories that get it right:
From underinvestment in new energy projects, supply issues stemming from the war in Ukraine, and increased demand, energy and food prices are soaring around the world.