Setting the record straight on the day’s top anti-oil and gas media stories
ACTIVIST CLAIM: International Institute for Sustainable Development again stretches the definition of subsidy to include government ownership of pipelines in their latest report.
THE FACTS: If you buy a pipeline and charge market rates to use it, you are not subsidizing it, you are investing in infrastructure.
Here are some talking points and sources to have a reasonable conversation about governments investing in infrastructure projects:
- Of the 23 billion in subsidy claims, 65% relates to governments purchasing pipelines because of government policy that chased interested private sector investors away. Is it a subsidy if you buy something after you coerce the owner to sell it to you?
TMX Pipeline where the Government will charge market rates is $12.6 billion
- Keystone Pipeline, where the Government along with the private pipeline company are taking legal action to recover $1.5 billion. The $6 billion dollar loan guarantee was returned before it was even used but the authors counted it as if it was a cash subsidy anyway.
- The remaining balance of 500 million in misleading claims of subsidies comes from Export Development Canada in the form of a loan. However, Export Development Canada is an organization that is financially self-sufficient and raises money just like a bank, mostly through fees and global markets, not the public.
- The real subsidies for energy unsurprisingly and overwhelmingly go to green energy. A policy brief from the International Institute for Sustainable Development notes that Canada announced almost $15 billion in financial support for “green” initiatives in 2020 alone.
- The oil and gas industry contributes an average of $26 billion per year in taxes which goes to important civil services like health care and even subsidies to green energy.
Statistics Canada (2020b). Table 10-10-0017-01: Canadian Government Finance Statistics for the Provincial and Territorial Governments
Statistics Canada (2020c). Table 33-10-0006-01: Financial and Taxation Statistics for Enterprises, by Industry Type Statistics Canada (2020d). Financial and Taxation Statistics for Enterprises, by Industry Type (x 1,000,000). Custom tabulation.
Statistics Canada (2020a). Table 10-10-0016-01: Canadian Government Finance Statistics for the Federal Government
Stories that get it right.