Taxpayer-funded climate change

Why the next B.C. government needs to stop giving public money to oil and gas companies

We live in Super, Natural British Columbia. At one point, our government was famous around the world for its ambitious climate policy. We may no longer be able to claim the climate leader title, but we expect our government to take the climate crisis as seriously as British Columbians do.

So here is my question for anyone running in this election: do you think B.C. should spend twice as much public money paying oil and gas companies to pollute as it does fighting climate change?

The B.C. government now gives a billion dollars a year to the very industry fuelling the climate crisis. That’s twice as much as its climate action budget ($484 million) and five times more than it collects in royalties ($198 million). It’s also 79 per cent more than Christy Clark’s Liberals ever spent on oil and gas handouts. And it makes B.C. one of the leading providers of fossil fuel subsidies in Canada — second only to Alberta.

How on Earth did ‘Clean B.C.’ end up here?

B.C.’s billion dollar giveaway to oil and gas

Christy Clark’s dream to capitalize on the vast gas reserves in B.C.’s northeast was born on the campaign trail, with outlandish promises (remember 100,000 jobs and a debt free province?) based on getting elected, not sound economics. B.C. tried to get its LNG industry off the ground as the fracking industry was going from boom to bust, plagued by a glut of gas across North America and collapsing prices.

In a scenario familiar to anyone who’s followed the Trans Mountain boondoggle, as LNG investors saw the writing on the wall and started to back away from B.C., the government stepped in with an ever growing stack of handouts in the form of tax breaks, royalty credits, subsidized electricity and direct cash payments.

The biggest single giveaway, at an average of $231 million per year, is the catchily-named Deep Well Royalty Credit. This subsidy allows fracking companies to reduce their royalty payments to the government — effectively the ‘rent’ private companies pay to the people of B.C. After years of fighting to keep the numbers a secret, freedom of information requests finally named some of the companies profiting from these credits, which include Encana and Petronas — one of the partners in the LNG Canada consortium. A retired government whistleblower has also revealed that B.C. is giving out $2 in rebates for every dollar in royalty tax paid.

In other words, we are getting royally ripped off.

Funding pollution, not solutions

We are literally paying giant, foreign-owned corporations to carry away B.C.’s public resource, and get even richer by producing fuels that threaten life on Earth as we know it.

Every public dollar handed over to the fossil fuel sector is one that’s not available for health care, housing, and helping families weather the economic storm caused by COVID-19. Every subsidy to a fracking company comes at the expense of support for new renewable energy projects or clean tech research. And every tax break to oil and gas undermines policies, like the carbon tax, by sending the exact opposite signal to the market: ignore the transition we all know is coming and drill, baby, drill.

And if we go down that road, B.C.’s emissions targets (already too low for climate safety, already being missed year after year), will be impossible to reach. One recent study showed that if B.C.’s ‘carbon bomb’ LNG industry is developed as proposed, every single other sector of the economy would have to reduce its emissions to zero — and we’d still blow past our targets.

Who will stop pouring gas on the fire?

When they were in opposition, NDP MLAs didn’t pull any punches about the Liberals’ plan to prop up LNG with B.C. tax dollars.

Michelle Mungall, now an NDP cabinet minister, called it a “sellout of this province…a sellout of this future.” Current Environment Minister George Heyman warned, “We are creating significant environmental catastrophe, significant health issues and we are going to cost the economy of this province, this nation and the world billions of unnecessary dollars.”

But once in office, the NDP doubled down on LNG subsidies, increasing the tax incentives and adding project financing, infrastructure investment and direct cash payments into the mix — despite the fact the economics of LNG have only gotten worse. As prices have dropped, fracking companies across Canada and the U.S. are spending more than they earn, and since the pandemic, bankruptcies and write-offs have plagued the industry.

The bottom line is, in 2020 the only way to expand the oil and gas industry is with public money. That’s horrifying, but it also gives citizens power we didn’t have before. If we stop the flow of our tax dollars, we stop the drills and the pipelines, the poisoned water and polluted air, the conflicts on unceded territory, the legacy of climate chaos we’re leaving to our kids.

The next government of B.C. will guide us through half of the remaining eight years we have left to avoid the most terrifying impacts of the climate crisis. We need MLAs who are willing to go the distance — even stand up to their own parties — to turn the ship around before it’s too late. Step one: stop giving public money to oil and gas companies, and invest it instead in the people and projects that will fuel a clean energy revolution for B.C.

13 Responses to “Taxpayer-funded climate change”

  1. Omri Haiven says:

    Well said. Thank you for this concise and important message

  2. Eileen Hackett says:

    Thank you for this very disappointing and discouraging information. Let’s hope BC citizens can make enough noise for the gov’t to finally stop subsidizing these terrible fossil fuel corporations!

  3. Elisabeth Hart says:

    Your right….we can’t have our government giving anymore subsidies to the fossil fuel industry. It must stop now. But who shall we vote for if the NDP lied, the liberals don’t accommodate, and the greens have no chance of winning on the mainland. Who do we vote for????

  4. Ronald Mackenzie says:

    Thank you for your well researched and heartfelt article. Do you have my financial support on a regular basis. I wish it could be more. Keep up the good work.

    Ron Mackenzie

  5. Glenn Fyfe says:

    To NDP: stop doing these bad things. Promise to stop before the election or you won’t get my vote!

  6. Vic Brice says:

    sadly there is no penalty for lying.

  7. Trudeau and Horgan, and other Provincial Leaders have been ‘captured by Big Fossils. We need to keep chipping away at them, changing their attitudes and favoring their constituents, the the superwealthy Big Oil and Gas. We only have until 2030 to meet our UN contributions, and get the world going in the right direction. Give it all you’ve got!

  8. mekindred says:

    The fossil fuel companies have instilled fear in all of us that if we don’t support them, we’ll be out of gas–to put it simply. Government and citizens live with this fear, which is why government supports the industry. Citizens also don’t want to alter their energy-gobbling lifestyles.

    There’s the matter of all the jobs at risk if the fossil fuel industry collapses. It’s going to take a great leap of faith federally, provincially, and in our personal lives to say, “Stop the subsidies. We’ll deal with the risks.” We have to make this terrifying leap to adopt and adapt to the greening of our economy and all aspects of our lives. There’s job training, providing development funds, and educating everyone that change is critical for the survival of our species and most life forms on Earth.

    The fossil fuel mandarins and all those used to significant dividends from fostering the fear of change to renewable energy and sustainable lifestyles must be faced with courage and a huge leap into the unknown.

  9. Katherine Kortikow says:

    Voting for the Greens then? That’s simply a toss to the Libs.

  10. Thanks for this well-researched article. I despair at the slow pace of the measures needed to avert climate catastrophe.
    Help me understand WHY politicians who were so against LNG and royalty credits for the fossil fuel industry flip after they get into office? Heyman was a strong environmental advocate with the Sierra Club and now defends Clean BC even though it only reaches 75% of their emission reduction targets.
    I support your good work, Dogwood, in working to halt fossil fuel expansion!

  11. Anita DEN DIKKEN says:

    Vote for the Greens anyway. We need to send a message that we, the public, are fed up with the subsidies given to oil and gas companies. Especially we are fed up with the lies that LNG is a clean fuel. It is NOT. Even if the Greens don’t get in, stand up and be counted. Change comes in increments and we need to make those increments happen.

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