Ottawa is implementing new measures to restrict subsidies to the fossil fuel industry, while maintaining the industry’s largest source of public financing. Environment Minister Steven Guilbeault has released six rules to ensure that Canada’s support for the industry aligns with federal climate targets. Under the new guidelines, subsidies will only be permitted if they support clean energy or if companies can demonstrate a credible plan to achieve net-zero emissions by 2030. Indigenous involvement, remote community support, and emergency response programs will also continue to receive subsidies. Additionally, subsidies that align with Article 6 of the Paris Agreement, allowing countries to claim carbon credits, will be allowed. The exact financial impact of these measures is unknown, but it is estimated to affect approximately $1 billion in public money. These guidelines do not affect generally available subsidy programs or public funding provided through Crown corporations such as Export Development Canada, which is the primary source of government subsidies for the sector. Further rules restricting Crown investments in fossil fuel development will be introduced next year. However, there are concerns about the continued public financing of carbon capture and storage projects, which are expensive and slow to implement and do not fully address emissions from burning fossil fuels. Environmental groups have praised the new guidelines but would like to see more information on their implementation and enforcement.
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