May 26, 2010 - A leaked memo to Finance Minister Jim Flaherty
advised the minister to live up to a G20 commitment to phase out tax
breaks to the companies that produce coal, oil and gas. With just four
weeks left before the G20 summit in Toronto, it's time for Minister
Flaherty and Prime Minister Harper to commit to a Canadian plan to end
tax breaks to fossil fuel producers.
"The leaked memo shows
that senior officials at the Department of Finance want to see an end
to tax breaks for the fossil fuel sector. We couldn't agree more," said
Graham Saul of Climate Action Network Canada. "At a time when we need
to be cutting greenhouse gas pollution, tax breaks to polluting
companies make no sense. Canada needs to live up to its word and
announce a timeline and real plans to phase out fossil fuel subsidies."
In
a 2005 report, the Pembina Institute estimated that federal tax breaks
to the oil and gas sector were worth $1.4 billion/year. Since that
report was published, the government has announced that it will phase
out some subsidies, including a specific tax break for oilsands
companies. But because the sector has also grown significantly, current
tax breaks are likely on the order of $2 billion/year.
G20
countries committed to "rationalize and phase out" fossil fuel
subsidies "over the medium term" at their 2009 summit in Pittsburgh.
They also agreed that their energy and finance ministers would report
back to them on strategies and timeframes to phase out fossil fuel
subsidies at Canada's summit this June.
"As the G20 host,
Canada has an extra responsibility to lead by example," said Dale
Marshall of the David Suzuki Foundation. "The briefing note points out
clearly that there's no reason to keep providing tax breaks to a sector
that is doing just fine financially. Finance officials are giving the
right advice, but so far there's no evidence that Minister Flaherty and
Prime Minister Harper are listening."
"Phasing out fossil fuel
subsidies would provide an important source of new and additional
funding for climate action," said Clare Demerse of the Pembina
Institute. "Canada needs to make a massive investments in the
transition to clean energy, and the government must provide our fair
share of support to developing countries as they tackle climate change.
The revenues from ending fossil fuel subsidies would go a long way
towards those urgent priorities."
UN Secretary-General Ban Ki
Moon has urged Canada to make climate change an important part of the
Muskoka and Toronto summits. Canada is the only developed country that
has yet to announce its contribution to "fast start" climate financing
under the Copenhagen Accord, which would support emission reductions
and adaptation to the impacts of climate change in developing
countries.
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For comment:
Clare Demerse, 613.762.7449
Dale Marshall, 613.302.9913
Graham Saul, 613.558.3368
For further media inquires:
Hannah McKinnon 613.276.7791
www.climateactionnetwork.ca
