Are Canadian governments giving away the country's fossil energy resources? It seems our energy producers, always ready with political cash to throw around (remember Christy Clark?), are getting something of a free ride.
Not only are Canadian governments lavishing billions in direct and indirect subsidies on these largely foreign fossil energy giants, these same energy giants are giving us a small fraction of what they remit per barrel to other countries, places such as Indonesia or Nigeria or the Ivory Coast or even Britain.
The low rate that oil companies pay in Canada represents billions of dollars in potential revenue lost, which an industry expert who looked at the data says is a worrying sign that the country may be “a kind of tax haven for our own companies.”
“I think it will come as a surprise to most Canadians, including a lot of politicians, that Canada is giving oil companies a cut-rate deal relative to other countries,” said Keith Stewart, an energy analyst with Greenpeace.
Companies like Chevron Canada paid almost three times as much to Nigeria and almost seven times as much to Indonesia as it did to Canadian, provincial and municipal governments.
Chevron used to run its Nigeria and Indonesia projects out of the U.S., but after allegations that they evaded billions in taxes, their operations were moved to Canada.
According to data collected by the Guardian, Suncor also paid six times more taxes to the UK, and Canadian Natural Resources Limited (CNRL) paid almost four times more to Ivory Coast.
To rub salt into our wounds, in 2016 the IMF calculated that Canada's direct and indirect subsidies to the fossil energy giants were a staggering 46 billion dollars a year.
Trudeau has, of course, promised to eliminate direct subsidies (the 1.4 billion figure) by 2025 which, naturally, will be long after he's gone.
I guesstimated that amount in subsides.
ReplyDeleteBack in 2009, it was $30 billion a year. Wonder what happened...? :p
That was when prices per barrell were crazy high. High enough, there was still profit to be had.
And I guessed almost correctly how much subsides would need to rise simply for tar-extraction companies to remain profitable. However, I'm guessing they're only making between 25% to 75% of the profits they used to make when oil used to be profitable. Back then, it was a $10 billion profit. Now, it's probably anywhere from $2.5 to 7.5 billion.
And the longer this goes on, the more in subsides Canada will need to pay simply for these tar-extractors to declare they're turning a profit. And the cost of subsidies will likely compound rather than grow at any sort of steady pace.
As it is now, companies are struggling to remain operating, decommissioning drills simply to remain at balance. Canada needs to get on a planned implosion of this industry.
Hell, Canada could take care of a number of difficulties facing the economy simply pursuing a Volcker-style reset of the economy. But that would be quite a bit of short-term pain for all of us. But that would take care of a whole assorted number of problems. It'd kill the tar extractors, pop the housing bubble, thwack tuition fees.
Honestly, we're not even getting into how shutting down the tar sands is simply the right thing to do. It would be best for most of Canada, from coast to coast, if we simply put it out of our misery.
The heydays aren't coming back. There's no future in it. Canada's economy, and environmental health - basically Canada's future is sinking to the bottom of the tar sands the longer we remain mired in them.
Troy
ReplyDeleteThen there's the "parting gift" subsidy, cleaning up the tailing ponds when the oil giants hightail it out of Athabasca.
.. aside from alert & concerned Indy Bloggers.. so many of these energy related topics are simply not in the public realm aka Mainstream Media. Mainstream seems to concern itself mainly with the fabulist emissions of Donald Trump, Julian Assange (the emails) and certainly in Canada a fixation on electoral or popularity polls. We certainly can't expect the Government we elected or the loyal Opposition to bring up the unpleasant topic of selling out Canadians to primarily foeign owned Big Energy & Big Lobbying
ReplyDeleteThe sucker punch regarding your timely essay (in my view) is that all these energy conglomerates will simply walk away from the methane plumes, seeping wells, tailings ponds & frackwater holding dams etc. Its a complicit & explicit conspiracy to not just defraud the electorate and citizenry, but to do the old nudge nudge wink wink as they toxify wherever they operate, strip habitat.. all in the holy name of 'its the economy stupid!' & all those jobs for TFW's.. Its trickle down fantasy time in the era of political animals dressed up as unicorns.
Damn! We have so many pipeline welders marooned in Alberttawa.. that we could weld new series of coastal seach & rescue, navy supply tenders, a frigate or two and state of the art Coast Guard vessels to supplement Greenpeace or Sea Wolves tracking down poachers and bottom dragging foreign fishing ships.. mebbe an ice breaker or two.. tho we won't need icebreaking soon.. as it will be extinct right after the Canadian polar bear and the killer whales, the herring and the wild salmon.
Fortunately tho.. we won't suffer from a shortage of Norwegian owned & diseased farm salmon. Successive governments have deemed them critical to someone else's economy or bottom line.. and thus deserving of vigorous defence via our Ministry of Agriculture. The damn fish live in the sea last I heard.. not a concern of DFO..and one supposes all that lumber going to Asia with bark on.. may fall under Agriculture too.. or is that the purvey of Religious Freedom.. we just don't know.. Ministry of Strip Mines? Yes.. it gets stupid real quick in Ottawa.. and that's not 'news' - that's entrenched fact
ReplyDeleteYes, Sal, it does get "stupid real quick in Ottawa" and in Edmonton, Victoria and Regina. Of course Big Oil has our number now and it's too late to try to re-open royalties at this point. WWDD? What Would Donald Do?