A government serious about fighting climate change wouldn’t subsidize and support the construction of pipelines.

But in Canada, the federal and Alberta governments have given the oil industry at least $23 billion in support since 2018, according to a new report from the International Institute for Sustainable Development (IISD). The report doesn’t note the exact totals, due to a lack of government transparency, but the federal government has contributed at least $15.9 billion, and Alberta at least $7.5 billion.

Perhaps even worse, about $10 billion of the $23 billion has been given to the industry since the beginning of the pandemic.

It’s an enormous amount of money for the industry perhaps most at fault for the climate crisis we now face. An industry that has repeatedly lied about what it knew about the damage carbon was having to the climate (lots) and when (very early). An industry that, to this day, gloats about the politicians it has under its thumb.

The IISD studied three pipelines that are, or were, under construction over the past three years: Keystone XL, Coastal GasLink and the Trans Mountain Pipeline. According to the IISD, the governments provided Coastal Gaslink with about $500 million, Keystone XL with $7.5 billion and Trans Mountain with $15.4 billion. Alberta gave most of its money supporting Keystone XL, while the federal government picked up the majority of the tab for the other two pipelines.

The IISD report notes, “The progress of recent pipeline projects in Canada at large is tepid at best, and capital spending in the oil sands has slowed in recent years. Amid these historic shifts, project finance is increasingly being provided by the government, even at a time of increased international calls for phasing out public finance for fossil fuels.”

It adds, “Yet government support to pipelines places public money at financial risk for current and future generations. There is significant uncertainty surrounding the future of the projects outlined in this report, including whether pipelines will be completed or will be able to recoup costs.”

The government may not be able to ever recoup the costs of construction, for example, through tolls to companies shipping through the pipeline. The report notes that this is true for Trans Mountain, and that if the government ever tried to sell the pipeline back to the private sector the sale price will be hurt because “potential buyers of the pipeline will base its value on future earnings potential from toll rates.” 

This puts all the burden of the risks on the public, while oil companies reap the profits of their exports.

The report argues, “Not only does this prop up these projects themselves, but government support also signals to the private sector that oil and gas projects can expect bailouts in the future.”

It’s a strategy that’s more than a little puzzling considering it’s coming from a government that promises ambitious carbon-reduction targets and a net-zero future. It also dooms us to a future where burning fossil fuels is baked into our economic plans, because we’ve already poured all this money into these projects, so how can we stop, right?

Plus, even if Canada starts burning less oil, that doesn’t mean we won’t still be happy to export. For example, coal may be phased out as a power source here in Canada, but that hasn’t stopped Canadian miners from opening more mines to export to power plants abroad. It wasn’t that long ago Alberta was looking to lop off the top of the Rocky Mountain foothills to turn them into coal pits.

And worse, giving the fossil fuel industry money doesn’t just undermine the idea of fighting climate change — it undermines the ability to actually fight climate change.

A May study by the International Energy Agency (IEA) shows that if there’s any hope for the world to reach net-zero carbon emissions by 2050, fossil fuel subsidies by governments must end.

There’s an election around the corner, probably just weeks away. Ending fossil fuel subsidies needs to be on the table. Any politician — looking at you, Justin Trudeau — who says they are serious about tackling climate change, but want to take a balanced approach, is lying to you.

There is no balanced approach. There is taking on climate change, and there is continuing to prop up the fossil fuel industry. One choice can save us, and it’s not the one that sees pipelines completed.

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