Good morning. Thank you for the opportunity to discuss fossil fuel subsidies and Canadian climate and energy policy.
I'd like to make three points and signal their most important implications.
The first and most important point is this: The imperative of eliminating all fossil fuel subsidies is a means to an end, and we must not lose sight of the end goal. The end goal is not the elimination of all fossil fuel subsidies. The end goal is phasing out all fossil fuel extraction, production, export and use in Canada as soon as possible.
Eliminating all fossil fuel subsidies is a necessary but, in itself, insufficient means of achieving this end goal. Eliminating all fossil fuel subsidies may be the easiest of all steps necessary to phase out Canadian fossil fuel industry production, and it should be done immediately. Subsidies will only prolong and complicate this inevitable phase-out.
I'm mindful of the possibility that my statement this morning may sound radical outside the Canadian Overton Window. This is a testament to the fossil fuel industry's ongoing regulatory capture of Canada's climate and energy policy imagination, but this is not a radical proposition. It is based instead on leading independent, peer-reviewed climate science and policy research.
Climate modelling now shows that, in order to have only a 50% chance of limiting global warming to 1.5°C above the pre-industrial norm, rich producer countries, including Canada, must cut oil and gas production by 74% by 2030 and completely phase out oil production by 2034. Removing all fossil fuel subsidies is an important step toward this larger climate and energy policy goal.
Second, we can no longer afford—with great respect—to engage in semantic wordplay with respect to the meaning of the term “subsidy”, as so many in Canada are wont to do. There is no basis in international law or policy for distinguishing between efficient and inefficient subsidies, nor is there any basis for adopting a narrow definition of the term “subsidy” in relation to fossil fuels. The World Trade Organization's definition is well established and long-standing: A subsidy is a financial contribution by a government or any public body that confers a benefit. This is plainly a broad definition, and it's a definition that other international bodies follow, notably the United Nations Environment Programme.
Third, eliminating all fossil fuel subsidies will reduce greenhouse gas emissions and support the transition to decarbonization. In its latest major assessment report on climate change mitigation, the UN's Intergovernmental Panel on Climate Change discusses the following benefits of complete fossil fuel subsidy removal. According to the IPCC, removing fossil fuel subsidies will reduce emissions, improve public revenue and macroeconomic performance, and yield other environmental and sustainable development benefits.
Finally, I want to emphasize the three most important policy implications of these three points for Canada's current climate and energy policy.
First, the government should immediately cancel the Trans Mountain pipeline expansion project. The government should not approve or otherwise support any new fossil fuel development in Canada, meaning that it should also rescind its recent and improper approval of the Bay du Nord offshore oil project.
Second, the government should rescind the investment tax credit for carbon capture, utilization and storage announced in the recent federal budget, and cancel all other financial support—