Thank you, Mr. Chair.
I'd like to thank the committee for the opportunity to contribute to this important discussion.
My contribution will aim at clarifying certain economic arguments and ethical concerns, but first I would like to get the definition of an inefficient subsidy on record. A subsidy is any government support that confers a market advantage. For example, a tax credit is a subsidy and the OBPS is a subsidy.
As far as inefficiency is concerned, economic principles tell us that any program that does not pass the cost-benefit test is inefficient. As a result, some fossil fuel subsidies, such as small and temporary programs that aim at providing energy security to remote communities until they can transition, may not be inefficient. However, most fossil fuel subsidies are inefficient because the oil and gas sector is already a profitable one. They amount to funnelling taxpayer money to shareholders and executives while undermining emissions reduction efforts.
Now I'll move on to the CCUS tax credit. I claim it is both inefficient and unethical. It is inefficient because the oil and gas sector has the wherewithal to invest in this technology on their own. If they do not find it profitable, it is because the reward for cleaning up—meaning the carbon price—is too low. It's better to increase the carbon price and use public dollars to support vulnerable households. It is unethical because taxpayer dollars should go towards furthering the transition, not slowing it down. CCUS is not a transition technology. It is a cleanup technology. It is imperfect and unproven at scale and it does not capture a host of other pollutants. If your teenager smokes cigarettes inside the house while Grandma is ill and getting worse from second-hand smoke, you don't buy your child an air purifier. You scold them when they smoke—that's the carbon price—and you encourage them to chew gum instead—that's the transition.
I would like to clarify a few things related to plastics, jobs and meeting global demand.
This discussion is not about the elimination of fossil fuels but about the elimination of fossil fuel subsidies. Those who fear a shortage of polymers, like plastics and rubber, should not worry. Whether it will ever arrive, the polymer crisis is far away and we'll tackle it then. Better to kick that can down the road than the climate can, if you will.
Next, the jobs argument is a fallacious one. Yes, removing subsidies may cost jobs in this sector, but these jobs are jobs that will be shifted to other sectors that require the valuable knowledge and skills these workers hold, such as the development of clean energy, energy consultancy and so on. This can be scary, especially for workers who are in the later stages of their careers. That is why public dollars are better spent on reskilling, upskilling and generous relocation packages for oil and gas workers and their families.
Finally, I am unmoved by the argument that the world needs Canadian oil and that we should step up our production to meet global demand out of solidarity with other countries facing an oil crunch. Meeting global demand is not the duty of Canada as a nation. Honouring our climate pledge is, and it is the best act of solidarity we can perform right now.
I'm happy to talk about other topics, like inflation and competitiveness, should you ask about them.
Thank you.