Thank you.
The scenario of lower oil demand and thus lower oil prices coupled with fast-growing demand for clean energy needs to be acknowledged by the Government of Canada in its policy choices and economic planning. By shifting our focus towards investing in sectors such as clean energy, we can build the kind of diversified economy we need to be competitive in a global low-carbon economy.
In your discussions around the benefits of developing the oil and gas industry, I encourage you to consider the following policies that will help guard against the risks that I have identified and will ensure that future development is responsible and maximizes longer-term benefits for Canadians.
First, introduce regulations on greenhouse gas emissions for the oil and gas sector that are strong enough to get Canada on track to achieve its national 2020 climate target. Knowing the rules of the game would allow companies to make investments, particularly in innovative technologies, to reduce emissions with greater confidence.
Second, provide greater support for energy efficiency and the clean energy sector. A reinvestment in energy efficiency retrofits for homes and commercial spaces, for example, is win-win-win: reducing Canada’s emissions, creating jobs across the country, and saving money for Canadians. Similarly, programs such as production tax credits for clean energy encourage investment in a sector of growing global importance.
Finally, complete the phase-out of all tax preferences and subsidies to the fossil fuel sector by 2020. This government has made real progress in reducing tax breaks to fossil fuel producers, but Canada’s two largest subsidies, the Canadian development expense and the Canadian exploration expense, still remain on the books. These subsidies are costing the government and Canadians hundreds of millions of dollars in forgone revenue every year and are providing the wrong incentives to industry to over-invest in high-carbon fossil fuels.
Thank you for the opportunity to share these thoughts with you today and I welcome any questions.