Mr. Speaker, two years ago the Standing Committee on Environment and Sustainable Development recommended the elimination of subsidies to fossil fuel industries.
Two days ago I asked the Minister of Finance if he agreed that these subsidies were counterproductive in light of Canada's international commitment to reduce greenhouse gases and should therefore be eliminated.
Unfortunately we have federal tax incentives which encourage increased production of greenhouse gases and make it much more difficult for us to cut carbon dioxide emissions.
Commitments to reduce carbon dioxide emissions are not new. In the 1993 election we committed to cut by 20%. Yet the Department of Finance is blissfully continuing with policies which compound rather than resolve the problem.
In addition, in 1996 the government introduced a special tax concession for the oil sands industry. Oil sands extraction produces several times the amount of greenhouse gas produced from conventional oil extraction. This tax concession makes the task of reducing emissions much more difficult.
In addition, it may cost Canadians up to $600 million in forgone revenue. We found that out in 1997 from estimates provided by the Department of Finance. How then can we achieve the Kyoto goals with these perverse tax incentives in place, approved by the Department of Finance?
In a report commissioned by the highly respected Earth Council entitled “Subsidizing the Unsustainable Development: Undermining the Earth with Public Funds” we find a statement which applies to Canada as well as to other OECD countries:
Judging by their public pronouncements, governments around the world realize they should be following policies that encourage a transition to greater energy efficiency and lower energy use. Yet many official policies instead encourage energy profligacy and waste. Worse still, they usually favour the dirtier energy sources.
The report also includes a table showing subsidies provided by OECD countries. The table shows Canada contributing some $6 billion in budgetary subsidies in the form of tax expenditures. The authors go on to say:
The more environmentally damaging a fuel, the bigger the subsidy. The subsidy ranking is a pollution rogues' gallery—coal far in the forefront, followed by oil, then nuclear power and finally natural gas. Strikingly small is the proportion of total funding devoted to sources of renewable energy, the most environmentally friendly sources.
The Kyoto commitment is urgent and serious. We must remove counterproductive tax concessions and promote the production of a renewable energy and the shift to natural gas, of which we have plenty.
For all these reasons I ask the parliamentary secretary when the government will remove the tax subsidies to oil sands developments.