Mr. Speaker, as part of its effort to fulfill Canada’s G20 commitment to phase out or rationalize inefficient fossil fuel subsidies, on July 24, 2023, the Government of Canada released the “Inefficient Fossil Fuel Subsidies Government of Canada Self-Review Assessment Framework” and the “Inefficient Fossil Fuel Subsidies Government of Canada Guidelines”. The framework defines a fossil fuel subsidy and the methodology for assessing efficiency, while the guidelines are meant to avoid the creation of any new inefficient subsidies. The framework and guidelines were jointly developed by Environment and Climate Change Canada and the Department of Finance Canada and apply to all federal departments and agencies.
Proponents do not apply to the IFFS framework and guidelines, but rather, government departments and agencies are responsible for applying the guidelines when considering applications for project funding that could be deemed an inefficient subsidy to the fossil fuel sector.
Subsidies to the fossil fuel sector are considered “inefficient” unless they meet one or more of the following criteria: subsidies that enable significant net greenhouse gas emissions reductions in Canada or internationally in alignment with article 6 of the Paris Agreement; subsidies that support clean energy, clean technology or renewable energy; subsidies that provide an essential energy service to a remote community; subsidies that provide short-term support for emergency response; subsidies that support indigenous economic participation in fossil fuel activities; subsidies that support abated production processes, or projects that have a credible plan to achieve net-zero emissions by 2030.
No centralized database exists to track government-wide decision-making; however, departments and agencies are required to document how an approved project meets one of the six criteria, in cases where the guidelines apply.