NDP MP Charlie Angus cites Canada’s ‘failure to hold the oil industry accountable for the massive amounts of taxpayer money’

Natural Resources Canada has failed to "hold the oil industry accountable" for taxpayer funding tied to orphan well cleanup and climate mitigation in the sector, NDP MP Charlie Angus says.

The party's natural resources critic wrote to Natural Resources Minister Jonathan Wilkinson on Jan. 27 after recent reports found the federal government's climate change funding for oil and gas companies amounts to little more than fossil fuel subsidies.

In his letter, Angus points to a recent report from the Parliamentary Budget Officer that found over half of Alberta’s funding for orphan well cleanup went to financially stable companies he said should be able to take care of the wells without federal cash.

In an emailed statement, Natural Resources Canada ministry spokesperson Joanna Sivasankaran said: “As a condition of the $1.7 billion to clean up orphan wells, provincial jurisdictions were required to improve their regulations to eliminate future oil well liabilities, and added that the federal government “believes in the polluter pays principle.”

Another federal program was said to provide financial aid to help struggling oil and gas companies reduce greenhouse gas emissions, but a report from Canada’s environment commissioner revealed it was “poorly designed” and amounts to little more than a fossil fuel subsidy.

“What we see is the federal Department of Natural Resources either is completely incompetent and doesn't understand basic issues about how to handle a greenhouse gas reduction program, or they're using the climate crisis as a scheme to funnel money to Big Oil,” said Angus.

Accountability mechanisms need to be in place to deal with these types of programs to guarantee significant emission reductions, said Angus.

“If those targets aren't met, then Canadians have a right to say those companies need to pay the money back,” he said.

Natural Resources Canada has since announced strengthened funding criteria for its onshore emissions reduction fund. Sivasankaran said these changes reflect economic improvements in Canada’s oil and gas sector since 2020, lessons learned throughout the program, the environment commissioner’s report, and comments from environmental organizations including the Pembina Institute and the David Suzuki Foundation.

In 2020, the federal government “took the immediate action necessary to protect thousands of jobs in the oil and gas sector and support the communities that rely on them, while protecting our environment,” Sivasankaran said in her statement.

Some critics like Julia Levin, a senior program manager with Environmental Defence, say these programs are still antithetical to the polluter pays principle, which states those who pollute should pay the costs imposed on society. She would like to see the program scrapped.

Levin said this principle needs to be a key criteria of any emission reduction funding program.

For example, despite its name, the onshore emissions reduction fund that attracted the ire of politicians and environmentalists was created with the economic needs of companies in mind, not emission reduction goals.

“It's an attempt to pull wool over our eyes,” said Levin.

She said the polluter pays principle needs more recognition and that one avenue could be creating new policy tools to set up a formally binding commitment to ensure no new subsidies are created and no project that violates the polluter pays principle gets approved for funding.

Angus said the biggest barrier is a lack of political will.

“In a previous life, I worked for First Nations, I worked for arts organizations, and when we got a little grant money, if we didn't prove that the money was spent the way it was supposed to be spent, there were serious repercussions,” said Angus. “If they can do that for small arts organizations, they sure as hell can do that for Shell and Chevron and [ExxonMobil] and the rest of them.”

Since the Paris Agreement was signed in 2015, Canada has had the worst record among G7 countries for reducing greenhouse gas emissions, and last fall, the independent Climate Action Tracker found Canada is heading for 4 C warming — far exceeding the Paris target of 1.5 C.

Angus’ letter highlights the pleas of 400 academics who wrote to Finance Minister Chrystia Freeland urging her to cancel the government’s proposed carbon capture tax credit and invest in renewable energy.

A recent report by international NGO Global Witness found the Quest carbon capture and storage facility — operated by Shell near Edmonton — is emitting more greenhouse gases than it captures.

Angus’ letter also criticizes the federal government for its high frequency of meetings with oil and gas lobbyists.

Meeting with lobby groups is not inherently wrong, but Levin says oil lobbyists have far more access to high-level officials than most environmental groups, and their influence in Canada’s “environmental and energy policies is egregious.”

Limiting that influence on Canada’s policies is key for a climate-safe future, she said, adding: “We wouldn't put health in the hands of Big Tobacco, but we continue to do exactly that with Big Oil.”

By sending his letter, Angus wants two questions answered: “Is this government giving free money to Big Oil under the guise of dealing with the climate crisis? Or is [Wilkinson] going to overhaul his department to say the days of being the free money cash machine for Big Oil are over?”

— With files from John Woodside

Natasha Bulowski / Local Journalism Initiative / Canada’s National Observer