The Canadian government provided $29.6 billion in direct subsidies and financing to the oil and gas industry in 2024, a new report has found.
The dollar amount, calculated in an annual tally by the group Environmental Defence, includes $21 billion in financing for the Trans Mountain pipeline.
Another $7.5 billion in public financing flowed through Export Development Canada, a Crown corporation that acts as an export credit agency to help Canadian companies grow internationally.
Environmental Defence claims the nearly $30 billion provided to the fossil fuel industry last year could have paid for building out Canada's inter-provincial electricity grids — with more than $5 billion left to spare.
Connecting Canada’s electric grid is seen as a major opportunity to re-enforce the country’s supply of clean electricity amid soaring demand and increasingly frequent extreme weather made worse by climate change.
The 2024 subsidies dwarf the $18.6 billion in direct financing the Environmental Defence fund was provided to the oil and gas sector in 2023.
The group claims that over the past five years, financial support to the industry has climbed to $74.6 billion.
In July 2023, then-environment minister Steven Guilbeault said Ottawa would announce a plan to phase-out the public financing of the fossil fuel sector by the fall of 2024.
However, in January, an official with the Department of Finance told BIV the more than $20 billion loan to finance the Trans Mountain pipeline should not be counted as a subsidy. It was meant to replace existing higher-cost third-party financing and would reduce the company’s interest costs so it can pay down construction costs faster as it moves to sell the pipeline.
That's expected to reduce financing costs $3.5 billion over six years, said the official at the time.
In 2022, then-finance minister Chrystia Freeland indicated “the government will spend no additional public money on the project.”
Samuel Lafontaine, a spokesperson for Environment and Climate Change Canada, said the government’s Inefficient Fossil Fuel Subsidies Framework and Guidelines remain in effect. However, those guidelines provide criteria that allow for exemptions in certain instances, such as funding for clean technology, clean energy or abated production processes.
Lafontaine said the exemption do not appear to be reflected in the Environmental Defence report.
The spokesperson added that each federal department and agency is responsible for applying the guidelines to their own funding decisions. Lafontaine added that Crown corporations also have various mandates to support Canadian industry and exporters. That can include export credit insurance or bonding support.
Ahead of a federal election, Ottawa's appetite to support the country's businesses appears to have grown since U.S. President Donald Trump took office, threatening Canada's export economy and sovereignty.
In a statement, Environmental Defence associate director Julia Levin said oil and gas companies are using economic uncertainty brought on by U.S. tariffs to push governments to provide more subsidies to the industry.
“Canadians should be very wary of calls for new pipelines: it’s taxpayers who end up paying the price for new fossil fuel infrastructure as foreign-owned companies and wealthy shareholders reap the rewards,” Levin said.
On the campaign trail, Conservative Leader Pierre Poilievre said his party would commit to all five requests made by the oil and gas industry to expand their footprint in response to U.S. tariffs.
The five-point plan signed by oil, gas and pipeline executives included declaring an “energy crisis” and using emergency powers to speed up development of key projects in the “national interest.”
The CEOs also called on Ottawa to eliminate the federal government’s cap on emissions; reassess the West Coast limit on oil tankers; and perhaps most significantly, repeal the carbon levy on large industrial emitters.
“We need to get out from under America’s thumb and start building the infrastructure that is essential to sell our natural resources to new markets, bring home jobs and dollars, and make us sovereign and self-reliant to stand up to Trump from a position of strength,” said Poilievre.
“Canada’s energy sector, the experts on energy growth, have told us what we need to do. Today I am committing to meeting all of their urgent recommendations.”
Editor's Note: This story has been updated from its original version to reflect historic comments from the Department of Finance and a statement from Environment and Climate Change Canada.
