Govt. Aid to Canada Oil Firms Rose During Pandemic, Study Finds

Source:William Potter, Shutterstock


  • Aid went to polluting oil fields in Alberta, Saskatchewan, and British Columbia, claims study.
  • The companies were urged to avail federal aid to help pay employee salaries.
  • Government spent $1.9 billion in aid to the traditional energy sector in 2020.

Canadian oil and gas exploration companies have received significant amounts of money in government aid to help blunt the pandemic’s impact on the economy, an independent study finds.

According to the International Institute for Sustainable Development (IISD), the government subsidies were targeted mainly in two areas: protecting jobs and reducing greenhouse gas emissions.

The pandemic had threatened widespread layoffs as the economy came to a grinding halt during the height of the pandemic last year. The government had urged companies to avoid large job cuts and apply for federal aid programs to help pay employee salaries.

The report, however, has also raised questions about the government’s intentions in helping the fossil-fuel industry which contrasts with policies that underscore the transition to a green economy.

The report further claimed that Canada spent $1.9 billion in aid to the traditional energy sector in 2020, up from $600 million in the previous year. A major part of that money, amounting to C$1.5 billion, went to restoration projects of oil fields in Alberta, Saskatchewan, and British Columbia.

Pic Credit: Pixabay.

Green Energy Commitment

According to IISD, there are some 125,000 abandoned oil wells in the regions and most of them have been polluting because of methane leaks. The government has also spent $320 million in aid to the pandemic-hit oil industry in Newfoundland and Labrador, which begs the question of whether it is serious about climate change issues or other greenhouse gas effects, the researchers stated.

In 2009, Canada had vowed to phase out the use of fossil fuel in the country, and more recently, Prime Minister Justin Trudeau set a 2025 target for a full transition to a green economy.

Expressing his frustration, Environment Minister Jonathan Wilkinson had recently told the media that the subsidies were aimed at either enhancing oil production or extraction.

However, the green economy has been a major poll issue in the neighboring US. President Joe Biden has scrapped the flagship Canada-US Keystone oil pipeline project soon after taking office. Although that decision did not go down well in Canada, it signaled the coming of a new era in renewable energy that both sides embrace publicly.



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