BC's Subsidies to Oil and Gas
If you were to ask a government representative, they would probably say that British Columbia gives zero subsidies to the oil and gas industry. That's because admitting to this would sound bad, and it's possible to restrict the definition of a 'subsidy' enough to avoid sounding bad.
To be precise, the British Columbia government funnels money to the oil and gas industry in two main ways:
- By granting 'infrastructure credits' (that are applied to the cost of building things like new roads in the middle of nowhere, or pipelines). Normally a company would have to pay for these things in full as part of the capital cost of their project(s).
- By reducing normal royalty rates (a royalty rate is the percentage of profit that the public receives in return for allowing a company to access resources) in circumstances where getting at the resource is too costly to justify the effort of the company (e.g. during summer, or for particularly difficult-to-access oil or gas reserves).
Essentially, in circumstances where companies can't afford to build projects on their own, our government waves various forms of financial assistance in front of them to entice them onwards. The justification for this is that the public gets paid back in the form of increased revenue. Except that revenue comes at the expense of our climate and planet.
The American Heritage Dictionary defines a 'subsidy' as: monetary assistance granted by a government to a person or group in support of an enterprise regarded as being in the public interest.
So our government is granting $327 million of subsidies, this year, to the oil and gas industry because it thinks the public interest is benefited more by the revenue than it is damaged by the consequent contribution to climate change and local ecosystem degradation.
Dogwood Initiative disagrees; (a) because the revenue won't last long, but the damage will; (b) because if the market can't afford to develop a resource, then it should be left alone.
You decide.
