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In 2013, the International Monetary Fund (IMF) estimated that globally, subsidies for fossil fuels added up to $1.9 trillion dollars a year – 2.5 per cent of global GDP. In early 2015, a new estimate upped that number to $5.2 trillion per year. People and organizations around the world have been calling for an end to fossil fuel subsidies for years. So while I have sympathy for people who have lost jobs in Alberta’s oil fields, just as I do for people who lost jobs when the big local mills shut down, and when big international companies shut down their factories all across Canada, I will never argue that we should be supporting Alberta’s oil fields more.

In fact, this is the perfect time to actually start doing something different. Why? Because we have an abundance of people with skills and talents available, many of whom are realizing this has been the biggest slow-down in the oil fields they’ve ever seen, and they are starting to realize they can (and in fact, have to) put many of their talents to work at something else.

I’m not trying to beat Alberta up about this. It is true that many locals in the Robson Valley, and many people across the country, especially in the Atlantic Provinces where I come from, have found good work in northern Alberta. But when John Rose, chief economist with the City of Edmonton, is quoted in the Edmonton Journal saying Alberta can take credit for averting a social disaster in the eastern provinces by “bringing hundreds of thousands of people here, employing them, educating them and housing them,” I take exception.

For one thing, many of those hundreds of thousands of people had spouses, children, and houses back home in the east, family they had to leave behind and alone for long periods of time. It’s the same in BC too. If that was averting one social disaster, it was probably creating another. And now, with the biggest “bust” cycle in the industry that anyone remembers, those people are moving home, after getting used to an un-sustainable standard of living. I’m sure you can see it in the numbers now – unemployment, bankruptcy, domestic problems, all those things that happen in the usual bust cycles are now amplified, and they are getting attention in the news. But so are the people who are finally deciding this is enough – it’s time to do something different.

Yes, Mr. Rose, it would make sense for the rest of the country to want to see Alberta back up and running as soon as possible. But not same-old same-old – that would not be “plain self-interest” for everyone, only for those deeply tied with northern Alberta and the top companies that are getting the big subsidies for fossil fuels worldwide. Now is the perfect time to start making changes, because changes are already happening. And many of the good people of Alberta are realizing this.

I had a good argument with a friend recently when I suggested geothermal energy should get the same tax breaks and subsidies as oil and gas exploration and development. He has a good point – that I need to consider the basic laws of economics, and every time you consider changing price/cost, you need to also consider how that changes the supply and demand. Well, I do want to see the initial investment costs go down for geothermal, so there is a supply available, and then we can start using it.

I hold to my argument that geothermal exploration and development should get tax breaks and subsidies. Either that, or remove all subsidies from fossil fuels.

One thought on “Editorial: Time to level the energy subsidy playing field”

  1. Could you explain how fossil fuels are subsidized? To me, a subsidy is actual cash from general taxation ( also referred to as a grant) or taxes not collected preferentially.

    I have been reading that some view emissions causing global warming produced by an activity are considered a debt ( not sure who is owed) – is this the subsidy you are referring to?
    I am trying to get my head around this nebulous concept, but in light of the discussion coming out of the PMs meeting with Premiers all I see is a tax.

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