Canada's government under Prime Minister Mark Carney has introduced new tax incentives for oil extraction and revived a lapsed tax break for liquefied natural gas companies, contradicting its earlier pledge to phase out inefficient fossil fuel subsidies. The Parliamentary Budget Office estimates restoring the LNG tax break will cost $362 million over five years, while the expanded carbon capture tax credit, now including enhanced oil recovery, is projected to cost $12.3 billion. Environmental groups say these moves crowd out investment in clean energy and undermine Canada's climate commitments. Environmental Defence Canada estimates federal fossil fuel support at over $10 billion, while Export Development Canada provided $9.3 billion to oil and gas, up 22% from the previous year, compared to only $1.4 billion for solar, wind, geothermal, and battery storage. Critics argue that loans, tax breaks, and other government-backed financing for fossil fuel expansion should count as subsidies even when offered on commercial terms. The article highlights the tension between stated climate goals and actual policy actions in Canada.
