IISD Applauds Canada’s Reaffirmation to End Domestic Public Finance for Fossil Fuels in Budget 2024

Today's federal budget announcement delivers new measures to support affordability and reaffirms Canada's commitments on climate action. IISD is encouraged by the government's renewed pledge to release a policy to eliminate domestic public finance for the fossil fuel sector by Fall 2024. 

Building on Canada's existing policies to end international public financing for fossil fuels and phase out inefficient fossil fuel subsidies, Canada can continue to be a global leader in this area by eliminating public finance for fossil fuels domestically - which represents the bulk of Canada's financial support for the sector. 

Public financing for the fossil fuel industry far outweighs support for clean energy in Canada. Analysis shows Canadian public finance institutions provided at least CAD 8.1 billion to CAD 14.1 billion annually in domestic fossil fuel support between 2020 and 2022 - 96% of which comes from Export Development Canada. Eliminating subsidies for fossil fuels also requires stringent implementation of the Inefficient Fossil Fuel Subsidy Framework released last year, with increased public reporting.  

"It's good to see the government restate its pledge to phasing out public finance for fossil fuels," says IISD President and CEO Patricia Fuller. "A strong commitment to future generations also requires moving to end all subsidies for fossil fuels."

In addition, this budget provides important supports for workers, investing CAD 100 million in skilled trades and apprenticeships, and CAD 50 million to improve foreign credential recognition. These programs should ensure that the jobs created are sustainable, provide decent work, and help advance Canada's climate commitments. The announcement of consultations on the development of a Youth Climate Corps program is a positive step forward in this regard, which could serve as an avenue for young people to help build a more resilient future. We hope to see these announcements followed with further investment in the coming year to ensure workers and communities are involved in decision-making and supported through the energy transition with good green jobs across sectors. 

Addressing affordability and climate change can and must go hand-in-hand, and this budget offers several new measures that reflect this, such as the Green Building Strategy and climate conditionalities on investment in housing and transit. Expanding such safeguards to all major investments can ensure that federal resources are leveraged as effectively as possible to advance climate goals while reducing inequality. 

Experts estimate that Canada needs to spend approximately 2% of GDP on climate investments each year to remain globally competitive and avoid the worst impacts of climate change. This budget marks progress on key issues, but more is needed to scale up equitable investments on climate that can help move us beyond the boom-and-bust of fossil fuels to a more stable, resilient economy.