Auditor general questions Canada's plan to phase out fossil fuel subsidies

Canada's federal spending watchdog has won a battle with the Liberal government to gain access to information he deemed critical to evaluating whether the country is on course to phase out fossil fuel subsidies.

Michael Ferguson wins battle against Liberal government to obtain information crucial to his reviews

'We found that Finance Canada still had not defined what an inefficient fossil fuel subsidy was, nor could the department tell us how many inefficient fossil fuel subsidies there could be,' said Auditor General Michael Ferguson, who tabled his annual spring report Tuesday. (Sean Kilpatrick/Canadian Press)

Canada's federal spending watchdog has won a battle with the Liberal government to gain access to information he deemed critical to evaluating whether the country is on course to phase out fossil fuel subsidies.

Releasing a series of spring audits Tuesday, Auditor General Michael Ferguson expressed frustration that he wasn't able to gain key documents, including budget analyses, from Finance Canada to determine what progress has been made to meet Canada's 2009 G20 commitment.

He aired his grievance in a special message to members of the House of Commons detailing his fight.

"Our right to freely access information is fundamental to our work, and a cornerstone that protects our independence," Ferguson wrote.

During a news conference after tabling his report, Ferguson called any situation where the government is hampering the ability of his office to do its work "extremely concerning."

He noted that while battles over the disclosure of information go back several decades, this current tug-of-war unfolded over the last 18 months since the Liberals took office.

In a sudden about-face just minutes after that news conference concluded, Finance Minister Bill Morneau announced the government would change the rules and provide requested information of a similar nature in future.

"I believe it will help the auditor general to do his work, and will show that Finance took a broad approach in defining the scope of potential fossil fuel subsidies by identifying and rigorously analyzing all tax expenditures that support fossil fuel exploration or production," he said.

The Auditor General's office confirmed to CBC News that the information relevant for this report will not be supplied as the audits have already been completed.

"The same request could be captured in the scope of a future audit, however at this point, no such audit is planned," read the reply to a query from Ferguson's office.

But Ontario NDP MP David Christopherson called the government's resistance a "major red flag."

'No plan'

"The department seems to have no plan with regard to this commitment, which is a problem for a government that has made big commitments to climate change," Christopherson said. "The Liberals' refusal to provide information to the auditor general strikes at the very heart of accountability and makes a farce out of the Liberals' promise of openness and transparency."

Conservative finance critic Gérard Deltell accused the government of hypocrisy for presenting itself as an open government, then hiding critical information.

"Sometimes it's not good for the government, but it's good for the Canadian people," he told CBC. "We must keep in mind that we're here for the Canadian public, not for political purposes."

Ferguson's audit found that while Canada has recognized that inefficient subsidies for fossil fuels undercut efforts to reduce greenhouse gases, the government has not yet implemented its plan to end subsidies by 2025.

Finance Minister Bill Morneau announced today the government would turn over records related to phasing out fossil fuel subsidies to the Auditor General of Canada. His department had previously refused to provide the information. (CBC)

Finance Canada and Environment and Climate Change Canada have not defined what that commitment means in the Canadian context, or demonstrated whether tax reforms are actually working, his audit concludes.

"We found that Finance Canada still had not defined what an inefficient fossil fuel subsidy was, nor could the department tell us how many inefficient fossil fuel subsidies there could be," Ferguson said.

"We asked Finance Canada to provide us with its analyses of the social, economic and environmental aspects of these subsidies. The department did not give us that information."

Central Liberal promise

Green Party Leader Elizabeth May said she was "shocked" the government attempted to seal access to information related to a "central" Liberal promise on the climate change file. She said federal subsidies still amount to about $1 billion, which could be better spent on health care and infrastructure.

A statement from Environmental Defence said Canadians should be "alarmed" that the federal government tried to withhold important information from the auditor, which leaves the public in the dark about the degree to which the government is subsidizing oil and gas companies.

The organization said other G20 countries are being more transparent about subsidies.

"The U.S. and China have even opened their books to each other," the statement read. "The secrecy of Canada's Finance Department is extremely concerning, and undermines our democracy."

Ferguson's audits drilled down on a number of programs, gauging the government's efforts to reduce the risks of fraud and corruption and measuring mental health supports for Mounties. He said a "clear theme" that emerged is that the government is not putting its plans into action.

"Government departments must make sure that they implement their programs in the way that they were designed and communicated to Canadians," he said. "Programs will not produce their intended results if departments do not put into practice what they said they were going to deliver."

Fix for better results

While issues raised in the audits are "concerning," Ferguson said they can be fixed to achieve better results.

Other highlights of the audits:

  • The RCMP is not providing adequate mental health supports for its members. After announcing a mental health strategy, the national police force did not implement key programs, make services a priority or commit the necessary resources to support them.
  • Some supply-managed goods are entering Canada without proper duties being paid. The audit estimated that in 2015, the Canada Border Services Agency should have assessed $168 million in customs duties on imports of quota-controlled goods that exceeded volume limits, including dairy products, chicken, turkey and eggs.
  • The government is not doing enough to limit risks of corruption involving border immigration officials.
  • Transport Canada is not "actively engaged" in addressing infrastructure needs at remote northern airports that impact efficiency and safety, including runway lighting and navigational aids.
  • Changes to the temporary foreign workers program have not done enough to ensure Canadians aren't being squeezed out of jobs by international labourers, especially in the fish processing sector.
  • The government may be spending more to collect customs fees on parcels valued at less than $200 than it actually retrieves in revenues. Right now, the threshold for customs duties is set at $20 for parcels imported into Canada by mail or courier.


  • This story has been updated to make it clear the auditor general's report looked at the government's plan to phase out fossil fuel subsidies. An earlier version dropped the word "subsidies" from the headline and lead.
    May 16, 2017 11:55 AM ET


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