Ottawa, ON – A new report from the Parliamentary Budget Office (PBO) shows a windfall profit tax on oil and gas companies – similar to that already applied to banks and life insurance companies in the pandemic - would generate $4.2 billion to be directed towards proven climate solutions and affordability measures for Canadians.
“Those most responsible for our climate crisis should help to pay to combat it, and it’s clear they are not going to do it on their own as they walk back the few climate pledges and commitments they had made," said Mike Morrice, Member of Parliament for Kitchener Centre.
To address the concurrent climate and cost-of-living crises, Kitchener Centre MP Mike Morrice introduced Private Members Motion 92 in September 2023. The motion would extend the 15% windfall tax already placed on the banking and insurance industries for their excess profiteering off Canadians through the pandemic to the excess profits from the fossil fuel industry. The revenue raised would fund investments to make life more affordable for Canadians while helping to address the climate crisis. It’s this motion that has now been costed by the PBO.
While people across the country are struggling to afford the essentials, like housing and food, fossil fuel companies continue to rake in record profits. Last year was a boom year for the fossil fuel industry, with the five largest fossil fuel companies operating in Canada alone raking in over $38 billion in profit in 2022. A significant portion of these profits were made as a result of price-gouging at the pump in 2022, costing Canadians an additional 18 cents per litre more than typical profit margins on fuel, far outpacing the 2 cents per litre carbon pricing during that same period.
The proposed windfall tax would be levied on 2022 profits in excess of $1 billion for oil and gas companies operating in Canada, estimated to impact only seven corporations. The rate of 15% is significantly lower than windfall taxes on oil and gas companies operating in the United Kingdom, at a rate of 25%, and Europe, at a rate of 21%. Despite the modest rate, a single application of this tax on 2022 oil and gas sector profits is estimated to generate $4.2 billion in revenue, which could be directed towards needed investments in public transit and greening residential and commercial buildings to fight climate change and increase affordability for Canadians.
For more information or to arrange an interview with MP Morrice, please contact:
Senior Communications Advisor
Office of MP Mike Morrice