MP urges windfall tax for fossil fuel companies

Motion cites high cost of living, climate crisis

A Green MP is calling on the federal government to impose a windfall profits tax on fossil fuel companies, citing increasing unaffordability and the ongoing climate crisis.

The push comes as the federal government calls on major grocers to stabilize prices — another mighty force often accused of contributing to the rising cost of living.

But Green MP Mike Morrice and other parliamentarians view fossil fuel companies as a more significant target. Recent figures by the Canadian Climate Institute show that Canada’s total emissions in 2022 increased 2.1 per cent from the previous year, undercutting Canada’s emission reduction goals. And as fossil fuel companies’ profits rise dramatically, they’ve walked back on some major climate pledges, Morrice said. Morrice’s motion calls on the House of Commons to extend the pandemic-era Canada Recovery Dividend to include the “excess” profits of fossil fuel companies operating in Canada. It was introduced on Sept. 14.

The Canada Recovery Dividend is a one-time 15 per cent tax on taxable income above $1 billion for 2021. It was implemented in the 2022 budget targeting banks and insurance companies specifically, and will be paid out over five years.

If the tax was applied to fossil fuel producers, Morrice says the resulting revenue could be used to address the climate crisis and improve affordability for Canadians, namely through investments in public transit, retrofitting buildings and greening the electricity grid.

The Office of the Parliamentary Budget Officer estimates that extending the Canada Recovery Dividend to the oil and gas sector and big-box stores would generate $4.4 billion.

Morrice’s motion has piqued the interest of one former environment and climate change minister. In an interview with the Star, Catherine McKenna said the federal government needs to consider a windfall tax on fossil fuel companies, which have made record profits while failing to pay for their devastating impact on the environment.

“When you see these historic record profits, and in particular, a galling lack of investments in clean (energy) while it is a fossil fuel caused crisis, we’ve got a problem,” she said.

Morrice also has some support in Ottawa. Speaking in question period last week to promote his motion, he received applause from NDP and Bloc Québécois MPs, with NDP MP Charlie Angus adding a call to hold fossil fuel companies accountable for climate disinformation. A Bloc Québécois spokesperson later said the party is still reviewing the motion, but echoed its previous calls for the federal government to stop investing in fossil fuels.

Some Liberal MPs could be on board as well. In an interview with the Star, Mark Gerretsen said he was inclined to support the motion, although he awaited debate in Parliament.

Although Conservatives blame government action such as carbon pricing for rising fuel costs, Gerretsen said it should lie with corporations making excessive profits.

Regardless, increased urgency in Ottawa and political pressure amid public anger with increasing unaffordability has made it clear in Ottawa that government intervention is necessary, Morrice said.

Environment Minister Steven Guilbeault and Finance Minister Chrystia Freeland were noncommittal when asked about Morrice’s proposal. Guilbeault told the Star that Parliament would examine the motion.