Joint Letter: Excess Profit Tax on Oil and Gas Companies Now

Dear Hon. Minister Freeland

As the Tax Fairness critic and the Environment critic for the NDP, we are writing amid a climate crisis to urge you to implement an excess profits tax on oil and gas corporations. It is clear, Canada is falling behind on its carbon emission targets and we must urgently invest in renewable energy sources across the country.

Your government has proven its unwavering support for the oil and gas sector time and time again. It is deeply concerning that since January and in the lead up to the 2024 budget, your department officials met with oil lobbyists a total of 30 times. We know that the Pathways Alliance met with you on March 15 about budget 2024-2025. In the end, a windfall profits tax was excluded from the 2024 budget. Did oil lobbyists convince you to pull the windfall profits tax? And if so, how was their lobbying so effective?

A windfall tax is critical given the climate emergency we face. According to the Parliamentary Budget Officer (PBO), a tax of 15 per cent on oil and gas companies making over $1 billion in taxable income would raise $4.2 billion over five years. This is money that could go towards financing Canada’s green transition. According to another recent PBO report on corporate federal taxes, the oil and gas sector paid 2% of Canada's corporate taxes despite record profits and the fact that they makeup 8% of Canada's GDP. Canada’s oil and gas sector pays less in tax than our farmers, foresters, and fishers.

Furthermore, the United Nations Secretary General António Guterres has called on developed nations like Canada to implement an excess profits tax on oil and gas and invest the revenues in climate solutions and green jobs. It is evident that your government can both tackle the climate crisis and the affordability crisis. It is a matter of political will. Canada can take on corporate greed, but unfortunately your government has consistently shown it is unwilling to act.

The climate crisis will not be solved by taking the easy way out. When asked about the possibility of a windfall-profit tax the Prime Minister described it as “simplistic,” which goes to show your government is not up to the task of taking on the climate crisis nor the affordability crisis. Canada needs bold climate solutions, and bringing in a windfall tax on oil and gas corporations is being part of the solution.

The United Kingdom, Germany, the Netherlands, Italy, and other countries have already implemented an excess profits tax on oil and gas. Canada cannot afford to fall behind other developed countries in its climate responsibilities.

It is clear that the oil and gas industry is not in crisis. They are making more than they have ever made in profits. The ten biggest oil and gas companies made a whopping $66.5 billion in pre-tax profit over the last year, more than twice what they usually make.

The reality is your government has failed both in fighting climate change and in making life more affordable for Canadians.

We do not have time to wait. We urge you to act and bring a windfall tax on oil and gas corporations now.

Sincerely,

MP Niki Ashton, NDP Critic for Tax Fairness, (Churchill—Keewatinook Aski)

MP Laurel Collins, NDP Critic for Environment and Climate Change, (Victoria)