Canada Set to Provide CAD 3.93 Billion in LNG Support by The End of 2030

The governments of Canada and British Columbia are set to provide more than CAD 3.93 billion in support to the liquefied natural gas (LNG) industry by the end of 2030, according to a new study by the International Institute for Sustainable Development.

This support means the Canadian public, not the project proponents, are bearing much of the increasing costs and risks of LNG expansion.

But it’s not too late: policy-makers can still prevent this outcome by redirecting resources away from fossil fuels and toward the priorities of taxpayers.  

Released today, IISD’s report Launching a Loss: An inventory of government support for BC LNG offers the most recent and comprehensive estimate of government financial support for BC’s LNG export industry to date, with projections to the end of 2030. The estimate does not account for potential support for the LNG Canada Phase 2 project.  

The findings include:

• CAD 1.62 billion in public finance and CAD 151.95 million in infrastructure funding from the federal government.
• CAD 2.16 billion by the end of 2030 from the BC government through foregone revenue, reduced electricity rates, and investment in enabling infrastructure.  

The combined support of CAD 3.93 billion is likely a low estimate, as it does not factor in non-quantifiable benefits such as the 2019 waiver on steel tariffs.  

“LNG projects come with a high price tag and much of that cost is being carried by the public,” says Danielle LaBrash, policy advisor at IISD and co-author of the report. “These subsidies slow down the energy transition, embed emissions in the Canadian economy, and tie up resources that could otherwise support workers, communities, and cleaner energy sources.”

The report finds that LNG Canada Phase 1 project is the single greatest beneficiary of public support, with about CAD 1.36 billion committed by the end of 2030, while the Coastal Gaslink Pipeline has also received about CAD 700 million in public finance.

And although market forecasts predict a glut of LNG supply in the coming years and a peak in global gas demand in the early 2030s, the government has signaled further public support for LNG projects. Prime Minister Mark Carney on September 11 announced LNG Canada Phase 2 as a priority for review. Phase 1, which came online this summer, was delayed and ran 29% over budget. Phase 2 risks similar setbacks and is also expected to enter an already oversupplied market—raising the likelihood that additional public support will be required to see it through. 

For a secure nation-building strategy, the report recommends:

• The Canadian and BC governments should ensure the costs and risks of LNG expansion are borne by project proponents—not the public.
• The federal government should end all domestic financing for new fossil fuel projects.
• The provincial government should make approval of any new project conditional on credible alignment with climate plans, without reliance on subsidies.

“Understanding the scale and impact of public support for LNG is the first step to reforming it. It’s not too late for governments to redirect these resources toward projects that deliver tangible benefits for communities, workers, and the climate,” LaBrash says.  

Join co-author Danielle LaBrash in our September 18 webinar covering the report’s findings.

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Nick Pearce

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