As the Trudeau government begins to roll out its investment in “clean tech” he also told Canadians that he will be ending fossil fuel subsidies, which begs the question are they really subsidies ?
Lets take a look at what the media and lefty politicians often confuse as subsidies, Intangible Drilling Costs (IDC) this is the costs accumulated when oil and gas companies drill for wells, this is the only way they can find oil so what happens is they deduct this as part of the cost of goods sold and in return they expense these costs. Canadian producers take about seven years to deduct most of their IDC. Development drilling is subject to 30 per cent declining balance under their classification as Canadian Development Expense (CDE)
IDC’s are almost always reported as “subsidies” by the media for “big oil” and as usual they blame Conservatives for working for big oil! Pure nonsense, every sector of business does the same including manufacturing. These valuable tax tools to our Canadian energy industry have historically helped to create sustainable domestic production and helped Canada become the industrialized power that it is.
If Trudeau is to take away tax incentives to drill for new wells its also not going to help us in reducing foreign imports and providing Canadians with affordable, secure forms of transportation fuel.