The Need for a Windfall Profits Tax

Sonia Furstenau, MLA for Cowichan Valley, (250) 7152792 Sonia.Furstenau. MLA@leg.bc.ca

Community members, British Columbians, and indeed all Canadians are struggling with recordbreaking affordability challenges right now. Every week, my office works to support constituents who are increasingly squeezed by rising living costs which have not been tempered by government policy.

Meanwhile, oil and gas companies are making some of the most significant quarterly profits in history. Cenovus Energy reported its highest first-quarter profit ever: $1.6 billion, compared to $220 million in the first quarter of last year. Similar record-breaking profits have been reported by Imperial Oil ($1.17 billion), Canadian Natural ($3.1 billion), and Suncor ($2.95 billion).

The extreme rises in gas and diesel prices have caused distress for many BC families already struggling with the increasing costs of living. Simultaneously, because the Canadian and international economies are so dependent on energy provided from oil and gas, the surge in prices has exacerbated inflation across a range of goods – including food and essential products.

The windfall profits that oil and gas companies are reaping are an example of what economists call economic rent - unearned income derived from ownership and control over scarce resources.

Such unearned profits are unjust and unfair in the face of the present affordability crisis, and in the context of the climate crisis where we need to be rapidly decarbonizing. Housing is unattainable, inflation is at record levels, and the price of gas is making it incredibly difficult to access basic services. The BC provincial government has failed to address these crises or invest in accessible transportation options.

That is why my interprovincial colleagues David Coon (Leader of the New Brunswick Greens), Peter Bevan-Baker (Leader of the PEI Greens), and I have called on the Prime Minister to implement a windfall profits tax on oil and gas companies, with the proceeds returned directly to Canadians.

Right now, British Columbians, and all Canadians, are struggling to make ends meet. A windfall profits tax would redistribute billions of dollars to Canadians from oil and gas companies who have benefitted from the surge in oil prices, partially a result of Russia’s invasion of Ukraine.

Canada should join other countries, including the United Kingdom, Spain, Italy, and Greece, who have levied windfall profit taxes to support households struggling with the rising costs of living and incentivize a rapid transition towards a low-carbon economy.