VANCOUVER | TRADITIONAL, UNCEDED TERRITORIES OF THE xʷməθkʷəy̓əm (MUSQUEAM), Sḵwx̱wú7mesh (SQUAMISH) AND səlilwətaɬ (TSLEIL-WAUTUTH) FIRST NATIONS — The David Suzuki Foundation released the following statement from the Foundation’s senior climate policy adviser, ecological economist Tom Green, following the release of the B.C. government’s oil and gas royalty program independent review.

Royalty regimes are meant to create incentives for use of common resources to benefit society. B.C.’s regime is outdated and undermines climate change and reconciliation priorities.

The authors, both respected economists, describe B.C.’s royalty system as “broken” and misaligned with government and societal goals. Their report gives the current system a failing grade and documents how the province is getting ever less value for oil and gas extracted, even as fracking production has ramped up. They describe it is a piecemeal system, designed for a different era — before the climate emergency and the need for reconciliation were acknowledged — with out-of-date deductions and cost assumptions that give oil and gas companies incentives to drill. As a result, the B.C. government is encouraging drilling of marginal wells that risk being orphaned, worsening the sector’s already serious environmental impacts. Recent research showing that methane emissions from the fossil fuel sector in B.C. are twice the level recorded in official statistics implies that the way the royalty regime provides incentives for wells makes a bad problem worse.

Despite worsening wildfires, heat domes and other extreme weather, British Columbians have watched with distaste as fossil fuel subsidies in B.C. have risen dramatically in recent years, reaching $1.3 billion in 2020-21 and projected to keep growing. We cannot hope to meet climate targets or B.C.’s climate plan while increasing subsidies to fossil fuel projects.

The independent review describes in great detail all the loopholes and flaws in the current royalty regime. The hugely generous deep well and infrastructure royalty credits, a fossil fuel subsidy for fracking wells, has largely cancelled out the royalties paid by the companies. Companies have been overcompensated for using drilling techniques that were once high-cost but are now standard practice.

The David Suzuki Foundation calls for a comprehensive reform of the entire fracked gas royalty system, in line with Canada’s commitments to eliminate fossil fuel subsidies. An overhauled program must recognize that fossil fuel extraction worsens the climate emergency and steer the province toward a managed decline of the oil and gas industry.

Foundation Western Region director general and nature portfolio head Jay Ritchlin added, “A comprehensive reform must also ensure that revenues support Indigenous nations whose territories are left with the negative impacts but not the financial benefits. The next steps must include robust engagement that seeks out advice from all those affected, especially Indigenous Peoples.”

– 30 –

For more information or to arrange a media interview, please contact:

Brendan Glauser, David Suzuki Foundation:, 604-356-8829