Cenovus CEO shrugs off Ottawa's plan to nix subsidies
Story by Jeff Lagerquist •
Cenovus Energy logos are on display at the Global Energy Show in Calgary, Alta., Tuesday, June 7, 2022. The Calgary-based oil company says its refinery throughput for the third quarter of 2022 and the first quarter of 2023 will be weaker than expected.
Story by Jeff Lagerquist •
Cenovus Energy logos are on display at the Global Energy Show in Calgary, Alta., Tuesday, June 7, 2022. The Calgary-based oil company says its refinery throughput for the third quarter of 2022 and the first quarter of 2023 will be weaker than expected.
THE CANADIAN PRESS/Jeff McIntosh
Cenovus Energy's (CVE.TO)(CVE) CEO is shrugging off Ottawa's plan to end "inefficient" fossil fuel subsidies, while taking a wait-and-see approach to the looming federal cap on oil and gas sector emissions.
"It probably should be a fairly short piece of legislation," Jon McKenzie told analysts on a post-earnings conference call on Thursday, referring to the new subsidy framework unveiled by Environment Minister Steven Guilbeault earlier this week.
"I've been in this industry for a lot of years, and many of those years have been spent in finance," he added. "I certainly remember writing a lot of cheques to the provincial and federal governments, but don't remember receiving a lot of cheques in return."
Looking to ensure alignment with federal climate targets, Ottawa's new framework will apply to existing tax measures and 129 non-tax measures. The government has not put a dollar figure on the subsidies impacted, or detailed which measures are included.
"I'm genuinely not aware of any subsidies that are direct to the oil and gas industry that they may or may not be speaking of," McKenzie said.
The new rules do not impact generally available subsidy programs, or money that flows through Crown corporations like Export Development Canada (EDC).
The federal government gave more than $20 billion in subsidies and financial support to fossil fuel companies in 2022, according to the non-profit group Environmental Defence. Of this, $19.8 billion was financing provided through EDC. Julia Levin, the group's associate director of national climate, called this a "glaring omission" in a statement on Monday.
Calgary-based Cenovus will be among the companies subject to Ottawa's planned cap on greenhouse gas emissions from the oil and gas sector, a final version of which is set to be published by mid-2024, according to Reuters.
Canada has committed to net-zero by 2050, with an interim target requiring the oil and gas industry to cut 42 per cent of its emissions below 2019 levels by 2030.
McKenzie says he is "waiting for more details on this."
Former Cenovus CEO Alex Pourbaix told Yahoo Finance Canada in March that a 42 per cent cut by 2030 is "not feasible by any stretch."
Cenovus reported second-quarter financial results on Thursday. The company booked a lower profit year-over-year due to weaker oil prices, while cutting its production guidance for the year due to wildfires.
Toronto-listed shares climbed 3.11 per cent to $24.55 as at 2:32 p.m. ET on Thursday.
Cenovus Energy's (CVE.TO)(CVE) CEO is shrugging off Ottawa's plan to end "inefficient" fossil fuel subsidies, while taking a wait-and-see approach to the looming federal cap on oil and gas sector emissions.
"It probably should be a fairly short piece of legislation," Jon McKenzie told analysts on a post-earnings conference call on Thursday, referring to the new subsidy framework unveiled by Environment Minister Steven Guilbeault earlier this week.
"I've been in this industry for a lot of years, and many of those years have been spent in finance," he added. "I certainly remember writing a lot of cheques to the provincial and federal governments, but don't remember receiving a lot of cheques in return."
Looking to ensure alignment with federal climate targets, Ottawa's new framework will apply to existing tax measures and 129 non-tax measures. The government has not put a dollar figure on the subsidies impacted, or detailed which measures are included.
"I'm genuinely not aware of any subsidies that are direct to the oil and gas industry that they may or may not be speaking of," McKenzie said.
The new rules do not impact generally available subsidy programs, or money that flows through Crown corporations like Export Development Canada (EDC).
The federal government gave more than $20 billion in subsidies and financial support to fossil fuel companies in 2022, according to the non-profit group Environmental Defence. Of this, $19.8 billion was financing provided through EDC. Julia Levin, the group's associate director of national climate, called this a "glaring omission" in a statement on Monday.
Calgary-based Cenovus will be among the companies subject to Ottawa's planned cap on greenhouse gas emissions from the oil and gas sector, a final version of which is set to be published by mid-2024, according to Reuters.
Canada has committed to net-zero by 2050, with an interim target requiring the oil and gas industry to cut 42 per cent of its emissions below 2019 levels by 2030.
McKenzie says he is "waiting for more details on this."
Former Cenovus CEO Alex Pourbaix told Yahoo Finance Canada in March that a 42 per cent cut by 2030 is "not feasible by any stretch."
Cenovus reported second-quarter financial results on Thursday. The company booked a lower profit year-over-year due to weaker oil prices, while cutting its production guidance for the year due to wildfires.
Toronto-listed shares climbed 3.11 per cent to $24.55 as at 2:32 p.m. ET on Thursday.
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