Environmental advocates call LNG tax incentive a fossil fuel subsidy

Wudang, a liquefied natural gas (LNG) tanker, fills up at an LNG Canada facility, in an aerial view, in Kitimat, B.C., on Thursday, Nov. 13, 2025. THE CANADIAN PRESS/Ethan Cairns

CALGARY — Environmental advocates say a tax incentive for “low carbon” liquefied natural gas facilities amounts to a government subsidy for the fossil fuel industry.

The federal spring economic update included details around an accelerated capital cost allowance for LNG plants that fall under a certain emissions intensity threshold.

The measure would allow LNG companies to claim capital costs against their taxes faster than would otherwise be the case.

Richard Brooks, climate finance director at Stand.earth, says taxpayer dollars are supporting projects geared toward “the fuel of the past” and the move presents a missed opportunity to boost electrification, renewables and battery storage.

Jesse Stoeppler, co-executive director of the Skeena Water Conservation Coalition, says the policy’s definition of “low carbon” does not take into account the full emissions impact from LNG and the tax incentive undermines Ottawa’s climate credibility.

Canada has one LNG facility in operation in Kitimat, B.C., and several more are either under construction or in the planning phase.

This report by The Canadian Press was first published April 29, 2026.

Lauren Krugel, The Canadian Press