Canada promises to announce an implementation plan by Fall 2024 to phase-out public financing of the fossil fuel sector
Video: The construction of EDC financed Coastal GasLink and Trans Mountain pipelines has been facilitated through RCMP C-IRG violence.
The Canadian government recently announced its (somewhat awkwardly titled) Inefficient Fossil Fuel Subsidies Government of Canada Self‑Review Assessment Framework and the Inefficient Fossil Fuel Subsidies Government of Canada Guidelines.
These guidelines could affect about $1 billion in subsidies to the fossil fuel industry.
Notably, the guidelines do not impact Export Development Canada (EDC) which provided $19 billion in financing for fossil fuel projects in 2022. Loans and guarantees are not technically considered by the government to be subsidies.
The Glasgow Statement
The Glasgow Statement holds some promise though.
The Canadian government signed the statement at the UN COP26 climate conference in Scotland in December 2021. The statement is essentially a pledge to stop financing new fossil fuel projects in other countries by the end of 2022.
In December 2022, EDC stated it was “on track to no longer provide new direct financing to international fossil fuel companies and international projects as of Jan. 1, 2023, in line with Canada’s commitment at COP26 last year.”
But The Financial Post has reported that while “the self-imposed Glasgow Statement deadline kicks in on Jan. 1, 2023”, EDC “may still provide billions of dollars in support for fossil fuel projects in other countries in 2023.”
EDC acknowledges that amount to be $2.5 billion of “exposure” that had not yet reached maturity (and that would not be renewed).
Oil Change International has also noted: “Just days after [our Promise Breakers] report was finalized [in March 2023], it appears Canada’s export credit agency, Export Development Canada is already in breach of their policy by approving four international oil and gas transactions totaling at least USD 5.5 million already in 2023.”
National security exemption
Oil Change International has also highlighted one other potential concern about Canada’s promised implementation of the Glasgow Statement: “Canada’s policy leaves the door open for fossil fuel projects on national security grounds. In the Canadian policy, ‘national security’ includes not only the energy security requirements of Canada, but also of an ally, or other recipient country deemed important to Canada’s national interests. The policy provides little detail on how this should be interpreted.”
Natural Resources Canada has also noted: “[The Glasgow Statement] allows for support for projects on national security grounds, including ensuring the energy security requirements of Canada, an ally, or other recipient country deemed important to Canada’s national interests, on a case-by-case basis.”
It remains to be seen if fossil fuel projects in Colombia and Mexico, for instance, could be deemed in Canada’s national interests.
There are already concerns that Mexican President Andrés Manuel López Obrador has defined unpopular extractivist megaprojects, including the Dos Bocas Refinery, as being of “national security and public interest”.
The meeting of high-level Canadian and Mexican ministers in July 2021 already suggests that TC Energy pipelines in Mexico are seen as “crucial”.
Photo: Canadian Trade Minister Mary Ng meets with Jennifer Pierce, Senior Vice President of Pipelines in Mexico and President of TC Energía, and Tatiana Clouthier, Secretary of Economy of the Mexican government, at the TC Energy offices in Mexico City.
Photo: In January 2022, PBI-Mexico accompanied the National Meeting of Struggles against Gas Pipelines and Death Projects that expressed opposition to the TC Energy Tuxpan-Tula gas pipeline (across the states of Veracruz, Puebla and Hidalgo).
Public financing announcement expected in 2024
Earlier this week, CBC News reported: “[Canada’s environment minister Steven] Guilbeault said the government is [now] working on identifying all remaining sources of public financing — including Crown corporations [like Export Development Canada] — and will announce a plan to phase those subsidies out by the end of 2024.”
And a Government of Canada media release stated: “Canada is also committed to phasing out public financing … beyond the scope of today’s fossil fuel subsidies commitment. The Government’s work will identify current public financing by 2024 and announce by fall 2024 the implementation plan to phase out public financing of the fossil fuel sector.”
The promise is that “by fall 2024” – about a year from now – an “implementation plan” could be announced that would address EDC domestic financing of fossil fuel projects (like its up to $500 million loan to Coastal GasLink in April 2020 and a $3.75 billion – $4 billion guarantee to the Trans Mountain Corporation in March 2023).
We recall though that Prime Minister Justin Trudeau has stated the TMX pipeline is in “the national interest” and Jim Carr, his special representative for the Prairies, said the same of the CGL pipeline in January 2020.
It also remains unresolved if there is any pathway for redress for the climate damage and human rights violations involved in EDC’s financing of oil and gas pipelines constructed on Wet’suwet’en and Secwepemc territories without consent.
The millions EDC has provided for Coastal GasLink and billions for Trans Mountain are for oi and gas pipelines not yet completed, but when operational will emit carbon and put at risk waterways for the pipelines’ lifespan of approximately 40–50 years.
What culpability does EDC hold for that? What remedy or reparation is available for EDC’s financing of pipelines that the United Nations Committee for the Elimination of Racial Discrimination has repeatedly called on Canada to halt?
Are there similar obligations to consider with fossil fuel projects financed by EDC in other countries?
These may be questions that could be asked of the Minister of Canadian Heritage (who is responsible for Canada’s international human rights reporting) and the Minister of Small Business, Export Promotion and International Trade (who is responsible for Export Development Canada).
We continue to follow this with concern.
Photo: PBI-Canada en route to the Unist’ot’en Healing Centre on Wet’suwet’en territory on November 20, 2021, just after an RCMP C-IRG raid.