19 March 2018
Last fall we wrote to Canada’s environment minister urging that the government include in its review of fossil fuel subsidies the support it provides to oil and gas companies through Export Development Canada (EDC).
We have now received confirmation from the trade minister that “EDC has been included as a part of this review.” That’s good news, because the level of support this Crown corporation provides to oil and gas companies each year is staggering: more than $10 billion last year, and close to $12 billion in 2016. Investments of this scale cannot reasonably be ignored in an assessment of public financial support for fossil fuels. The review has not yet concluded, however, so it remains to be seen whether the government will determine that EDC financing of oil and gas is an inefficient fossil fuel subsidy, and must therefore be phased out in accordance with Canada’s international commitments.
The World Bank has committed to stop financing fossil fuel extraction, other than under exceptional circumstances,* by 2020. Given its stated goal of fighting climate change, the Canadian government should similarly commit to a swift timeline for eliminating public financial support for fossil fuels, including the support it provides through EDC.
*The World Bank announcement states that “In exceptional circumstances, consideration will be given to financing upstream gas in the poorest countries where there is a clear benefit in terms of energy access for the poor and the project fits within the countries’ Paris Agreement commitments.”