No plan in sight as deadline to end Canada’s international fossil finance nears

At last year’s UN climate conference in Glasgow, Canada joined dozens of countries in pledging to end its international public finance for fossil fuels by the end of 2022.¹ Specifically, the statement signatories committed to “end new direct public support for the international unabated fossil fuel energy sector by the end of 2022, except in limited and clearly defined circumstances that are consistent with a 1.5°C warming limit and the goals of the Paris Agreement.” The complete statement is available here.With mere weeks remaining before the deadline, the government has yet to release its plan for implementing the commitment. The plan’s fine print, including definitions of key terms and potential exceptions, will be instrumental in determining the full scope and impact of the pledge for Canada.

Protesters gather outside of Export Development Canada’s headquarters in Ottawa on October 7, 2022. Photo courtesy of Environmental Defence

It’s unclear if Ottawa has even shared these details with Export Development Canada (EDC), the Crown corporation that provides nearly all of the fossil finance in question. The billions of dollars in annual support that EDC provides to Canadian and foreign oil and gas companies has made Canada one of the world’s largest public financiers of fossil fuels.

In April 2022, EDC’s president told parliamentarians that the agency would end “new financing for international [fossil fuel] companies” by the end of the year. Yet her comments left many questions unanswered: do these “international” companies include Canadian companies operating abroad? Do they include foreign companies operating in Canada? Does EDC foresee exemptions to the policy that would allow it to continue supporting gas projects overseas, or those employing contentious carbon capture technology, which scientists criticize for prolonging fossil fuel dependence?

Above Ground wrote to EDC in July to obtain clarifications to these and other questions. The agency’s response, sent in September, did not contain answers to the above queries. Nearly a year after Ottawa signed the commitment in November 2021, EDC stated that it was still working with the government to “interpret [its] scope” and the government’s “plans for implementation.”

The definitions that the government includes in its plan will have a substantive impact on the portion of Canada’s oil and gas support captured by the Glasgow pledge. A preliminary government estimate pegged this figure at just $1 billion annually. This is a tiny fraction of Canada’s overall fossil fuel finance, much of which flows to Canadian companies operating domestically. 

There are also strong indications that some government support for fossil fuel companies will be exempted from the pledge under the justification that it’s to help develop “clean technologies.” The government defines this term so broadly as to include “[a]ny good or service that is less polluting or more resource efficient than equivalent normal products.” Ottawa’s taxonomy allows EDC to consider carbon capture, utilization and storage (CCUS) projects in the fossil fuel sector as “cleantech,” even though scientists warn that the industry’s use of CCUS has resulted in increased emissions overall. This is because carbon capture encourages increased oil and gas production, while doing nothing to address the 80% of oil and gas emissions that are generated when the fuel is burned. 

Despite repeated requests from civil society and parliamentarians, EDC has yet to publish a list of transactions that it has classified as “cleantech.” In our July letter to EDC, we asked once again for the agency to produce such a list, but EDC declined.²Such a list must exist in some form. Without it, the agency could not have calculated that it facilitated $6.3 billion in business in “cleantech” in 2021.

With emissions from the burning of Canadian fossil fuels skyrocketing, the government can’t justify allowing EDC to continue bankrolling the industry’s expansion. It must immediately present a plan for promptly ending this support.

• Read our letter to EDC (July 29, 2022)
• Read EDC’s response (September 22, 2022)
• Learn more about Canada’s financing of fossil fuels
• Take action: send a message with Amnesty International calling for an immediate end to Canada’s bankrolling of fossil fuels