Canada must stop bankrolling and exporting climate destruction
Emissions from Canada’s fossil fuel exports have skyrocketed, and now eclipse Canada’s total domestic emissions from all sectors combined. Oil companies are exporting climate destruction, with billions of dollars in backing each year from Canada’s public export bank, Export Development Canada.
Between 2019 and 2021, Canada provided more public finance for fossil fuels than any other country in the G20 other than Japan. Nearly all of this financing was delivered through Export Development Canada (EDC), which provided on average $11.6 billion a year in support to Canadian and foreign oil and gas companies. This was nearly ten times greater than EDC’s support for renewable energy.
EDC has no plan to end its support for fossil fuels. In 2022, the agency’s annual support for the industry, including financing through the Canada Account, in fact surged to over $21 billion in loans, guarantees and insurance.1EDC approved $8.7 billion in support to the oil and gas sector in 2022, representing nearly double the support provided the prior year. In addition to this, the government used the EDC-administered Canada Account to support the Trans Mountain Expansion project: this includes a loan worth between $1.75 billion and $2 billion, as well as a loan guarantee worth between $9.75 billion and $10 billion.
Above Ground and over one hundred other civil society organizations have called on Ottawa to immediately end EDC’s support for fossil fuels, in Canada and abroad. This is necessary to avoid catastrophic warming of over 1.5°C, which experts say means immediately halting development of all new oil and gas fields, slashing production, and leaving the vast majority of Canada’s oil sands reserves unexploited.
A small step in the right direction
At the 2021 UN climate change conference (COP26) in Glasgow, Canada joined the United States, the United Kingdom and dozens of other countries in pledging to end a portion of this finance – certain types of support for the overseas fossil fuel development – by the end of 2022. Ottawa released the guidelines for implementing this commitment in December 2022. The government states that it will impact $2.5 billion in “current, existing business” from EDC that will not be renewed once the maturity dates are reached.
This represents only a fraction of EDC’s overall fossil finance, much of which flows to companies and projects in Canada. In recent years, this domestic support has included billions in loans to projects such as the Trans Mountain and Coastal GasLink pipelines, as well as to the country’s major oil sands players.
The federal government has also committed to phasing out domestic fossil finance, but has not committed to a deadline. The finance, natural resources and environment ministers have been tasked with developing the plan, with a phase-out date expected to be announced within months.