Canadian senator wants to end widespread financial support for fossil fuels

The United Nations climate change conference, COP27, has started in Sharm el-Sheikh, Egypt. Looking ahead to the conference, UN Secretary-General Antonio Guterres said the recent report by the Intergovernmental Panel on Climate Change revealed “a litany of broken climate promises” by governments and businesses.

“It’s a record of shame, cataloging the empty promises that put us firmly on the path to an unlivable world,” he said.

Canada is high on the list of empty promises. The government’s commitment at COP26 to reduce carbon emissions by 40-45% by 2030 – enacted by Canada’s Net Zero Emissions Accountability Act – is not only seen as an inadequate target, but it has also been heavily criticized for its lack of necessary measures to achieve its goals. commitments. Rightly so, given his lackluster record in achieving past goals.

A report commissioned by the International Institute for Sustainable Development found that high-income countries like Canada must cut oil and gas production by 74% by 2030 and end production by 2034 to sustain global warming to less than 1.5°C. And yet, Canada’s national energy regulator predicts that oil production will continue to rise until 2040 and decline only slightly thereafter.

Financing of oil production

Despite the proliferation of climate-related disasters in Canada and around the world, Prime Minister Justin Trudeau’s Liberal government has purchased – and continues to guarantee – bank financing for the Trans Mountain Pipeline. It will transport bitumen from the oil sands to the west coast.

The federal government has also approved the Bay du Nord oil development project off Newfoundland, which aims to double oil production by 2030. The Coastal GasLink pipeline in northern British Columbia is also supported by public funds.

Piping is visible atop a receiving pad that will be connected to the Coastal GasLink pipeline terminus at LNG Canada’s export terminal under construction in Kitimat, BC in September 2022.
THE CANADIAN PRESS/Darryl Dyck

Governments have turned a blind eye to the role of financial institutions that are responsible for the lion’s share of the money pumped into Canada’s fossil fuel industry.

The Big Five banks – RBC, TD, Scotiabank, BMO and CIBC – are among the top 20 lenders to fossil fuels globally and have lent or invested more than $900 million in fossil fuels since 2015 Paris Agreement.

About 20% of their directors also sit on the boards of fossil fuel companies. Sun Life and Manulife Insurance together hold close to $20 billion in investments in coal companies.

Despite touting their dubious credentials for sustainable finance, Canada’s major financial institutions have only committed to reducing the carbon intensity of their fossil fuel customers’ operations. They have yet to commit to reducing absolute emissions.

In the public sector, Export Development Canada provides oil and gas companies with substantial financing, loan guarantees and insurance.

Pension plans in Canada and Quebec hold billions of dollars in fossil fuel investments. While the Quebec plan – CDPQ – has pledged to divest from oil producers by the end of 2022, the Canada Pension Plan continues to explicitly exclude divestment.

Senator proposes real climate action

Amid this sea of ​​hypocrisy, delusion and denial — “Blah blah blah,” in the words of climate activist Greta Thunberg — there are some bright spots in Canada’s Parliament.

One resides in the Senate. Independent Quebec Senator Rosa Galvez, one of Canada’s leading pollution control experts, was a professor of environmental engineering at Laval University for more than 25 years before being appointed to the Senate in 2016 by Trudeau.

Galvez called for ambitious and consistent government intervention to address the risks that financial institutions pose to the climate and to protect financial institutions from system failures.

She has exposed conflicts of interest by bank executives who simultaneously serve on fossil fuel company boards, alleging earlier this year: “It’s just one big family…”

In March 2022, Galvez introduced Bill S-243, the climate-aligned finance law, aimed at holding governments and financial institutions to account for their actions. She presented her legislation in a keynote address to the Group of 78 conference in September.

The act:

• Hold corporate directors, officers and trustees accountable for meeting corporate climate commitments.

• Mandate corporate action plans and climate goals with annual progress reports.

• Ensure boards have the necessary climate expertise and ensure there are no conflicts of interest.

• Align existing laws for relevant government organizations with climate priorities, including requiring the federal supervisor, the Office of the Superintendent of Financial Institutions (OSFI), to impose climate goals.

Dealing with pushback

A recent report examining the carbon footprint of banks calls for the passage of the Climate Aligned Finance Act as soon as possible.

However, it faces major pushback from financial and fossil fuel companies, as well as politicians and senior government officials.

To have a chance of becoming law will require aggressive advocacy by climate-committed citizen groups and politicians at all levels of government. If successful, it would be an important step towards phasing out fossil fuel production in Canada, in line with scientific and UN warnings.

A person carrying a sign that reads code red, don't run away stands in front of a stone building with other protesters
Climate protesters gather outside the Prime Minister’s office in Ottawa to demand Justin Trudeau take action on climate in November 2021.
THE CANADIAN PRESS/Sean Kilpatrick

The Trudeau government’s climate incrementalism does not inspire optimism. The record of most provincial governments is even less inspiring. The rise of authoritarian populism accompanied by climate denial among much of the conservative base presents an even more worrying obstacle to effective action on climate change.

In the 1930s, the philosopher Antonio Gramsci wrote about “the pessimism of the intellect, the optimism of the will”, contrasting his pessimistic analysis of the present with hope for the future.

With planetary survival in jeopardy, voices like Galvez’s offer some optimism. But she will need Canadians to get on board with her proposals — and fast.

About Chris McCarter

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