Hey there, time traveller!
This article was published 22/7/2020 (546 days ago), so information in it may no longer be current.
Canadian environmental groups are raising concerns about the amount of money flowing to oil and gas companies through the country’s Crown corporation export bank, Export Development Canada (EDC), to support the fossil fuel industry during the pandemic and a time of slumping oil prices.
Three organizations — Environmental Defence, Oil Change International, and Above Ground – released a report Wednesday highlighting the lack of transparency in how the publicly backed EDC evaluates climate risk associated with loans to companies, and how continued investment in oil and gas runs contrary to the country’s emissions reductions targets.
"The three organizations that put out the report are the ones who have been really tracking Export Development Canada for the last several years. So now that Export Development Canada has been given a more important role, being tagged as one of the main COVID-recovery vehicles, we felt it was incumbent to share the knowledge we have," said Julia Levin, the climate and energy program manager at Environmental Defence.
Research previously conducted by Environmental Defence and co-operating organizations found that on average nearly $14 billion in support is provided to fossil fuel companies in a given year.
"Now the federal government is using EDC to channel even more support to the oil and gas sector, which has been intensely lobbying the government for a bailout package of up to $30 billion," the report reads.
While a formal bailout of that size likely would not have been palatable to Liberal voters, Levin said, the EDC offers a less transparent backdoor means of accomplishing a similar end.
"On April 17, the government announced their support package to oil and gas and they really emphasized the two parts of the program that direct environmental benefits," Levin said, referencing the federal government’s plan to spend $1.7 billion on abandoned and orphan well cleanup, and an additional $750 million to create a new repayable loan program for oil and gas companies to reduce their greenhouse gas emissions.
"In that same announcement, that is when they first went public with some of EDC’s support programs. They weren’t fleshed out at that point, yet. But it was a strategic decision to not emphasize that part of the package."
The federal government’s original announcement in April stated the increased role of EDC and the Business Development Bank of Canada "will provide viable energy sector companies with rapid access to the financing they need to maintain operations and keep their employees working."
No one from the EDC was made available for an interview. However, in a statement a spokesperson underlined the importance of financial liquidity to support an industry that employs so many Canadians and accounts for approximately 7.5 per cent of the country’s GDP.
"We are providing this short-term assistance in response to the current crisis, while remaining firmly committed to addressing climate change," the statement reads. "Companies receiving the risk-sharing guarantee — a loan obtained from their financial institution and guaranteed by EDC — will be required to publish a climate-related disclosure report… This requirement speaks to our steadfast commitment to addressing climate change."
sarah.lawrynuik@freepress.mb.ca