End of fossil fuel financing | Ottawa must act quickly

Fossil fuel subsidies will feature prominently in climate policy debates when Parliament resumes, with a particular focus on how Ottawa intends to fulfill its recent pledge to end fossil fuel subsidies by 2023 – two years earlier than initially promised.

Posted on January 8

Karen Hamilton

Karen Hamilton
Director of Above Ground*

The government’s commitment to phase out public funding of fossil fuels – which the government does not consider a subsidy – also deserves public attention. It is this support in particular that has resulted in Canada being singled out on the world stage as one of the greatest promoters of fossil fuels.

At the United Nations climate conference in November, Canada joined more than 30 countries in pledging to eliminate “direct” support for fossil fuels abroad by the end of 2022. Yet , this represents only a portion of Canada’s overall fossil fuel funding, most of which goes to projects in Canada.

The natural resources minister said in November that a timeline for full phase-out, including national funding, would be announced “in the coming months.”

As the government works on this timeline, three facts should be kept in mind.

First, supporting the growth of the oil and gas industry is in direct contradiction to the goal of limiting global warming to 1.5°C – the level beyond which deadly climate impacts will become far greater, affecting hundreds of people. million more people. Experts say that to meet this target, no new oil and gas deposits can be developed and the vast majority of oil sands reserves must remain undeveloped.

Second, Canada supports this industry with more public funding than any other G20 country. Most of this funding comes from Export Development Canada (EDC), which provided an average of $13.6 billion in loans, insurance and other support to the oil and gas industry each year from 2018 to 2020. includes billions of dollars in loans for projects such as the Trans Mountain and Coastal GasLink pipelines.

Third, you should know that Export Development Canada does not intend to end its support for fossil fuels for the time being.

The Crown corporation has pledged to reduce some of its support for oil and gas exploration and production. But it remains free to maintain or even increase its support for other types of fossil fuel development – ​​new pipelines or refineries, for example, which play a vital role in expanding oil and gas production. .

You have to face reality. This demands that we shut down the oil and gas industry. Credible climate leadership would require at the very least cutting off the flow of public money that helps it thrive.

Ottawa should commit to ending all public financial support for fossil fuel development of any kind, in Canada or abroad. To do less would put us out of step with the urgency of the climate crisis.

*Above Ground is a project of Makeway Charitable Society which ensures that companies based in Canada or supported by the Canadian state respect human rights and the environment.

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