Canada’s federal and provincial governments need to immediately stop all supports for fossil-fuel exploration and extraction, and find ways to pressure Canadian banks to do the same
Dr. Trevor Hancock
8 November 2022
When you are in a hole, as the old adage goes, stop digging. Well, as the COP 27 UN climate conference in Egypt makes clear, we are in a hole on climate change. U.N. Secretary-General Antonio Guterres warned last month the world is in “a life-or-death struggle” for survival as “climate chaos gallops ahead”, while the World Health Organization calls climate change “the single biggest health threat facing humanity”.
We quite literally need to stop digging up – and drilling for – fossil fuels. In a May 2021 report, the International Energy Agency stated “the global journey to net zero by 2050 . . . includes, from today, no investment in new fossil fuel supply projects.” And Mr. Guterres said in April 2022 “Investing in new fossil fuels infrastructure is moral and economic madness.”
Yet the world continues to invest in new fossil fuel infrastructure and to expand production of fossil fuels. A 2021 report from a group led by the Rainforest Action Network stated “most of the oil majors are still on the path to significantly increase their oil and gas production between now and 2030.”
The Canada Energy Regulator reported in July that Canada is the fourth largest oil producer in the world and that since 2010, crude oil production has increased by 57 percent and exports by 87 percent. In addition, Canada was the sixth largest natural gas producer in the world.
Of particular concern are the ‘carbon bombs’; fossil fuel extraction projects that will release at least 1 billion tons of CO2 over their lifetimes (see my May 22nd and 29th columns). There are 425 such projects around the world, of which 40 percent are yet to start extraction. They will emit almost triple the amount of CO2 emissions allowable after 2020 if we are to stay under a 1.5°C rise in global temperature. Canada, with 12 carbon bombs – all in BC or Alberta – is the seventh largest carbon bomber in the world and could add 39 billion tons of CO2 to the atmosphere.
Small wonder that an article in The Guardian in June of this year described Mr. Guterres, speaking at a White House-organised Major Economies Forum, as “furious” that “governments that are failing to rein in fossil fuels, and in many cases seeking increased production of gas, oil and even coal, the dirtiest fossil fuel”. Fossil fuel producers and financiers, he added, “have humanity by the throat.”
Unforgivably, the government of Canada is supporting increased production and export of fossil fuels, while Canadian banks and the Canadian government are among the global leaders in financing fossil fuel expansion. The Rainforest Action Network report noted “the world’s 60 largest commercial and investment banks . . . poured a total of $3.8 trillion into fossil fuels from 2016–2020.” The report showed Canada’s big five banks are among the top 25 global banks supporting fossil fuels, with RBC ranked 5th in the world, TD 9th and Scotia Bank 11th.
A July 2021 report from the Dutch consultancy Profundo, commissioned by Greenpeace, notes: “Since the Paris Climate Agreement was signed in 2015, the six Canadian banks in this study have provided over $694 billion to fossil fuel companies in the form of loans ($477 billion) and underwriting services ($216 billion)”, with 88% of it going to oil and gas companies.
Meanwhile, Canadian governments are also funding fossil fuel expansion. In 2021, Environmental Defence reports, federal government support alone amounted to at least $8.6 billion, of which $5.1 billion was provided through Export Development Canada. A 2022 report from the International Institute for Sustainable Development pegged provincial subsidies at a further $2.5 billion in 2020/21.
This at a time when the fossil fuel industry is wallowing in cash from the windfall profits stemming from Russia’s war on Ukraine. Moreover, the report notes, “between 2018 and 2020, Canada provided 14 times more fossil fuel finance than support for renewables.”
Canada’s federal and provincial governments need to wake up and smell the burning, immediately stop all supports for fossil fuel exploration and extraction, and find ways to pressure Canadian banks to do the same. The health and wellbeing of this and future generations depends upon whether our governments stop digging.
© Trevor Hancock, 2022
Dr. Trevor Hancock is a retired professor and senior scholar at the
University of Victoria’s School of Public Health and Social Policy