Export Development Canada (EDC) has increased its direct financing to the oil and natural gas sector in 2022, testifies its annual report whose title promises “a better world through trade”.
$1.3 billion of federal public money ended up in the pockets of Canadian oil and gas companies last year in the form of loans, more than the $1.1 billion offered by EDC in 2021. Last May 23, the annual report also shows a spectacular increase in public aid to this sector in the form of insurance, covering a value rising from 2.4 to 6.5 billion dollars in a single year.
“The increase is largely attributable to world events, in particular the war in Ukraine, which has led to industry volatility and greater demand for insurance coverage,” says EDC, which also boasts of be engaged in the fight against climate change on numerous occasions throughout the report.
The federal Crown corporation’s mission is to “help Canadian companies of all sizes succeed abroad,” but also boosts Canadian oil and gas operations. It provides either direct aid, such as loans, or indirect, such as insurance or “bonding solutions”, amounting to 900 million dollars for 2022.
About half of EDC’s industry insurance is related to oil and gas production; the other, to help trade “in electricity and energy”. The Trudeau government has ended such subsidies heading overseas, and promises to end “inefficient” oil and gas subsidies in Canada by the end of 2023.
Towards the end of the subsidies
“The oil and gas companies have made indecent profits. It seems to me that they are able to pay their insurance. This is the basis, ”reacted Bloc Québécois MP Monique Pauzé, also vice-president of the federal parliamentary committee on the environment and sustainable development.
On Thursday, Liberal MPs let it be known in the House that they intend to support his party’s motion demanding, among other things, “that the federal government stop investing in fossil fuels”. The New Democratic Party (NDP) also supports the idea, leaving little doubt that the non-binding motion will pass in the vote, scheduled for Monday.
“Our motion says the government must stop investing in fossil fuels, but the numbers [du rapport annuel d’EDC] show that this is not the case at the moment”, adds Mme Pauze.
She accuses the Liberal government of maintaining ambiguity on this theme by leaving the door open to “effective” subsidies, whereas, from her point of view, “green oil doesn’t exist”.
The Liberal Party of Canada (PLC) has moreover signed an agreement with the NDP to remain in power until 2025 in exchange for the implementation of public policies, including, specifically, “phasing out public funding of the sector fossil fuels, including that of state corporations, [avec] rapid measures in this direction in 2022”.
“It is very worrying that EDC is lending more money to companies that have made record profits and in a context where we have concrete examples of the impacts of the climate crisis,” writes NDP MP Alexandre Boulerice, who said he was “still confident” to move the file forward thanks to his partnership with the Liberals.
green oil
Export Development Canada presents in its annual report various indicators with complex calculations which claim that its investments are greener. For example, its “volume of production” related to loans from the oil and gas sector totaled 1.11 exajoules of energy, which represents “a 40% decline in portfolio emissions intensity compared to 2020. “.
In the same breath, the institution admits that its activities caused much more greenhouse gases (GHG) than the previous year, from 811 to 1321 tonnes of CO equivalent.2 between 2021 and 2022.
Never mind, the state-owned company is calculating that it is on the right track to becoming carbon neutral by 2050. It wants to reduce by 2030 its “financing portfolio” linked to oil and gas exploitation by 15% compared to to 2020. On the other hand, it has no intention of stopping investing its money in oil.
“The oil and gas sector, while responsible for a significant portion of Canada’s emissions, is essential to the Canadian economy and should remain so during the transition to a low-carbon future,” writes the EDC spokesperson, Zoé de Bellefeuille, in an email to Duty.
She says the institution helps clients “strengthen their climate action measures,” such as requiring oil companies to provide climate reports. EDC has also increased its support for the clean technology sector, amounting to $8.8 billion in 2022.
“Financing the oil and gas industry through EDC investments is a form of support for fossil fuels,” says Andréanne Brazeau, climate policy analyst at Équiterre. She says EDC’s transition vision is “inconsistent with science,” including portraying natural gas as a transitional energy.
“It’s ironic that Export Development Canada identifies climate change as the most important issue for its stakeholders, while continuing to fund the root cause of this crisis. This is particularly aberrant these days, when the country is in flames. We literally continue to throw oil on the fire. »
During the last federal election campaign, in 2021, The duty calculated that EDC provided more aid to the oil and gas industry, on average, under Justin Trudeau’s Liberal Party years in power than under Stephen Harper’s Conservatives.