A federal Crown corporation is extending a $200- to $300-million loan to Enbridge Inc. to support the company’s oil and gas expansion plans.
Export Development Canada renewed the previously granted loan on July 23, a spokesperson told Canada’s National Observer in an emailed statement. Export Development Canada (EDC) is a Crown corporation that provides commercial loans, equity and insurance to help Canadian businesses reach the market. It is also a prolific financier of fossil fuels.
The renewal of this loan to Enbridge comes on the heels of EDC giving between $100 million and $200 million worth of project financing to Coastal GasLink and a separate loan worth between $400 million and $500 million to Cedar LNG in June.
“That's a billion dollars in one month for fossil fuel companies at a time when the government has committed to stop funding fossil fuels,” said Julia Levin, associate director of national climate for Environmental Defence, in a phone interview.
In a submission to EDC, four environmental groups argued this financing for Enbridge — which supports fossil fuel expansion and increased planet-warming greenhouse gas emissions — runs counter to the federal government’s international and national commitments to end fossil fuel subsidies.
The federal government is expected to release its plan this fall to phase out public financing to the fossil fuel sector.
The loan is for projects in the U.S., and environmental groups point out this makes it an international transaction. Canada has said it would end financing for international fossil fuel projects.
EDC said it no longer provides new direct financing to the unabated international fossil fuel sector consistent with Canada’s climate goals and an international agreement called the Glasgow statement — but it does continue to provide support to U.S. subsidiaries of Canadian oil and gas companies in specific cases where the pipeline infrastructure is carrying 100 per cent Canadian oil and gas and is physically connected to the Canadian infrastructure.
“Further, we no longer provide new indirect business support (i.e., insurance, bonding, guarantees) for Canadian oil and gas producers’ international upstream and downstream operations,” read the statement. “EDC does not provide grants or subsidies.”
It’s true that refinancing the loan doesn’t technically violate Canada’s commitments, but Levin argues that doesn’t make it right.
“It's not new financing, and that's how they justify it. But they don't have to keep prioritizing fossil fuel companies,” Levin said, pointing out that we are in a climate emergency.
The science is clear: to limit climate change as much as possible, fossil fuels need to stay in the ground and be rapidly phased out in favour of cleaner energy sources.
Enbridge has plans to expand its operations, including new LNG pipeline projects, crude oil storage, export infrastructure and a new fossil fuel pipeline, the submission points out. Building new oil and gas infrastructure locks in emissions for years to come and risks stranding those assets as the world moves away from dependence on them.
Enbridge just broke ground on a $358-million gas pipeline expansion in Ontario, and has multiple projects in the works south of the border.
Among these is the 137-mile Rio Bravo pipeline project, which would move up to 4.5 billion cubic feet of gas per day from the Texas Permian Basin to the Rio Grande LNG terminal for liquefaction and export.
“[Enbridge’s] goal is to delay the transition off of gas, even though it costs customers way more and obviously contributes to the climate crisis,” Levin said. “They're a clear climate villain and should not be receiving government support in any form, and that includes extended loans from federal Crown corporations.”
At the same time as the federal government pledges to end fossil fuel subsidies, it provided billions of dollars of taxpayer money and taxpayer-backed loan guarantees to complete the Trans Mountain expansion project, despite vast cost overruns.
In defense of its climate efforts, EDC pointed to a 41 per cent increase in its support for renewable power, with $8.9 billion going toward it in 2023.
“Supporting Canadian companies operating in carbon-intensive sectors as they innovate to reduce their emissions is an important part of our strategy and commitment to net zero,” the statement reads.
— With files from John Woodside
Nataasha Bulowski / Local Journalism Initiative / Canada’s National Observer
Comments
“Supporting Canadian companies operating in carbon-intensive sectors as they innovate to reduce their emissions is an important part of our strategy and commitment to net zero,” the statement reads.
The sad part of that statement is, the EDC is so misguided or have been tricked into thinking the sector is actually doing something to reduce their emissions. Reports on emissions, shows that emissions are increasing, not decreasing by the sector.
Governments and Financial & Fossil Fuel corporations are exhibiting mutual derangement, determined to drive the planet into wild and catastrophic devastation, for reasons that are unfathomable to the sane.
It is abundantly true that Corporations are psychopathic and have, through extortion, sucked too many governments into their self destructive vortex. The complicit governments run the gamut from authoritarian to the ostensibly democratic. There is little to distinguish one from the other when it comes to Fossil Fuels.
I am glad this was reported here, but not happy.
I looked this up for some context to better understand.
They (Crown Corporations) are established by an Act of Parliament and report to that body via the relevant minister in Cabinet, though they are "shielded from constant government intervention and legislative oversight" and thus "generally enjoy greater freedom from direct political control than government departments."
So I wonder, how can we get the EDC to start acting like they actually take the climate crisis very seriously?
I suggest we go after the head of EDC.
As Jasper, and Jasper National Park are burning, the Federal government is aiding the expansion of oil and gas production through the EDC. Monty Python and Catch-22 come to mind.
It is a Crown Citroen, government doesn’t tell them how to disseminate its funds.
*corporation
The problem when you say feds, people thinking current Liberal government. EDC is a crown federal corporation. The government doesn’t decide how it manages its money. So depending on who is the head of the Crown Corp, perhaps you should attack them instead of causing disinformation to be disseminated.