Workers, families, communities and small businesses across the country urgently need financial support during this incredibly challenging time. We applaud all of the federal parties for working together to take this positive step to pass legislation which will help those struggling. But hidden inside this new law were changes that will make it easier for Canada’s export credit agency, Export Development Canada, to funnel billions more towards domestic oil and gas operations – without public scrutiny.
About ENVIRONMENTAL DEFENCE (www.environmentaldefence.ca): Environmental Defence is a leading Canadian advocacy organization that works with government, industry and individuals to defend clean water, a safe climate and healthy communities.
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Barbara Hayes, Environmental Defence, email@example.com
Today, the federal government passed the COVID-19 Emergency Response Act. We applaud all of the parties for working together to pass this bill in order to get much needed financial support to individuals and families across the country and make it easier for Canadians to stay at home and pay for basic necessities. People across the country are struggling, and this support is a much needed step in the right direction.
As part of these measures, changes were made to the act that governs Export Development Canada (EDC). EDC is Canada’s official export credit agency, which means it is mandated to facilitate export growth in Canada’s international industries and businesses. Unlike independent commercial finance providers, EDC’s finance is underwritten by Canadian taxpayers. EDC is accountable to Parliament and overseen by the Minister of International Trade and the Minister of Finance.
Changes to Export Development Canada from the Act:
Changes to the Export Development Act include:
- EDC’s mandate has been broadened further to support domestic businesses
- Current limits on the liability that EDC can incur, which was previously capped at $45 billion, have been lifted and are now at the discretion of the Minister.
- The Ministers of International Trade and Finance have a broader scope on the transactions that they can approve.
There is no sunset clause on these changes.
Export Development Canada before the Emergency Act:
Despite being mandated to focus on exports, Export Development Canada has also been supporting domestic oil and gas companies and operations, as a result of changes made to the act in 2008. This includes providing the loans and financial support required for the Trans Mountain pipeline purchase, and now includes financing the construction of the expansion. In January, EDC was considering a loan for the contentious Coastal Gas Link Pipeline in British Columbia, that is being opposed by the Wet’suwet’en First Nation’s hereditary chiefs.
EDC already provides on average ten billion dollars in government-backed financial support to oil and gas companies every year. With the limit to financing lifted, it will become even easier for the government, through EDC, to continue to prop up oil and gas companies – and provide even greater levels of government-backed financial support to these companies.
EDC’s track record on financing fossil fuels – as opposed to the clean energy sector – is concerning. Between 2012 and 2017, EDC provided twelve times more support for oil and gas than for clean technologies.
Public spending during this time should be focused on measures that address health, the economy and the climate together and hasten measures to bring about a just transition.
EDC has been criticized for a lack of transparency, so we are concerned that financial support can be funneled to the oil and gas sector without public scrutiny.
We are calling on the government to ensure that financing goes towards smaller companies that are really struggling at this moment and align with Canada’s commitment to a just transition to a sustainable economy, and not continue to be funnelled to oil and gas companies.
Further information about Export Development Canada
- Risking It All: How Export Development Canada’s For Fossil Fuels Drives Climate Change https://environmentaldefence.ca/report/exportfossilfuelsubsidies/