The COVID-19 crisis has put the livelihoods of millions in Canada at risk, and the federal government is preparing historic levels of public finance in response. Since the stimulus money will shape our economy for decades to come, the government should use this opportunity to build resilience to future crises and invest in a clean recovery that maximizes job creation. It must not respond with further public backing of oil and gas, which is entirely incompatible with the Paris Agreement’s goal of limiting warming to well below 2°C. This would leave us vulnerable to escalating climate impacts and economic risks associated with an over reliance on fossil fuel extraction.
Canada’s export bank, Export Development Canada (EDC), already provides on average nearly fourteen billion dollars in support to oil and gas companies each year. As a result, Canada ranks second highest among G20 countries in public finance for fossil fuels. Now the federal government is using EDC to channel even more support to the oil and gas sector, which has been intensely lobbying the government for a bailout package of up to $30 billion.
This document answers basic questions about EDC and its role in Canada’s COVID-19 relief for oil and gas firms, and makes recommendations to align the government’s pandemic response with its climate commitments.