Canadian banks have a serious fossil fuel addiction. But it is not just a Canadian problem.
The latest study of corporate data from 60 of the world’s largest banks shows that rather than cutting back on the funding of fossil fuel projects since the 2016 global agreement to limit greenhouse gases, they have increased that funding to $3.8 trillion US in the past five years.
The report outlining the data, titled Banking on Climate Chaos 2021, is the 12th annual tally of fossil fuel financing by a group of seven climate advocacy organizations, including Rainforest Action Network and the Sierra Club, both based in the United States.
The good news for those concerned about climate change is that a crash in the fossil fuel business during the COVID-19 pandemic led to a sharp drop in investment growth in 2020, but the report’s authors fear that a growing recovery this year will lead to a “snap back to business as usual.”
Although U.S. banks, including JPMorgan Chase, have committed to establishing emissions targets for their financing portfolios in line with the Paris climate accord, the report declares that North America’s biggest bank has also been “the world’s worst fossil bank” over the past five years, lending $317 billion to the industry.
RBC punches above its weight
And while U.S. banks lead the pack, Canada’s RBC has the dubious honour of punching above its weight. Four Canadian banks are in the top 20, including RBC, TD, Scotiabank and Bank of Montreal.
“Citi follows as the second-worst fossil bank, followed by Wells Fargo, Bank of America, RBC and MUFG [Mitsubishi],” the fossil fuel finance report says. “Barclays is the worst in Europe and Bank of China is the worst in China.”
Despite repeated calls by people like former central banker Mark Carney and business leaders such as Larry Fink, CEO of investment giant BlackRock, for companies to decarbonize to avoid risks to the entire economic system, people close to Canada’s banking industry say banks like RBC are having trouble changing direction.
“There’s a lot in the Canadian psyche and history that is wrapped up in the fossil fuel economy, and we’re feeling some of that inertia right now,” said Laura Zizzo, co-founder and CEO of Manifest Climate, a Toronto company that advises financial institutions across North America on strategies to help them navigate climate change.
Working closely with Canada’s big banks — though she wouldn’t say whether RBC was one of her clients — Zizzo said she is convinced that people at the highest corporate levels really are committed to change. It’s just happening more slowly than many who fear the impact of climate change would like to see.
Responding to my question asking why Canada’s biggest bank continued to lend such large amounts — $160 billion over the past five years — to the fossil fuel industry and its projects, RBC reaffirmed its commitment to net zero emissions, including a promise of $500 billion in sustainable finance by 2025. It said it was also the first bank to commit not to lend to resource projects in Alaska’s Arctic National Wildlife Refuge.
RBC has committed to net zero carbon emissions in its portfolio, but a new report says it has loaned more money to the fossil fuel industry in the past five years than any other bank in Canada. (Mark Blinch/Reuters)
But in a country where there is so much political and economic pressure for oil and gas development, RBC said that to be successful, its move to net zero must be gradual.
“This transition is vitally important and it must be done in an inclusive manner that brings all sectors and communities along or we won’t achieve the support we need to meet these goals,” RBC said in an email.
Bad for banks, as well as the climate
As Carney — who was governor of both the Bank of Canada and Bank of England before becoming head of impact investing at Brookfield Asset Management — has warned in the past, when financial institutions take a stake in long-term fossil fuel projects, it is not just bad for the climate.
In order to hold temperatures at levels scientists say are necessary to keep temperature rise to 2 C, experts say the value of fossil fuel investments must fall to zero in about 30 years. Carney and others say a rush to get out of those investments as the crisis worsens could create a financial risk for the entire economy and for institutions such as banks, pension funds and insurance companies.
Former central banker Mark Carney, addressing the United Nations Climate Change Conference in London in February 2020, has warned that when financial institutions take a stake in long-term fossil fuel projects, it creates a financial risk for the entire economy. (Tolga Akmen/Pool via/Reuters)
It also creates a risk for ordinary Canadians who depend on those institutions for their banking, pensions and insurance, as well as for investors and employees.
That is what Zizzo, who trained as a lawyer, sees as her company’s job: to help banks transition to a point where climate risk will not hurt them or their stakeholders. And she says part of the difficulty for banks is that their normal investment horizons are two years, or maybe a little longer.
“But generally they are all still too short to think about the longer-term issues of climate,” she said. Financial institutions are currently struggling to adapt to new global requirements, expected soon, where investors will have to be informed of a bank’s long-term climate liability, she said.
“It’s taking time before it actually percolates into the risk-management functions of these financial institutions,” Zizzo said.
She also says that so far, banks have been better at expanding their investments in greener projects than they have been in paring back on fossil fuels.
That failure to reduce investments in fossil fuel expansion is the problem identified in Wednesday’s bank report. Adam Scott, director of Shift, a Toronto-based group that monitors pensions for climate risk, says it demonstrates what he calls a lack of “climate literacy.”
Suncor’s oilsands base plant in Fort McMurray, Alta. A crash in the fossil fuel business during the COVID-19 pandemic led to a sharp drop in investment growth in 2020. (Jason Franson/The Canadian Press)
Despite the recent vote by federal Conservatives in Canada rejecting the idea that climate change is real, Scott said that is not a view shared by most bankers he meets. The problem is that they fail to recognize that the problem “requires the phaseout of fossil fuels entirely over a very short period of time.”
“I think the thing that’s missed here is that when you build new fossil fuel projects, you’re locking in emissions for decades to come. So an investment today in new fossil fuel makes it harder to address the climate crisis,” Scott said.
“It’s going to make a very difficult thing more difficult,” he said. “The banks are pouring money into making this problem harder, and that just has to stop.”
FREDERICTON – New Brunswick Premier Susan Holt announced today that medicare will now cover surgical abortions that are administered outside hospitals in the province.
Access to abortions in clinics has been restricted across New Brunswick because the government only covered the cost of the surgical procedures if they were performed in one of three hospitals.
Holt, whose Liberals came to power in an election last month, calls the change an important first step to improve abortion access.
She says New Brunswick will now be aligned with most other provinces by covering the cost of abortions whether they are administered in hospitals or clinics.
Her government’s next step is to work with groups, including the province’s medical society and regional health authorities, to establish how abortions will be provided in communities.
The previous Progressive Conservative government had refused to pay for surgical abortions outside hospitals, saying women across the province had access to medical abortions, which are administered with prescription medication.
This report by The Canadian Press was first published Nov. 7, 2024.
OTTAWA – India’s consulate in Toronto is suspending some of its diplomatic visits to process paperwork at places like religious temples after violence between Sikh and Hindu people.
The violence started Sunday outside the Hindu Sabha Mandir in Brampton, Ont., where police allege people in the crowd were carrying weapons and throwing objects.
The next day there were tense protests outside the temple, leading to another police intervention and calls to ban protests at Brampton religious sites.
The clashes have involved Hindu groups clashing with Sikh separatists, who have protested visits by Indian consular officials to process paperwork for matters such as pensions.
The violence has further heightened tensions between Ottawa and New Delhi after Canada expelled six Indian diplomats last month when the RCMP flagged them as persons of interest in alleged crimes against Canadians.
India’s Toronto consulate says it’s suspending some of its announced site visits, but did not specify which ones have been cancelled.
“In view of the security agencies conveying their inability to provide minimum security protection to the community-camp organizers, (the Toronto) consulate has decided to cancel some of the scheduled consular camps,” the consulate said in a post on X.
The consulate’s website lists planned visits in places like Brampton, Mississauga, Halifax, Windsor and London, Ont.
India’s high commission in Canada did not immediately respond when asked if its Ottawa mission or Vancouver consulate had also suspended consular visits. Officials in those missions have announced what they call “consular camps” across the Prairies this weekend, as well as in Montreal and parts of British Columbia later this month.
Sikh separatists, who advocate for an independent country called Khalistan to be carved out of India, have alleged Indian diplomats use their temple visits to recruit informants to target Khalistan supporters.
While the Canadian government has refused to identify the diplomats it expelled, the federal government does maintain a database of diplomats who are accredited to Canada. That database was updated a week after the expulsions were announced on Oct. 14, and six names that were previously on the list had been removed.
That includes High Commissioner Sanjay Kumar Verma and Toronto consul general Siddhartha Nath. The websites of each Indian mission now list interim replacements for both positions.
The database also previously included Bikram Pal Singh Bhatty, a first secretary at the Ottawa high commission, as well as Toronto consular officer Dheeraj Pareek, Vancouver consular officer Rahul Negi and a Vancouver consular employee named Kanwaljit Singh.
Global Affairs Canada would not confirm whether those were the names of the six diplomats who were expelled.
“We are not in a position to provide the names of the six Indian diplomats that are now considered persona non grata. We can confirm that they have left Canada,” wrote spokeswoman Clémence Grevey.
India’s foreign ministry listed the names and ranks of the six Canadian diplomats it also expelled; both countries claimed they had ordered expulsions first.
Yet the spokesman for India’s foreign ministry, Randhir Jaiswal, refused to identify the six diplomats Canada expelled, when asked at an Oct. 17 press conference.
“For various reasons, we don’t want to reveal their names to you,” he said.
This report by The Canadian Press was first published Nov. 7, 2024.
OTTAWA – A parliamentary committee is calling on the government to change how it handles permits for temporary workers after a UN report said the system creates “a breeding ground for contemporary forms of slavery.”
The citizenship and immigration committee released a report on Wednesday calling on Ottawa to work with the provinces to establish permits that allow temporary workers to find work in a specific region or sector.
Right now, most temporary workers have closed permits that tie them to a single employer.
The committee’s report found that system creates conditions that can lead to exploitation and abuse.
NDP MPs Jenny Kwan and Matthew Green say the government needs to take this a step further by allowing all temporary workers access to open work permits in an effort to prevent abuse.
“The reality is, if you’re tied to one specific employer, you are really at their behest to do what they demand of you,” Kwan said.
“No matter what the abuse is, no matter if you’re faced with wage theft, with harassment, with violence, for women, with sexual harassment — you just have to live with it.”
She said the least the federal government can do to curb abuse in the temporary worker system is end the closed work permit system.
The committee also recommended increasing the number of unexpected, on-site workplace inspections and developing a plan to provide more permanent residency pathways to low-wage and agricultural workers.
More than half of workplace inspections take place virtually, according to the report.
These inspections uncovered a 36 per cent increase in non-compliant employers in the last fiscal year, resulting in more than $2 million in fines. The vast majority of employers were found to be in compliance with program rules.
Elizabeth Kwan, a senior researcher with the Canadian Labour Congress and no relation to MP Kwan, testified during the committee’s hearings. She said its recommendations “tinker at the edges” of problems like worker abuse.
“The system discourages employers from improving job quality like wages and working conditions and investing in technology. What it does is that it allows the continued reliance on underpaid and vulnerable workers,” she said.
The government is making changes to the temporary worker program, most recently focused on making it harder for employers to get applications approved to hire temporary workers.
Those changes take effect Friday, raising the minimum for high-wage applications to 20 per cent above a province or territory’s hourly wage.
Employment Minister Randy Boissonnault’s office did not immediately respond to a request for comment on the committee report’s findings.
This report by The Canadian Press was first published Nov. 7, 2024
