The UN climate change conference, COP 29, is taking place in Baku, Azerbaijan from November 11-22 as fossil fuels dominated greenhouse gas (GHG) emissions are driving the planet towards the brink.

The 2024 Lancet Countdown on Health and Climate Change, report found that climate-related global health threats are breaking alarming new records—including heat-related deaths, food insecurity and the spread of infectious diseases.

Prime Minister Trudeau recently stated that Canada is on a solid path towards its 2030 emissions reductions targets, a claim disputed by the Auditor General’s Environmental Commissioner. The Climate Change Performance Index 2024 ranked Canada among the very worst—at number 62 out of 67 countries—on emissions, renewable energy, and overall climate policy.

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In his chapter in The Trudeau Record, Hadrian Mertins-Kirkwood sums up Trudeau’s climate policies and programs as “well-intentioned” but generally too weak to make a significant impact on climate. Those policies stand in stark contrast to what can be expected from the climate denialist the Conservative party which may form the next government.

With COP29 around the corner, it’s an important time to take stock of the Canadian government’s failures on the climate front, particularly when it comes to financing fossil fuels—and propose a roadmap towards real climate action.

Fossil Fuels financers

According to a report from the University of Toronto’s Toronto Climate Observatory, Canada’s largest financial institutions are financing fossil fuel companies at $1.4 trillion per year,

Canadian banks have been among the top financers of fossil fuels globally since the 2015 Paris Agreement. They rank amongst the worst in the world in funding fossil fuels compared to renewable energy.

Canada’s largest public pension funds continue to invest billions in fossil fuels. The largest fund—the Canada Pension Plan—has increased its shares in fossil fuel companies since Canada signed the Paris Agreement.

Insurance companies—whose raison d’être is managing risks—are expanding their underwriting and investment in fossil fuels. The seven largest Canadian property and casualty insurers invested more than $19.5 billion in fossil fuel assets in 2023. They are essentially underwriting climate disasters.

Many companies are also cutting back insurance coverage in regions most affected by climate change while increasing annual dividends to shareholders—all while lobbying government to backstop companies operating in high-risk areas.

Direct government financing of the petroleum industry

From 2020 to 2023, the federal government’s total financial support for the oil and gas industry was at least $65 billion. It is spending nearly three times more support to fossil fuels than renewables,

The government is providing over $1.3 billion in subsidies for carbon capture and storage projects (CCS). An Oxford University analysis found that relying on CCS is an extremely costly pathway to net-zero.

Five wealthy countries— Australia, Canada, Norway, the UK, and the US— accounted for 56 per cent of oil and gas licences since 2000. Together they made up 71 per cent of leases in 2023.

The gaping hole

While the government has taken a number of substantive climate measures, the gaping hole in its climate policy is its failure to confront and constrict the fossil fuels industry and its financial enablers, which drive fossil fuels expansion.

Some examples includethe government repeatedly delaying its proposed cap on oil and gas emissions, and ignoring its support for Canada’s vast oil and gas exports on the grounds that they don’t create emissions inside Canada.

Most oil and gas companies’ emissions are exempted from the price on carbon. Changes to the government’s climate plan, including criteria for determining economic activities in alignment with net zero, contains no regulations to mandate emissions reductions for oil and gas companies and their financial enablers. The government has repeatedly refused to impose a windfall profits tax on the industry’s record profits.

Let’s also remember the federal government’s purchase of the Trans Mountain pipeline, approval of Baie du Nord offshore oil rig development, and financial support for the Coastal Gas-Link pipeline.

Several measures that would help ensure Canada’s financial institutions align with Canada’s climate commitments include:

  • Granting the Office of the Superintendent of Financial Institutions (OSFI) the regulatory oversight ability to ensure the credibility of financial institutions’ climate plans.
  • Requiring the Bank of Canada to factor in climate risk in its oversight of the economy and protect against events which could cause widespread disruptions across the financial system. Although they have taken initial steps, they have a long way to go.
  • Enacting Senator Rosa Galvez’ Climate Aligned Finance Act (CAFA) Bill S-243, which would introduce a serious accountability framework for enforcing climate finance rules and provide the legislative framework necessary to drive the alignment of public and private investments with Canada’s climate commitments.

Powerful corporate forces continue to obstruct their implementation. Though the challenges in rebalancing the corporate-government power relationship are formidable, they can be overcome. The stakes could not be higher.