An analysis published Tuesday revealed that six of Canada’s largest banks are financing the construction of the Trans Mountain tar sands pipeline expansion, partially fulfilling a promise by the center-left government of Prime Minister Justin Trudeau to secure private funding for the highly controversial project while calling into question the administration’s pledge to cap oil and gas emissions.
“Our big fossil banks and the federal government have been working in tandem for a long time behind the scenes.”
Based on data from Bloomberg Terminal, the grassroots advocacy group Stand.earth found that the banks—TD Securities, RBC Capital Markets, Canadian Imperial Bank of Commerce, BMO Capital Markets, Scotiabank, and National Bank of Canada—quietly agreed last month to lend CAD $10 billion (U.S. $7.9 billion) to Trans Mountain Corporation after the country’s Department of Finance guaranteed taxpayers would foot the bill if anything went wrong.
The government then waited three weeks to inform the public of the deal and has refused to confirm who is behind the loan.
“Once again, we see that Canadian banks are leading the world in financing climate-destructive, Indigenous rights-violating projects like the Trans Mountain pipeline and tanker project,” Stand.earth climate finance director Richard Brooks said in a statement. “It’s time for them to choose sides—are you going to help us reach our national climate goals, or do everything possible to hold us back?”
Breaking: 6 banks behind $10 billion loan to boondoggle #Transmountain tarsands pipeline finally revealed: @RBC @TD_Canada @BMO @cibc @nationalbank @scotiabank.— Richard Brooks ☀️ (@R_BrooksStand) May 31, 2022
Deal inked w/ banks same day @FinanceCanada got cabinet to approve loan guarantee
The approximately 1,150-kilometer (715-mile) pipeline, which was completed in 1953, is owned by the Canadian government through its Trans Mountain Corporation and carries crude oil from the tar sands of Alberta to the British Columbian coast. Tar sands oil is often called the world’s dirtiest.
Climate activists have called on the Canadian government to cancel the expansion, arguing that in addition to exacerbating the climate emergency and threatening the environment, it desecrates sacred Indigenous lands, and workers housed in “man camps” sometimes murder, rape, traffic, and perpetrate other crimes against First Nations women, girls, and two-spirit people.
Campaigners note that Trudeau—who has often come under fire for his fossil fuel-friendly policies—pledged at last year’s United Nations climate summit in Glasgow, Scotland to lower Canada’s carbon footprint by committing to a cap on emissions from the country’s oil and gas industry.
According to the federal agency Statistics Canada, oil and gas extraction contributes about 5% to the country’s gross domestic product, and over 20% of the provincial economies of Alberta and Newfoundland and Labrador. Canada is the largest single source of U.S. imported petroleum and refined products.
Wow. Just wow…— Seth Klein (@SethDKlein) May 31, 2022
Canada’s biggest banks quietly prop up TMX | Canada’s National Observer. Great investigative work here by @Woodsideful. And shame on @cafreeland & cabinet & the banks for this secrecy. https://t.co/3mXRXVVzM6
All six of the banks named in the new report also claim they are committed to climate action. TD, for example, declares it is “continually working to embed responsible business practices,” including “working toward achieving our target of net-zero greenhouse gas emissions associated with our operations and financing activities by 2050,” while CIBC says it is “committed to collaborating with carbon-intensive sectors for a successful transition to net-zero” and Scotiabank proclaims it is “ensuring we are lowering our environmental footprint in our operations.”
Canadian taxpayers have already contributed CAD $17 billion (U.S. $13.3 billion) toward the Trans Mountain pipeline, which the government purchased from Texas-based energy infrastructure giant Kinder Morgan in 2018. Earlier this year, Canadian Finance Minister and Deputy Prime Minister Chrystia Freeland promised not to spend any more public money building on the project.
In February, the government announced that the pipeline’s price is expected to nearly double to over $21 billion. Other analyses suggest the cost could be even higher.
“Clearly our big fossil banks and the federal government have been working in tandem for a long time behind the scenes, with no oversight or scrutiny by any members of the public, despite all Canadians owning this pipeline,” Brooks said Tuesday. “Why have they been so secretive? Should we not have transparency at Canadian crown corporations when we are all on the hook for this massive, climate regressive, Indigenous rights-violating investment?”