Fed­eral agency spend­ing 12 times more on fos­sil fuel in­dus­try than clean tech

The Prince George Citizen - - Money - Mia RABSON

OT­TAWA — New re­search shows Ex­port Devel­op­ment Canada pro­vided 12 times as much fi­nan­cial back­ing to oil and gas com­pa­nies as it did to clean-tech­nol­ogy com­pa­nies over the last five years.

The find­ings by lobby group Oil Change In­ter­na­tional show that the fed­eral gov­ern­ment’s ex­port-fi­nanc­ing agency pro­vided $62 bil­lion in back­ing to oil and gas com­pa­nies be­tween 2012 and 2017, com­pared to the $5 bil­lion of­fered to the clean-tech sec­tor.

The re­port was re­leased in part­ner­ship with a num­ber of Cana­dian en­vi­ron­ment groups, which want Ot­tawa to re­de­fine Ex­port Devel­op­ment Canada’s man­date to move en­tirely away from fi­nanc­ing the oil and gas sec­tor by 2020. The agency has sev­eral pro­grams aimed at help­ing Cana­dian com­pa­nies sell abroad, in­clud­ing lend­ing them money di­rectly to scale up pro­duc­tion and lend­ing to buy­ers of Cana­dian prod­ucts.

Patrick De­Rochie, the cli­mate and en­ergy pro­gram man­ager at En­vi­ron­men­tal De­fence, says Canada can­not claim to be a cli­mate leader when it is of­fer­ing bil­lions of dol­lars to com­pa­nies that spew car­bon diox­ide and other green­house gases into the at­mos­phere.

Ot­tawa is in the midst of a re­view of Ex­port Devel­op­ment Canada that’s re­quired ev­ery 10 years and De­Rochie said this is the per­fect time to align the pri­or­i­ties of the agency with Canada’s cli­mate-change poli­cies to cut emis­sions be­tween 25 and 30 per cent from cur­rent lev­els by 2030.

Shel­ley MacLean, a spokes­woman for EDC, said Thurs­day the agency wel­comes the re­port and is study­ing it “with in­ter­est.” MacLean said in 2017, EDC worked with 225 Cana­dian clean-tech com­pa­nies, up from the 113 com­pa­nies sup­ported be­tween 2012 and 2015.

The EDC funds are be­yond the $3.3 bil­lion in tax in­cen­tives and other gov­ern­ment sub­si­dies to oil com­pa­nies pro­vided an­nu­ally by Ot­tawa and the prov­inces.

As part of the G20 group of na­tions, the world’s big­gest economies and big­gest emit­ters of green­house gases, Canada com­mit­ted to elim­i­nat­ing “in­ef­fi­cient” fos­sil fuel sub­si­dies back in 2009. No coun­try has made sig­nif­i­cant progress on that front, Canada in­cluded, and the G20 hasn’t yet even de­fined what “in­ef­fi­cient” means.

Prime Min­is­ter Justin Trudeau is widely ex­pected to at­tend the G20 sum­mit in Ar­gentina next week, where coun­tries are sup­posed to re­port on progress to­ward the fos­sil-fuel phase-out.

Ear­lier this year Canada and Ar­gentina agreed to do a peer re­view of each oth­ers sub­si­dies but that work has no time­line for com­ple­tion.

The 2017 fed­eral bud­get got rid of some tax in­cen­tives for suc­cess­ful oil ex­plo­ration, and the pre­vi­ous Con­ser­va­tive gov­ern­ment elim­i­nated a pol­icy that al­lowed oil pro­duc­ers to write off cap­i­tal in­vest­ments faster than other in­dus­tries can.

How­ever in Wed­nes­day’s fall fis­cal up­date the Lib­er­als in­tro­duced a new pol­icy to al­low any man­u­fac­turer or pro­cess­ing com­pany in Canada, in­clud­ing oil pro­duc­ers, to write off the full cost of cap­i­tal in­vest­ments in ma­chin­ery and equip­ment as soon as the new gear goes into use.

The main dif­fer­ence in the new pol­icy is that is not spe­cific to oil pro­duc­ers but is avail­able to all man­u­fac­tur­ing and pro­cess­ing com­pa­nies. The gov­ern­ment also made the same tax in­cen­tive avail­able to cap­i­tal in­vest­ments in clean tech­nol­ogy equip­ment.

De­Rochie said En­vi­ron­men­tal De­fence has been ask­ing the Depart­ment of Fi­nance for two years to do the ex­act op­po­site with cap­i­tal cost al­lowance write-offs for oil com­pa­nies and phase them out en­tirely.

“The depart­ment didn’t agree with us,” he said.

Mike Mof­fatt, a for­mer eco­nom­ics ad­viser to Trudeau and now the se­nior di­rec­tor of pol­icy and in­no­va­tion at the Uni­ver­sity of Ot­tawa’s Smart Pros­per­ity In­sti­tute, said the gov­ern­ment doesn’t have to make a full choice to sup­port only clean tech or only the oil­patch.

He said in fact many clean-tech so­lu­tions in Canada af­fect the oil­patch, with in­no­va­tions that pro­duce or burn fos­sil fu­els with fewer emis­sions re­leased into the at­mos­phere.

But Mof­fatt said the gov­ern­ment should do more to pro­mote Canada’s clean-tech sec­tor. Smart Pros­per­ity wants a tax credit in­cluded in the next fed­eral bud­get for peo­ple who in­vest in clean-in­no­va­tion com­pa­nies. Mof­fatt said there are gaps in fund­ing for Cana­dian com­pa­nies to scale up their pro­duc­tion and ad­di­tional fed­eral help, par­tic­u­larly aimed at start-ups, would go a long way to help­ing Canada’s clean-tech in­dus­try ex­pand.


A wind tur­bine over­looks a coal-fired power sta­tion in Gelsenkirc­hen, Ger­many. Be­tween 2012 and 2017, Ex­port Devel­op­ment Canada spent $62 bil­lion in sup­port of fos­sil fuel com­pa­nies, com­pared with $5 bil­lion spent sup­port­ing clean tech­nol­ogy firms.

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