New Report: Canadian governments provided at least CAD 23 billion in support for oil & gas pipelines since 2018

July 6, 2021, Ottawa—Over the past three years, oil and gas pipelines received more than CAD 23 billion in support from Canadian federal and provincial governments, including CAD 10 billion since the COVID-19 pandemic started, reveals a new study released today by the International Institute for Sustainable Development (IISD), titled Pipelines or Progress: Government support for oil and gas pipelines in Canada.

This analysis marks the first time government financial support for Canadian pipelines has been quantified; it’s the highest amount reported to date of government fossil fuel support in Canada. 

Breaking down the CAD 23 billion total, the report finds the federal government provided nearly CAD 16 billion in support for the Trans Mountain Pipeline and Coastal Gaslink projects, while the Government of Alberta committed CAD 7.5 billion to Keystone XL. 

The CAD 23 billion is likely an underestimate. Nearly two years after filing 13 related Access to Information and Privacy requests, thousands of pages of federal government documents related to financial support for the Trans Mountain project were either withheld from researchers or heavily redacted. 

“It is extremely concerning that governments are hiding the full picture of their support from Canadians when taxpayer dollars are on the line,” says Vanessa Corkal, lead author of the report. “Looking at Canada’s climate ambition and the global race to net-zero emissions, we can’t afford to keep expanding fossil fuel supply—and that’s exactly what governments are enabling by financing oil and gas pipelines.” 

Due to low private sector interest, oil and gas companies are increasingly turning to government sources to finance export infrastructure, IISD experts report. This means that government support for pipelines extends and expands fossil fuel production that would be otherwise uneconomic, leading to large increases in emissions that last for decades, the study concludes.

In addition, the report suggests governments’ assumptions that these projects will provide economic benefits to Canadians may be unwarranted. The study notes that the financial future of these pipelines is uncertain as projects may not recoup costs, putting public investments at significant risk—as illustrated by the recent cancellation of Keystone XL. 

“Rather than risking public money on high-carbon pipelines, Canada must focus on diversifying the economy and supporting workers and communities in the low-carbon transition,” says Corkal. “It’s not too late to rethink these projects, particularly Trans Mountain. Governments need to shift funds to growing clean energy industries and work with Canadians to secure strategic economic opportunities. We also need to end public finance for fossil fuels—Export Development Canada extends at least CAD 13 billion to the oil and gas industry every year.”

These issues should be top of mind for Canadian leaders, Corkal suggests, as they convene with the rest of the G20 to address climate change and a resilient COVID-19 recovery, including at this month’s Climate and Energy Ministers meetings.