Recovery Through Reform: Export Development Canada's role in fossil fuel subsidy reform
This brief explores Export Development Canada's history in providing fossil fuel subsidies and support, examines its current role in the COVID-19 response, and proposes concrete actions to ensure future spending is aligned with the low-carbon transition Canadians need and expect.
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Export Development Canada, a Crown corporation, provides an average of over CAD 13.2 billion in support for oil and gas every year, representing over 12% of finance committed by the institution.
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EDC's support for fossil fuels significantly outpaces its support for cleaner options.
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There is a lack of transparency regarding how EDC screens potential clients for social and environmental risks, including climate change.
Canada’s export credit agency, Export Development Canada (EDC), has been a primary vehicle for supports to businesses in the wake of the COVID-19 pandemic. As the federal government continues to plan for economic recovery and provision of stimulus, EDC’s role will be key. However, EDC also has a troubling history of providing public finance for fossil fuels, both domestically and abroad. To better leverage EDC's role in green recovery, Canada should:
- Draw inspiration from—and match the ambition of—leading public finance institutions that are restricting investments in fossil fuels.
- Improve EDC's internal climate policy and targets to align with Canada's net-zero goals.
- Apply "green strings" to finance provided through EDC, including financial conditions, requirements for companies to have net-zero plans, and transparency on spending.
This brief is one of three International Institute for Sustainable Development (IISD) policy briefs in its Recovery Through Reform series, which assesses how efforts to achieve a green recovery from COVID-19 in Canada rely on—and can contribute to—fossil fuel subsidy reform.
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