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Canadian banks directed over US$100 billion to oil and gas last year



Canadian banks provided nearly US$104 billion in funding to fossil fuel projects last year, according to the latest Banking on Climate Chaos report. This funding comes despite the urgent need to reduce emissions and combat climate change.


The report, released by a coalition of climate groups, highlighted that RBC contributed US$28.2 billion, placing it seventh globally, while Scotiabank added US$24 billion, ranking it tenth. Collectively, the top 60 banks worldwide committed US$708 billion to fossil fuel projects.


In 2023, most of Canada’s five largest banks recorded some of their lowest levels of oil and gas financing since the Paris climate agreement. BMO had its lowest year since 2016, providing US$15.8 billion, while CIBC, TD, and RBC each had their lowest levels except for 2020. For Scotiabank, it was the fourth-lowest year.


Richard Brooks, climate finance director at Stand.earth, emphasized the significance of the numbers despite the reduction. He noted that tens of billions of dollars are still flowing into extreme forms of oil and gas projects that perpetuate long-term fossil fuel dependency.


The Canadian Bankers Association acknowledged the banks' crucial role in the transition to a low-carbon economy. Spokeswoman Maggie Cheung stated that firm commitments are necessary to accelerate clean economic growth, highlighting the banks' climate action plans and net-zero emissions targets for 2050. However, only BMO has set an interim absolute reduction target.


The decline in fossil fuel funding may be influenced by changes within the oil and gas industry. With no major new oilsands projects and companies generating substantial profits to self-fund, reliance on bank funding has decreased. This trend might continue, as significant projects like the Trans Mountain pipeline expansion and Coastal GasLink pipeline are now completed.


The report also revealed that TC Energy Corp. and Trans Mountain Corp. were major recipients of global fossil fuel funding, raising US$15.3 billion and US$9.54 billion, respectively. Calgary-based Enbridge Inc. topped the list with US$35 billion, including funds for acquisitions and pipeline expansions.


Despite the downward trend, Brooks expressed concern over banks potentially retreating from policy commitments, citing BMO's reduced restrictions on lending to coal producers. He stressed the need for robust policies to ensure a continued reduction in financed emissions.


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