“That is more than the price of building out interprovincial electricity transmission infrastructure, which is estimated to cost $24 billion,” the Toronto-based advocacy organization writes. At least $2.4 billion was allocated for carbon-capture and hydrogen projects, which have struggled to attract private investment amid doubts about their business viability.

The costs associated with pollution impacts from the oil and gas sector are even higher, Environmental Defence estimates. Using the social cost of carbon as a benchmark, climate change, health impacts and reduced agricultural activity amount to about $53 billion in losses for Canadians.

The report is the latest round for an annual publication tracking government support for fossil fuels through grants, tax breaks, loans and loan guarantees. Much of the financing flows through Export Development Canada (EDC), a Crown corporation that provides low-cost financing to Canadian companies – or companies buying Canadian services and goods. Environmental Defence writes, as it has in past years, that a lack of transparency and public reporting makes it difficult to track these subsidies accurately.

The biggest subsidies went to the Trans Mountain pipeline

The available information shows that $7.53 billion of the total $29.6 billion went toward supporting companies developing liquefied natural gas projects, oil and gas exploration and production, and carbon capture. The rest was directed toward a single project: the Trans Mountain pipeline (TMX), a contested initiative that was completed last year, significantly behind schedule and over budget. The government purchased the pipeline in 2018 for $7.4 billion, but costs have since ballooned to $34.2 billion.

Through the many years that the oil sands industry advocated for the pipeline, the promise was that TMX would open up new markets for Canadian crude oil, particularly in Asia. But this week, Reuters reported that Crown-owned Trans Mountain Corporation has “downgraded forecasts for the amount of oil expected to flow through its system over the next three years.” Citing analysts, the news agency says those anticipated results “indicate unwillingness by oil companies to pay higher tolls the government-owned Trans Mountain has been charging customers to ship oil on the newly expanded pipeline.”

RELATED

The oil industry is selling carbon capture as a way to boost production

Fossil fuel subsidies are costing Canadian taxpayers way more than the carbon tax

What a nationwide grid network would mean for clean energy in Canada

The tolls have been an issue since mid-2023, when five of Canada’s biggest oil sands producers voiced concerns about how much of the project’s cost overruns they’d have to pay, as well as how the pipeline handles fees for late shipments, Bloomberg reported at the time. “The resulting higher tolls may make Trans Mountain a more expensive way to reach Asian buyers than shipping through the U.S. Gulf Coast,” and the news had Canadian fossils disappointed in the new pipeline taxpayers had built for them.

As recently as last fall, news reports had the flow of oil through TMX surging, but the debate over who would pay for the cost overruns intensifying.

A lack of clarity in federal financing for fossil fuels

This week’s analysis from Environmental Defence shows that TMX received $21 billion in federal financing in 2024, including a $1-billion loan guarantee from EDC in May and a $20-billion repayment of higher-cost debt and working capital support for Trans Mountain. The report suggests the latter sum is linked to $20 billion worth of loans from third-party financiers that were guaranteed by EDC, which EDC has repaid to hold the loan at a lower interest rate.

“The bottom line is the government has not provided nearly enough clarity to taxpayers to fully understand just how much taxpayer money is on the line – we don’t really know,” Julia Levin, associate director of national climate at Environmental Defence Canada, told The Energy Mix. “We’ve done our best to estimate it, and have given the government the benefit of the doubt on the latest transaction based on their word, but the government needs to provide clarity.”

The repayment does not result in TMX receiving additional loans but shifts the financial burden from private lenders to public funds. TMX and federal officials have said the transaction will reduce overall financing costs by $3.5 billion over six years due to EDC’s lower interest. But as Levin has previously remarked, the repayment remains a “very clear violation” of former finance minister Chrystia Freeland’s pledge in 2022 that the government would not spend more public funds on the project.

The debate over the accounting details may obscure a larger issue: regardless of the technicalities, the Canadian public is ultimately responsible for a project burdened by debt.

This article was first published on The Energy Mix. It has been edited to conform with Corporate Knights style. Read the original story here.

The post Canada paid record subsidies to fossil fuel companies in 2024 appeared first on Corporate Knights.

Polling by Abacus Data found that 37% of respondents would definitely back a party that wanted to eliminate the federal carbon tax and another 28% might do so, while only about one in five said they would never support the idea.

The issue was one of four that Abacus identified as a vote winner for any party that espoused it, along with increasing income taxes on the richest 1% of Canadians (46% definite/32% possible), making public transit free in every Canadian city (40% definite/31% possible), and forcing religious organizations to pay taxes (34% definite/29% possible).

“This data confirms that eliminating the carbon tax has become a vote winner for the Conservatives and a real liability for the Liberals,” Abacus says.

Conservatives “overwhelmingly love” the idea of abolishing the carbon tax, the poll showed. Liberal and Bloc Québécois supporters are likely to oppose it, though with some disagreement, while New Democratic Party supporters “are the most divided—27% say they would never vote for a party that promised to eliminate the carbon tax while 25% say they definitely would vote for such a party,” the polling report states.

The Liberals maintain that better communication and public awareness will increase the carbon price’s popularity, and the party has tried to remind voters that the vast majority of households benefit from a carbon tax through rebates. Amid low poll numbers and with the election coming up, the current government is committed to moving forward without further exemptions since pausing it for home heating oil in the Atlantic provinces.

Meanwhile, Prime Minister Justin Trudeau trails behind Conservative leader Pierre Poilievre, whose “Axe the Tax” campaign has gained momentum and won him points at the polls.

The controversy prompted Corporate Knights Research Director Ralph Torrie to call for a “grown-up conversation” about how to address the climate emergency without having a “shouting match” over carbon pricing. “The last thing the country needs is a ‘take no prisoners’ battle to the death over the carbon tax that could set back what climate progress has been made,” he wrote earlier this year.

RELATED

• Is it time to axe the carbon tax?
• Canada’s biggest emitters are paying the lowest carbon tax rate
• Canada needs to make Big Oil pay their fair share

Perceptions Skewed in the U.S.

Across the border in the United States, a skewed perception of public support for climate action is steering lawmakers away from implementing policies to address climate change, Grist reports.

Local officials especially continue to misinterpret public support for fossil fuels, even though three-quarters of Americans favour regulating carbon dioxide as a pollutant, according to polling by the Yale Program on Climate Change Communication.

Academics have studied specific cases of this disconnect. In a recent article in the journal Nature Energy, researchers wrote that locally elected officials in Pennsylvania underestimated their constituents’ support for large solar projects. Another study by Cambridge University found that congressional staffers underestimated the popularity of restricting carbon emissions in their local districts.

The misperception is partly due to a psychological bias, says Grist. But more deliberate, intentional actions by corporations are also at work to present a false narrative, with some going so far as to hire actors to indicate support for fossil fuel projects and oppose renewables at public meetings.

“What really matters, in some ways, is not objectively what the public thinks, but it’s what decision-makers think the public thinks,” said Matto Mildenberger, a political science professor at the University of California, Santa Barbara. “There’s this enormous effort by the industry to shape what politicians think the public wants.”

This article first appeared in The Energy Mix. Read the original article here.

The post How to draw voters in the next election: Roll back the carbon tax (and make transit free) appeared first on Corporate Knights.

The United Auto Workers (UAW) strike began on September 15 at selected Detroit plants run by automakers General Motors, Ford, and Stellantis, and has since expanded in a bid for better wages, benefits, and job security for members.

But weeks of negotiation ensued after the Detroit Three said they could not afford to meet union demands because they needed to invest profits in the costly transition from gas-powered cars to electric vehicles, reports the Associated Press.

Push to Unionize EV Plant Workers

“Perhaps most important to the union is that it be allowed to represent workers at 10 electric vehicle battery factories, most of which are being built by joint ventures between automakers and South Korean battery makers,” AP adds. “The union wants those plants to receive top UAW wages. In part that’s because workers who now make components for internal combustion engines will need a place to work as the industry transitions to EVs.”

On October 6, the UAW announced the strike was working, after an unexpected concession by GM to allow workers at its joint venture battery plants to be covered by union contracts, Reuters reports. The union said it would hold off additional strikes against the Detroit Three, but on October 9, 4,000 unionized workers at Mack Trucks went on strike after a separate five-year deal was voted down. The total number of UAW members on strike now exceeds 30,000 across 22 states, the union says.

The post How politicians are pitting auto worker rights against the green transition appeared first on Corporate Knights.

The federal government considers nuclear energy—including small modular reactors (SMRs) that are touted as easier to build and run than traditional nuclear plants—as key to meeting energy needs while aiming for net-zero by 2050.

In Finance Minister Chrystia Freeland’s 2023 budget in March, investments for nuclear power and SMRs were included alongside hydropower and other “non-emitting electricity generation systems” eligible for a $25-billion, 15% tax break from the Clean Electricity Investment Tax Credit.

And Trudeau has since made multiple public statements in support of nuclear energy. “Nuclear is on the table, absolutely,” he said, during a speech in British Columbia earlier this month. And at a University of Ottawa visit, he said investment in nuclear and SMRs is something Canada is “very, very serious” about, reported the Canadian Press.

“We’re going to have to be doing much more nuclear over the coming decades,” Trudeau said.

But on April 25, anti-nuclear activists and a cross-partisan group of MPs held a media conference on Parliament Hill, urging Ottawa to rethink its stance on nuclear and calling the energy source a dangerous distraction from climate action, reported CBC News.

Speakers in the group said Trudeau and his cabinet are getting bad advice about nuclear energy.

“The nuclear industry, led by the United States and the United Kingdom, has been lobbying and advertising heavily in Canada, trying to convince us that new SMR designs will somehow address the climate crisis,” said Prof. Susan O’Donnell, a member of the Coalition for Responsible Energy Development in New Brunswick (CRED-NB). The reality, she added, is that SMRs will produce “toxic radioactive waste” and could lead to serious accidents while turning some communities into “nuclear waste dumps”.

Moreover, there is “no guarantee these nuclear experiments will ever generate electricity safely and affordably,” O’Donnell said, since SMRs are still relatively untested.

Green Party Leader Elizabeth May called government funding for nuclear projects a “fraud.”

“It has no part in fighting the climate emergency,” May said. “In fact, it takes valuable dollars away from things that we know work, that can be implemented immediately, in favour of untested and dangerous technologies that will not be able to generate a single kilowatt of electricity for a decade or more.”

Liberal MP Jenica Atwin, New Democrat Alexandre Boulerice, and Bloc Québecois MP Mario Simard also attended the media event, the National Post reports. Atwin, who was first elected as a Green in 2019 before crossing the floor, “is the only Liberal to publicly break ranks so far, but said she has had conversations with colleagues who appear to be ‘open-minded’ to learning more about her concerns,” the Post says.

Advocacy groups like the Canadian Environmental Law Association (CELA) have also pushed back against SMRs, arguing they “pose safety, accident, and proliferation risks” akin to traditional nuclear reactors. CELA urged the federal government to “eliminate federal funding for SMRs, and instead reallocate those investments into cost-effective, socially responsible, renewable solutions.”

The International Energy Agency (IEA) says renewables will “lead the push to replace fossil fuels” but that nuclear can help in countries where it is accepted. As of 2022, there were only three SMR projects in operation—one each in Russia, China, and India, CBC News reported.

Canada’s first SMR passes pre-licencing

In Ontario, which currently produces 60% of its electricity from conventional nuclear stations, plans for one such SMR passed a regulatory checkpoint in March. Slated to be Canada’s first new nuclear reactor since 1993, the BWRX-300 is being built by Ontario Power Generation (OPG) and North Carolina-based GE Hitachi.

The Canadian Nuclear Safety Commission (CNSC) said it found “no fundamental barriers to licencing” the BWRX-300 after a pre-licencing vendor design review. As an assessment requested by the developer, the design review makes a preliminary identification of shortcomings. It is an integral part of the regulatory process, aimed at providing feedback to the vendor about “how it is addressing Canadian regulatory requirements and CNSC expectations in its design and design activities,” a CNSC spokesperson told The Energy Mix in an email.

The BWRX-300 is the first SMR to pass such a review, reported the Globe and Mail. It is also expected to be North America’s first grid-scale deployment of an SMR. The CNSC nod of approval is a checkpoint in OPG’s plans for the Darlington New Nuclear Project (DNNP), which will bring the BWRX-300 SMR to the existing Darlington nuclear station in Bowmanville.

Darlington is Canada’s second-largest nuclear facility by energy output, capable of meeting around 20% of Ontario’s current power demand. It is also the only site in Canada licenced for a new nuclear build with an accepted environmental assessment, thanks to a prior application process from 2006. The project that underwent assessment was cancelled in 2014, but OPG maintained the licence and resumed planning activities for the site in 2020, with operations set to begin in 2028.

It has no part in fighting the climate emergency.

 

– Elizabeth May, Green Party leader

CNSC staff concluded in their review that GE Hitachi “understands and has correctly interpreted the intent of regulatory requirements for the design of nuclear power plants in Canada” and that they “did not identify any fundamental barriers to licencing.”

The review is not binding on the commission and does not involve the issuance of a licence, but its completion does give OPG “a head start on licencing,” said GE Hitachi spokesperson Jonathan Allen.

However, the pre-licencing review also revealed “some technical areas that need further development,” CNSC said. The commission will require OPG to supply further details on severe accident analysis and the engineered features credited for mitigation. OPG must also demonstrate that the reactor’s design meets the requirement for two separate and diverse means of reactor shutdown (or an alternative approach) and provide further information “on the protective measures for workers in the event of an out-of-core criticality accident.”

“From the list of areas needed for further development, it looks like [GE Hitachi] has some work to do,” said Allison Macfarlane, director of the University of British Columbia’s public policy school, who chaired the U.S. Nuclear Regulatory Commission (NRC) between 2012 and 2014.

BWRX-300 raises safety questions

But Edwin Lyman, director of nuclear power safety for the Union of Concerned Scientists, told The Mix he has concerns about the design. He pointed to a joint CNSC-NRC review that identified several issues associated with reactor containment, including a potential for “reverse flow” of steam from the containment back into the reactor vessel under certain accident conditions. The review also found that the reactor’s reliance on isolation condensers may not always be effective to remove heat from the reactor during loss-of-coolant accidents.

“The consequences of a failure of isolation condensers is apparent from the fate of Fukushima Daiichi Unit 1, which experienced a core melt only hours after the system was lost,” Lyman said, citing the 2011 nuclear disaster in Ōkuma, Japan.

He added he is “extremely skeptical” that the BWRX-300 design will mature quickly enough to allow CNSC to make a meaningful determination of its safety in time for the anticipated 2028 start date. SMR designs need to undergo further testing and analysis before they can be considered safe, and yet vendors are rushing to deploy new, untested reactor designs without going through the necessary stages of technology development, including testing of full-scale prototypes, Lyman said.

“History has shown that shortcuts in this process are an invitation to disaster,” he added.

SMRs fall under the same Class 1A Nuclear Facilities Regulations as traditional reactors, so they do receive the same level of CNSC scrutiny. With its mandate to ensure the safe conduct of nuclear activities in Canada, the commission “will only issue a licence if the applicant has demonstrated the reactor can be operated safely,” the spokesperson said.

Next steps for the DNNP include a CNSC assessment, already under way, to review OPG’s licence application. This will result in a Commission Member Document that offers results and recommendations to an independent commission. Then there will also be two public hearings. The first is slated for January 2024 and will consider the applicability of the previous environmental assessment to the BWRX-300. A separate, future hearing will determine whether to issue a construction licence for the DNNP.

“It is the independent commission who will make the decision as to whether the licensee or applicant is qualified to carry on the proposed activities and in a safe manner that protects the public and the environment,” the CNSC spokesperson said.

This article by The Energy Mix is published here as part of the global journalism collaboration Covering Climate Now.

The post Are small modular reactors a dangerous distraction from climate action? appeared first on Corporate Knights.

Led by economist Gregor Semieniuk of the University of Massachusetts Amherst, researchers found that assets worth US$1.4 trillion in the oil and gas sector would lose their value globally. “Most of the market risk falls on private investors,” they add, overwhelmingly in Organisation for Economic Cooperation and Development (OECD) countries like Canada, with substantial exposure through investment funds, shareholdings, and pensions.

“The ownership distribution reveals an international net transfer of more than 15% of global stranded asset risk to OECD-based investors,” the researchers warn. “Rich country stakeholders therefore have a major stake in how the transition in oil and gas production is managed, as ongoing supporters of the fossil fuel economy and potentially exposed owners of stranded assets.”

While stranded assets are a normal consequence of “dynamic, capitalist economies,” the paper adds, they become a social concern when they destabilize financial markets with repercussions in the real economy, “such as on pensions and government finances.”

Stranded assets occur as the profitability of old products and industries falls below expectations—either because of disruptive policies, or when they are replaced by new technologies. They don’t usually indicate a systemic financial risk, since the emerging assets are able to buoy the overall financial sector. However, new climate policies aiming to limit global heating to 2°C call for a rate of industrial change that is dramatic enough to cause a rapid collapse of fossil fuel industries and “presents major transition risks.”

To better understand how this risk is distributed worldwide, the researchers calculated the expected profits from global fossil fuel assets and traced the possible losses from those assets. They calculated the losses from changing fossil fuel demand expectations using the shift from an expected baseline scenario to a revised scenario that represents updated expectations resulting from climate policies.

Losses were traced through four stages of entities that would be affected, moving from Stage 1 losses at the oil and gas field locations, to Stage 2 losses at headquarters, to Stage 3 corporate owner losses, and finally Stage 4 losses to the ultimate owners, including “governments and individuals, as shareholders or outright owners of companies or investors in funds, including pension funds.”

Of the US$1.4 trillion in stranded assets world-wide, the researchers found that physical stranded assets in OECD countries accounted for a total US$552 billion, or 39.2%. Stage 2 losses—on balance sheets of OECD-headquartered oil and gas companies—rose to US$728 billion, or 51.7%, because the companies own or have a claim on profits from production assets across the globe. Financial investments of OECD-based companies in oil and gas companies brought the share of losses to 57.1% for ultimate corporate owners in OECD countries. In Stage 4, 1.6% of losses were redistributed back to non-OECD countries, mainly through non-OECD clients of OECD-based asset managers.

The large exposure of pension funds will be a major concern, even if “outright financial instability is avoided,” the researchers warn.

“In all circumstances, the political implications of loss allocations at each stage are likely to be major,” they conclude, underscoring the need for international cooperation toward a stable phaseout of fossil fuels.

Christopher Bonasia is a staff writer at The Energy Mix and has several years’ experience sustainably raising livestock.

This article was first published in The Energy Mix.

The post A trillion reasons to transition off fossil fuels appeared first on Corporate Knights.