Fossil Lobby Demands Changes to ‘Overly Prescriptive’ Federal Bailout Rules
Canada’s fossil lobby is complaining about federal bailout programs designed to help companies weather the economic crisis brought on by the COVID-19 pandemic, claiming the conditions they’re required to meet are “ineffective and overly prescriptive,” the Globe and Mail reports.
Canadian Association of Petroleum Producers (CAPP) vice-president Ben Brunnen said only five of his members have applied for a series of loan guarantees on offer from Export Development Canada (EDC), the Globe writes, and only two have been approved, with actual funding yet to appear. He’s urging the government to restructure funding available through EDC and the Business Development Bank of Canada (BDC), as well as the Large Employer Emergency Financing Facility (LEEFF), “before it’s too late”.
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“They’re technically complex—I think overly complex—and they still don’t meet the short-term liquidity needs for the industry,” Brunnen said of the EDC and BDC programs, “so there are definitely some tweaks and changes we’re looking for”.
While EDC is already prepared to risk up to C$100 million in taxpayers’ money per exploration and development company on the promise that cash-strapped fossils will repay their loans to private banks, that isn’t enough for the fossil lobby.
“We’re hearing one of the key barriers is that EDC hasn’t put enough skin in the game to support companies based on what their needs are,” Brunnen told the Globe. “We’re asking for a little bit of energy to be put into that to speed it up.”
EDC spokesperson Jessica Draker said EDC has provided about $400 million in support to 11 fossils so far [presumably, more than half of those 11 are not dues-paying members of CAPP—Ed.], adding that climate disclosure requirements attached to the loan guarantees are “a crucial part of Canada’s transition to a lower-carbon economy,” the Globe says.
“By making this a condition of our business support, we are helping to make climate-related information more widely available and are promoting its importance as a tool in the global fight against climate change,” Draker told the paper in an email.
Brunnen complained that no CAPP members have applied for government backing under LEEFF, a support program to help large employers across multiple industries that can’t count on conventional financing to stay afloat through the pandemic. The Globe notes that the strings attached to LEEFF support include “an interest rate that increases over the course of the loan and a swath of reporting requirements around climate change and what the company is doing to help Canada reach its 2050 goal of net-zero greenhouse gas emissions.” Applicants must also agree to prohibit shareholder dividends, restrict executive compensation, and accept a government representative on their board, The Canadian Press reported in late May.
“There is just absolutely no interest in pursuing that program due to the nature of the restrictions,” Brunnen said this week.