A defining feature of the ongoing federal election campaign has been the of the environment and climate change as top-of-mind issues due to threats by the United States against Canadian sovereignty, security and trade.

But how Canada responds to U.S. President Donald Trump’s actions will also have profound implications for its future greenhouse gas emissions and its economy.

The current federal election is very different from those held in 2015, 2019 and 2021. In those elections, the environment and climate were central issues. , more than 60 per cent of Canadian voters chose parties (Liberal, NDP, Bloc Québécois and Green) that advocated for strong climate action, including some form of carbon pricing.

The increasing evidence of the consequences of a changing climate had placed the environment and climate change in the minds of Canadians for nearly two decades. The political landscape since then.

The role of inflation

Although Trump’s second presidency is often cited as the trigger point for a decline of the environment as a top-of-mind concern for Canadians, the a year earlier, in the fall of 2023.

Despite the record wildfire season that summer, the , triggered in large part by the COVID-19 pandemic and Russia’s invasion of Ukraine, moved economic concerns to the forefront of the public’s mind. Government stimulus programs needed to counter the impacts of the pandemic contributed to inflationary pressures, prompting the to hike interest rates in response, adding to Canadians’ economic distress.

Amid high inflation and high interest rates, the Liberal government’s climate strategies — especially consumer carbon pricing — became an easy political target, particularly for a with little apparent concern for the climate challenge.

But even though climate change is no longer top of mind for Canadians, it remains a significant and caused by human activity. And perhaps surprisingly, despite the criticism levelled at the consumer carbon tax, between of non-Conservative leaning voters (those intending to cast their ballots for Liberal, NDP, Bloc and Green candidates) continue to support the concept of carbon pricing.

Focus on fossil fuels

Despite this, many and leaders have responded to Trump’s actions by focusing on natural resource exports, especially fossil fuels and , to bolster the Canadian economy.

This has been accompanied by environmental review and approval processes for resource extraction and export projects like pipelines, and to expand their subsidization by taxpayers.

Discussions about the climate implications of these initiatives have been noticeably absent. So have conversations about the long-term economic viability and desirability of expanding Canada’s dependency on resource commodity exports to increasingly uncertain global markets.

On fossil fuels, the and others are predicting that global consumption will peak within the next decade. This will reflect the falling costs of renewable energy, improving energy productivity and the by mid-century.

The peak will likely happen before any new major export infrastructure can be built in Canada, regardless of what review and approval requirements they might be subjected to.

In a world of declining fossil fuel consumption, Canada — increasingly reliant on high-cost and high-carbon production like and fracked and liquified — seems more likely to be among the earliest producers to fall than among the last standing. Public investments in new export infrastructure look like dubious propositions in this scenario.

International markets for critical minerals are likely to remain in as the in renewable energy and energy storage accelerates to on costly and difficult-to-access materials.

Mining operations also continue to have substantial environmental impacts with significant implications

Backwards approach

All of this means there must be continued of projects in terms of their implications for climate change, environmental sustainability and reconciliation, as well as their economic viability and potential for taxpayers — not a further streamlining of review processes.

Falling back on fossil fuels in response to Trump is a fundamentally backwards approach. It ignores the implications of the climate challenge. As recently noted by at least one Canadian , it also overlooks the need to not just diversify Canada’s markets, but to diversify Canadian products as well.

Canada must design and implement strategies that transform its industries from producers of low-value raw materials into producers of higher-value products and services for a world that must decarbonize and advance sustainability.

As a recently pointed out, climate change remains a real threat to Canadians and their communities. It’s not going away regardless of what might say.

As they campaign to lead the country, the situation requires more substantive responses from Canada’s would-be prime ministers than Canadians are getting right now.

By Professor Mark Winfield, Faculty of Environmental and Urban Change, 91ŃÇÉ«

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As the UN global climate conference begins, it’s time Canada get serious on decarbonization—that means going after fossil fuel finance

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Once again, Canada will almost certainly fail to meet its target to  in accordance with the most recent  recommendations.

This is despite the  spin on the release of its latest . Jerry DeMarco, ,  as a litany of broken promises:

“We have been repeatedly ringing the alarm bells. Now, these bells are almost deafening.”

Canada is the only G7 nation with 2022 , and its 

And its financial institutions — banks, pension funds and private equity firms — fund the industry and are therefore helping fuel the climate crisis.

As a result, financial institutions’ assets are at risk. So too are the economy, people’s lives and ultimately the survival of the planet due to catastrophic fires, floods and droughts.

The federal government has so far been unable to effectively regulate financial institutions’ investments in the fossil fuels industry in accordance with its climate commitments.

Regulatory agency

DeMarco recently examined reports by the federal bank regulator, the  that oversees climate risks and sets risk guidance priorities for financial institutions.

The environment commissioner noted that while OSFI has belatedly designated climate change as a top priority, full implementation is years away. OSFI’s plan to improve banks’ resilience to climate change also fails to specifically encourage their transition to net-zero carbon emissions.

Sen. Rosa Galvez  that OSFI should ensure financial institutions have  to protect against the eventuality of 

Financial institutions need to adopt the standard of putting aside , they’ll have enough money to compensate depositors, workers and shareholders and avoid declaring bankruptcy.

In April 2023, the Bank of Canada released its  to provide guidance on the climate change risks facing the Canadian economy and financial system.

Like OSFI, the Bank of Canada report is a start but has a long way to go to make up for lost ground. And ironically, any positive effects could be offset by the bank’s high interest rate monetary policy. Critics of these central bank policies credibly argue that they hinder the transition away from fossil fuels.

Economic experts argue that .

Current reality

The latest fossil fuels report by the non-governmental organization  found that the world’s 60 largest banks invested more than US$5.5 trillion into the fossil fuel industry since the .

The Big Five Canadian banks all made the list of Top 20 funders globally after investing more than $1 trillion in fossil fuel companies since 2016.

The Royal Bank of Canada ranked as the world’s largest financier of fossil fuels in 2022, providing fossil fuel companies with US$42.1 billion with a total investment of US$253 billion since 2016 — the fourth highest on the globe.

An article in the journal  estimated that global stranded investor assets — namely, the present value of future lost profits in exploration, production and related services in the fossil fuel sector — exceeds US$1 trillion. The Canadian loss risk is more than US$100 billion, disproportionately in employee savings locked up in Canadian pension funds.

Canada’s largest banks have committed to voluntarily align their investments and lending with the United Nations target of net zero emissions by 2050 as part of the . They have also committed to cut emissions financing in half by 2030.

However, these banks haven’t made any commitments to jettison their fossil fuel clients. That makes their net-zero pledges highly suspect, bordering .

Conflicts of interest

None of their publicly available plans measure up, according to Matt Price, co-founder of , a shareholder advocacy organization.

Although the International Energy Agency has stated that there’s no need for additional fossil fuel infrastructure, Canadian banks continue to fund expansion activities. Multiple proposals put forward by  to give them a say on climate plans have been rejected.

A study by the organization  has concluded that Canadian pension funds have generally failed to align their investment strategies with the Paris Agreement goals and neglected to develop a credible pathway to transition out of fossil fuels.

Pension funds are also rife with conflicts of interest. The report found that seven of Canada’s 10 largest public pension funds have at least one director who also sits on the board of a fossil fuel company.

Overall, 80 different directors, trustees, executives and senior staff currently hold or previously held 124 different roles with 76 different fossil fuel companies.

 which manage funds beneath the radar for wealthy individuals and institutional investors, have invested an estimated US$1 trillion in the energy sector since 2010 — the vast majority in fossil fuels.

Where to go from here

Introduced more than a year ago, Galvez’s  â€” which seeks to hold financial institutions accountable for investments that increase climate risk — has passed second reading but is still waiting to go to committee and hear from witnesses.

Calling it the gold standard in legislation, 58 academics, myself included, have written a letter urging senators to move the bill forward by referring it to committee for testimony.

The close ties between the federal government and corporations largely explain Ottawa’s failure to effectively regulate banks and pension fund investments.

The corporate government power relationship — known as  â€” largely explains the government’s failure to effectively regulate banks and pension fund investments.

Regulations benefit the industry at the expense of the public interest. In this case, the fossil fuel industry and financial institution enablers are able to shape the regulations governing their operations, block or delay new regulations and remove or dilute existing regulations deemed a threat to their interests.

Countervailing measures must be urgently implemented to  and ensure the public interest takes precedence over profit.

By 91ŃÇÉ« Adjunct Professor Bruce Campbell in the Faculty of Environmental and Urban Change.

This article is republished from 

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