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By: Ross McKitrick
Conservative Leader Pierre Poilievre is very concerned about financial conflicts of interest that Prime Minister Mark Carney may be hiding. But I’m far more concerned about the one out in the open; namely that while Carney is supposed to act for the good of the country he’s lobbied to defund and drive out of existence Canada’s oil and gas companies, steel companies, car companies and any other sector dependent on fossil fuels. He’s done this through the Glasgow Financial Alliance for Net Zero (GFANZ), which he founded in 2021.
Carney is a climate zealot. He may try to fool Canadians into thinking he wants new pipelines, liquified natural gas (LNG) terminals and other hydrocarbon infrastructure, but he doesn’t. Far from it. He wants half the existing ones gone by 2030 and the rest soon after.
He has said so, repeatedly and emphatically. He believes that the world “must achieve about a 50% reduction in [greenhouse gas] emissions by 2030” and “rapidly scale climate solutions to provide cleaner, more affordable, and more reliable replacements for unabated fossil fuels.” (By “unabated” he means usage without full carbon capture, which in practise is virtually all cases.) And since societies don’t seem keen on doing this, Carney created GFANZ to pressure banks, insurance companies and investment firms to cut off financing for recalcitrant firms. “This transition to net zero requires companies across the whole economy to change behaviors through application of innovative technologies and new ways of doing business” he writes, using bureaucratic euphemisms to make his radical agenda somehow seem normal.
The GFANZ plan (outlined on page 9 of the final report) puts companies into four categories. Those selling green technologies or engaged in work that displaces fossil fuels will be rewarded with full financing. Those that still use fossil fuels, or have investments in others that do, but are committed to being “climate leaders” and have set a path to net-zero, will also still be eligible for financing. Those that still do business with “high-emitting firms” but plan to reach net-zero targets on an approved time scale can get financing for now. And companies that own or invest in high-emitting assets must operate under a “Managed Phaseout” regime or may be cut-off from investment capital.
What are “high-emitting assets”? Carney’s group hasn’t released a complete list but a June 2022 report (p. 10) listed examples—coal mines, fossil-fuel power stations, oil fields, gas pipelines, steel mills, ships, cement plants and consumer gasoline-powered vehicles. The finance sector must either sever all connections to such assets or put them under a “Managed Phaseout” regime, which means exactly what it sounds like.
So when Carney jokingly suggested it doesn’t matter if his climate plan drives up costs for steel mills because people don’t buy steel, he could have added that under his plan there won’t be any steel mills before long anyway. Or cars, gas-fired power plants, pipelines, oil wells and so forth.
GFANZ boasts at length about its members strong-arming clients into embracing net-zero. For instance, it extols Aviva for its “climate engagement escalation program… Aviva is prepared to send a message to all companies through voting actions when those companies do not have adequate climate plans or do not act quickly enough.”
To support these coercive goals Carney’s lobbying helped secure the implementation in Canada of rule B-15, the Climate Risk Management Directive from the federal Office of the Superintendent of Financial Institutions (OSFI), which requires banks, life insurance companies, trust and loan companies and others to develop and file reports disclosing their “climate transition risk.” This requires asset holders to conduct extensive and costly research into their holdings to determine whether value may be at risk from future climate policies. The vagueness and potential liabilities created by this menacing regulation means that Canada’s largest investment firms will eventually decide it’s easier to divest altogether from fossil fuel and heavy industry sectors, furthering Carney’s ultimate goal.
Yet Carney will become prime minister just when Canadians face a trade crisis that requires we quickly build new coastal energy infrastructure to ensure our fossil fuel commodities can be exported without going through the United States. I have listened to him say he will take emergency measures to support “energy projects” but I assume he means windmills and solar panels. He has not (to my knowledge) said he supports pipelines, LNG terminals, fracking wells or new refineries. Unless he disowns everything he has said for years, we must assume he doesn’t.
Canadian journalists should insist he clear this up. Ask Carney if he supports the repeal of OSFI rule B-15. Show Carney his GFANZ report. His name and photo are on page vi, in case he has forgotten it. Ask him, “Do you still endorse the contents of this document?” If he says yes, ask him how we can build new pipelines and LNG terminals, expand our oil and gas sector, run our electricity grid using Canadian natural gas, heat our homes and put gasoline in our cars if his plan succeeds and the financing for all these activities is cut off. If he tries to claim he no longer endorses it, ask him when he changed his mind, and why we should believe him now if he seems to change his core convictions so easily.
I hope the media will not let Carney be evasive or ambiguous on these matters. We don’t have time for a bait-and-switch prime minister. If Mark Carney still believes the rhetoric he published through GFANZ, he should say so openly, so Canadians can assess whether he really is the right man to address our current crisis.
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