Canada’s Spring Economic Update and the ‘sovereign wealth fund’ that ignores affordability

OTTAWA | TRADITIONAL, UNCEDED TERRITORY OF THE ALGONQUIN ANISHNAABEG PEOPLE – Following Prime Minister Mark Carney’s announcement of Canada’s first sovereign wealth fund – and as every day Canadians feel the financial strain and pain at home made worse by a a volatile oil and gas market – the spring economic update tabled today by Finance Minister François-Philippe Champagne is welcome news to the fossil fuel industry but not most Canadians.

While most other countries’ sovereign wealth funds are designed to bank money from their finite resource industries to grow national wealth, diversify economies away from resource dependency, stabilize budgets, and secure funds for future generations, the federal government’s latest proposal does the complete opposite.

Richard Brooks, Stand.earth Climate Finance Director, said:

“This Spring Economic Update is delivering a $25-billion, taxpayer-funded boondoggle disguised as a ‘sovereign wealth fund.’ Let’s call it what it is: a massive corporate slush fund intended for risky, financially unsound projects that the private sector won’t touch. In the midst of a crushing affordability crisis, that $25 billion could go a long way to provide real relief to Canadians struggling to keep a roof over their heads and food on the table. Instead, the government is using our money to gamble on more ill-timed LNG projects and fantastical oil pipelines.”

Ironically as countries, including Canada, gather in Santa Marta, Colombia, to discuss a global fossil fuel phase out Canada lags on its own climate commitments. This fiscal update has once again stalled Canada from being a part of a global scale up of clean energy investments.

Sven Biggs, Stand.earth Oil and Gas Campaigns Director, said:

“Canada can be a clean energy superpower and play a critical role in the global economy of the future if Prime Minister Carney and his government makes the decision to invest in long-term sustainable major projects, like a more interconnected national electrical grid. Carney must not continue to squander this opportunity by wasting Canadians’ tax dollars on subsidies for foreign owned fossil fuel projects which sends our wealth out of the country.” [1]     

Canadians are struggling to make ends meet and instead of looking to the grossly lucrative fossil fuel sector to help people buy groceries, use functional infrastructure, and keep the lights on, the Liberal government appears to be playing a streetside cup game with taxpayer money.

“If Ottawa were actually serious about balancing the books, they’d target the real money: the projected $90 billion in obscene, war-fueled profits of oil and gas giants. It’s time for a windfall tax on these majority-American corporations that are popping champagne on Canadian soil while devastation rocks Iran and Lebanon,” concluded Brooks. [2]

Meanwhile, although funding earmarked for Canada’s new nature strategy is welcome, the government risks undermining this initiative if it continues pushing forward with destructive fossil fuel megaprojects and fast-tracking legislation that puts profit over communities and violates Indigenous rights.[3]

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Editors notes

[1] Who owns Canada’s fossil fuel sector?

[2] The oil industry is making billions from the Iran war—it should be taxed

[3] Stand.earth’s statement on federal nature strategy 

Contact

Sven Biggs, Canadian Oil and Gas Programs Director – Stand.earth +1 778-882-8354, sven@stand.earth (Pacific Time)

Richard Brooks, Climate Finance Director – Stand.earth +1 416-573-7209, richard@stand.earth (Eastern Time)

Arin de Hoog, Communications, Oil, Gas and Shipping – Stand.earth. +1 613-978-7329, arin.dehoog@stand.earth (Eastern Time)