Story of the Week: June 2024

This article originally appeared in the Western Standard The Canadian Senate, according to the old saying, is the house of “sober second thought,” where proposed laws are supposed to receive careful consideration before they’re passed. Well, having recently testified before a Senate Committee about a piece of environmentalist legislation, I can’t help wondering if that is still accurate. Because nothing about this bill is sober. The legislation in question is Bill S-243, the “Climate-Aligned Finance Act,” which was introduced by Senator Rosa Galvez. According to Senator Galvez, its goal is “to align our financial sector with climate commitments and set us on an ambitious path to a climate-safe future.” Which is a flowery way of saying that Bill S-243 is designed to make it extremely difficult for financial institutions to invest in hydrocarbon energy, or give loans to companies in that field. Bill S-243 multiplies the number of hoops that banks have to jump through to do business with oil and gas companies, making it much more expensive and less lucrative to do so. And it meddles with the internal governance of all federal financial institutions so they are aligned against Canadian energy. The bill mandates, for instance, that the board of all such institutions must include at least one member who is an expert in “climate change science,” “who has acute lived experience related to the physical or economic damages of climate change,” or who has expertise in “Indigenous ways of knowing, being and doing.” Whatever that means. It forbids banks from appointing a single board member who “controls any capital, shares, stock” or is involved in an organization that is not “in alignment with climate commitments.” To be considered “in alignment, “an organization must be dedicated to “avoiding new fossil fuel supply infrastructure and exploring for new fossil fuel reserves and instead planning for a fossil fuel–free future.” So if the geological firm you work for does any work on pipeline construction or locating natural gas deposits, you couldn’t even be considered for the board of a Canadian bank. These provisions would be an outrageous intrusion by the government into the internal governance of financial institutions. Their goal is to ensure that no one with any relevant experience in Canadian hydrocarbon energy can serve on one of these boards, while insisting that each board will have at least one member who is only there because he is ideologically opposed to oil and gas, and wants the entire sector to disappear. That would be a disaster for all of us, because oil and gas is Canada's most productive sector — by leaps and bounds, according to a recently released study by Philip Cross and Jack Mintz. Oil and gas drives Canadian exports, incomes, and government revenue. That goes a long way towards answering a key argument Senator Galvez makes for her bill. When she complains that Canadian banks invest more than other nations in oil and gas, the reason is because our country has been abundantly blessed with those resources. Oil and gas is, Cross and Mintz argue, our “golden goose.” As the Executive Director of InvestNow, a not-for-profit which stands up to the anti-oil and gas “divestment” movement in Canada, I was invited to testify against this legislation where I made all of these points. But I was one of the few. And those testifying in favour of the bill included bigwigs like Eric Usher, who heads the U.N.’s Environment Program Finance Initiative; and Mark Carney, the former Bank of Canada governor who is frequently mentioned as a possible successor to Justin Trudeau as leader of the Liberal Party of Canada. So as bad as this bill would be for our economy, it has some very powerful defenders. That’s why it is important for regular Canadians to speak up against this extreme legislation. Because these days we are the sober ones, not our representatives in Ottawa. We are the only ones with sense enough to say, “This bill is bad for Canada.” Gina Pappano, executive director of InvestNow, was head of market intelligence at the Toronto Stock Exchange (TSX) and TSX Venture Exchange (TSXV.)

This article originally appeared in the Financial Post.

Banks are essential institutions for participating in modern life. Without a bank account it’s hard to be part of society. Of all institutions banks therefore need to be truly inclusive. Which means they should be held to a standard of strict political neutrality, looking after the interests of their clients and shareholders in a nonpartisan, non-ideological way. So long as their clients are abiding by the law, banks should be open to all potentially profitable businesses — for the good of the bank’s own shareholders and the health of the economy.