Canada Ranked as G20’s Largest Public Bank Financier of Fossil Fuels

Canada provided more public bank financing for fossil fuels than any other G20 economy between 2022 and 2024, according to new research examining the role of state-backed financial institutions in the global energy system.

The analysis, published by the advocacy organization Oil Change International, estimates that Canadian public banks supplied an annual average of C$18.2 billion to oil, gas and coal activities during the three years. This is equivalent to approximately US$13.5 billion a year, based on the figures reported by Sustainable Views.

By comparison, Canadian public institutions provided an average of C$975 million annually for renewable energy projects over the same period. Fossil fuel financing was therefore about 19 times higher than renewable energy financing.

The findings raise questions about how governments use public banks, export credit agencies and other state-backed financial bodies to support their energy and industrial strategies. These institutions can provide loans, guarantees, insurance, equity investments and other financial instruments, often helping projects attract additional private investment or proceed under more favourable conditions.

Export Development Canada Accounted for Most Financing

Export Development Canada, or EDC, was responsible for approximately 99 per cent of the fossil fuel finance identified in the Canadian data, according to the researchers.

EDC is a federal Crown corporation that provides financing, insurance and risk-management services to Canadian exporters and companies operating internationally. The analysis also covered the Business Development Bank of Canada, the Canada Development Investment Corporation, the Canada Infrastructure Bank and the Canada Growth Fund.

A large proportion of the financing identified by the study was connected to the Trans Mountain Expansion project, commonly known as TMX. The Canadian government purchased the existing Trans Mountain pipeline and its expansion project in 2018 after its former owner, Kinder Morgan, sought to withdraw from the development.

The expanded system, which entered commercial service in 2024, nearly tripled the pipeline’s capacity to transport crude oil from Alberta to Canada’s Pacific coast. Supporters argue that it gives Canadian producers greater access to international markets and reduces their dependence on customers in the United States. Critics have focused on its rising construction costs, public ownership and the potential for expanded oil production to increase emissions.

Because the new research includes loans, guarantees and other public financial transactions but excludes direct government subsidies, it does not represent the full value of public support available to Canada’s fossil fuel sector.

Study Covers 7,800 Transactions

Oil Change International’s analysis examined approximately 7,800 transactions involving 54 public financial institutions across G20 countries between 2016 and 2024. The underlying data is published through the organization’s Public Finance for Energy Database.

The researchers classify financial support according to whether it benefits fossil fuels, clean energy or other energy activities. The database is intended to show how public finance institutions influence the development of national and international energy infrastructure.

Public financing can have an impact beyond the amount recorded in an individual transaction. Government-backed loans, insurance and guarantees may reduce the financial risks faced by private investors, improving a project’s ability to secure commercial funding.

However, the results should also be understood in the context of the report’s authorship and methodology. Oil Change International is an advocacy organization campaigning for the phase-out of fossil fuels. Its classifications may differ from those used by public banks themselves, particularly where institutions support diversified companies involved in both conventional and low-carbon energy.

The database also acknowledges that the total amount of fossil fuel financing may be higher because of gaps in the information disclosed by some public institutions.

Canada Contrasts with Other Public Banking Models

Across most G20 countries, the research found that public banks have recently directed more finance to renewable energy than to fossil fuels.

Looking at the longer period from 2016 to 2024, the institutions studied supplied almost US$53 billion annually for renewable energy, compared with about US$40 billion for fossil fuels. Countries including Brazil, Germany, the United Kingdom and Mexico were highlighted as examples where public banks are increasingly being used to support renewable power, electricity networks and other transition-related investments.

Between 2022 and 2024, eight G20 economies provided more domestic public finance for clean energy than for fossil fuels: Australia, Brazil, China, France, Germany, South Africa, Türkiye and the United Kingdom.

In Canada, Indonesia, Mexico, Russia, South Korea and the United States, fossil fuels represented at least 74 per cent of the energy financing identified over the same period.

The comparison illustrates the strategic influence of public financial institutions. Governments can use them to address financing gaps in emerging technologies, support infrastructure with long development periods and reduce the cost of capital for projects considered important to national policy.

Directing this capacity towards conventional energy may support employment, exports and energy security in the short term. It may also increase long-term exposure to carbon-intensive infrastructure, changing demand patterns and future climate regulation.

EDC Points to Growing Clean Technology Support

EDC presents a broader view of its energy and sustainability activities. The organization reported that it facilitated C$8.3 billion for the clean technology sector in 2025, alongside C$5.3 billion in sustainable finance.

This included C$1.4 billion disbursed to 51 renewable energy initiatives. EDC facilitated C$135 billion in total trade-related activities during the year and supported almost 24,000 businesses across multiple sectors.

The organization has also adopted climate-risk policies, targets and disclosure procedures. Its 2025 climate-related report describes governance processes for assessing physical and transition risks and outlines its continued use of reporting recommendations developed by the Task Force on Climate-related Financial Disclosures.

These figures are not directly comparable with the Oil Change International dataset because the two organizations use different classifications, scopes and reporting periods. For example, EDC’s definition of clean technology can include activities beyond renewable energy generation, while its sustainable finance totals may include financing for transition projects and companies operating in several industries.

Implications for Canada’s Net-Zero Transition

Canada has committed to achieving net-zero greenhouse gas emissions by 2050. Meeting that objective will require substantial investment in electricity generation, transmission networks, energy storage, building efficiency, industrial decarbonisation and low-emission transport.

The public finance findings suggest that the allocation of government-backed capital will remain a central part of the country’s climate and economic policy debate.

For project developers, the figures indicate that renewable energy and grid infrastructure may still face a smaller pool of public financial support than established oil and gas activities. For taxpayers and policymakers, the issue is whether public institutions are adequately accounting for construction risk, changing energy demand, carbon policy and the possibility that some assets could become less competitive during the transition.

For public banks, the challenge will be to demonstrate how individual transactions support their statutory mandates while remaining consistent with national climate objectives. More detailed disclosure of project-level finance, guarantees, emissions exposure and transition plans would allow investors, regulators and the public to assess that alignment more accurately.

The report does not mean that all Canadian public finance is directed towards fossil fuels, nor that clean energy investment is absent. It does, however, show that conventional energy continued to receive substantially more support than renewable energy from the institutions and transactions included in the study.

Source: Sustainable Views