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July 05, 2012
Investors Fear Canadian Budget Bill Weakens Environmental Regulations
    by Robert Kropp

Despite efforts by the Social Investment Organization, which warned that passage of an omnibus budget bill could discourage investment by providing for inadequate environmental regulation, the bill passes in a Senate dominated by conservatives.


At last year's COP17 climate change conference in South Africa, Canada withdrew from its Kyoto Protocol commitments. Largely because of the extraction of oil from the tar sands in the province of Alberta, Canada's greenhouse gas (GHG) emissions were 26% higher in 2007 than in 1990, and 34% higher than the target it agreed to in the Protocol.

In addition to emitting high levels of GHGs, tar sands extraction requires the consumption of three barrels of natural gas to create one barrel of oil and leaks approximately three million gallons of contaminated water into surrounding rivers and groundwater each day.

Last week, the government of Canada made its withdrawal from the Protocol official, when its Senate passed Bill C-38, the omnibus budget bill. Writing in advance of the Senate vote, the progressive journalism site rabble.ca warned that the bill "officially withdraws Canada from the Kyoto Protocol reducing the federal government's obligations to report on climate change policies."

Also, "Bill C-38 guts environmental legislation and 'streamlines' the environmental review process to pave the way for rapid approval of industrial mega-projects" such as the Alberta tar sands, rabble.ca reported. Meanwhile, aspects of the bill also "violate the federal government's obligation to consult with First Nations and accommodate First Nation Treaty and Aboriginal rights." First Nations communities have been disproportionately impacted by tar sands extraction, and in 2008 the Beaver Lake Cree First Nation filed a lawsuit against the Government of Alberta alleging 17,000 infringements of their treaty rights.

The Social Investment Organization (SIO) of Canada also expressed its concern about the environmental impacts, and the consequences for sustainable investment, resulting from passage of the bill. In a letter to Prime Minister Stephen Harper, SIO Executive Director Eugene Ellmen wrote, "The SIO believes this package of changes may serve to discourage investment in certain resource projects by calling into question the legitimacy of environmental approvals on such projects."

"Inadequate environmental regulation creates serious long-term financial risk and has the potential to discourage investment," the letter continued. "From an investor perspective, we believe that in some cases the best outcome for long-term sustainable value creation is that a project should not go ahead, with investment being redirected to another project that can deliver returns with less risk."

 

 
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