Press Release: BC First Nations highlight Canadian banks’ pattern of supporting Trans Mountain Expansion through preferential rates
xʷməθkʷəy̓əm (Musqueam), Sḵwx̱wú7mesh (Squamish) and səlilwətaɬ (Tsleil-Waututh) Territory/Vancouver, B.C.
This week Tsleil-Waututh Nation (TWN) and the Union of British Columbia Indian Chiefs (UBCIC) wrote letters to the CEO of Canada’s six largest banks, RBC, BMO, TD, Scotiabank, CIBC and National Bank regarding the $10 billion loan currently being negotiated for the Trans Mountain Expansion Project (TMX).
Trans Mountain needs to borrow an additional $10 billion to continue construction, after the cost of TMX ballooned to $31 billion in March 2023.
Finance Minister Freeland previously promised that no further public money would be spent on TMX, even as the debt owed by Trans Mountain to Canadians continues to grow to nearly $17 billion, due to interest obligations.
Last year, the six banks contacted by TWN and UBCIC loaned $10 billion to Trans Mountain. Public records show that this loan is only earning the banks 1.85% interest – well below the prime borrowing rate at the time. Today, the prime interest rate is 6.7%.
This means that the banks provided a preferential rate to Trans Mountain, contrary to their shareholder’s interests and public commitments to reconciliation and addressing climate change.
The letter follows the release of the Banking On Climate Chaos report, in which found that RBC was the top global financier of fossil fuels in 2022, with USD $42.1 billion provided to fossil fuel companies, and USD $254 billion since the Paris Accord in 2015. The big 5 Canadian banks all ranked in the top 15 for money provided to fossil fuel companies: #7 Scotiabank: USD $29.5B; #8 TD USD $29 B; #13 BMO: USD $19.3B; and #14 CIBC: USD $17.8B. Canada’s big five banks have collectively provided over one trillion dollars to fossil fuels since the Paris Agreement was signed (CDN $1.14 trillion / USD $876 billion).
In the letter, TWN and UBCIC call for the banks to stop propping up the costly and harmful Trans Mountain Project and start making choices in support of protecting Indigenous Rights and the climate. Quotes and letter content below:
Charlene Aleck, TWN Sacred Trust Spokesperson:
The banks are lying about their commitments to reconciliation and to helping the climate. There isn’t even a good business case for their actions – the banks are losing money for their shareholders to prop up a costly, devastating and archaic oil pipeline project. The Trans Mountain project risks so much for us all, from the survival of the Southern Resident Killer Whales to Tsleil-Waututh’s ability to practice our culture in Burrard Inlet.
Grand Chief Stewart Phillip, President, Union of BC Indian Chiefs:
It’s an absolute disgrace that RBC and Canadian banks are positioning themselves as fossil fuel lenders of last resort while painting an image of a corporation that cares about people and the planet. This is disgusting colonial era corporate greed in real time. Our experience at the RBC Annual Meeting on April 5th confirmed without a doubt how far RBC has to go. Their decision on TMX will be the litmus test on the sincerity of their commitments to reconciliation and addressing the climate crisis.
The text of the Letter is below:
To David McKay, CEO of RBC
We are writing about the recent announcement that the Trans Mountain Oil Pipeline Expansion (TMX) project’s costs have ballooned to $30.9 billion, with additional third-party financing required.
We expect that RBC is considering participating in this new $10 billion round of financing to Trans Mountain Corporation (TMC), based on your participation in the 2022 $10 billion syndicated loan.
We were disappointed to learn that RBC participated in the 2022 loan, as it speaks loudly about the sincerity of your commitments to reconciliation and addressing climate change. We were further dismayed to learn that the $10 billion loan is only earning the bank 1.85% interest – below the prime rate at the time and well below the interest rates that Canadians are currently struggling with.
This means RBC chose to provide a preferential rate to the oil and gas sector, and forego potential earnings, contrary to your own shareholders’ interests.
While the federal government’s guarantee of the loan reduces risk for RBC’s, it exposes the public to even more potential losses. Canadians will likely lose tens of billions of dollars on this pipeline and tanker project. Last year, economist Robyn Allan predicted that Minister Freeland would forgive $17 billion in debt owed to Canadians by Trans Mountain in order to maintain the illusion of commercial viability.
The Parliamentary Budget Officer assessed the TMX project value at $21.4 billion and found that it would result in a net-loss for Canadians. With the new $31 billion price tag, things are looking worse than ever.
We have repeatedly raised the issue of the collapsed economic case for TMX at the National Energy Board, the Canadian Energy Regulator, and during consultation, as the supposed economic benefits were used to justify the harms to the environment, the climate and the violations of Indigenous rights. Today, with the project expected to lose billions of dollars, those benefits have evaporated, and funding TMX means financing further Indigenous rights violations and climate destruction.
We reiterate that the Tsleil-Waututh Nation has not provided Free, Prior and Informed Consent (FPIC) for TMX, after a thorough and independent review under unextinguished Tsleil-Waututh laws. This pipeline, and by extension your business relationship with Trans Mountain, is a threat to our land, our water, our people, our life. It is, further, a violation of Tsleil-Waututh’s constitutionally-recognized Aboriginal rights, title, and interests.
We also remind you that the United Nations committee on the elimination of racial discrimination (CERD) has sent Canada a series of three letters since 2019 issuing a directive for Canada to stop work immediately on TMX due to violations of UNDRIP and the UN Convention on the Elimination of All Forms of Racial Discrimination. Further, just this month, the UN Special Rapporteur on the Rights of Indigenous Peoples, Mr. Francisco Calí Tzay, issued his preliminary findings after his visit to Canada. Mr. Calí Tzay cited the Trans Mountain Pipeline Expansion project as an example of how “corporations further contribute to human rights violations and abuses of Indigenous Peoples in provinces across Canada, including the criminalisation of human rights defenders”.
RBC has made numerous commitments about fighting climate change and advancing truth and reconciliation. You say climate change is one of the most pressing issues of our age and that RBC has an important role in supporting the most significant economic transition in centuries. You also commit to acting on reconciliation “in genuine and meaningful ways.”
But actions speak louder than words.
Your decision to further finance TMX will be a litmus test of the sincerity of your commitments, and your role in propping up the pipeline will mean that your bank will forever be linked to Canada’s greatest boondoggle.
RBC provided $54.7 billion to fossil fuel companies in 2022, the most of any bank in the world. Since the Paris Accord was signed in 2015, RBC has provided $254 billion to the fossil fuel sector.
Tsleil-Waututh Nation is a major client of the Royal Bank. This pipeline, and by extension your business relationship with Trans Mountain, is a threat to our land, our water, our people, our life. It is, further, a violation of Tsleil-Waututh’s constitutionally-recognized Aboriginal rights, title, and interests. We remain hopeful that you will consider your client’s interests in your investment choices and decline further funding of the Trans Mountain Corporation.
We urge you to reconsider your previous practices and decline funding the Trans Mountain expansion project any further.
TWN Sacred Trust
Director Treaty Lands and Resources, Tsleil-Waututh Nation
Grand Chief Stewart Phillip Chief Don Tom Chief Marilyn Slett
President Vice-President Secretary-Treasurer
Tsleil-Waututh Nation Communications
Grand Chief Stewart Phillip, President, Union of BC Indian Chiefs
 UN Office of the High Commission on Human Rights. Press release – Canada: UN expert decries “appalling” legacy of Residential Schools, calls for meaningful reconciliation https://www.ohchr.org/en/press-releases/2023/03/canada-un-expert-decries-appalling-legacy-residential-schools-calls?fbclid=IwAR0Lra91XRdj4kUH6iM6vmHdncQmJ3yIG9dTQsWb17YHMpSEH7m_SDSnohc