The Canada Infrastructure Bank must not bankroll Wall Street’s risky LNG fantasy
The Canada Infrastructure Bank has a clear mandate: to invest in projects that drive economic growth, support Canada’s low-carbon transition, and foster genuine economic reconciliation.
When functioning at its best, the Canada Infrastructure Bank (CIB) is a catalyst for public good—a source of pride for its staff and board, and concerned Canadians in general.
However, there is now a concerted push to redirect its mandate to the financially risky Ksi Lisims LNG project in British Columbia. This project has been much hyped of late, with its proponents touting non-binding letters of interest from German state-owned buyers. The CIB has recently been tasked by Prime Minister Mark Carney’s Major Projects Office with reviewing this nearly-stalled project for possible financing. Doing so would be a monumental and financially risky error that would betray the Bank's core mandate and its legacy.
Ksi Lisims, on the books since 2014, is already massively over-budget with no shovels in the ground. Early estimates pegged the cost around $10-billion—that has since ballooned to an estimated $26-billion, according to the Institute for Energy Economics and Financial Analysis. The project also requires a greenfield 900-kilometre pipeline, bulldozing pristine mountainous wilderness—itself a multi-year, legally fraught project. The final investment decision has been delayed multiple times, and recent announcements about “interested” German buyers do not change the fundamentals. The global energy market is accelerating towards renewables.
There will be no benefit to Canadian manufacturing workers. The massive floating LNG structures are slated to be built with foreign steel in South Korea by Samsung Heavy Industries.
Ksi Lisims is actually wholly owned by Western LNG, a Texas-based company bankrolled by two massive American private equity firms: Blackstone and Apollo Global Management—controversy-laden Wall Street giants with a history of prioritizing aggressive wealth extraction over community stability. Western LNG has never completed a project. Using a Canadian Crown corporation to subsidize American private equity firms and a Texas shell company is a gross misallocation of public funds. This is not nation building.
From electric ferries in B.C., to information and technology upgrades for rural communities across the nation, the CIB has financed more than 100 projects delivering net-positive impacts. At least a third of this support involves Indigenous community ownership or partnership—including the Oneida Energy Storage project with Six Nations of the Grand River, one of the world's largest battery storage facilities, and the Mesgi'g Ugju's'n 2 Wind Farm in Quebec, co-owned by three Mi'gmaq communities—delivering clean power and long-term revenues.
Ksi Lisims LNG, though, is highly contentious. Nisg̱a'a Nation members have filed a lawsuit in the B.C. Supreme Court alleging inadequate consultation and warning of immense financial risks placed on their community. Gitanyow Hereditary Chiefs expressly stated they do not consent to the project, citing concerns about impacts on at-risk Chinook salmon.
The Gitxsan Nation have challenged the associated fracked gas pipeline's environmental review and the Council of the Haida Nation have issued a statement opposing more LNG tanker traffic in their coastal waters.
So, is the CIB funding genuine reconciliation, or subsidizing a foreign-owned venture to undermine these communities on behalf of the Major Projects Office?
The CIB is a Crown corporation with a constitutionally required legal duty to consult directly with impacted First Nations. A dereliction of this duty for Ksi Lisims will expose the CIB to lengthy and paralyzing lawsuits.
Every public dollar diverted to prop up a U.S.-backed LNG terminal is a dollar stolen from the clean energy sectors Canadians and Indigenous communities desperately need.
The CIB board must assert its independence and not buckle to any direct, or indirect, pressure from the minister of Natural Resources—who spends his days pushing LNG—or the Major Projects Office.
Financing Ksi Lisims LNG risks pushing back the critical work of reconciliation while stalling Canada's clean energy progress. The CIB should protect its legacy, and not be dragged backwards into being a fossil-fuelled Wall Street slush fund.
Richard Brooks is climate finance director with Stand.earth.
The Hill Times