The “profound impacts” of new public subsidies for liquefied natural gas (LNG) terminals could violate constitutionally-protected rights under the Canadian Charter of Rights and Freedoms, environmental law charity Ecojustice warned earlier this month in a legal letter to the Canada Infrastructure Bank (CIB), Export Development Canada, the new Major Projects Office, and the federal Cabinet.
One of the catalysts for Ecojustice’s concern is a change in infrastructure bank’s mandate that makes some part of its $45-billion funding envelope available to fossil fuel megaprojects. That has a veteran climate finance expert warning that the new mandate could imperil the good work CIB has done and the credibility it has earned for its leadership to date in clean energy financing.
“Public subsidies and financing for fossil fuel projects that increase global warming engage and may violate Canadians’ fundamental rights to life, security of the person, and equality,” Ecojustice wrote [pdf] in the letter to Prime Minister Mark Carney, several Cabinet ministers, and the heads of the three agencies on behalf of British Columbia-based citizens group My Sea to Sky. The letter, dated May 4, was released in public May 19.
“Through its laws and actions the federal government is actively contributing to a potential boom in new fossil fuel infrastructure and production projects,” the letter adds, citing the Ksi Lisims and LNG Canada Phase 2 terminals as projects that have been referred to the federal Major Projects Office (MPO), as well as the new West Coast pipeline that has been a centrepiece of the controversial Memorandum of Understanding between Canada and Alberta.
“Public financing that enables new fossil fuel infrastructure worsens both the climate crisis and the risks to Canadians’ Charter protected rights,” the legal letter states. “Judicial decisions increasingly link climate impacts and governments’ Charter, human rights, and international law obligations,” and “governments’ laws and actions that enable major new fossil fuel projects cannot be justified as reasonable limits on Canadians’ Charter rights—on the contrary, they are likely to decrease affordability, increase global instability, and contribute to stranded assets.”
On the same day that Ecojustice published its letter, news broke that the CIB had retained a Texas-based former president of Woodfibre LNG, David Keane, as a consultant to help it review possible financing for the Ksi Lisims project.
“Canada has a unique opportunity at this moment to advance globally competitive infrastructure while setting a high standard for partnership and engagement,” Keane wrote on LinkedIn last month. “Projects such as Ksi Lisims LNG exemplify what is possible when strong Indigenous leadership, clear vision, and disciplined execution come together,” and “I look forward to working with CIB and industry partners to help move critical projects forward—responsibly, efficiently, and in a way that creates long-term value for all stakeholders.”
Keane had nothing to add to that statement when he was contacted for comment, the Globe and Mail reports. But critics of the project, which received conditional approval from the B.C. and federal governments last fall, “say climate and health impacts are being ignored,” the Globe writes. “They are urging governments to suspend LNG development on the West Coast and fracking for natural gas in northeast B.C.”
Richard Brooks, climate finance director at Stand.earth, said the CIB’s mandate “until recently was actually positive” after it was first set up in 2017, with a focus on driving economic growth, enabling Canada’s transition to a lower-carbon economy, and fostering economic reconciliation.
“It took a bit of time to get up and running and start financing projects,” he told The Energy Mix. But with more than 100 investments now in the CIB’s portfolio, “these are examples of great projects that are Indigenous-led, or where there are significant Indigenous ownership stakes, and they’re obviously accelerating the energy transition. They’re showing that things can get built in Canada, despite the narrative that is being weaponized out there that things don’t get built…. It’s harder and slower to build fossil fuel projects in part because the world is changing.”
But Brooks recalled a meeting in April where he and a group of Indigenous leaders learned that the CIB had received an expanded mandate from Housing and Infrastructure Minister Gregor Robertson, including instructions to “collaborate closely with the MPO and other federal organizations to align and prioritize investments in nation-building projects referred to the Office, regardless of sector or asset class.”
The CIB is to meet this new requirement by “first seeking to maximize private capital and then applying the full extent of the Bank’s mandate, risk capacity, and available capital, to the extent required, to advance projects of national significance,” Robertson added. “This will serve to complement other federal support measures by enhancing the competitiveness of projects in key nation-building and strategic sectors.”
CIB’s Vice President of Asset Management, Glenn Kilayko, said the new set of priorities “marks a pivotal moment” for the CIB, and for Canadian infrastructure as a whole.
“Expanded mandates in enabling infrastructure for housing, agriculture, mining, AI and data centres, alongside a path to $45 billion in capital, signal real ambition,” he wrote on LinkedIn. “What strikes me most, from my seat leading Asset Management, is that this growth is only possible if we remain disciplined stewards of the portfolio we’ve already built. Private capital follows institutional credibility. Every project that performs, every loan that’s repaid, every outcome delivered—that’s what earns the right to deploy more.”
Stand.earth’s Brooks said that’s precisely the concern.
“This would be a 180° degree turn for the CIB,” he said. “They would go from a very proud and proven record of financing positive projects that are not controversial, that accelerate the energy transition, to potentially financing a project that is extremely financially risky. [Ksi Lisims] already has multiple lawsuits filed against it by Indigenous communities, it is highly controversial, and it would set us back in terms of emissions and lock us in to the energy system of old.”
Brooks added that, due its past track record with more straightforward investments, the CIB appears to lack in-house systems “to properly consult with communities directly. They don’t have the experience of dealing with a project that is extremely complicated from a legal perspective. Nor do they have experience dealing with a project that is subject to global market upheaval, which is currently the case for all fossil fuels and in particular LNG.”
During the meeting in April, CIB staff also underscored the bank’s role in making projects more “finance-ready” for private sector investors, Brooks said. “Ksi Lisims LNG is a project that the private sector is not prepared to touch at this point,” he told The Mix. “We knew that before the meeting with CIB because the final investment decision for this project has already been pushed back several years, proving that it is really financially risky” and has only garnered very limited investor interest to date.
In an email, CIB’s manager of media relations and issues management, Ross Marowits, wrote that Robertson’s Statement of Priorities and Accountabilities “reinforces the CIB’s mandate to partner with the private sector, Indigenous communities, and other orders of government to accelerate the delivery of infrastructure which support long‑term economic growth, domestic capabilities, and energy security, among other goals.” He added that the 2025 federal budget included legislative amendments “allowing CIB to invest in any nation‑building project referred to the MPO.”
Marowits declined to make a CIB subject specialist available for further comment.