Environment Committee on June 13th, 2024

[Monique Pauzé, Bloc, Repentigny, QC]

I understand that you do try to base your decisions on science, relying on experts who are out there.

My third question is for Mr. Thomson from Scotiabank.

All the banks represented here are members of the Net‑Zero Banking Alliance, which includes over 140 financial institutions worldwide. Clearly, as part of this commitment, there must be an intention to have a science‑led internal policy to lead towards carbon neutrality.

However, you're also a member of the Canadian Bankers Association and the Canadian Chamber of Commerce, both of which have publicly opposed climate policies that affect the economy in Canada.

So, do you give your loyalty to the Net‑Zero Banking Alliance, or to the Canadian Bankers Association and the Canadian Chamber of Commerce? Your loyalty can't go in those two different directions.

[Scott Thomson]

We are a signatory to the Net-Zero Banking Alliance, and we do voluntarily commit to reducing our financed emissions for our lending investment portfolios over time to align with pathways to net zero by 2050.

What I would say is I'm very proud of the work that has been done to date to do that. As I said in my opening comments, we have a $350-billion target, of which we've already achieved $182 billion, and importantly, it's on the path to—

[Monique Pauzé, Bloc, Repentigny, QC]

Mr. Thomson, allow me to interrupt you.

Your bank has taken some steps, but it's also a member of two associations that are against climate policies. So isn't it a bit difficult to make decisions on climate policies when your bank is a member of these two associations?

[The Chair, Liberal, Francis Scarpaleggia]

Answer very briefly, please, Mr. Thomson.

[Scott Thomson]

We have set these sectoral targets, which have highlighted interim progress to 2030 in oil and gas, power and utilities, and transport. That allows us to get to the path to 2050 and the commitments to net zero. I'm very pleased with where we're heading.

[The Chair, Liberal, Francis Scarpaleggia]

Okay, thank you.

We have Mr. Green.

[Matthew Green, NDP, Hamilton Centre, ON]

Thank you very much, Mr. Chair. My questions, through you, sir, will be for the CEO of RBC, Mr. McKay.

Mr. McKay, I'm going to put a series of questions to you. It might feel like it's in a bit of a rapid-fire way. For example, if I interrupt you to reclaim my time, it's not personal. I just want to make sure that I have a chance to ask all of the questions.

Mr. McKay, as Canada's top fossil fuel bank, RBC disclosed a bombshell data point a few months ago, that RBC's emissions from financing oil and gas companies are equal to the emissions from all cars and light trucks in Canada every year. This is a shocking amount of pollution that a single company, RBC, finances and is responsible for every year.

Through you, Mr. Chair, to Mr. McKay, what are you doing to cut this in half over the next six years—as scientists say must happen to avoid more fires and floods?

[David McKay]

I can't reconcile any of the numbers that you mentioned, but as you think about the complex journey we're on, it's important that we made a $15-billion commitment to investing in renewables. That's going to make a significant difference in the journey. We've made a $1-billion commitment to—

[Matthew Green, NDP, Hamilton Centre, ON]

Sir, you said that in your opening remarks.

Mr. McKay, RBC is under investigation right now by the Competition Bureau of Canada for misleading customers by touting its climate record, as you've done in your opening remarks, while continuing to be one of the largest financiers of fossil fuels in the world.

How do you reconcile that to the customers you sell this greenwashed messaging to and who feel misled?

[David McKay]

There was one complaint from an individual to the Competition Bureau. The Competition Bureau did a full review, and we've not heard anything from that whatsoever—

[Matthew Green, NDP, Hamilton Centre, ON]

On the question of ethics, Mr. McKay, Canadian banks are still financing an expansion of fossil fuels, which goes against our need for a clean energy transition. Last year, your company was listed fourth and Scotiabank was sixth of the top 10 banks around the world financing fossil fuel expansion, new oil and gas pipelines and power plants that lock in new emissions for decades to come.

When will you stop the greenwashing and doublespeak with climate plans when really you're the companies pouring fuel on the fire?

[David McKay]

I respectfully disagree with your points. We are a big part of the solution. You've seen the commitments we've made to transition financing. You've seen the transparency that we have in terms of the emissions that we have from our core sectors, whether it's automotive, transportation, energy or manufacturing. We're very clear on the emissions that are coming from our lending portfolio. We've made commitments to reduce those to net zero by 2030. We've made commitments to reduce our clients' emissions, and from that perspective, I think we've—

[Matthew Green, NDP, Hamilton Centre, ON]

Okay, Mr. McKay, I'm satisfied with your response.

In 2021, the Queen's University Finance Association hosted an event called “Road to CEO”, featuring you, sir.

At the start of the appearance, in relation to RBC's financing of fossil fuels, you said:

I have not had one prime minister, one cabinet member.... Not one single elected official has called me and said, “Dave, why are you doing this?” And you'd think if we were doing something wrong, if we were financing something that we shouldn't be, somebody in the Liberal government...would call and say, “Dave, why are you doing this?”

Then you said, “In fact, they call me and say, 'You have to finance the transition.'”

Who in the Liberal government has called you and asked you to finance the oil and gas sector?

[David McKay]

The energy sector is a big part of the Canadian economy, and as I said in my remarks, this is a transition. This is a complex transition. We are not getting off fossil-based fuels immediately. To just stop is not an option for us. We have to commit to finding greener sources of energy. We have to accelerate that transition. There is anxiety in the country about making this transition. Therefore, Canada has to move and keep moving forward. I think from that perspective—

[Matthew Green, NDP, Hamilton Centre, ON]

Mr. McKay, sir, as an elected official, I'm going to ask you this directly: Why are you financing the expansion of the oil and gas sector, when we know we have climate targets that are rapidly approaching beyond a place from which there's no return, sir?

[David McKay]

We're financing the transition.

Energy is still a big part of the Canadian economy; therefore, we have to continue to support the economy as we make the transition. You have to do both. You can't just do one. Therefore, we're focused on emissions and we're focused on reducing—

[Matthew Green, NDP, Hamilton Centre, ON]

If we're talking about a balanced approach, sir, can you please provide me with the amount at which you finance oil and gas versus financing the transition? Let's just compare those two numbers.

[David McKay]

I don't have that number in front of me. I can tell you we've made a $15-billion commitment to the transition. We have made a $500-billion commitment to sustainable—

[Matthew Green, NDP, Hamilton Centre, ON]

Yes, but you don't know how much you have in oil and gas. Is that correct?

[David McKay]

We've financed $400 billion of that $500-billion commitment to sustainable transition so as to make that. I don't have the number off the top of my head because—

[Matthew Green, NDP, Hamilton Centre, ON]

I'm sorry, Mr. Chair, but the doublespeak sometimes obfuscates what I'm trying to ask, so I'm going to ask it very directly.

Is it your testimony here today that you have put $400 billion into oil and gas and $15 billion into the transition? Is that the scale of magnitude that we're talking about here?

[David McKay]

No. The $400 billion I referred to was sustainable financing across a number of initiatives. I was trying to explain, before you cut me off, that we finance a number of transition initiatives from equity [Inaudible—Editor] small business—

[Matthew Green, NDP, Hamilton Centre, ON]

You don't know your total holdings in oil and gas, though. You don't have that. As a CEO, don't you know that?

[David McKay]

I can get that for you. No, I don't have it at the top of my head. It breaks down by different sectors, different countries, different regions and different capabilities.

We can get that for you. It's in our disclosure, so you could look it up as well.

[Matthew Green, NDP, Hamilton Centre, ON]

Thank you.