Royal Bank defends funding B.C.'s Coastal GasLink pipeline despite environmental concerns

Royal Bank of Canada's chief executive defended the bank's funding of the Coastal GasLink pipeline Thursday and called for incentives to help the shift to a net-zero economy, as investors and Indigenous groups denounced its support of fossil fuels.

Chief executive Dave McKay was speaking at the bank's annual shareholder meeting, which had been changed to a virtual-only format late on Wednesday after confirmation of a positive case of COVID-19 among its staff.

Wet'suwet'en hereditary chiefs had travelled from British Columbia to Toronto to express their opposition in person to RBC's financing of the pipeline's construction on traditional Indigenous land. The pipeline is 65 per cent owned by private equity firm KKR & Co. Inc. and the Alberta Investment Management Corp.

Calling into the meeting, they accused the bank of funding a project that they said has damaged rivers and wetland forests and limited their ability to hunt wildlife. 

McKay said the project has been extensively reviewed and approved by regulators and has the support of all 20 elected First Nations along the route. He added that 16 of them have taken the option to have an economic interest in it.

Despite support from elected leaders, the pipeline still faces fierce opposition from several groups, most notably Wet'suwet'en hereditary chiefs who say band councils — as political entities created by the federal government — do not have authority over land beyond reserve boundaries. 

That job, they say, belongs to hereditary chiefs under the Wet'suwet'en governance system which predates the formation of Canada and has not been extinguished.

Canada's major banks, including RBC, the largest, have released plans to lower their financed emissions but continued funding of fossil fuel companies and pipelines has riled some investors and communities. 

Last week, Canada released a $9.1-billion plan to meet its 2030 emissions-reduction targets.

Spending on green technologies is set to be a focal point of the 2020 budget, to be released later on Thursday.

The Canadian government's plan to reduce carbon emissions will lead to "a massive shift in this decade," which will require "public and private capital to support both growth and the green transition," McKay said.

"That's why investment and tax policies, as well as incentives must be considered."

McKay also reiterated his concern about a proposed tax on banks' profits. 

Two shareholder proposals urging RBC to exclude fossil fuel activity and projects opposed by Indigenous groups from eligibility for sustainable financing, and refrain from funding and advising on the privatization of pollution-intensive assets were defeated, in line with the board's recommendation.