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In B.C., inflation threatens local government's climate plans

Staff at the District of Saanich have become the first in Canada to propose an aggressive solution to close the fiscal gap and balance the district's budget: sue the world's largest oil and gas companies. 
Saanich flood 02012020
A flooded road at Granville Avenue and Hastings Street in Saanich. The municipality's mayor and council voted unanimously to back the staff plan to assess joining a potential class action involving 'Big Oil.'

Inflation is threatening to derail the climate plans of one of the most ambitious municipalities in British Columbia, prompting fears cities across the province could be quietly following a similar path.

In response, staff at the District of Saanich have become the first in Canada to propose an aggressive solution to close the fiscal gap and balance the district's budget: sue the world’s largest oil and gas companies. 

On Monday, council members for the District of Saanich unanimously passed the recommendation, which now directs staff to explore joining other local governments in potential future litigation. 

Fossil fuels are the primary drivers of human-caused climate change. Research has shown that between 1954 and 2010, 90 companies were responsible for nearly two-thirds of all fossil fuel emissions worldwide. 

Over several of those decades, there is a wide body of evidence alleging many fossil fuel companies knowingly deceived the public on the impacts their products have had on the world’s climate system.

Any potential lawsuit would seek to recover the city’s fair share of costs associated with the resulting extreme heat waves, drought, floods, increasingly powerful storms and sea level rise. 

The recommendation is not without precedent. More than 60 local governments in the United States have brought similar lawsuits against fossil fuel companies, and last year, California sued the American Petroleum Institute and five of the largest oil and gas companies in the world for state-wide climate-related harms.

One of climate activists’ biggest legal victories came in 2021, when a Dutch court called on Shell to move more aggressively to reduce its emissions. But many cases governments have brought against petroleum companies have yet to be tested in front of a judge, and it’s not clear how such class-action litigation would fare in the B.C. court system. 

Governments falling behind on climate targets

The move from the Vancouver Island municipality comes as federal, provincial and local governments across the country consistently fail to meet their climate targets.

Last week, Vancouver was the latest large city to admit it is not likely to meet most of its 2030 targets, including zero-emission heating; promoting complete, walkable neighbourhoods; and active transportation and transit.

In the District of Saanich’s case, high rates of inflation and oversubscribed federal and provincial funding has left the municipality falling behind on its own climate targets, according to a recent report to council. 

By 2022, staff found the district’s emissions had decreased 16 per cent from its 2007 baseline, less than half of the 33 per cent drop the community should have hit to remain on track to its own targets. 

“Inflation really has had an impact on us,” Rebecca Newlove, manager of sustainability at the District of Saanich, said in an interview.

Newlove pointed to recent plans to retrofit two community centres, and in the process, lower the community’s carbon footprint by thousands of tonnes a year. To help pay for the upgrades at the G.R. Pearkes and Cedar Hill rec centres, staff went to the B.C. and federal governments for a combined $5.2 million in grants. 

But when those were finally approved, inflation and building costs had raised the district’s share of the projects to unsustainable levels. Newlove said the district asked both governments for more money, but there wasn’t any.

Staff scrambled for another solution, eventually choosing a path that led to more electricity consumption at one facility, and no upgrades to a tennis and squash court at the other. 

While small in scope, Newlove says the two projects are emblematic of sacrifices facing several municipalities across British Columbia and beyond. 

“We are not alone,” she said. 

Saanich could be a sign of things to come

Compared to many communities in B.C., Saanich has carried out especially rigorous reporting on progress toward its climate targets.

And while the local government has made some positive progress in recent years, its latest climate report card found one in five of its climate actions are behind schedule or on hold. 

The district’s two largest emitting sectors — transportation and housing — remain far off-track its 2030 targets. 

According to the latest report, public transit trips need to double within six years in a community where the number of trips taken by transit have actually dropped to seven per cent in 2023 from 8.7 per cent in 2007. In six years, 100 per cent of the district buses should be electric, according to its plan. But so far, less than one per cent have made the fuel switch. 

When it comes to the community’s built environment, only 1.7 per cent of buildings have had their gas heating systems replaced with renewable energy systems. The district’s 2030 target is 40 per cent.

Meanwhile, Newlove said the community hasn’t even begun cost estimates on adaptation plans to fend off coastal flooding. 

Without enough government funding to accelerate its action on climate change, Newlove said Saanich is looking at more creative ways to balance its budget. 

“We’re going up to budget time and we’re realizing that gap,” she said. “We know the numbers are going to be a lot bigger.” 

Property tax not enough to cover rising climate costs

Nanaimo councillor Ben Geselbracht said his staff have yet to produce numbers that would reflect how inflation is squeezing the city’s climate policies. But like any program that leans on matching outside grants during periods of high inflation, he says a reckoning is coming. 

“Under the financial pressures everyone is under, I think it’s just a matter of time,” he said. 

“There just isn’t enough money from property tax that’s able to cover it.”

From fire-proofing urban boundaries to upgrading sewers to handling increased floods, the cost to confront climate change is massive. One national estimate from the Insurance Bureau of Canada suggests adapting to and reducing the impacts from climate change requires $5.3 billion in spending.

Most of climate change’s financial impacts are expected to be felt heaviest in cities, where millions of people live and billions of dollars of infrastructure is at risk. 

Some cities in B.C., such as Vancouver, are in the process of assessing how much climate change will cost them locally. At the national level, modelling from the Canadian Climate Institute shows that for every one dollar invested, governments can save between $13 and $15 in future damages.

But first, a city needs money to invest, often above and beyond what it can raise through property taxes, say experts, politicians and municipal staff.

A plan to 'Sue Big Oil' gains incremental support

In response to that funding gap, in 2022, the Vancouver law firm West Coast Environmental Law, along with several other advocacy groups, launched a campaign to join B.C.’s municipalities in a class-action suit against fossil fuel companies. 

Under the banner “Sue Big Oil,” cities who have signed on agree to put $1 for every resident into a fund for future legal fees. 

“The logic is simple,” said Andrew Gage, a staff lawyer with the firm. “Those who profit from selling harmful products should bear their fair share of the costs of the harms caused by their products.”

Known in legal circles as the “polluter pays” model, in 2019, 28 Canadian law professors wrote an open letter in support of municipalities pursuing such legal action. The suit would be novel in the same way the first cases set precedents on Indigenous rights, gay marriage or claiming compensation from tobacco and asbestos companies, wrote the legal experts. And just like those cases, it would be hard to judge whether it will succeed. 

“However, this does not mean that such a lawsuit cannot be won or that local governments should not explore its potential,” they wrote.

The law professors added that existing legal principles “could form a solid basis" for such a lawsuit and would help establish accountability for past actions and target “a history of corporate deception.”

The Sue Big Oil campaign received a big boost only months after it launched when the City of Vancouver passed a motion to commit nearly $700,000 to the fund. But last year, the new municipal government under Mayor Ken Sim did not include the plan in its budget. 

That hasn’t stopped some smaller B.C. cities from signing on. Last week, Qualicum Beach became the fourth municipality in the province — joining Gibsons, Squamish and View Royal — to back future litigation against oil and gas companies. 

Vancouver Island’s Capital Regional District (CRD), meanwhile, voted to explore joining a future lawsuit in December 2023, with a report due back from staff in the spring of 2024.

“We are looking into the request to join,” CRD spokesperson Andy Orr said in an email. “That is all I can say for now.”

Support for a class action appears to extend beyond those few communities. A 2022 survey found about 69 per cent of B.C. residents supported local governments suing ‘Big Oil’ to cover the costs of climate change. 

Saanich’s decision a Canadian first

So far in B.C., past motions for cities to sue 'Big Oil' were brought forward by politicians, themselves backed by community interest groups aligned with the advocacy campaign.

Saanich’s step toward a potential lawsuit was fundamentally different, said Gage.

“Us [politicians aligned with the 'Big Oil' campaign] saying that we need a lawsuit is a political act,” he said. “But when staff are doing it, their focus is very much on how do we get this budget balanced.” 

“This is the first time we’ve seen it in Canada.”

On Monday, a number of public speakers came to support Saanich's consideration of a class-action suit. Speaking to Saanich councillors Monday night, one resident from View Royal said that as the largest municipality on the South Island, Saanich has always played a unique role in leading on climate policy. 

“I sincerely hope you will lead the charge…” she said.

Others at the council chambers noted that B.C.’s class-action laws make it an ideal jurisdiction to file a lawsuit. Unlike some others in Canada, the province does not require plaintiffs to cover the other side’s legal costs should they lose the case. 

In the end, Saanich’s mayor and council voted unanimously to back the staff plan to assess joining a potential class action.

“Climate change is about debt and paying down that debt,” said Coun. Nathalie Chambers. “We need to pay.” 

Several councillors said they would like to see cities across Canada, including the Union of BC Municipalities and the Federation of Canadian Municipalities, get involved if Saanich were to pursue such an ambitious legal case. Neither municipal body was available to comment by the time of publication.

Mayor Dean Murdock said that in backing an exploration of a class action, council was signalling that “we can't go it alone” and that the district's “limited tax base” won’t be enough to reach climate targets that require a “wartime effort.”

“This is going to be a long haul,” said the mayor. “I think it's well worth doing. But we got to make sure if we're going, we're all going together.”