By Aidan Gilchrist-Blackwood, CNCA Network Coordinator, in collaboration with KAIROS Canada
The global economy has been shaped by deeply unequal power dynamics. Centuries of colonialism have extracted resources from the Global Majority, including Indigenous communities, leaving wealth ever-increasingly concentrated with a tiny fraction of the world’s population who are overwhelmingly based in wealthy nations.
These same power dynamics are reflected in the politics of climate change. A minority of governments and companies, mostly based in North America and Europe, are responsible for the vast majority of historical carbon emissions. But front-line Indigenous communities and communities from low-to-middle income countries bear the worst impacts of climate chaos.
The debt crisis and corporate impunity each result from, and reinforce, these dynamics. Canada is directly implicated. Approximately 50 national governments have had to take out loans under these unfair conditions. When it comes to climate finance, for every five dollars received by Global Majority countries, they are paying seven dollars back.
Private actors have swooped in to profit. Approximately 62 percent of public debt owed by countries in the Global South is held by wealthy private creditors – major investment firms, hedge funds and commercial banks – often based in North America and Europe. Their practices force governments to choose between costly repayment plans and responding to urgent human needs, too often trapping governments in unsustainable debt. Due in part to these lenders, 3.3 billion people now live under governments that spend more – sometimes dramatically more – on debt repayments than they do on social protections, education or healthcare
Creditors do this because they can: governments haven’t created binding requirements to ensure their practices respect the human rights of frontline communities. They can pursue, with impunity, a business model that seeks only to generate wealth for their shareholders.
The history of unjust debts is also connected to serious human rights abuse by companies in other economic sectors, including Canadian mining companies.
During the debt crisis of the 1980’s, international financial institutions promised debt relief to many countries in Asia, Africa and Latin America on the condition that they change their laws to make it easier for multinational companies to set up operations. These reforms sidelined local democratic processes and allowed companies to operate with very little oversight or accountability. Following these reforms, scores of Canadian resource extraction companies began to set up operations in low-to-mid income countries, where they remain an inescapable presence to this day. Our companies have been linked to systemic human rights abuses, including killings, union-busting, serious environmental contamination and the failure to respect the Free, Prior, and Informed Consent of Indigenous peoples.
Debt justice and corporate accountability are interconnected struggles. Lifting the burden of unjust debts helps tip the scales of power from multinational corporations towards local communities and enables governments to direct their resources towards the things that matter most, like robust public services and climate action. That’s why KAIROS and CNCA, who have worked together for many years to hold Canadian extractives companies accountable, are calling together for debt justice.
In this time of global geopolitical transformation, Canada has the opportunity to chart a new course. Committing to debt justice is an important piece of how we could stand firmly for the public good, human rights and climate action. Canadians are calling for nothing less: in April, activists delivered to Parliament Hill a debt justice petition signed by over 72,500 people.
We urge the Canadian government to:
- Review its own bilateral debts and cancel all debts which have become unsustainable;
- Advocate in multilateral forums for global financial reform and for a UN Framework Convention on Sovereign Debt;
- Shift its bilateral climate finance strategy to prioritize grants, not more loans.
Finally, we call on Canada to introduce mandatory human rights and environmental due diligence legislation to hold Canadian companies accountable for abusing the rights of workers and communities around the world.
Learn more about the Turn Debt into Hope Campaign at: https://kairoscanada.org/turn-debt-into-hope.
