Ottawa issues first green bond

(Montreal) The federal government has announced the results of the first issuance of green bonds used to fund energy shifts and the fight against climate change.

Posted at 2:39 pm
Updated at 3:46 pm

Stephen Bryce
Canadian press

Ottawa states that the commitment announced when the budget was presented in 2021 was “successful in issuing the first 7.5 billion green bonds worth $ 5 billion.”

“Canada’s green bonds are an important step in our plan to grow Canada’s sustainable finance,” said Stephen Gilbo, Minister of Environment and Climate Change, at a press conference Wednesday afternoon. did. In a neutral economy, increasing private sector investment through Canada’s sustainable financial markets is essential. ”

Treasury Minister Randy Boissonault is in strong demand from environmentally and socially responsible investors, who make up the majority (72%) of buyers, and international investors, who make up more than 45%, with the first issuance of Canadian green bonds. He said he was born. Investor base.

The funds can be used for new projects and projects with federal support in the two fiscal years prior to issuance.

Financing ecological projects

Among the projects and programs that can benefit from the Green Bond Fund, the guidelines released by the Ministry of Finance include new charging stations for electric vehicles, the federal government’s efforts to plant 2 billion trees, and renewable infrastructure. It lists energy and even tax credits for home renovations.

Patrick Bonin, Climate Energy Campaign Manager at Greenpeace Canada, called the government’s announcement “good news,” but said his organization is watching over which projects are funded by Green Bonds.

“We need to be vigilant and expect the government to apply certain rigor so that these bonds are truly green and not a means of funding bad projects.” He said.

To explain what would be a bad project, Greenpeace spokespersons compensated for greenhouse gas emissions by planting single-grown trees or by financing a hydrogen project made from natural gas. Here is an example of a company that is expected to be.

However, Patrick Bonin said that the government had a “strong framework” and “nevertheless, installed filters and did some work to ensure that the project really became a green project. I admit that.

A reliable framework, according to an independent company

A review of the Ottawa Guidelines conducted by Sustainalytics found that the Government of Canada’s Green Bond Framework was credible, but some eligible projects could have a negative impact on the environment and society. It has also been pointed out. Includes indigenous rights or local ecosystem infringement by hydropower projects.

Treasury Minister Chrystia Freeland said in a statement, “This strong demand for the first green bond issuance is what many will come first and Canada’s future as a leader in the field of sustainable finance. It’s a sign. ”

Globally, the green bond market has grown in the context of talks on funding ecosystem transitions. According to a recent Royal Bank report, returning the economy to net zero within 30 years could cost about $ 2 trillion nationwide.