Question Period: Green Bond Program

By: The Hon. Clément Gignac

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Hon. Clément Gignac: My question is for the Government Representative in the Senate.

Senator Gold, last week it was reported that Ottawa is lending, via the Crown corporation Canada Infrastructure Bank, close to $1 billion to Ontario Power Generation for the addition of a modular nuclear reactor for the Darlington nuclear site. Following that announcement, Ontario Power Generation has adopted a $300 million Green Bond Framework that includes financing for nuclear power to achieve net-zero carbon emissions by 2040.

Interestingly enough, or disturbingly enough, the federal government has specifically excluded nuclear power projects in its Green Bond Framework released last spring.

My question for Senator Gold is the following: Could you explain to me how come the federal government, on the one hand, supports the financing of nuclear technology in Canada via the Canada Infrastructure Bank but, on the other hand, refuses to include nuclear solutions in its very own green bond offering to achieve net-zero emissions by 2050?

Hon. Marc Gold (Government Representative in the Senate): Thank you for the question, senator. My understanding is that Canada’s Green Bond Framework is fully aligned with the international green bond standards and the expectations of the market, which is an important factor in designing such a framework. This framework, which includes the nuclear exclusion, is consistent with the green bond frameworks from other sovereign issuers, including France, Germany, Sweden, Spain, Italy and the United Kingdom.

I’m advised that while investments from the green bonds will go towards projects that meet the framework’s criteria, the government continues to support innovation and environmental improvements across the country to ensure that Canadians, communities and businesses can adapt properly and effectively to a net-zero economy. In that regard, Canada recognizes and supports the important role that the broader energy sector plays in this transition.

There is the international framework that governs green bonds, but there is also the government’s commitment, as exemplified in this investment, to encourage innovation and all measures that could help us transition to a net-zero economy.

Senator Gignac: Is it something that the government could reconsider? I think the regime has changed since the Russian invasion of Ukraine, and energy security is important. This is an approach that maybe could be reconsidered. I have information that the European Union is currently reconsidering that aspect because green bond issuance is important for capital markets.

Senator Gold: Thank you for the question. It’s a fair question. I will look into that, but allow me to say the following, though: As colleagues may know, the Government of Canada issued its inaugural Canadian-dollar-denominated green bond just this year, and this inaugural green bond, the first of many such issuances, will create new financing opportunities that will speed up projects ranging from green infrastructure to nature conservancy while also helping to grow our economy and the jobs that flow from that.

As in all government programs, there is a commitment and a willingness to revise and reconsider, and I’ll certainly follow up with your question and hope to have an answer soon.

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