MPs call for climate-focused rules for Canada’s big banks

4 min read

A cross-party group of federal lawmakers is backing a call for climate-focused rules on how Canada’s banks, insurers and pension funds invest their money.

“We have to do more,” said Ryan Turnbull, the Liberal MP leading a new push to bring the financial system in line with the commitment Canada has made to reduce its carbon emissions and keep global warming below 1.5 degrees.

Turnbull held a joint news conference on Thursday, along with MPs from the NDP, Green and Bloc Québécois parties, to highlight a private member’s motion he made earlier this month calling for the government to use “all legislative and regulatory tools at its disposal to align Canada’s financial system with the Paris Agreement.”

This government has slimmed up its spending to encourage investment in green initiatives and technology: this spring’s federal budget included the promise of roughly $80 billion in refundable tax credits over the next 10 years, and Ottawa committed up to $13 billion in subsidies to get Volkswagen’s new electric-vehicle battery factory built in St. Thomas, Ont.

But alongside those incentives for green investment, there have also been growing calls for rules aimed at Canada’s financial system.

The country’s major financial players have been under pressure to disclose their investing practices, to account for continued stakes in fossil fuels (many big investors make the argument that they can influence the companies responsible for major emissions to transition to a green future), and to come up with concrete plans to transition to net-zero carbon emissions by 2050.

On Thursday, the MPs were joined by Sen. Rosa Galvez, who introduced the Climate-Aligned Finance Act (CAFA) in the Senate last year. But that bill has been stalled at the second-reading stage despite broad calls to move it to a committee hearing for further debate.

CAFA would, among other things, impose new climate disclosure rules and require banks and other federally regulated institutions to develop transparent plans to meet federal emissions targets.

“The science is clear. The solutions are there. We have hope that our financial institutions will rise to the climate challenge, but we know that hope is not a strategy,” Galvez said Thursday. “Regulations are necessary because we have to give a clear signal to the finance world.”

Turnbull’s motion, which has so far been seconded by 13 MPs, does not explicitly support Galvez’s legislation.

But he said Thursday that it should be taken as “a sign to both the government and to other parties that we need to start to have these debates and conversations in preparation for what I hope will be a successful passage through the Senate of Sen. Galvez’s bill.”

After that, he said, the House of Commons could begin its own work on examining Galvez’s bill.

Turnbull, who is the MP for Whitby, Ont., is not part of the federal cabinet, but Julie Segal said the cross-party support for Turnbull’s initiative is “groundbreaking.” (No Conservatives have seconded it to date.)

Segal, who is senior program manager of climate finance at Environmental Defense and also spokesperson at the news conference, said it is crucial to “tackle what remains the biggest gap in Canada’s climate policy.”

“Regulation is the essential solution to mobilize the financial sector for a safe climate and a functioning, more affordable economy,” she said. “So, this motion is very much a kickstarter.”

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