Two senior Cabinet ministers in Ottawa are facing down a 30-day deadline to report back on what they’re doing to get Canada’s financial system in line with the country’s climate commitments.
The pressure is coming from the House Committee on Environment and Sustainable Development, where a motion last week by MP Monique Pauzé (BQ-Repentigny) asked Finance Minister Chrystia Freeland and Environment Minister Steven Guilbeault what steps they’ve taken in relation to:
• Financial system reforms laid out in the proposed Climate-Aligned Finance Act, Bill S-243, introduced in March, 2022 by Sen. Rosa Galvez;
• Calls for the Office of the Superintendent of Financial Institutions to reinterpret its mandate and issue “detailed guidance on transition plans” for the sector;
• Requirements for federally-regulated pension funds, particularly the Canada Pension Plan Investment Board and the Public Sector Pension Investment Board, to fully disclose their investments in private equity funds;
• Combatting greenwashing in the financial sector through the federal Competition Bureau.
The motion passed with seven Bloc Québecois, Liberal, and NDP MPs in favour and four Conservatives opposed.
Pauzé said the motion was necessary to put some action behind the federal government’s “fine words on the fight against climate change.”
With global banks investing trillions in new fossil fuel development since the 2015 Paris climate agreement, and Big Five institutions like the Royal Bank of Canada in the spotlight, “we can no longer afford delays from this government,” Pauzé told The Energy Mix in an email. She urged Freeland and Guilbeault to come back to the committee with “a rigorous regulatory framework that will force financial institutions to align with the Paris Agreement, stop financing new oil and gas projects, [and] adopt credible transition plans that will follow the science” on climate change.
Conservative MPs on the committee said the measure was “insane” and “purely ideological”, warning that it would result in “gutting public pension funds.” Pauzé countered that the majority of Canadians and Québecois support regulations requiring financial institutions to respect the country’s climate commitments.
“It’s time for the Trudeau government and the Conservatives to finally listen to the wishes of the population,” she wrote.
Ecojustice lawyer and sustainable finance lead Karine Péloffy said it was encouraging to see the committee take a “proactive approach” to the issue.
“Climate-aligned finance is the largest gap in Canada’s climate plan, and we continue to fall further and further behind our global peers,” she wrote in an email. “The committee’s action is especially welcomed given the government’s lacklustre announcement on a taxonomy process and eventual [Canada Business Corporations Act] disclosures earlier this year, and as the Climate-Aligned Finance Act has now been stuck in the Senate Banking Committee for a year and a half.”
She added that the motion “substantially reflected” Ecojustice recommendations that “offer the robust, science-based regulatory framework needed to tackle greenwashing and ensure Canada’s financial sector is doing its part in securing a climate-safe future for all—instead of actively working against it.”
