A new report from the Institute for Sustainable Finance, published today, assesses whether anti-woke financial activists in the U.S. are gaining ground in Canada, too. The authors find that the anti-ESG movement is able to exert influence on Canadian institutional investors, but there are enough legal protections in Canada to keep climate-aware investing secure, at least for now.

From the perspective of at least some institutional investors, the logic of climate-aware investing is clear, explains Julie Bernard, the report’s lead author: “One of the ways I can manage my risk is to make sure that I integrate climate because, from a risk perspective, I know that the climate will change, whether I like it or not,” she says in an interview. “And the best way to make sure that I can have return is if I can mitigate some of those risks.” The main motivation of the report was to reassure those investors that “what’s happening in the U.S. is not happening here, and that so far we’re navigating the storm,” Bernard says. “A lot of the things that are happening down in the U.S. could not be happening here, just because of the legal framework we have.”

Canadian corporate law explicitly permits directors to consider material ESG factors and stakeholder interests, the report states. By contrast, the U.S. system relies on a “shareholder primacy” model that emphasizes shareholder value to the exclusion of other considerations, leaving U.S. investment managers more vulnerable to legal challenges from anti-ESG activists. Since 2021, some state legislatures like those in Texas and Florida have enacted anti-ESG measures, while several Republican-led states also withdrew or threatened to withdraw public pension assets from managers over their  climate positions. Last year, the Securities and Exchange Commission ended its defence of Biden-era climate-disclosure rules.

Canada has multiple regulatory frameworks that support ESG integration, the report points out, including traditional fiduciary duties for corporate directors and pension trustees, as well as securities disclosure rules, prudential regulations, anti-greenwashing laws. “That doesn’t mean that there is no pressure [or] that there is no tension,” Bernard says. “But we’re not facing the same situation as in the U.S.”

That said, “we’re not bulletproof,” she warns. There have been signs that the anti-ESG movement is weakening climate integration in Canadian investing, according to the report, the clearest of which was last year’s decision by the Canadian Securities Administrators to pause development of a mandatory climate-related disclosure rule. Also, U.S.-based asset managers own large stakes in many Canadian public companies, which sometimes translates to reduced support for climate-related shareholder proposals.

In order for pension and investment boards to do their job well – which is to protect the long-term financial interests of their members – “governance vigilance remains essential,” the report concludes, because “anti-ESG pressure may evolve in ways that create new challenges for Canadian investors.”

Mark Mann is the managing editor at Corporate Knights.

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Fortier says the demand for native seed is coming from several directions at once, including municipal naturalization and mine and infrastructure reclamation. “I would say the sector is evolving very quickly,” says Fortier, who is also chair of the board for the Native Seed Producers of Canada, an association representing Canadian farmers producing native forbs and grasses.

As demand grows, so does the awareness that there aren’t enough native seeds to meet it. A 2023 Natural Resources Canada assessment found that 78% of restoration and reclamation practitioners identified a lack of native seeds as a limiting factor in their landscape renewal projects, particularly when it came to trees, shrubs and forbs.

“A lot of these types of projects aren’t new,” Fortier says. “What has changed over the last few years is increased public awareness and interest in sourcing seed from Canadian growers, coming from both the public and restoration practitioners.”

The climate change accelerant

The ideal in landscape restoration is to use local plants and seeds that have developed symbiotic relationships with the local soil, climate, and the wildlife that depend upon them for forage. As climate change accelerates, these plants are playing a critical role. Because of their local adaptation, they are better able to withstand climate shocks such as drought, intense rainfall and wildfire. Many native species have deep root systems that tap into the underlying layers of the soil, improving soil stability, reducing erosion and acting as buffers against flooding.

In Eastern Canada, Akène Native Seeds was founded in 2020 and has seen a steady increase in demand for native seeds to plant along waterways, agricultural watercourses, and roadsides that act as vegetated buffers against soil erosion and flooding. “The mere appearance of a producer dedicated to native seed was enough to surface demand that had been sitting there unserved,” says founder Philippe Denis. “Our seed sales have grown roughly 4.5 times between 2023 and today.”

The growing demand for native seed has also prompted conservation organizations to invest in seed orchards. In 2021, the World Wildlife Fund (WWF) of Canada’s strategic plan identified habitat restoration as a priority for the non-governmental organization and set a goal of restoring one million hectares of lost complex ecosystems that provide essential wildlife habitat and sequester carbon in nature.

“We do not have enough seed for growing all the native plants that we need to do all the restoration we have committed to in this decade,” says Kate Landry, senior manager of community action at WWF. There isn’t reliable national market data to know how much seed is needed, but according to Landry, Canada needs billions more native seeds than are available.

A native seed strategy takes root

To help increase supply for their restoration projects, in 2025 WWF-Canada awarded grants to 13 First Nations, organizations and businesses in five provinces to support the establishment and expansion of seed orchards.

As producers scale output, the need for a national native seed strategy grows. Working with Environment and Climate Change Canada, the Canadian Wildlife Federation will soon release a national native seed strategy that will not only describe the state of the native seed sector in Canada, but will focus on how to grow the industry sustainably through better coordination between growers and buyers, and through the incorporation of Indigenous knowledge. That knowledge is already shaping post-wildfire restoration in British Columbia, where WWF-Canada has worked with the Secwépemcúl’ecw Restoration and Stewardship Society (SRSS).

Longer, hotter and drier periods caused by climate change have increased wildfire risk across Western Canada. In 2017, almost 193 hectares of traditional Secwépemcúl’ecw territory were scorched. Much of the land devastated by the wildfire was monoculture forest. The SRSS has replanted the area using traditional knowledge that suggests a mixed canopy of trees is more likely to retain moisture, potentially lowering wildfire risk and intensity. Incorporating this knowledge into a national native seed strategy will help growers know what to plant and will play a role in mitigating financial risk when demand is uncertain.

According to Landry, part of the problem with scaling native seed production in Canada is that producers are often investing and planting on speculation, without funding in place for restoration work. “There is no assured demand,” she says. Growers don’t always know if they will be able to sell their seeds, and so, according to Landry, it’s a lot of upfront investment that may or may not pan out.

To overcome this, Native Seed Producers of Canada has recommended that, if public funds are used to support the sector, one valuable investment would be a national study of the native seed market that looks at how much seed is imported into Canada each year, which species are being imported, and to which regions. This kind of market intelligence will become increasingly important.

“The question will be less about simply producing more seed and more about scaling intelligently to meet real market demand – understanding which species, regions and volumes are genuinely undersupplied and directing new production accordingly,” Northern Wildflowers founder Fortier says.

Jennifer Cole is a Vancouver journalist writing about the people and ideas restoring ecosystems and building a more sustainable future.

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Canada announced yet another expert group to finalize a taxonomy of green investing intended to facilitate the country’s net-zero transition. This has been framed as an urgent policy priority and the subject of many governmental commitments – yet to be realized – for more than a decade. At the same time, advocacy group Investors for Paris Compliance announced that it is closing its doors as climate considerations have receded on the national priority list. Meanwhile, south of the border, the U.S. Air Force pledged to spend billions to improve resilience to climate change for an Air Force base in Tyndall, Florida, despite a vow by the “secretary of war” to “not do climate crap.”

Global concerns about slowing down or preventing climate change have led to lots of talk but relatively little concrete action. A regrettable consequence has been that financing for adaptation and resilience has also lagged. Mitigation and adaptation have often been viewed as conflicting priorities vying for scarce climate finance. Of the two, mitigation – which includes reducing emissions and protecting natural carbon sinks to limit global warming – has received more attention. In the meanwhile, the business of investing in climate resilience is projected to be a US$1.3 trillion global market annually, with vast scope for innovation.

The impacts of climate change are now upon us. Communities and economies are at increasing risk from storms, floods, fires and other climate threats. As a result, Canada needs to shift from climate debates to immediate measures for improving lives – addressing the pressing need for investing in adaptation.

Part of the challenge with mitigation has been that Canada’s efforts may not count for a lot, whether globally or locally. This is largely due to global sharing of the negative consequences of carbon emissions when the largest emitters, and our neighbour, feel little urgency to reduce emissions. In contrast, resilience and adaptation initiatives tend to be more localized in terms of results, directly benefiting those who invest in them more immediately and without nearly as much leakage.

Many adaptation investments are also expected to reduce greenhouse gas emissions. Examples include investing in wildfire suppression and response; promoting sustainable agriculture and land use, climate-smart buildings and farming practices; improving mass transit; and protecting coastal wetlands. Many of these investments are ripe for innovation and should create export opportunities for Canadian companies. For example, large power plants dominate centralized electricity grids. An accident at any point in such a vast system can affect the entire network. Shifting toward more decentralized grids powered by renewables (when they can be harnessed closer to their point of consumption), even if backstopped by traditional power sources, can reduce emissions and ensure that communities can better withstand extreme weather impacts.

Concentrating on immediate, tangible benefits and on reducing cross-border leakage of climate investments should make this dual focus easier to achieve, but we will still need to overcome the institutional inertia that has characterized governments’ commitments to climate solutions to date. Hopefully, the attractive economic returns and public-sector focus on investing in infrastructure will help do so.

Nor does focusing on immediate benefits reduce the need to plan carefully, as “maladaptation” can occur within our own borders. One person’s actions can make things worse for others. For example, if someone builds a wall to stop flooding on their property, it may just send water to their neighbour’s. The good news is that this possibility cuts both ways. If someone increases green space on their property, it should also boost the resilience (and value) of nearby properties.

We should be thoughtful about how to prioritize. A recent Canadian Climate Institute report found that investments in adapting Canada’s roads, bridges, storm sewers and water treatment systems for rising heat and heavy rain could result in up to $9 billion in annual infrastructure savings. The results of such early successes should be self-reinforcing – making it easier to build strong community support for similar initiatives.

There remains the challenge of “implementation illusion” – political currency generated by reporting on new projects without being accountable for implementation success. A practical agenda will require meaningful frameworks that define, measure and communicate successful execution.

We have witnessed decades of slow progress on climate change policy in Canada. Facing the reality of actual climate impacts, we now share a growing sense of urgency for moving toward thoughtful action before events take over.

Gerry Rocchi is a corporate director with experience in climate finance.

Ed Waitzer is a senior fellow at the C. D. Howe Institute, a former chair of the Ontario Securities Commission and was a founding director of the Sustainability Accounting Standards Board.

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Governments are preparing to absorb a risk that highly profitable oil companies have declined to take. That is not a technical detail of project financing. It is the clearest signal yet of a fraught economic strategy for Canada’s near future – one that puts resource extraction at the centre of national development.

A strategy, not a project

On July 2, the federal government and British Columbia committed billions in public investment to liquefied natural gas development, mining and other extractive industries, and to expanding the Roberts Bank port terminal south of Vancouver, later identified as the marine terminus for the new Alberta pipeline. Later that day, the West Coast line was revealed. The following week, Alberta and Ontario proposed a second pipeline, also without a private proponent and also likely to require substantial public money.

Whether or not that second line is ever built, the sequence confirms that these are not separate infrastructure decisions. They are part of a broader commitment to an extractive economy: the federal Major Projects Office is now fast-tracking 23 “nation-building” initiatives worth well more than $130 billion across liquefied natural gas, nuclear, mining and transportation.

A bet the industry won’t make

Ottawa has formally proposed listing the pipeline as a “project of national interest.” Alberta’s submission puts the cost at $35.2 billion to $43.7 billion, excluding escalation and financing costs, and assuming regulatory savings. It would be built by a new entity jointly owned by Trans Mountain Corporation, Alberta’s Petroleum Marketing Commission and Pembina Pipeline, a Calgary-based company whose non-binding 10% stake is the only private participation. Taxpayers would carry the rest, and there is still no finalized financing plan.

The pipeline is also only part of the public bill. Add the Roberts Bank terminal at roughly $10 billion and the linked carbon-capture project at $16.5 billion officially, and more than $20 billion by recent estimates, and allow for overruns of the kind Trans Mountain produced, and the public commitment could exceed $100 billion – an estimate from market-oriented critics, not climate advocates.

The project includes an Indigenous equity purchase right, to be drawn from the two governments’ shares, but its size and timing remain unspecified. First Nations along the southern route say they were not consulted before the announcement, and 14 First Nations are challenging the fast-tracking law in court.

Canada has been here before: Ottawa acquired the Trans Mountain system in 2018 after private investors stepped back. The expansion ultimately cost about $34 billion, more than six times the original estimate.

The reluctance of industry is not hard to explain. Bitumen is among the highest-cost sources of oil, highly sensitive to price swings and exposed to declining long-term demand as decarbonization accelerates. The International Energy Agency expects global oil demand to peak by 2030, with supply capacity running well above it. With the West Coast line unlikely to be complete before the early-to-mid 2030s, the project risks becoming a stranded asset.

Companies are behaving accordingly. Through the recent price boom, the four largest oil-sands producers cut investment – to $15.9 billion a year across 2021 to 2024, down from $27.9 billion a year in the 2011 to 2014 boom – while sharply increasing dividends and share buybacks. Capital is being returned to shareholders, not committed to new production. If the industry believed in the economics of expansion, it would be leading the investment.

Who this economy is for

Ottawa and Alberta describe the West Coast line as the way to build a strong, prosperous, sovereign Canada. But the record of the last boom complicates these claims.

A report by the Alberta Federation of Labour and Canadians for Tax Fairness found that between 2021 and 2023, the oil and gas industry earned $135.2 billion in operating profits while paying $43 billion in wages – $3.14 in profit for every dollar paid to workers, up from $0.92 in the previous boom. The sector employs roughly 30,000 fewer people than in 2014. And the owners collecting those profits are largely not Canadian. The report estimates that the big four producers are 73% foreign-owned and 60% U.S.-owned, with an estimated $58 billion in dividends and buybacks flowing to foreign owners between 2021 and 2024.

An industry that produces more with fewer workers, invests less, and sends most of its returns abroad is a weak foundation for shared prosperity – and a strange candidate for one of the largest public commitments of the coming decade.

The rollbacks are part of the plan

You might wonder about the environmental safeguards in place, especially as the urgency of climate change is evident all around us. Projects on this scale face barriers under existing environmental rules. So, those rules are being loosened. Canada and Alberta signed a cooperation agreement to streamline and add flexibility to impact assessment; their implementation agreement commits both governments to regulatory frameworks enabling substantial oil-sands growth. The federal government is now proposing faster approvals, expanded pre-designated development zones, and a narrower scope for environmental assessment.

The retreat extends beyond permitting: over the past year, Ottawa has scrapped or weakened the consumer carbon price, the planned oil and gas emissions cap, the electric vehicle mandate, the clean-electricity regulations and the industrial carbon price. Deregulation and environmental rollbacks are not incidental to this strategy. They are what makes it possible – and they build higher emissions into it by design.

The environmental case offered in return is the multibillion-dollar plan to capture and store 16 million tonnes of carbon dioxide a year from the oil sands by 2045. The so-called Pathways project – designed by an alliance of five major oil-sands players – would itself require substantial public funding. Reducing production emissions is worthwhile and should be required of the industry. But about 80% of a barrel’s life-cycle emissions come from burning the fuel, not from producing, refining and transporting it – which is what carbon capture addresses.

Pathways is to capture six million tonnes a year by 2035, while the pipeline is sized to carry a million barrels a day – 365 million barrels a year, or about 157 million tonnes of carbon dioxide when burned. So the “decarbonized oil” the prime minister has invoked would, even if every commitment in the package is met, be oil whose emissions are lower by less than a 10th. In exchange, the companies get a slower rise in carbon-price stringency.

The path not taken

Capital markets respond not only to subsidies but to perceived direction. When governments commit to fossil expansion while delaying climate policy, they signal that Canada’s economic future remains anchored in extraction – shaping where investment flows, which technologies scale and which regions are seen as growth areas while eroding the policy certainty that clean industries need.

The contrast with other jurisdictions is stark. Across Europe, parts of Asia and especially China, governments are pursuing electrification strategies built on renewable energy, grid expansion, electric mobility and low-carbon industry. These are not environmental side projects; they are 21st-century industrial strategies designed to win in a decarbonizing economy. Ottawa’s recently proposed electrification strategy will be credible only if matched by fiscal and regulatory decisions of comparable weight.

Fiscal capacity is finite. Hundreds of billions of dollars committed over the coming decade to extractive infrastructure, nuclear development and military expenditure will press on everything else – healthcare, education, affordable housing, climate adaptation and the care economy, sectors already facing hiring freezes and service reductions even as capital commitments are made elsewhere.

Political capital is finite, too. Aligning closely with the governments of Danielle Smith and Doug Ford eases agreement on these projects while making a different course harder to take later. Pipelines built in the 2030s will still be seeking returns in the 2060s. That is the definition of lock-in, at a time when Canada is already off-track for its climate targets and when extreme heat, wildfire smoke, floods and drought are already damaging health, infrastructure and public finances.

A better bet

Canada does need an ambitious strategy for a low-carbon future – one that diversifies trade, strengthens economic sovereignty and builds at scale. And the same public investment and political capital could go to renewables, a national electricity grid, storage and efficiency, building retrofits, electrified transportation, a circular economy, climate resilience, the care economy and a just transition for the workers and communities that depend on extraction. All this builds value as the world decarbonizes, employs more people per dollar, and cannot be stranded by a shift in global demand.

Before Canada commits another generation of public money to the industries of the last century, governments should be able to explain why this is a better investment in the country’s future than the alternatives competing for the same support. So far, they have not.

Ricardo Grinspun is professor emeritus of economics at York University and a member of Seniors for Climate Action Now!

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“We’ve really tried to harness a culture of inclusivity and innovation. We try to differentiate ourselves as a leadership company and move into spaces that other companies haven’t been,” Busch says. “What I want is to encourage employees to look at our business with a more innovative and creative eye.”

In February, Busch began transitioning the company to an employee ownership trust (EOT) model. An EOT is a structure in which a trust holds an ownership stake in a business on behalf of its employees. The employees don’t buy shares from the company; instead, the trust finances the purchase from the owner. Employee-owners receive profit-sharing, allowing them to build wealth and equity in the company they work for, and the trust pays back the owner over time.

Busch retained a 49% ownership stake in the company and plans to stay on as CEO. He sees the transition as the natural next step to fuel the company’s culture of innovation and ensure job security for employees. After months of uncertainty, a recent announcement from the federal government has paved the way for other business owners to follow in these footsteps, and do business differently.

“For me, it’s a way to create longevity in what we’ve created, make it last beyond me so that it has more infrastructure, deep roots in the community, and continuity in what our product, thought, and social leadership is,” says Busch.

In 2023, the federal government amended the Income Tax Act to enable EOT transitions, announcing a time-limited $10-million capital gains tax exemption for qualifying business transfers between January 1, 2024, and December 31, 2026. The incentive addressed a financial barrier faced by business owners by reducing or eliminating the tax on the owner’s gain from the sale, making selling to an EOT more competitive with selling to a third party. Canada’s move followed in the footsteps of the United States and the United Kingdom, which introduced similar incentives in 1974 and 2014, respectively. Since then, data in both countries have shown that the EOT model increases productivity, competitiveness, entrepreneurship and employee wealth.

EOT transitions can take between 12 and 18 months, so the two-year window gave companies a limited time to get going. When an extension to the incentive didn’t materialize in the November 2025 federal budget, EOT advocates expressed concern that it would kill interest and that the government was missing out on an opportunity to strengthen Canadian ownership at a time when it faced the dual challenges of a succession tsunami and U.S. threats to Canada’s economic sovereignty.

“I think this is really important for the future of Canada,” Busch says. He cites a number of local businesses in Barrie that have been bought by foreign firms. “Thankfully, they’re still around, but they’re not in the community the way they were.”

He and other advocates were relieved earlier this year when the government announced in the spring 2026 economic statement that the $10-million incentive would become permanent. The government also introduced a similar incentive for business transitions to cooperatives.

The road to permanence

The evidence of the benefits of EOTs has been growing for decades. In the United Kingdom, employee-owned businesses employ more than 350,000 people. A study by the EO Knowledge Programme found that employee-owned businesses had 8% to 12% higher productivity than comparable businesses, paid employees higher annual salaries on average, and had lower turnover.

In the United States, the National Center for Employee Ownership found that employee share ownership plans (ESOPs) have driven increased competitiveness and employee engagement and have grown to hold more than US$2 trillion in retirement assets for 15 million employee-owners.

According to the Canadian Federation of Independent Business, 76% of Canadian small business owners plan to exit their businesses in the next decade, most of them to retire. Only 10% of these business owners have succession plans. Experts fear that a lack of planning and options may force some owners into closures or sales to foreign owners and that the scale of the potential shift in ownership could significantly affect Canadian workers, communities, and the country’s economic sovereignty and vibrancy.

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The cost of paradise 

Pete Walker advises businesses on succession transitions through his firm, Boughton Riverview Consulting. He is also a director with Employee Ownership Canada. “When you look at this generational transition of ownership that we’re going through right now, there is tremendous macroeconomic and societal risk to the Canadian economy and communities across the country,” he says. “A lot of the conventional wisdom would point people in the direction of selling to a third party, and that that’s the only option. It’s great that business owners now have more options. When an owner can make a confident decision for themselves and the business, they’re more likely to meet the outcomes they’re looking for.”

Moving EOTs up the government’s priority list at a time of political and economic uncertainty was a challenge. When the Carney Liberals gained power in 2025, their focus was on global competitiveness, not small business succession. But Trump’s sovereignty threats opened a new door. Employee Ownership Canada recruited a broad coalition of supporters from across business, finance and government to make the case that enabling employee ownership was an important tool in the government’s sovereignty plan. “Advocates were able to position the benefits of this new model in a way that continues to address some pretty important strategic priorities for the Canadian government and economy,” Walker says. “It feels like an overnight success that was years in the making.”

The road ahead

While there’s no official count of the number of EOT transitions that have occurred since 2023, estimates put the total at close to 10 companies from a range of sectors, including Taproot Community Support Services, Paradigm Transportation Solutions, Grantbook, Brightspot Climate, Terra Remote Sensing, KCI Philanthropy and Busch Systems. While many have been succession transitions, some, like Busch Systems, have been driven by the belief that employee-owned businesses have an advantage over other structures.

Joanna Philips, a director at Rewrite Capital Advisors, a firm that advises clients on all types of employee ownership models, says the company saw an increase in the number of inquiries in April and May, an uptick that was echoed by Wesley Novotny, a corporate tax lawyer with Bennett Jones who has been working on EOT transitions since 2024.

“For us, the transition was an ideal alignment across the philosophical, structural and financial buckets,” says Paul Koreen, co-owner of KCI Philanthropy, a consultancy that has been supporting charitable organizations for more than 40 years. “It’s a perfect fit with our core values as a firm, which are focused on improved communities and lives. This was a way to extend that thinking into how we structure the ownership of KCI.”

The government estimates that the annual cost of the permanent exemption will rise to $80 million over the next five years, a sharp increase from the $25-million projection it released in 2023 – signalling an expectation of substantially higher transaction volumes over time. “The regulatory certainty that we now have gives everybody the time and the runway to plan with confidence and make educated decisions,” Walker says.

Craig Busch has adopted an “evangelistic” approach to sharing what he’s learned about the process with other owners. He says the decision to become an EOT has shifted not only the structure of Busch Systems, but also how he leads the business: “I’m more focused on the bottom line and the business since the transition. I’ve always been on it, but I’m more on it now that I know the employees are going to own most of it. I’m more motivated to get to a payday for them than I was for myself.”

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Driven by aggressive provincial housing mandates, multibillion-dollar federal investments in clean energy and electric vehicle supply chains, and the push to unlock critical minerals in regions like Ontario’s Ring of Fire, we are accelerating infrastructure and resource development at a pace not seen in decades. At the same time, Canada has committed not only to protect nature, but to halt and reverse biodiversity loss by 2030 and put nature on a path to full recovery by 2050.

These goals are typically framed as being in conflict. But the real problem is not the tension between development and nature. It is that we have never built a system that allows them to work together.

Canada’s growth agenda is not optional. Housing shortages, energy systems and major infrastructure projects must move forward quickly. The question is not whether we develop. It is whether we continue to do so in ways that degrade the natural systems our economy depends on, or whether we build a system that allows development and nature to advance together.

The missing piece isn’t capital – it’s architecture

Over the past decade, a familiar argument has taken hold: nature is valuable, essential to the economy and increasingly at risk. The conclusion seems obvious. Capital should flow toward protecting and restoring it.

But it hasn’t, at least not at the scale required.

The reason is not a lack of capital, policy intent or even progress on measurement. It is a lack of architecture. Nature largely remains outside the systems that drive investment decisions. It is measured inconsistently, accounted for incompletely and governed through fragmented, project-by-project processes. The result is predictable: nature remains economically invisible and therefore largely non-investable.

That is now beginning to change.

The economic stakes are enormous. Globally, an estimated $700 billion per year is required by 2030 to halt and reverse biodiversity loss. At the same time, Canadian pension funds and institutional investors manage hundreds of billions in capital seeking long-term, stable returns.

The issue is not capital. It is the absence of structures that allow it to flow into nature.

A convergence of conditions

Canada’s emerging nature strategy signals a structural shift. It positions nature not just as something to protect, but as a foundation of long-term economic prosperity. More importantly, it introduces tools that could fundamentally reshape how development and conservation interact.

One of the most significant is the use of regional assessments under the Impact Assessment Act. This tool is designed to evaluate cumulative environmental, social and economic effects across entire regions, including past, present and future activities.

This is a quiet but profound shift. For decades, environmental decision-making in Canada has been reactive and project-based. Regional assessments are emerging as a mechanism to shift toward proactive, forward-looking land-use planning that can define ecological limits in advance.

They are more than a planning tool. They are the foundation of a functioning nature market.

By defining cumulative impacts, ecological thresholds and development scenarios at a regional scale, regional assessments create the clarity and predictability that capital requires. Without this, nature remains too uncertain to price, too fragmented to manage and, ultimately, too risky to invest in.

If Canada is serious about becoming a nature-positive economy, regional assessments cannot remain occasional exercises. They must be institutionalized, scaled and embedded into how development decisions are made across the country – and quickly.

At the same time, other foundational elements are falling into place. Advances in ecosystem measurement and accounting frameworks are improving how nature is understood and valued. Financial frameworks are beginning to integrate nature-related risks into decision-making. Artificial intelligence, satellite monitoring and environmental data are making it possible to measure and verify ecological outcomes at scale.

Crucially, Indigenous stewardship is emerging as a central pillar of both conservation and economic participation. Large-scale Indigenous Protected and Conserved Areas, such as the Seal River Watershed, demonstrate how Indigenous leadership can secure vast carbon sinks and protect biodiversity at scale. Mature initiatives like British Columbia’s Great Bear Forest Carbon Project show that conservation can also be highly investable, generating long-term revenue streams through verified ecosystem services.

Paired with financial tools such as Indigenous loan-guarantee programs, Indigenous communities are uniquely positioned to become primary suppliers and equity partners in nature-based solutions.

The constraint is no longer the absence of data alone. While important gaps remain, advances in environmental measurement, accounting and monitoring are rapidly reducing this barrier.

Individually, these developments are important. Together, they represent something more: Canada is no longer missing the pieces. It is missing the architecture.

From protection to recovery – and the case for net gain

This shift is reinforced at the global level. Under the Kunming–Montreal Global Biodiversity Framework, countries have committed not only to protect nature, but to halt and reverse biodiversity loss by 2030 and restore ecosystem integrity by 2050.

That ambition goes beyond conservation. It implies a transition from minimizing harm to actively restoring nature – from “no net loss” to net gain. Over time, development must not only reduce its impact, but contribute to rebuilding natural systems.

From limits to markets

If regional planning defines ecological limits, it also creates something markets require: certainty.

That certainty can be translated into a simple but powerful mechanism.

When major projects affect ecosystems, they are generally expected to follow the mitigation hierarchy: avoid, minimize, restore and only then offset residual impacts. In practice, however, its application remains uneven and fragmented, limiting its effectiveness as a foundation for consistent, investable outcomes.

What if those residual impacts were consistently quantified and priced? What if developers were required to deliver not just mitigation, but net-positive outcomes?

This is not theoretical. In the United Kingdom, “biodiversity net gain” rules have already created a functioning market that channels private capital into restoration and conservation.

Canada is now in a position to build its own version – potentially more ambitious and more integrated.

A Canadian nature-positive market

At its core, the system would be straightforward:

• Regional plans define ecological limits and priorities. 
• Developers are required to address impacts, with residual effects converted into measurable obligations. 
• Markets allow those obligations to be met through investment in restoration and ecosystem services. 
• Indigenous communities, conservation authorities and landowners become suppliers of nature-based solutions. 

Over time, this could expand beyond biodiversity to include carbon, water, flood mitigation and habitat, creating multiple, stackable revenue streams.

With the right structure, these projects begin to resemble infrastructure investments, with long-term, stable returns tied to measurable ecological outcomes.

Sticks, carrots – and a familiar playbook

For this system to scale, it will require both regulation and incentives – and, crucially, alignment between federal environmental ambition and provincial jurisdiction over natural resources.

In practice, this means a combination of “sticks” and “carrots”: clear ecological limits, mandatory net-gain requirements and enforceable obligations, alongside tax incentives, blended finance and public guarantees that reduce risk and attract capital.

Canada has used this model before. Flow-through shares and public–private structures helped build the oil, gas and mining sectors. The same logic can now be applied to nature.

A nation-building opportunity

This is not environmental policy. It is economic strategy.

Canada has a once-in-a-generation opportunity to move from protecting nature to financing it, embedding natural assets into the same systems that fund roads, energy and housing.

The choice is no longer between development and conservation. It is between continuing with fragmented approaches that fail to scale or building a system where growth and nature are structurally aligned.

The pieces are now on the table. What remains is the architecture.

Peter van Dijk is a former global finance executive, adjunct professor at Brock University, and incoming PhD researcher at the University of Ottawa focusing on nature finance and the economic architecture for a nature-positive future.

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There’s no tangible evidence that caribou have memory the way humans have memory, but researchers, such as biologist Anne Gunn, have observed tundra caribou change migration routes based on past experiences. If a route is too icy and foraging is difficult, for instance, older female caribou – who lead the herd – may remember a different, less icy path they used a previous year.  

“The average cow lives, say, 15 years, and she will have learned [routes] from her mother, because when she was a yearling, she will have followed her mother, who would have followed her mother,” Gunn says. “So there’s collective memory. They learn from each other.” 

As the barren-ground caribou population declines – with the Bathurst herd in particular thinning out by 98% – the risk of caribou losing their collective memory increases. The key to retaining that memory, beyond ensuring the population doesn’t go extinct, is making sure those migration routes stay accessible to caribou, Gunn says. But infrastructure initiatives in the Canadian Arctic, such as the proposed 400-kilometre all-season road from the Northwest Territories to Nunavut, are poised to cut through a significant portion of caribou migration range, blocking the routes these animals have crossed for millennia. 

“We know that caribou, especially barren-ground migratory caribou, really do not like crossing roads,” says Elie Gurarie, professor of wildlife ecology at the College of Environmental Science and Forestry at the State University of New York.  

Researchers have a good sense of how caribou might react to the all-season road based on their behaviour on smaller roads linking the Diavik and Ekati diamond mines in the Northwest Territories to Yellowknife. These mining roads are not open to the public, with traffic increasing seasonally along with mining activity. 

Data from GPS-collared caribou – collected by the Northwest Territories’ Department of Environment and Climate Change – have recorded caribou crowding along the sides of these roads when traffic is active, unable to cross and roam their natural range. “Caribou are just remarkably successful in the Arctic,” Gurarie says. “The environment is really harsh and not very protected. I think the key to that success is that collective memory, their sociality and their freedom to move.”  

Barren-ground caribou have extremely variable migratory routes, so it’s not as simple as making sure one path is free for them to use. They need a lot of space to roam. When it came to the diamond mine roads, one solution, Gunn says, was to close these roads for a few hours each day during the high migratory season.  

The proposed all-season road, however, is much bigger than the mining roads. It’s part of the $40-billion Arctic Economic and Security Corridor linking mines, military operations and communities under Prime Minister Mark Carney’s nation-building projects list, which allows it to be fast-tracked through the approval process. A portion of the road, called the Grays Bay Road and Port project, cuts right through the dwindling Bathurst herd’s migratory range.   

If we don’t look after the herd well enough when they’re declining, and we lose most or all of a herd, all that collective memory of the landscape is lost.

— Anne Gunn, biologist

But there are three ways the impact of the road on caribou can be mitigated, Gurarie says. The government could collaborate with researchers and local Indigenous wildlife monitoring groups – including the North Slave Métis Alliance, Tlicho Ekwǫ̀ Nàxoèhdee K’è and Yellowknives Dene First Nation – to map a route least intrusive on the caribou range. The road itself could be designed to make crossings easier, such as with lower embankments, so that the animals don’t have to climb anything to make it through. And the roads could be closed for dedicated periods when migration activity is highest.  

With the project still in its infancy, the fate of the caribou can still be changed. As their natural habitat becomes ever more fragmented – spurred by industrial operations and a warming climate that affects the vegetation they need – caribou populations, and the memory they rely on, are on a precipice.  

 “If we don’t look after the herd well enough when they’re declining, and we lose most or all of a herd, all that collective memory of the landscape is lost,” Gunn says. “But the herds are still there, and there are still knowledgeable individuals among the caribou there. So, not letting a herd go extinct is really important.” 

Ayesha Habib is a Vancouver-based journalist. 

The post How researchers are working to preserve caribou collective memory and migratory routes appeared first on Corporate Knights.

But the hope of federal governments to unlock supposedly sleeping animal spirits is a long-standing one, and the problem has proven resilient. What is required is a break with models whose narrative doesn’t match results and a decision to upset cornerstones of Canada’s economic framework. 

To unlock investment and corresponding productivity gains, the Carney government will need to bring real competition for markets and workers to a corporate sector that has been doing better than ever under the status quo.

Do profits drive investment?

A quick survey of moves by the Carney government on the economic-policy front reveal reforms to the tax system to encourage investment, work to address regulatory barriers across borders and governments, and the spinning up of public-sector funding bodies to complement private-sector investment.

The narrative is that Canada’s productive capacity is held back by taxation that blunts financial rewards, a regulatory system that throws sand in the gears of private enterprise, and a public sector reticent to invest. For taxation in particular, the logic seems clear: why invest if you can’t keep a meaningful portion of the profits? But recent experience at home and abroad suggests that this proposed remedy for unlocking lagging investment and productivity growth comes with a caveat.

If profit and investment move in a pack, Canada should be in the midst of an investment golden age. Changes to the taxation of corporate profits to spur investment – both those enacted in the most recent budget bill and further cuts requested by business groups – come at a time when Canadian corporations have never been more profitable. 

Since 2020, there has been sustained growth in Canadian private-sector profits without a corresponding increase in capital expenditures. Except for oil and gas extraction, sectors that have seen real growth in capital expenditures – mining, utilities, transportation – have experienced relatively flat profits since the pandemic. This suggests that the link between profits and investment is not as clean as initially pitched. Amid an all-time high in macro-level profits, the tax incentives designed to drive investment brought in through Budget 2025, the “productivity super-deduction” and “scientific research and experimental development” tax credit enhancements, might at best change the timing of investment decisions already on the books. 

But recent efforts do not bode well for this strategy. The previous government’s suite of clean-economy tax credits, designed to encourage investment in greener economic activities such as carbon capture, utilization and storage, still a plank of the current government’s approach to climate change, have seen little uptake. As of July 2025, the auditor general of Canada reports that clean-economy credits related to carbon management, hydrogen development and greener manufacturing have seen no uptake. 

A fair response is that these tax credits were misguided in the first place in their attempt to spur investment in sectors where the business case, credit or not, does not exist. But what, then, of more broad-based efforts to use tax reform to spur investment?

The Tax Cuts and Jobs Act (TCJA) of 2017 brought in by the Trump administration represented the largest cut to the United States’ corporate tax system in a generation. While the headline figure was the reduction of the federal corporate tax rate from 35% to 21%, the act contained several investment-specific provisions, including a similar super deduction accelerating the expensing of capital investment for businesses. While the uptake of the tax cut has been universal, adding more than a trillion dollars to the United States’ annual deficit, the promised investment gains have been scarce. A 2023 analysis by the think tank American Compass showed that, despite allowing U.S. corporations to keep billions more on the books, the TCJA has had no measurable impact on investment-driven growth. 

What can spur investment?

If at the macro level Canadian corporations are already awash in profits, what can Canadian policymakers do to unlock desired investment and corresponding productivity growth? 

The answer, counterintuitively at a moment when Canadians have never felt less secure of their place in the world, is competition. While a sufficient return is a necessary condition of investment, it is the competitive process that keeps the flywheel in motion. The rivalrous process of competition, being chased by another firm attempting to outdo you and steal share, is what ultimately spurs companies to continue to invest in new and better ways of doing business. 

Studies show that competition is a driver of productivity-enhancing investment, and the relaxing of the competitive constraint is a recipe for complacency. While academics such as Philippe Aghion make the case for a point at which competition is so fierce that it ultimately blunts competition, a market singularly obsessed with beating out the competition to win the business of customers seems like a side effect worth bearing.

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In this area, the Carney government has made encouraging moves. Efforts to reduce interprovincial trade barriers can create the conditions for greater competition among Canadian regional businesses and economies. Though rarely framed in these terms, we are exposing our own companies to greater competition. On the sectoral front, Carney is finally set to open up Canada’s infamous banking oligopoly, a move the Trudeau government set in motion.

The most recent spring economic update provided a clue that this thinking might be resonating on a deeper level within the federal government. The headline of “Driving Productivity and Affordability Through Competition” teased a “whole of government” approach to spurring competition that is desperately needed. But, so far, what’s on offer is platitudes about red tape and a promise of future action.

To successfully drive productivity, the government must take an imaginative approach to the project of a more competitive Canadian economy.

Rather than cutting red tape, Ottawa must understand that regulation can be a powerful tool for opening markets for contestation. Long-standing oligopolies must be broken – open if not necessarily up – whether through orders to spin off business lines or regulation that erodes walled gardens. Here, the example of progress on competition in the banking sector is encouraging and cautionary. Encouraging because a growing list of firms angling to break down the gates and cautionary because of the sheer volume of sand incumbents were able to throw in the gears of the modernization of the plumbing of Canada’s banking sector.

The Carney government must also understand an underappreciated vector of driving productivity: competition for Canadian workers. While often framed in terms of vying for market share, competition for inputs is a critical driver of productivity. As the recent oil price shock has shown, make an input more valuable and you increase the incentive to reduce your reliance on it. Paradoxically, competition for Canadian workers must drive wages higher to drive the adoption of the technologies to augment their productivity.

This runs counter to Canada’s pitch as a source of high-quality, low-wage labour for companies both foreign and domestic. While the Temporary Foreign Worker Program has come under scrutiny, just as damaging to our productivity ambitions has been the discounting of our most qualified. By putting high-quality and relatively low-wage employees on offer, Canada has been able to attract businesses willing to set up branches within our borders. While this approach may have generated good jobs and recognizable logos on buildings, it has created a tension between generating the high wages that drive productivity and placating a corporate community dependent on cheap labour. Whatever the mechanism, a tighter labour market with more intense competition for Canadian workers will be key to breaking out of Canada’s persistent productivity slump.

The Carney government faces the unenviable position of breaking out of a secular productivity slump while familiar elements of our traditional economic model break away. Meeting that moment will involve breaking out of the policy responses whose narrative has fallen short of results. Allowing competition to flourish for both markets and workers is the path forward.

Keldon Bester is the executive director of the Canadian Anti-Monopoly Project and a fellow at the Centre for International Governance Innovation.

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