“With this new partnership, we will not stop until the goals of Atmanirbhar Bharat and Canada Strong are reached,” Carney said, citing the Hindi term for “self-reliant India.”

The agreement will see Saskatoon-based Camemco deliver nearly 22 million pounds of uranium fuel between 2027 and 2035, CBC reports. India currently has 25 nuclear reactors in operation, eight under construction, and plans to boost its nuclear capacity from 8.7 to 100 gigawatts by 2047, the national broadcaster adds.

A wide-ranging joint statement issued by Carney’s office also puts liquefied natural gas (LNG), liquefied petroleum gas (LPG), crude oil and refined petroleum products at the centre of the expanded trade relationship.

Carney “framed this new course as not just a return to how things were but rather an ambitious revisioning of what the two Commonwealth countries can do together in an uncertain era marked by instability,” CBC writes. Just prior to his meeting with Modi, Carney said he hoped to secure a wider free trade agreement with India by the end of the year, possibly in time for a signing at this year’s G20 summit at a Trump property in Miami. The two leaders affirmed that timing after their one-on-one.

“With India positioned to be the largest contributor to incremental global energy demand growth over the next two decades, beyond its current position as the world’s third-largest oil consumer and fourth-largest LNG importer, both sides acknowledged the significant potential to further expand bilateral energy trade,” the joint statement declares. “This includes increased oil and LNG imports by India from Canada, as well as the supply of refined petroleum products from India to Canada. In this context, Canada reaffirmed its plans to expand heavy oil export infrastructure and supplies of LNG to the Indo-Pacific market through Canada’s stated goal of producing 50 million tonnes of LNG per year by 2030 and up to 100 million tonnes by 2040.”

The statement calls for broader cooperation “across clean energy and climate-related value chains, including renewable energy, hydrogen and its derivatives, biofuels, sustainable aviation fuel, battery storage, and electricity systems modernization, recognizing the central role of these sectors in advancing shared climate objectives and energy transition goals.” It says the two leaders also “underscored solutions for carbon capture, utilisation and storage (CCUS) as a key area of cooperation, offering a significant opportunity for the sustainable production of energy and critical minerals.”

And it celebrates a “comprehensive institutional framework to advance bilateral collaboration across solar, wind, bioenergy, small hydro, energy storage, and capacity-building” while recognizing India’s “leadership and capacity in large-scale solar and grid-level energy storage technologies along with scalable models in rooftop solar and other forms of distributed renewable energy solutions.”

CBC has a list of smaller deals that were announced or re-announced this week, including a 1.2-million-tonne coal export contract for British Columbia–based Elk Valley Resources, valued in the hundreds of millions of dollars. Canada will also join the 112-member International Solar Alliance, first conceived by India in 2015 and launched by India and France in 2017.

News coverage of the announcement has focused extensively on the warming of relations after the former Justin Trudeau government concluded and the Modi government denied that India had conducted foreign interference in Canada. “Touting an approach he calls ‘values-based realism,’” The Globe and Mail writes, Carney “has largely sidestepped questions over meddling by New Delhi in Canada, including the allegations it was behind the 2023 murder of a Canadian Sikh activist. Last year, a public inquiry report flagged India as the ‘second most active country engaging in electoral foreign interference in Canada’ after China.”

“But, with Carney at the helm, the relationship has become friendlier with much more diplomatic dialogue – with even more to come after the prime minister invited Modi to visit Canada sometime soon,” CBC reports.

Uranium sale has ‘implications’

Just ahead of Carney’s visit, India’s high commissioner to Canada, Dinesh Patnaik, said the country would be open to buying Canadian nuclear technology or taking an ownership stake in the country’s uranium mines. “We are willing to take whatever,” he told CBC. “Nuclear is a huge field in which we want to work together.”

The Canadian Press says Saskatchewan is the only province that exports uranium. And in New Delhi Monday, Premier Scott Moe declared it a “great day” for his province. “Saskatchewan’s always a big winner when it comes to export deals,” he said. “Saskatchewan will certainly benefit from the agreement signed today, but all Canadians benefit as well. I think that’s important for us to remember.”

In a Globe and Mail opinion piece in December, Gordon Edwards, president of the Canadian Coalition for Nuclear Responsibility, and Erika Simpson, president of the Canadian Peace Research Association, raised the prospect that the uranium deal – then valued at $3.94 billion – would make it easier for India to divert some of its existing nuclear fuel stockpile for military use.

“India is not a routine customer,” they wrote. “It is a nuclear-armed state that has never signed the Nuclear Non-Proliferation Treaty (NPT), the agreement meant to anchor global efforts against the spread of nuclear weapons. In selling it uranium, Canada appears willing to extend to India the kinds of benefits normally reserved for states that accept international inspections on all nuclear facilities and abide by NPT treaty obligations.”

With “one of the world’s largest stockpiles of civilian plutonium, separated from spent reactor fuel,” India could already produce as many as 2,686 nuclear weapons if it chose to redesignate the material for military use, Edwards and Simpson say. “Doing so would require only a political decision. The risk is not hypothetical. It sits just outside the boundaries of our public policy discussion.”

Mitchell Beer is publisher of The Energy Mix, a non-profit community news site and e-digest on climate change, energy and the shift off carbon. This article first appeared on The Energy Mix. It has been edited to conform with Corporate Knights style. Read the original article here.

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The year started and ended with considerable uncertainty, but for different reasons. On the front end of the year, this was due to the federal election, where – depending on the outcome – a wholesale dismantling of Canada’s policy architecture was a real possibility.

But after a come-from-behind victory by Mark Carney’s Liberals, it became clear that the question ahead was a different one: what will Canada’s climate-policy approach include and how effective will it be at reducing emissions and supporting competitiveness in an era of disruption spawned by Donald Trump?

As the year comes to a close, we have a better idea of what some of that is likely to include: stronger industrial carbon pricing, stronger methane rules for oil and gas, finalized clean-electricity tax incentives, a climate investment taxonomy, support for critical minerals and more. But a fair number of these policy wins are still marked with ongoing uncertainty, including some of the most impactful on the list such as industrial carbon pricing.

Earlier in the year, my colleagues and I at the Canadian Climate Institute outlined a handful of top priorities the government could focus on to make meaningful policy progress. This was especially important given that our research showed that Canada was not going to be able to reach its 2030 emissions target and needed a course correction. That finding was confirmed this week by the federal government’s progress report on its climate plan.

Of the six policies we originally identified to get the country on the path to progress, three remain unfinished or uncertain.

Canada needs fast action on its new climate competitiveness strategy

The government has committed to strengthening industrial carbon pricing, but the details here will make or break this policy. Getting it right is especially important in light of the recent  memorandum of understanding with Alberta, which pushes any clarity on this out to April of next year.

The MOU agreement is vague on specific outcomes: it agrees to increase the minimum carbon credit price to $130 per tonne of emissions – roughly six times the current level – but it doesn’t define a timeline. To be credible, both governments need to agree that this price should be reached by 2030.

Already we’ve seen worrying signs. The ink was barely dry on the MOU when the Alberta government went tinkering with their carbon-pricing system to further weaken it, just one week after the signing.

On a more positive note, the federal government finalized stronger methane rules for the oil and gas sector. Action on methane is a no-brainer, representing some of the lowest-cost actions available. The feds and Alberta need to agree to an effective equivalency agreement to ensure that the level of reduction committed to by the federal government – 72% by 2030 – is achieved. But this is generally good policy news.

On clean electricity, the federal government is currently implementing its long-promised investment tax credits in legislation, which should be passed early next year. And while the government appeared to reaffirm its commitment to the Clean Electricity Regulations, the MOU again undermined that with a carve-out for Alberta.

That risks copy-cat requests from other provinces and a race to the bottom in other areas of climate policy. For the moment, we’re holding out hope that the two parties can negotiate something approaching equivalency on this file.

On electric vehicles, the government has paused its Electric Vehicle Availability Standard and consumer incentives, throwing into question one of the only policies Canada has to reduce emissions in the transportation sector.

Government has said that more information about the future of that policy should be coming soon, but the uncertainty has stymied EV sales in the country, which were previously rising steadily year over year. Maintaining a strong standard will help Canadians find better, more affordable vehicle options, while creating flexibility for vehicle manufacturers.

A fork in the road for the Canadian climate change discussion

The clearest case for progress has been with the federal government’s commitment to implement sustainable investment guidelines – also known as the climate taxonomy. The government has tasked the Canadian Climate Institute, working with Business Future Pathways, to do the technical work that will underpin the guidelines in order to help drive private investment into projects that are in line with the global energy transition.

Add it all together and we’re left with a policy picture that is still muddled.

That’s particularly unsettling given the stakes here: 2025 was also marked by the second-worst wildfire season in Canadian history. That meant people were faced with evacuation orders and alerts, especially those in remote and Indigenous communities. It meant millions of Canadians saw their neighbourhoods blanketed in toxic wildfire smoke for days at a time. And B.C.’s Lower Mainland recently had its major highways cut off from the Interior of the province, and floodwater is pouring into Abbotsford after an atmospheric river drenched the coast. That’s eerily reminiscent of the 2021 atmospheric river event that devastated much of the province and left billions of dollars in economic losses in its wake.

Yet, when it comes to concrete actions to protect people and communities across Canada, much is left wanting from all orders of governments.

All this is happening as clean and electric technologies – like renewables, batteries and electric vehicles – continue their inexorable march to transform global energy markets.

That on its own holds enormous potential to dramatically reduce future damages from climate change. It also offers a massive opportunity for Canada to increase prosperity, support affordability and bolster competitiveness in a world responding to new trade relationships.

Looking to the year ahead, Canada needs to resolve the policy uncertainty that’s standing in the way of progress as soon as possible. The problems we face are urgent, but the solutions are right in front of us.

No more grandiose rhetoric please: all I want for Christmas is some concrete delivery of long-promised climate change policy by Canadian governments.

Rick Smith is president of the Canadian Climate Institute, the co-author of two bestselling books on the effects of pollution on human health, and the executive producer of Plastic People, a 2024 documentary chronicling the damage done by microplastics in the human body.

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The plant is designed to use Alberta natural gas to produce hydrogen, a clean-burning fuel that is used in refining and could replace oil and gas in a range of applications, including transportation and electricity. Air Products says the plant will capture some 95% of the carbon dioxide it emits and sequester the greenhouse gases in saline aquifer formations deep underground. In short, it was touted as a model for carbon capture and storage (CCS) technology that proponents say can dramatically reduce carbon emissions in the oil and gas sector, as well as in the cement, chemicals and steel industries.

Now, CCS proponents are about to face their biggest test, as Ottawa and Alberta put their weight behind a multibillion-dollar project in the oil sands. 

Fading promise

In 2022, both governments were on board for Air Products’ Edmonton blue hydrogen plants. “We need to be bold and seize the moment, and that’s exactly why we’re investing in Air Products,” François-Philippe Champagne, then the industry minister, said in a 2022 news release. 

The federal government pitched in $300 million from its strategic innovation fund, alongside Alberta’s $161-million contribution to what was pegged to be a $1.6-billion project. The plant was slated to create 2,500 construction jobs, along with 230 “highly skilled jobs.” Above all, the initiative was billed as “another major step forward on the path to net zero,” the federal government said. 

Fast forward three years, and the sheen has faded, amid delays and cost overruns that have doubled the price tag, to US$3.3 billion.

In an investor call last summer, the company labelled the Edmonton operation an “underperforming asset” not expected to be profitable. The plant was originally due to open last summer; projections now put the ribbon-cutting into late 2027, perhaps 2028. Air Products had pinned its hopes on supplying a growing hydrogen market, which so far has failed to materialize. 

Keeping the faith

Despite that setback, CCS technology still plays an important role in Canada’s net-zero ambitions and is a key plank in the government’s climate competitiveness strategy unveiled in the November budget. Prime Minister Mark Carney and Energy Minister Tim Hodgson are counting on CCS to deliver emission reductions even as they support expansion on oil and gas infrastructure that will increase exports and production. 

On November 27, the prime minister announced an agreement in principle with Alberta Premier Danielle Smith, in which Ottawa will support a bitumen pipeline to the West Coast, in exchange for provincial agreement on a higher carbon price and industry investment in CCS.

Carney has focused on CCS as a key to reducing emissions in the oil and gas sector. The Pathways project will be “the largest carbon capture utilization and storage project in the world,” he said in a speech to the Calgary Chamber of Commerce. “It will make Alberta oil amongst the lowest carbon intensity in the world, and it has the potential to create an entirely new industry in Canada.”

At the same time, proponents are touting CCS as a key means of cutting emissions in industrial sectors like cement and steel.

Despite the ongoing enthusiasm in Ottawa, the Air Products failure serves as a warning to the Liberal government and other would-be investors. Scaling up CCS will require huge subsidies. Just how much investment risk corporations will take on it remains up in the air. And in Canada, the tension between climate policy and a powerful petroleum sector is on full display, adding another layer of uncertainty.

Environmental groups argue that CCS is being used as a panacea to justify continued production and use of oil and gas, which will make it harder and more costly to deal with climate change in the coming decades. The majority of emissions from a barrel of oil, after all, come from its combustion in cars, planes, ships and other end uses.

“The narrative around so-called decarbonizing oil is nothing but a myth to justify expansion of oil production,” says Aly Hyder Ali, oil and gas manager at the Canadian advocacy group Environmental Defence. 

An expensive proposition

Canada is not alone in pursuing CCS. It remains an important component in decarbonization strategies produced by groups like the International Energy Agency and the United Nations’ Intergovernmental Panel on Climate Change. To date, there are 77 commercial projects in operation globally capturing up to 64 million tonnes of carbon dioxide per year, with 47 more under construction. However, few of those target oil production facilities like Canada’s oil sands. Norway’s Sleipner project, for example, is the world’s first commercial CCS facility and is located in an offshore natural gas field.

Norway-based consulting firm DNV Group anticipates the world will spend some US$80 billion on CCS projects between now and 2030. Much of that investment will be focused on natural gas processing and cement and steel producers, DNV said in a report released last summer.

But there remain huge hurdles to investment. In addition to prohibitive capital costs, CCS drives up operating costs at existing plants and can be energy intensive.

In search of profitability

Canada’s cement industry has focused on CCS as part of its plan to be net-zero by 2050. To date, however, no company has made an investment in a CCS facility. “The only way to make this work is if there is a path to profitability,” says Sarah Petrevan, vice president for industrial decarbonization at the Cement Association of Canada. “And there is no path to profitability.” 

To help make CCS financially viable, Carney’s first budget seeks to increase the industrial carbon tax and make it apply to a greater percentage of a company’s emissions. The levy applies to a portion of emissions from the country’s largest polluters. It now costs $95 per tonne of carbon dioxide and is due to rise. 

A more costly carbon tax is intended to incentivize businesses to invest in multibillion-dollar emission-reduction projects, like CCS. Ottawa is also providing companies with a type of insurance, known as contracts for differences, which compensates investors if carbon prices fall below project costs.

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The industrial carbon price “plays a big role in determining the economic viability of various low-carbon projects,” Dale Beugin, research director for the Canadian Climate Institute, wrote in an explainer. “But the risk of future governments moving away from that carbon pricing pathway dilutes the policy certainty – and the incentive to invest in clean growth projects.” 

However, the levy won’t work to drive investment unless it has greater stringency and applies to a greater percentage of a plant’s emissions, Beugin argues.

The Alberta showdown

After the budget’s release, Petrevan welcomed the government’s climate-competitiveness pledges. She hedged, however, on whether the budget measures would provide a “path to profitability” for CCS projects. “Stability and predictability of the industrial carbon price are important contributors to building a positive business case for investment.” 

However, the federal government will have to find “alignment” with the provinces, Petrevan says. (Ottawa sets benchmarks for the industrial levy, but most provinces administer their own systems.) Alberta – home to the vast oil-sands sector – froze the price at $95 earlier this year. More recently, it proposed to allow a broader range of investments to count toward a company’s compliance requirements and allowed smaller firms to opt out completely.

The changes would reduce demand for the credits that companies receive when they succeed in reducing emissions. Cheaper credits would result in lower return on investment, and therefore less spending on emission-reduction technology.

The federal–Alberta memorandum signed in November commits the two sides to working together to “design and commit to globally competitive long-term carbon effective prices.” Alberta agreed to unfreeze the price to rise to $130 over the next three years.

The carbon price still won’t be enough to drive investment in CCS, says Chris Bataille, a Vancouver-based fellow with Columbia University’s Center on Global Energy Policy. With the enforcement mechanism related to pipeline progress, “it has to become basically a regulatory outcome,” he says. “That doesn’t mean post-combustion CCS will work or that the feds will enforce the deal. But Alberta gets to push forward its pipeline.”

Oil-sands companies working together under an umbrella organization dubbed the Pathways Alliance have released their own plan for emission reductions that relies on heavily subsidized CCS and a strong carbon credit market. 

The federal–provincial memorandum endorses the industry plan, and Ottawa and Alberta pledge to work with the oil companies in advancing the plan, with construction starting by 2027.

Corporate investment in CCS is contingent on the approval, commencement and continued construction of the pipeline, while ongoing progress with the pipeline will be contingent on the Pathways plan moving ahead. The federal government also agreed to drop its proposed cap on emissions from the oil and gas sector.

Bataille argues that Ottawa needs the threat of a cap as a stick. “Without the emissions cap as leverage – get these [emissions] cuts done or we will do this – I don’t see it happening,” he says. 

A subsidized market

It’s clear that without government intervention, carbon capture will not take root. The Pathways Alliance has laid out a $16.5-billion CCS plan that would require significant tax breaks. Even with those subsidies, it’s questionable how many carbon-capture projects would be built given the long-term financial risks and technological issues.

A key problem is that government policy is by its nature uncertain, especially given that Carney presides over a minority government that has a precarious hold on power. Any promise by Ottawa to set a floor under the cost of emitting and guarantee profitability for CCS could be quickly undone by a new federal government that would share Alberta’s opposition to aggressive climate action. Conservative Leader Pierre Poilievre – who came within 25 seats of winning the March election – has shown little enthusiasm for climate policy and promised to unshackle the oil and gas industry. 

In the United States, President Donald Trump has scuttled virtually all the climate measures adopted under Joe Biden.

Given those risks, corporate CEOs will be reluctant to invest in CCS projects that are bolted onto existing production facilities and generate no revenue except through regulatory means, Bataille says. The promise of a pipeline may, however, be the carrot that drives action.

Momentum continues 

Carbon capture itself isn’t novel, but its application for large-scale underground storage remains unproven over the long term. 

The fossil fuel industry already captures carbon dioxide for natural gas processing plants and injects the gas into old wells to enhance oil production. The Pathways plan would largely sequester carbon in saline aquifers rather than sell it. Worldwide, there is much less space underground for injected carbon than previously thought: less than a fifth of what the Intergovernmental Panel on Climate Change has estimated, according to a recent study by researchers at Imperial College London.

Carbon capture also isn’t widely applicable. In upstream oil-sands production, a large percentage of emissions result from burning natural gas in boilers to produce steam needed to extract bitumen, and from burning diesel in large trucks and other machinery. CCS would not currently be viable for either of those sources.

Sean McCoy, a professor at the Schulich School of Engineering at the University of Calgary, estimates that roughly 60% of carbon emissions in the oil-sands sector “might be capturable” with CCS. Despite the challenges, CCS continues to find support from government, even as the list of cancelled projects grows longer. Just last year, Edmonton-based Capital Power pulled the plug on a proposed $2.4-billion CCS project at its Genesee gas-fired generating station. “Through our development of the project, we have confirmed that CCS is a technically viable technology,” the company said in its statement. “However, at this time, the project is not economically feasible.”

The reality gap

Among the projects that have materialized, there is also a gap between carbon-capture promise and reality. A recent report from the Institute for Energy Economics and Financial Analysis (IEEFA) noted that claims of capture rates of 90% or more are misleading. Typically, the promise of higher capture rates applies only to concentrated streams of emissions at the specific types of plants.

In the oil and gas industry, CCS is used for natural gas processing plants that purify the fuel by removing contaminants like water, carbon dioxide, hydrogen sulphides and solids. And it includes facilities that produce hydrogen from gas for use in oil-sands upgraders and refineries.

Even at natural gas processing and hydrogen plants, carbon-capture rates rarely exceed 70% of emissions, the IEEFA report said.

Some projects, including at Air Products in Edmonton, are employing a new technology to produce hydrogen: autothermal reforming, which replaces steam methane reforming. Autothermal reforming is both more energy efficient and more capital intensive than the steam methane process. It also creates a more concentrated emission stream. 

CCS is best suited for applications that have high carbon dioxide concentrations in their flue gas and have high and stable flow emissions. In other words, facilities that burn hot and steady. 

Even in the bullish forecast by Norway’s DNV Group, CCS would capture only 6% of global emissions in 2050, a level that falls well short of what the consultancy says is needed to achieve any net-zero outcome.

“Recent turmoil, and budgetary pressure in the global economy pose risks to CCS deployment, potentially shifting priorities and removing the necessary finance,” the DNV authors wrote.

While some CCS will be viable, overly optimistic reliance on CCS is a trap if it is used to support delays in other emission-reduction strategies. The more we delay the transition away from fossil fuels, the more we will have to rely on hugely expensive carbon-capture strategies.

Shawn McCarthy is an Ottawa-based writer and senior counsel with Sussex Strategy Group.

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One year earlier almost to the day, then-UN Special Envoy on Climate Action Mark Carney gave the keynote address at the Sustainable Finance Forum in Ottawa, in a speech titled “Transformational Leadership.” At the time, Carney’s reputation as a climate leader was gold-plated. Regarded as one of the architects of modern sustainable finance, his Glasgow Financial Alliance for Net-Zero had corralled hundreds of major banks, insurers and asset managers to pledge funds for the energy transition. To add to his veneer, he was already being chased by reporters about his prospects for Canada’s top office.

A lot has happened in a year. Carney and his central bank bona fides soon became the hottest commodity on the Canadian political map, for an electorate that was suddenly feeling under siege by a Donald Trump White House. He won the Liberal leadership, then eked out a come-from-behind win in the federal election, upending what had looked to be the dawn of a new Conservative era in Canada.

Now, these two moments – the finance summit and the pipeline deal – mark a full turning for Carney, from climate hero to, in the eyes of some, climate villain. Even so, Carney stated his convictions clearly back at the Ottawa event in 2024. Asked if the federal government should invest in decarbonization in high-emitting industries, Carney said, “I’m suggesting we should run towards that, because that, in the end, is going to have the highest impact on the climate.”

As promised, Carney has now stamped his approval, and his reputation, on so-called decarbonized oil and the infrastructure to move it. It’s a high-stakes gamble, at a different inflection point in the climate battle than the showdowns over the Keystone XL and Trans Mountain pipeline projects. The politics are shifting, as evidenced by the shuttering of Carney’s net-zero banking alliance in October.

The myth of low-carbon oil

So-called decarbonized oil hinges on the deployment of expensive technology to snatch carbon from smokestacks and pump it underground, known as carbon capture and storage, or CCS. While there are many CCS projects already operating around the world, albeit mostly for methane gas processing rather than oil, the technology has not been proven at scale as a reliable climate solution. Critics point out that it is costly, inefficient and unlikely to ever exist independently of government subsidies.

Whether CCS turns out to make sense economically, the marketing belies the fact that oil cannot be decarbonized. It is made of carbon, and you still need to burn it to use it, which is when most of the pollution is released. The word “decarbonization” exists to set the widest possible frame around what reducing carbon dioxide emissions can mean. In this case, it means roughly 10% to 20% of the full life-cycle emissions of a barrel, and those reductions come at such a high price that any market for it is conjectural at best.

The Pathways Plus system agreed to in the new MOU, billed as “the world’s largest carbon capture, utilization, and storage project,” will cost approximately $16.5 billion to deploy in the oil sands, and that’s just for the underlying infrastructure to move the CO2 around and store it. The participating companies still need to buy their own carbon-capture units and install them at their extraction and upgrading plants.

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Few in the world of net-zero finance are buying it. Carney is “legitimizing doublespeak,” says Kyra Bell-Pasht, director of research and policy at Investors for Paris Compliance. “By using greenwashing terms like ‘decarbonized oil’ on his pulpit, he is setting a standard of misinformation at the highest level,” she writes in an email.

Carney has already paid a high political cost for backing the oil and gas industry’s plan to increase production in the era of climate consequences. Just hours after the deal was signed, former environment minister Steven Guilbeault quit his new cabinet post as minister of Canadian culture, saying that he could not have looked himself in the mirror if he’d gone along with the prime minister. Two core members of the Net-Zero Advisory Body, which gives guidance to the government on reducing emissions, also stepped down over the pipeline deal: Catherine Abreu, director of the International Climate Politics Hub, and Simon Donner, the group’s co-chair. The Assembly of First Nations chiefs passed a unanimous emergency resolution echoing coastal leaders who say the project “will never happen,” while B.C. Premier David Eby was more tepid but still dismissed the deal as a “distraction.”

Premier Smith, too, paid a price for collaborating with Ottawa, which Alberta premiers can little afford to be seen doing. She was loudly booed at her party’s annual general meeting just a few days after signing the MOU.

More than half of Canadians still support the proposed pipeline, but any push by Carney would surely be a long, bruising effort, and the prize at the end looks very much in doubt. At the Sustainable Finance Forum in 2024, he told the crowd, “We may be the first generation that understands the risks associated with climate change. We’ll also be the last generation that can do anything about it.” Building an oil pipeline is not something most people in that room would have picked for a next step.

Mark Mann is the managing editor at Corporate Knights. He is based in Montreal. 

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Prime Minister Mark Carney and Ontario Premier Doug Ford have made common cause in promoting nuclear energy. Indeed, the prime minister has indicated that the federal climate strategy relies on construction of low-carbon power for a national electrification effort, and nuclear is central to that vision.

This fall, Carney and Ford together announced $3 billion in funding for Ontario’s purchase of four BWRX-300 SMR reactors from Hitachi GE Vernova, a joint Japanese and U.S. company. Ottawa will shoulder $2 billion of that amount through the Canada Growth Fund. In a news release, the two leaders boasted that Canada will become the first Group of Seven country to build an SMR reactor. The prime minister said the federal investment “will extend Canada’s world leadership in clean energy.” Ontario is also pursuing plans to build large-scale reactors.

However, critics argue that the industry’s cost estimates are unreliable. They point to overruns and delays at other “first of a kind” nuclear installations. At the same time, Ontario will rely on a U.S.-based supplier of enriched uranium to fuel the SMRs, unlike its current fleet of Candu reactors that run on non-enriched Canadian sources.

“They’re taking a flyer off Mount SMR and the world is sitting back to see how much of a splat there is,” says Mark Winfield, a professor of environmental studies at York University. The reliance on a U.S. fuel supplier “makes absolutely no sense given our quest for energy independence and security,” he adds.

Pitting nuclear against renewables

Provincially owned Ontario Power Generation (OPG) plans to purchase four Hitachi GE reactors for $20.9 billion, although it has committed to only one at a price of $7.7 billion, including $1.1 billion for infrastructure that would serve all four units.

In addition to the direct support, OPG will benefit from federal investment tax credits of 15% that support investment in clean electricity. The tax credits will be paid out in cash to provincial and municipally owned utilities that are not taxable.

OPG received a construction licence for the SMRs last April from the Canadian Nuclear Safety Commission. It is now preparing the ground at its Darlington site, which currently hosts four larger Candu reactors that have been refurbished in a decade-long, $12.8-billion project that was completed on time and on budget.

OPG cites work by the province’s Independent Electricity System Operator (IESO) to back its bet on SMRs as a cheaper alternative to hybrid options of wind, solar and batteries to supply an additional 2,200 megawatts of low-carbon, baseload power. An IESO paper released in August concluded that it would cost up to $34 billion to meet additional baseload demand with SMRs, while a hybrid renewable system would cost $47 billion. Wind and solar would also entail more transmission and land development costs, the IESO said.

Nuclear facilities operate at far higher capacity factors and, unlike wind and solar, the electricity is constantly generated. IESO assumes that nuclear plants operate at 93% capacity, while that figure for wind is only 38% and for solar, 24%.

OPG also defends the nuclear option by pointing to the large supply chain and workforce in the province that is currently focused on refurbishments at its Pickering site and at Bruce Nuclear and will benefit from further investment in reactors. However, critics argue that cost estimates for nuclear are notoriously unreliable, especially for first-of-a-kind projects like OPG’s deal for the BWRX-300. There have been SMRs of different designs built in the world: two in Russia, one in China and one in Argentina. In every case, there were delays and higher-than-promised costs.

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The Crown utility – and ultimately Ontario ratepayers and taxpayers – will be responsible for any cost escalation in the SMR deal.

A report prepared for the Ontario Clean Air Alliance compared the levelled cost of power – that is, the average cost of electricity generation over the plant’s lifetime. It concluded that, in 2030, electricity from SMRs would cost up to US$174 per megawatt/hour, while wind would be $93 and solar would be $41. Those costs do not include transmission or land development, nor do they account for capacity factors.

Ralph Torrie, research director for Corporate Knights, weighed capital costs for the nuclear options against alternatives in his Climate Dollars project, which provides a decarbonization analysis for each province. The report concludes that the upfront investment for reactors would far exceed the cost of renewables plus efficiency and other demand-management strategies.

“Public investment in new nuclear plants has a double-barrelled negative effect on addressing greenhouse gas emissions,” Torrie says in an email. “It diverts capital from efficiency and renewables that would increase the supply of emission-free electricity faster than nuclear at a lower cost and with less risk.”

“The government subsidies for nuclear expansion are driving electricity price increases in Ontario,” he adds, “and that slows down the switch to electricity that we need in buildings and vehicles to give our children and grandchildren a fighting chance against climate change.”

Shawn McCarthy is an Ottawa-based writer and senior counsel with Sussex Strategy Group.

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The new strategy is an important moment for action to both reduce emissions in the country and support economic competitiveness in uncertain times. It follows months of speculation and some policy signals that introduced significant uncertainty about the government’s climate commitments.

The verdict? It ain’t perfect, but the strategy is a useful step forward.

Now the government needs to quickly implement it and flesh out the details it promises. That’s critical if Canada hopes to dramatically increase investments in low-carbon projects across the country and reduce uncertainty for businesses that stalls economic development. There’s never been a more urgent time: Canada’s trading partners are accelerating their energy transitions and Canada risks missing out on big economic opportunities right when they’re needed most.

So, what are some of the central pieces of the climate strategy that are encouraging – and where are some of the biggest uncertainties?

Top on the list is the commitment to strengthen industrial carbon pricing. This is one of the most important things the federal government can do to cut emissions while keeping costs low for businesses and having virtually no impact on the costs for consumers.

That last part is critical. Misinformation about this policy has ramped up recently, and it’s worth underlining that research shows that industrial carbon pricing has negligible costs for the average Canadian. The impact is around 0% on household consumption, according to Canadian Climate Institute research. There are a number of reasons for that: the carbon price applies to large emitters only; it adds very low costs on those businesses (think a Timbit per barrel of oil); moreover, these already-low costs on industrial goods are a small fraction of the final costs for finished consumer goods.

The climate competitiveness strategy commits to fixing the industrial-carbon-pricing benchmark, which defines minimum standards for provincial systems. It also commits to strengthening the backstop, which will be decisively applied in provinces that do not meet the benchmark. In addition, the government will be setting a carbon-price trajectory that is measured in decades and sets Canadian industry on the path to net-zero emissions.

Each of these commitments is positive. But the details here will matter greatly; it’s no exaggeration to say they will make or break this policy’s effectiveness, for both Canada’s emissions and its competitiveness.

Some other highlights included a commitment to finalizing methane regulations for oil and gas, which has been a long-standing promise to slash these powerful emissions by 75% over the next five years. Canada has already made big progress here, and these are lower-cost emission reductions that provide opportunities for innovative Canadian companies to lead the charge.

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The strategy also recognizes the importance of dramatically increasing investment into Canada’s electricity system: it commits to soon implementing the clean electricity investment tax credit and restates its commitment to the clean electricity regulations. It recommits to finalizing a national climate investment taxonomy for the financial sector by the end of 2026. And it dedicates $2 billion for a critical minerals sovereign fund to invest in critical mineral projects and companies using equity investments, loan guarantees and offtake agreements. These financial risk-sharing tools can unlock private-sector investment in Canadian projects to help seize a growing opportunity in the global energy transition.

There was nothing new on the fate of the Electric Vehicle Availability Standard, though we should hear more “in the coming weeks.” And the strategy is almost silent on climate adaptation. Investing in adaptation is not just a “nice to have”; upgrading infrastructure for extreme weather will be crucial to saving billions of dollars in costs from disrupted trade and other economic impacts, and should be a key component of any climate competitiveness strategy.

I’m often asked my opinion on how the new government is doing on climate change. My honest answer is “I’m hopeful but increasingly impatient.” Now that the government has declared its climate change intentions, it’s time to get a move on.

Rick Smith is president of the Canadian Climate Institute, the co-author of two bestselling books on the effects of pollution on human health, and the executive producer of Plastic People, a 2024 documentary chronicling the damage done by microplastics in the human body.

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The government calls its “climate competitiveness strategy” a “central pillar” of the plan to make Canada the strongest economy in the G7 – based on “results, not objectives.” While these initiatives provide continuity, they fall short of the acceleration needed to compete in a global economy already moving toward clean technology.

The new post-2030 carbon-pricing trajectory and the “improved backstop” simply repackage commitments made years ago. The much-touted carbon contracts for difference are likely too small to transform markets, while the suite of refundable tax credits extends programs launched between 2022 and 2024. The Critical Minerals Sovereign Fund, worth $2 billion over five years, re-profiles existing Natural Resources Canada initiatives.

Global trackers rate Canada’s climate action as “highly insufficient,” and while extreme weather devastates our communities, the measures presented in Budget 2025 are unlikely to shift this metric.

Fiscal storytelling

The government’s new “capital budgeting framework” gives the deficit a makeover, recasting almost every dollar as an “investment.” The plan promises to balance day-to-day spending with revenues by 2028/2029 while nearly doubling capital expenditures: from $32.2 billion in 2024/2025 to $59.6 billion in 2029/2030, to spur productivity and long-term growth. By then, 100% of the deficit would be branded as investment spending.

But branding isn’t proof. Budget 2025 offers no metric of return, no measure of efficiency, and no test of climate alignment to show whether these billions are building resilience or simply deepening debt. The intent to modernize fiscal planning is welcome, but transparency on the real return of these investments – economic, social and environmental – is essential for public trust.

The government’s focus on modernization and efficiency is understandable, especially amid fiscal pressures. But to save $25.2 billion over four years, Ottawa will cut operating costs by 15% through “reducing inefficiencies” and “automating processes.” Uniform cuts rarely have uniform effects: departments with smaller budgets lose a far greater share of their operational capacity.

Environment and Climate Change Canada, for instance, is expected to save $1.1 billion in four years – a staggering sum for a ministry already stretched thin – largely through automation and program wind-downs. Natural Resources Canada must find similar savings of up to 15% over three years by “optimizing processes” and ending initiatives such as the Two Billion Trees program. Efficiency and modernization are laudable goals, but cutting capacity in key departments undermines the outcomes modernization seeks to achieve.

Small steps forward for preparedness

Budget 2025 takes small steps toward climate preparedness but falls short of the scale the crisis demands. It commits $40 million over two years to launch a Youth Climate Corps to train young Canadians to respond to climate emergencies and strengthen community resilience. It also allocates $257.6 million over four years to Natural Resources Canada to lease four aircraft and boost aerial firefighting capacity, and $55.4 million to Public Safety Canada to develop a new National Public Alerting System for timely disaster warnings.

These are positive measures, but modest when measured against record-breaking wildfires, floods and insurance losses that already cost Canada billions each year. Training youth to respond is vital; equipping the country to prevent and withstand these disasters is what leadership requires.

Incremental movement in climate finance

Canadians needed six clear signals of climate-aligned financial leadership in yesterday’s budget, but few appeared. Under “Mobilising Capital for Transition to Net-Zero,” the budget reconfirmed the intent to move forward with a “Made-in-Canada” taxonomy, with completion delayed until 2026, and indicated its intention to explore the development of a sustainable bond framework. These steps are within reach. Together, they would turn Canada’s fiscal promises into a credible plan for a resilient, low-carbon economy.

What was missing?

We need a green nation-building fund to enhance renewable energy and adaptation efforts in collaboration with Indigenous partners. Additionally, we propose a finance-sector alignment framework, such as the Climate-Aligned Finance Act, to ensure that banks, pensions and insurers align with our climate goals. We advocate for tax reforms that reward clean innovation while gradually phasing out fossil fuel subsidies. Furthermore, an Indigenous climate-leadership capital  fund should be established to finance community projects. To ensure accountability, we recommend regular audits and penalties for greenwashing. The government will update existing greenwashing provisions, removing certain aspects while maintaining protections against false claims.

Closing call – from rhetoric to results

Capital diverted to stranded assets is lost capital growth. Without climate-aligned financial flows, Canada faces a vicious cycle: inflation driven by climate shocks, rising indebtedness from bailouts or repair bills, and weak growth from stranded industries. Instead, we need a budget that funds clean growth and relies on a robust framework to shift finance toward low-carbon growth, fights inflation and secures long-term prosperity.

Other G7 economies are already integrating climate risk into regulation, creating taxonomies and redirecting investments toward clean growth. Without similar accountability, Canada risks becoming a “stranded-capital nation” – reliant on devaluing fossil assets while others seize tomorrow’s markets. Left unchecked, climate risk is inflation risk, debt risk and competitiveness risk.

Budget 2025 could have been the moment when fiscal discipline met climate ambition. Instead, it leans on past frameworks, future promises and cuts that weaken delivery. The tools exist to align dollars with duty and finance with the future.

In 2024, global investment in the energy transition exceeded $2 trillion. Capital is moving, and Canada must act or risk forfeiting future prosperity. History will judge not intentions but courage. This budget needs to seize the chance to invest in Canada’s future, not cling to its fossil past.

Rosa Galvez is a civil-environmental engineer and an independent senator for the province of Quebec.

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But big questions remain. Does the alliance’s collapse open the gates for full-scale bank financing of fossil fuels? Or does it point to a lower-profile but possibly more effective financing path for the climate transition?

And what about bank regulation? Does the failure of this voluntary initiative validate what many non-governmental organizations have been saying for years; namely, that the banks should be compelled to invest in the climate transition through regulation?

These questions are now front and centre after the alliance – known as NZBA – closed last week, ending its existence as a membership organization and converting to an archive of banking-industry climate-target guidance.

NZBA was the flagship of the Glasgow Financial Alliance for Net Zero, former United Nations climate envoy Mark Carney’s high-profile effort to marshal the world’s largest financial institutions to reduce carbon emissions. When launched in 2021, NZBA and other financial industry networks pledged to reduce their carbon emissions to net-zero by 2050 and to align billions of dollars in assets to the climate transition.

But as banks were called upon to live up to their net-zero commitments through short-term reductions in fossil fuel lending and underwriting, many of the alliance’s leading members jumped ship. All the major United States and Canadian banks left NZBA earlier this year, followed by many European and Japanese lenders. With Carney now in the role of Canada’s prime minister, the alliance lost its key leader. Staving off anti-climate pressures and potential legal challenges in Europe, the remaining 140 NZBA members voted to formally close the organization.

“The end of the NZBA is a real loss,” writes David Carlin, a climate adviser to the financial sector. NZBA provided market signals, a community of practice and transition pathways on climate risk, Carlin argued in a blog post: “Those values do not disappear with the end of the alliance, but the collective ambition is weakened.”

‘Zombie targets’ possible

Todd Cort, sustainability lecturer with the Yale School of Management, said the banks could enter a protracted period of limbo in which they don’t drop net-zero targets, but neither will they work toward them. “What worries me is that I think there is a higher probability of zombie targets,” he told Trellis Briefing.

Collaborations such as ShareAction in Europe and the Shareholder Association for Research and Education in Canada will continue to exert shareholder pressure on banks to account for their emissions targets. Climate-dedicated investors such as New York City Pensions will continue to be key members of these coalitions. And jurisdictions like California have enacted climate legislation to provide at least some measure of accountability by banks and other companies through mandatory disclosure.

But Donald Trump’s overwhelming control of the public agenda rules out any meaningful measures to compel the banks in the United States to reduce fossil fuel lending and underwriting. This would suggest that the banks – particularly those in North America – are getting ready for years of full-throated support of coal, oil and gas. After two years of decline in fossil fuel financing, the global banking industry reversed course in 2024, sharply increasing fossil loans and underwriting.

The distressing prospect that banks could enter a period of long-term financing for fossil fuels – and the impact this would have on global warming – has triggered a debate among climate and sustainability activists and researchers. Some are doubling down on public action, mounting bank protests in the United States and Europe.

But RMI (formerly known as the Rocky Mountain Institute) is taking a different approach, calling for a “recalibration” in how climate campaigners and advocates relate to the banking industry.

Banks not ‘moral agents’

In a report issued only weeks before the NZBA closure, RMI argues that the non-profit climate movement has overestimated the power of the banking industry to unilaterally direct its capital to the climate transition. “Banks are not moral agents or policy substitutes,” the report states. “They are commercial actors operating within regulatory, fiduciary and risk-based constraints.” The report says some climate advocates don’t consider the “complex, interconnected spider webs” of the banks and the economies in which they operate. “The expectation that banks (or any part of the financial sector) could drive the energy transition was myopic.”

Banks and fossil fuel companies are drawn to one another partly because lenders can extend sizable loans to oil, gas and coal companies based on their healthy balance sheets. This enables banks to issue credit without committing large amounts of their own capital under lending regulations. By contrast, low-carbon projects such as renewable-energy facilities typically require project financing, representing greater regulatory and financial risk to the banks. In addition, private equity, asset managers and pension funds can provide ownership financing to these projects that is not an option for most banks.

Given such limitations, RMI argues that civil society organizations should shift their focus from confronting the banks on climate targets to engaging with them on specific low-carbon transactions, such as clean power, green steel, zero-carbon homes, methane abatement and renewable fuel projects.

“What we need now is less choreography and more closing of deals,” says Kaitlin Crouch-Hess, senior principle for RMI’s newly formed Center for Climate-Aligned Finance. “We can get capital flowing by recognizing banks’ commercial role and playing to their strengths,” she says in an email statement. “Where the economics do not add up, we must work across the financial, policy and corporate systems to align policy and risk-sharing.”

Fossil risk buffer needed

While RMI’s new approach is aimed at boosting the low-carbon economy, it doesn’t address the large climate risk posed by bank-financed fossil fuel projects.

Last month, sustainable investment advocate Finance Watch issued a report showing that the 60 largest banks in the world carry more than US$1.6 trillion in credit exposure to coal, oil and gas. Finance Watch argues that as the world electrifies and decarbonizes, this large fossil-industry exposure poses a major risk to the banks as the value of fossil assets supporting loans could decline sharply and suddenly. “Banks have more than a trillion dollars of exposure to mispriced fossil fuel assets,” Julia Symon, head of research and advocacy at Finance Watch, said in a statement. “This is a carbon bubble that could burst, like subprimes in 2008. This risk is not properly recognized and banks are not prepared.”

Finance Watch argues that the European Central Bank (ECB) should impose a climate risk buffer (a requirement that additional bank capital be set aside for fossil loans). Banks with more fossil fuel credit on their books would be required to maintain a larger capital reserve, shoring up their stability in the event of a crash in fossil assets. Finance Watch is urging the ECB to impose such a buffer as part of a current review by the central bank on risks to the financial system posed by environmental issues.

While it’s unlikely that the Trump administration would permit such a climate risk buffer to be imposed in the United States, it’s expected that financial regulators in other countries would follow ECB’s lead. Global adoption could also pave the ground for a similar measure in the United States after Trump’s term comes to an end.

The end of NZBA is not good news, but it shouldn’t signal an end to climate action by the banks. Advocacy organizations could engage with the banks on important decarbonization projects and policy supports while also challenging them to achieve their net-zero targets.

At the same time, financial regulators can send a clear signal to the banks that fossil fuel lending is risky. If banks choose to lend to the industry, regulators should ensure they’re going to have to commit more of their own money to do it.

Eugene Ellmen writes on sustainable business and finance. He is a former executive director of the Canadian Social Investment Organization (now the Responsible Investment Association).

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In recent policy statements and conference appearances, officials at the Office of the Superintendent of Financial Institutions (OSFI) have sketched the outlines of a plan to unlock hundreds of billions of dollars – perhaps even as high as $1 trillion from the banking industry alone – for this mammoth undertaking.

OSFI head Peter Routledge, who holds the title of superintendent of financial institutions, says Canada’s financial system is so well capitalized that additional loan volumes or equity investments would not threaten the stability of the industry. Banks, for example, could make nearly $1 trillion in additional loans and remain above minimum regulatory capital requirements, he said last week at a financial industry summit.

“I do believe Canada’s financial system is in a strong position to help the economy adapt to our new economic environment,” he said in a speech hosted by the Global Risk Institute on September 17. Additional loans of $1 trillion would have a substantial impact on the Canadian economy, which, as Routledge pointed out, has a value of about $3 trillion in terms of gross domestic product in 2024. “Canada’s banks have ample capacity to help fund the country’s adjustment to this new era.”

Life insurance companies, which have boosted their capital over the last six years, have “ample capital buffers that can similarly be leveraged for new investments in the Canadian economy,” Routledge said.

Freeing up capital from insurers

Routledge said the Canadian economy and its financial sector are facing a level of turmoil not seen since the end of the Cold War in 1991. “The current era is no less bracing than that time. From escalating geopolitical instability and cyber threats to climate change; from domestic shifts to technological innovation; the risks and opportunities facing Canadian financial institutions are complex and consequential,” he said. OSFI “will enable Canadian financial institutions to play a central role in reinforcing Canada’s economic strength in this era of great uncertainty.”

This is not a philanthropic pursuit. This is a business strategy so that we have long-term resiliency. When you’re thinking 25 to 50 years out, you need to think about what the future economy is going to look like, and whether your investments will be there.

– Laura Zizzo, founder, Manifest Climate

In an example of the reforms to come, in July OSFI changed its life insurance capital adequacy regulations, which are the rules mandating how much capital life insurance companies must maintain as a buffer against potential losses on money they invest from policyholders and other customers. Under the new rules, life insurance companies can reduce the amount of capital set aside on investments in public infrastructure projects. The capital charge on debt investments in such projects drops to 3% from 6% and to 30% from 40% on equity investments. The aim is to free up the industry’s capital to create an incentive to invest more in infrastructure.

The life insurance industry welcomes these changes “as something we’ve long advocated for,” Blair Stransky, vice president of the Canadian Life and Health Insurance Association, said in a statement. The new rules “will help unlock significant investments, or billions of dollars, and accelerate national infrastructure projects.” The association estimates that life insurance companies held $50 billion in infrastructure investment in 2024.

The insurance company changes are only one facet of OSFI’s regulatory overhaul. OSFI has rescinded 20 guidelines to streamline regulation and paused some new capital requirements on banks as part of the federal government’s recently announced red-tape review. In remarks at another industry event in early September, Routledge also suggested OSFI may incentivize banks to increase their lending to the defence sector in keeping with the federal government’s pledge to boost military spending. More details will be announced in October, Routledge said.

Climate infrastructure is not charity

The life insurance changes will help the industry adapt to the transition to a low-carbon economy if they use this opportunity to invest in sustainable infrastructure, says Laura Zizzo, founder and chief strategy officer with Manifest Climate. Examples of sustainable infrastructure include flood-protection facilities, carbon capture projects, smart grids and renewable energy. “This is not a philanthropic pursuit. This is a business strategy so that we have long-term resiliency,” she says. “When you’re thinking 25 to 50 years out, you need to think about what the future economy is going to look like, and whether your investments will be there.”

In a joint brief with Corporate Knights to OSFI in 2021, Manifest, which uses artificial intelligence models to advise companies on climate risk, argued that losses on infrastructure investments are lower than on many market investments and capital requirements could be safely lowered, a suggestion implemented with the July changes.

In addition to relaxing the capital adequacy rules, Zizzo says, it’s reassuring that OSFI is holding firm on climate disclosure requirements for financial institutions. By holding the line on climate disclosure, OSFI is bucking the anti-climate backlash by United States and Canadian securities regulators, which shelved similar requirements for corporate stock issuers earlier this year.

Some Canadian insurance companies are recognizing the value of investments in sustainable infrastructure. Great West Life is partnering with Power Sustainable, an arm of parent company Power Corp., investing about $1 billion in sustainable food and infrastructure and renewable energy.

Sun Life has invested $4.2 billion in renewable-energy investments, about one-quarter of the company’s total infrastructure investment of $17.2 billion, according to figures cited by CEO Kevin Strain at the company’s annual meeting in May.

The OSFI reforms come at a time when the Liberal government of Mark Carney is under pressure to make good on his campaign commitment to make Canada into a conventional and clean energy superpower. The prime minister’s office did not respond to a request for comment on the OSFI reforms. However, Carney has said the government’s major projects office will play a key role in securing finance for projects on the national fast-track list.

A recent BloombergNEF report revealed that Canada’s big banks seem to be onside with the conventional-energy part of Carney’s ambition, but not so much on the clean energy side. The report shows that Canada’s major banks provided about $200 billion in fossil fuel lending and other financing in 2024, compared with about $104 billion to low-carbon energy. However, globally, in the first six months of 2025, banks and other financial institutions appear to be turning away from fossil fuels and increasing financing to renewables.

The scale of investment still not known

For now, the financial industry is non-committal on how much and what kind of investment could be financed from the OSFI reforms.

“At this point, we don’t know fully what the impacts of the OSFI changes will be on the insurance sector, but we welcome these changes and are watching with interest to understand what opportunities may exist to invest in Canada,” Stransky said.

The Canadian Bankers Association didn’t comment specifically on the OSFI reforms but in a statement said that “we can unlock growth, boost productivity and build long-term prosperity” through improvements in internal trade, infrastructure investment, financial regulation and tax policy, support for innovation, and fighting financial crime.

As the federal government’s major projects strategy names more infrastructure projects for fast-track approval, pressure will grow on Canada’s financial institutions to get on board with financing deals. It remains to be seen what mix of traditional and sustainable infrastructure and commercial deals will be made as the capital taps are loosened.

Eugene Ellmen writes on sustainable business and finance. He is a former executive director of the Canadian Social Investment Organization (now the Responsible Investment Association).

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This summer has been historically destructive. Climate-change-driven wildfires continue to burn across the country. As of this writing, more than 8.7 million hectares have been scorched – an area about 2.5 times that of Vancouver Island – the second-worst year in Canadian history. Smoke from these wildfires ensured that the effects of the fires were felt in terms of degraded air quality hundreds of kilometres away. Drought affected many parts of the country, with southern Ontario, where I live, receiving virtually no rain in July and August.

Aside from the sheer scale of the devastation, the real significance of the past few months is what it augurs for the future. The summer of 2023, the worst wildfire season in our country’s history, prompted a flurry of surprised reactions. When the summer of 2024 wasn’t quite so bad, many people breathed a sigh of relief. But this past summer makes clear that 2023 wasn’t a one-off: the flames came roaring back. The trend is now clear, and we need stronger, faster action to keep Canadians and their communities safer. The only way to do this is to reduce greenhouse gas emissions and to invest in improved climate-proof infrastructure.

Canada’s summer of wildfire isn’t unusual. Countries all over the world experienced something similar. In most places, governments have quite logically focused on necessary solutions and are doubling down on decarbonization and preparing for a future of worsening climate impacts. As one example, the European Union is locking in a plan to achieve a 90% reduction in climate-changing pollution by 2040.

In North America, however, we are overwhelmed with media coverage of Donald Trump’s vendetta against all things climate-related. There is no logic to this: in fact, Trump’s hatred of wind turbines apparently originated with a personal dispute related to his Scottish golf course.

With the U.S. federal government backing away from action on climate change (though it needs to be underlined that many U.S. states are staying the course on net-zero), there are some Canadian voices saying we should just fall in line with Trump’s retrograde agenda.

I’m confident that the vast majority of Canadians understand the folly of doing this. Canadians know that Donald Trump has terrible ideas. Terrible ideas on Ukraine. Terrible ideas on tariffs. And terrible ideas on climate change.

A much better approach is to skate to where the puck is headed globally. If you look at the current and contemplated climate change policies of all the other countries with which Canada needs to diversify its trade, they’re pointing in the opposite direction to that which Trump is laying out.

More than four months ago, the current federal government was elected on a very strong and explicit climate change platform. In the intervening period, it has given Canadians very little sense of how it wants to take the nation’s climate policy forward. That vacuum, unfortunately, has encouraged vested interests to surface endless cockamamie arguments as to why our country should give up on the fight against global warming completely.

The next parliamentary session is the moment to reset and relaunch Canada’s decarbonization journey.

The priorities are clear. A handful of laws, both existing and new, are necessary to move us forward, including fixing our system of industrial carbon pricing, nailing down new regulations to reduce methane pollution, building more clean electricity and getting more affordable electric vehicles into the hands of Canadians.

We need renewed progress on climate change that works for Canadians, not for Donald Trump. And we need it quickly.

Rick Smith is president of the Canadian Climate Institute, the co-author of two bestselling books on the effects of pollution on human health, and the executive producer of Plastic People, a 2024 documentary chronicling the damage done by microplastics in the human body.

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