Canada’s Green Bond Program

Since March 2022, Canada has issued green bonds to mobilize capital in support of its climate and environmental objectives.

The federal government recognizes that sustainable finance plays a key role in accelerating the transition to a cleaner, greener economy. Mobilizing capital is a crucial part of Canada's work to meet its 2030 emissions reduction targets and to achieve net-zero emissions by 2050.

Government of Canada green bonds meet the demand of investors who are looking for green investment opportunities backed by Canada's AAA credit rating, and which contribute to the development of a stronger, more sustainable Canada.

Canada's First Green Bond Framework

In March 2022, the Department of Finance launched Canada's first Green Bond Framework and successfully issued an inaugural 7.5-year, $5 billion green bond. Canada's first green bond issuance saw robust demand from domestic (55 per cent) and international investors (45 per cent), with a final book order of over $11 billion—setting a record high for a Canadian dollar green bond offering.

In March 2023, the government published its inaugural report on the allocation of green bond proceeds.

Recent Green Bond Developments

Since the introduction of Canada's Green Bond Framework, the European Union's Taxonomy for Sustainable Activities expressly included some nuclear activities as green until 2040-2045. The Sustainable Finance Action Council's Taxonomy Roadmap also considers certain nuclear expenditures to be green. Moreover, Bruce Power and Ontario Power Generation, Canada's largest nuclear electricity producers, have issued green bonds to fund nuclear activities, which were well received by investors.

Updated Green Bond Framework

To align Canada's Green Bond Framework with Canada's 2030 Emissions Reduction Plan, updated taxonomies, international best practices, and evolving investor preferences, in November 2023, the government released an updated Green Bond Framework that includes nuclear energy expenditures. The updated Framework maintains alignment with Canada's climate and environmental priorities and identifies eligible expenditures for allocation to a green bond, including:

• Clean transportation;
• Living natural resources and land use;
• Energy efficiency;
• Terrestrial and aquatic biodiversity;
• Clean energy, including nuclear;
• Investments in new reactors;
• Refurbishment of existing facilities;
• Research and development; and,
• Some investments in Canada's nuclear supply chain;
• Climate change adaptation;
• Sustainable water and wastewater management;
• Circular economy-adapted products, production, technologies and processes; and
• Pollution prevention and control.

Canada's Green Bond Framework has been independently reviewed by Sustainalytics, which confirmed the Framework's alignment with the International Capital Markets Association Green Bond Principles.