:
Good afternoon, colleagues.
Today we are commencing our study on the environment and climate impacts related to the Canadian financial system.
At the end of the meeting, I will need five minutes to give an update on our invitation to the oil company CEOs. We should be able to resolve that issue fairly quickly if we have everyone's co-operation.
Without further ado, I would like to welcome our first guests. With us are two members of Canada's expert panel on sustainable finance: Andrew Chisholm and Barbara Zvan, who also serves as president and chief executive officer of another organization.
I am told that they want to divide their ten minutes between themselves and that Ms. Zvan will begin.
:
Good afternoon, Chair and members.
My name is Barb Zvan. I am, as noted, the president and CEO of the University Pension Plan. I was also a member of the Sustainable Finance Action Council and the chair of the taxonomy technical expert group. In addition, I was one of the members of the expert panel on sustainable finance. As a representative of the finance community, I'm here to talk about the important link between the economy, sustainable finance and the environment.
The Canadian economy is not faring as well as we'd like. In March, the Bank of Canada's deputy governor said it was time to “break the glass” on productivity, warning us that Canada's lagging productivity had reached an emergency level. Against this economic backdrop, the effects of climate change are undeniably upon us. The last 12 months have been the hottest in recorded history. Last winter was 5.2°C warmer than historic norms, and 2023 marked our worst wildfire season.
The economic toll of climate change on Canada's GDP, exports and job losses is foreseeable. The global predictions released a few weeks ago are even more staggering. The 2022 federal budget estimated that Canada needs an additional $115 billion annually to meet our net-zero commitments. This is an unprecedented investment opportunity that cannot be met by public funding.
Being low carbon is a driver of competitiveness, and Canada is well placed to leverage its expertise in the area of critical minerals, clean energy and green transportation. The market is poised to grow, as evidenced by the rapid growth in the green bond market and in green exports. Canada's low-carbon exports grew by 9.4% between 2012 and 2023, outperforming the rate of growth of all other exports combined.
To benefit from market opportunities that support Canada's net-zero goals, we need to unlock private sector investment potential and bolster the attractiveness of Canada as a net-zero-aligned investment destination. What is holding us back? While there may be a myriad of reasons, let me focus on my area of expertise, which is investments.
When making long-term investments, Canadian and global investors alike look for as much certainty as possible by way of credible information, proactive disclosures aligned with global standards, and confidence that the projects and assets we're investing in will reduce carbon emissions in line with domestic and global commitments. Investors are looking for policy certainty around Canada's net-zero transition priorities and for the right building blocks for mainstream sustainable finance in support of net-zero goals.
In 2018, the expert panel on sustainable finance examined ways to scale and align sustainable finance with Canada's climate and economic goals. We identified the importance of a taxonomy and disclosures as critical building blocks for mainstream sustainable finance and for building market confidence. The recommendations we issued in 2019 included establishing the Sustainable Finance Action Council, or SFAC, to bring together stakeholders to develop Canada's taxonomy.
The SFAC, which included significant representation from Canada's financial industry and regulators, provided its report in September 2022. We included a framework for a made-in-Canada green and transition taxonomy that is aligned with our net-zero goals and economy and is in step with international expectations and other taxonomies. We also provided proposed elements of a good governance model to get this off the ground.
What is a taxonomy? A taxonomy is a classification system. It will help channel capital toward projects that are classified as green and, importantly and uniquely to Canada, will transition projects that will help companies reduce their carbon footprints in a stepwise way. The playbook for this already exists. Globally, there are more than 40 taxonomies already in place or under development. Each is customized to a specific country or region in order to link global capital markets with their respective net-zero pathways. Most G7 countries, many OECD countries, several resource-based economies, including Australia, and many developing countries have taxonomies. Kenya just published their draft taxonomy.
A taxonomy together with climate disclosure standards being developed by the International Sustainability Standards Board, which represents over 164 jurisdictions, would foster investor confidence, support the growth of Canada's sustainable finance market and create an overall more attractive investment climate. This will, in turn, attract funding for Canada's clean-tech sector, provide capex for operating companies' net-zero plans, grow our economy, generate good jobs and catalyze productivity growth.
We have studied this issue extensively. The expert panel and the Sustainable Finance Action Council recommendations were presented in 2019 and 2022, respectively. In the years that have passed, dozens of countries and regions have leapfrogged us, even levering our work.
Businesses and investors are prepared to invest now. I urge you to put the building blocks in place needed for Canada to be in the running to attract some of this investment to fund our transition.
Thank you for your time and interest. I look forward to your questions.
:
Good afternoon. Thank you very much for inviting me to participate in the session today.
My name is Andy Chisholm. I was a member of the expert panel with Barb and others.
For 30 years, my career was as an investment banker in New York and London. More recently, however, I have been involved in the sustainable finance arena in various ways. Among other activities, I am an adviser to ArcTern Ventures, one of Canada's leading clean-tech venture capital companies, and I am an investor myself in early-stage private companies that are involved in the clean-tech space. I am also on the board of RBC, and advisory boards of sustainability initiatives at two leading business schools.
My comments or observations today follow from the original work on the panel and represent high-level reflections that are coming, as Barb said, five years later.
My first observation is that the main tenets of the 2019 report still hold true. Specifically, if Canada wishes to succeed in its emissions reduction commitments in a timely manner, at the same time as taking advantage of the economic opportunities that arise from innovation in the face of climate change, it's essential that finance flows in an aligned manner. Furthermore, the amount of investment required to adjust energy systems, materials and industrial processes and to commercialize new technologies is well beyond the reach of the public sector, and in any case ideally would be the purview of private sector actors.
Hence, there is a need to create the conditions for the private sector to act in the context of our market-based economy. These conditions involve implementing new rules, regulations and standards, a number of which Barb has just referred to, in parallel with investing in infrastructure, supporting innovation and timely commercial adjustment, and easing implementation challenges.
My second observation is that approximately five years have passed since we published our report. That period represents something close to half of the available time to the year 2030, which is, as you know, widely used internationally as an important waypoint for measuring progress on emissions reduction.
While there has been significant progress made in sustainable finance on a number of fronts, and investment flows have grown significantly in very recent times, we're still falling well short on delivering emissions reductions. In part, this is because such capital flows and corporate investment are still meaningfully less than commentators suggest is necessary to reach the stated objectives.
Meanwhile, the important foundations for success in sustainable finance, which were outlined in the 2019 report, are still to be finalized in a Canadian context. Most notably, they include adjustments to corporate disclosure guidelines and the taxonomy that Barb referred to, with one aspect of the taxonomy, transition alignment, being something of particular interest to the Canadian economy, which is relatively carbon-intense.
Why are these things so important? Markets operate more efficiently with better, more observable information; consistency and clarity facilitate scale in financial activity; and in the face of uncertainty, many actors develop a go-slow bias, waiting for information to become more clear. It's for this reason that we must make more decisions more quickly, even if they are imperfect at the start.
Success in achieving an orderly path towards a decarbonization of the economy requires sufficient continuous progress; otherwise, the gap widens and available time compresses, thereby increasing the likelihood of a disorderly transition and/or undershooting on the delivery of the original goals and commitments. Within both society and government, it's evident that we do not have a singular point of view. Therefore, a degree of pragmatism will be required to get to decisions faster in the interest of gaining ground and not losing more time. Such decisions should also consider interoperability with provinces, territories and commercial partners, notably the U.S. and Europe.
My third observation is that to date, a high percentage of climate spending has come from government sources. Over time, the vast majority of capital investment activity will need to be initiated by the private sector. The private sector, both domestically and internationally, responds to signals that may intersect with but are not identical to those of government. As a result, to crowd in private market-based finance, especially in the context of the largest and most impactful projects, it's important that the interface between business, private sector finance and government be as efficient and effective as possible to ensure that both public sector and private sector objectives are met.
It's for this reason the relevant government departments would be well served by having a more coordinated approach to the sustainable finance file. Furthermore, it would be beneficial for individuals involved in that file to have strong senior business or market experience and relationships, allowing them to identify when and how best to employ blended finance techniques.
I would like to continue in the same vein.
Both witnesses said something that is very important to consider: What is the price of doing nothing? Canada has a lot to offer to attract investment from all over the world. Unfortunately, I note that we are falling behind in comparison with the European, American and Australian financial markets. So we need to have the tools as soon as possible to create an environment that, as was said, will give investors certainty that they can invest in our economy.
I would like you to give us some more examples of the consequences of Canada doing nothing, but also do a comparison with the other countries. Canada does not exist in isolation. We are competing with the big financial markets.
What is happening in Europe? Why are those countries ahead of us when it comes to taxonomy and disclosure? What can Canada do to speed things up and stay in the race?
I would like to hear Ms. Zvan's answer first and then Mr. Chisholm's.
:
Let me start with Europe. They published their report in 2018. They have a fully functioning taxonomy and disclosure regime, broader than that of the ISSB, the International Sustainability Standards Board. They're actually doing dual materiality under the European sustainability reporting standards. It's much more extensive, the reason being that they're trying to funnel money to green opportunities. They very much wanted to make sure that the average person knows how their money is being managed and whether it's being managed in line with climate.
There are funds now very specifically aligned to that taxonomy. That's very much their mindset. They are using that taxonomy to assess a company's capex, so they are able to say that the capex of oil and gas companies, writ large, is aligned to 15%, while the rest of the sector as a whole is only 8%. The oil and gas companies using this framework can demonstrate their greater alignment.
When you look at Canada, what are the implications of not doing this? You have a lack of clarity, so money doesn't come, and you're employing a taxonomy.... The other option is that you're employing a taxonomy from another region. That means the thresholds are not going to be relevant for Canada. Also, Canada will continue to fall behind international expectations. When we compare Canadian high emitters to global ones, not a single Canadian company today can articulate in their disclosures how their capital is aligned to the 1.5 °C scenario, whereas over 40% of the high emitters globally can.
You have to realize that capital will go to where it's easiest. This is a competition where capital goes. The total capital for Canada is $115 billion. McKinsey estimates that the capital needed globally for the transition in 2030 is $9 trillion to $12 trillion. It will go wherever it is easiest to ascertain good-quality investments, along with the clarity that it's aligned to the transition.
The additional—
:
Yes. In terms of other costs, the financial institutions will each make their own taxonomy or bespoke version of it. It will never be as detailed or done with the same level of public consultation. That will contribute to confusion. You will have a lack of green bonds that have credibility. Green bonds issued with a credible taxonomy can save anywhere from one to 10 basis points, so if you issue a $10-billion bond and you have a savings of four basis points, that means $4 million each and every year for the life of that bond.
Then you have the ability to leverage OSFI. OSFI would like to align capital, which would align investments from the banks with the climate transition. That would ultimately go back to GDP, enabling investments in Canada.
You will have a continued reputational risk from greenwashing because no investor will be able to know if the investment made by company X is aligned with Canada's transition. You'll also have a lack of ability to be in international dialogues. I can tell you that I get invitations from the World Bank and all sorts of groups to participate for Canada, but I cannot.
Last is ultimately your ability to finance the transition in Canada.
This is not an easy subject. You are here with us to help us understand it better.
Last year, when you testified before the House of Commons Standing Committee on Finance, you said:
In Canada right now we have 37 Canadian financial institutions engaging with the 40 top emitters for that reason of having a dialogue with the same consistent message of “Think about your long-term strategy, your governance, your targets.”
You then added that you wanted to help them with the transition, so you suggested that they be included in the taxonomy work plan.
Do you not think, though, that it is the role of the government to make laws and regulations, and businesses will then have to adapt to them?
I recall that this is exactly what Lord Deben said when he was on the United Kingdom's climate change committee: We have to make laws, and corporations will follow them.
Would it not be better to do that first, rather than inviting all the major emitters to make their own recommendations for a taxonomy?
:
From my perspective, I think there are a number of things there.
First of all, making sure that the disclosure regulations in play right now get nailed down will be very important.
Number two is the taxonomy we talked about. Taxonomy is not a silver bullet, but it is part of the systems change that can be useful.
A third aspect, which we have not spent enough time on and the country has not spent enough time on, has to do with data and being able to have much-improved data systems for measurement and transmission. How we use environment data together with business data on a sectoral basis can be strategically important and feed in very well—
:
That's okay. I think I will pick up on exactly that point.
You were talking about gas. I think many climate experts and folks from civil society and indigenous groups would contest whether natural gas is an effective transition fuel and say we need to leapfrog.
The recommendation specifically mentions oil. You are advocating for oil export pipelines, which to me is shocking for an expert panel on sustainable finance. One thing that caught my eye was at the end of that recommendation: “a clear pledge from industry”.
Given that we've seen industry fail time and time again, greenwash, make climate commitments and then roll those back while making record profits, how are we supposed to trust oil and gas companies and the financial institutions that profit off them to recommend a pathway forward when we're facing a climate emergency?
To our witnesses, welcome to your House of Commons committee.
Ms. Zvan, the nub of your argument relates to the taxonomy, which is a system of classification to help in directing capital to projects that are considered to be green or other projects that are considered to be less green.
To give you a very concrete example, I am going to tell you about a situation we are currently experiencing in Quebec. As we know, nothing is all black or all white; there are always grey zones. I am going to tell you about the Northvolt project, a $7 billion investment project for the battery industry. I have to come out of the closet and state my conflict of interest: I drive an entirely electric vehicle. That being said, the Northvolt project is an emotionally charged one in Quebec, unfortunately even for criminals: some thugs recently placed incendiary devices on the site of the Northvolt project. Obviously, that was denounced by everyone, starting with us.
Some say this project is excellent for the environment because we need batteries for electric cars. Others urge caution since the plant will be located on wetlands, or say the SOLO car is not necessarily the best solution from the environmental perspective, or believe there have been no consultations worthy of the name done for this project.
To summarize: On one side, some people think it is a good project; on the other, some people think it is not.
Ms. Zvan, do you think the project should be at the top, in the middle or at the bottom of the list?
I am going to talk to you about what is happening south of our border in the United States.
Last month, for example, the United States Senate budget committee and House of Representatives oversight committee released a report that, broadly speaking, said that the companies' massive public campaigns depict carbon capture and storage as a viable, available solution to address the rise in greenhouse gas emissions. However, the companies admit internally that they do not plan to deploy the technology needed to solve the global warming crisis. The report also says that the industry's real objective is to extend the use of fossil fuels unabated and perhaps indefinitely.
I would also like to tell you that on May 1, Capital Power Corporation in the United States announced that it was pulling the plug on its carbon capture and storage project, the value of which had been pegged at $2.4 billion. What justification did it give? It said the project was not economically feasible. In other words, the project would not generate profits for the investors. This is also absolutely not a good thing for achieving our targets under the Paris Accord.
So why is the financial sector supporting the proposal to include carbon capture and storage in the next taxonomy?
:
I would say two things.
One is that obviously it is going to have a very elongated process of evaluation, licensing and accreditation, and it should. Having said that, we should be introspective as to whether there is a way to do that in a faster manner, because the time frames are 10-plus years and that's hard.
Beyond that, assuming we can get through the safety part, the accreditation and the proper process of evaluation, it's about identifying where these solutions can best operate, and helping to facilitate the procurement, installation and execution of some of these projects.
Thank you to our witnesses for being here.
Ms. Zvan, I will ask my questions of you. I think you've done a great job of pointing to your colleague whenever it's necessary, so I will let you be the quarterback.
First, something that I know my colleagues across the way and everybody here will agree with is that I am not an expert on sustainable finance by any stretch of the imagination. The first time I heard the word “taxonomy” in this context, I thought we were talking about putting large stuffed trout and ducks on the wall. Then I realized there's a difference between taxidermy and taxonomy. That was news to me at the time.
Now that I understand that we're talking about definitions and terminologies for new categories of sustainable finance that didn't exist 25 years ago, I'm starting to understand it a bit. What I know is that the grass grows where you water it, and businesses grow where you invest. With a pension fund or any large financial operation, you control a lot of money, and you have the ability—to put it into an agricultural context—to control the sunlight and the water and control where things grow.
I try to make it simple for myself. I recognize that when you deprive certain sectors or industries of money that they've relied on for a long time, you might be able to force them to grow less quickly. If it's an industry that's super emissions-intensive, with oil and gas or cement production, you're actually forcing them to innovate, and that's super powerful.
Am I getting this right?
I know that all five of Canada's big banks control a lot of funds. They buy a lot of assets for mutual funds and different types of assets for folks, and they have all committed to achieving net zero by 2050.
I'd like to have some confidence that these institutions are living up to some of those commitments. There have been a lot of concerns and allegations about greenwashing and about convincing folks that if they want a green bank, they can count on those institutions to invest in places that will deprive organizations of water and sunlight if they are doing more harm than good, are not forcing innovation or are not talking about transition or encouraging that conversation.
Is there good evidence to suggest that some banks are doing a bit more greenwashing than others?
Since we're running a bit late, we have no time to waste.
We now welcome Mr. DeMarco, commissioner of the environment and sustainable development. He is joined by Mathieu Lequain, whom we know well, and Jean‑François Nadeau.
We have to wrap up at 5:45 p.m. at the latest. I will need 5 to 10 minutes at the end to hear feedback from committee members regarding the meeting with the oil company CEOs.
Without further ado, I turn the floor over to the commissioner for 10 minutes.
:
Mr. Chair, I'm pleased to be here today to contribute to the committee's study on environment and climate impacts related to the Canadian financial system.
I acknowledge that this hearing is taking place on the traditional unceded territory of the Algonquin Anishinabe people.
Joining me today are Mathieu Lequain and Jean-François Nadeau, who are, respectively, principal and director in our office.
My remarks today are based on three reports we published in recent years on this matter. These are our 2021 “Lessons Learned from Canada's Record on Climate Change”; our 2022 “Research Paper on Climate-related Financial Disclosures”; and our 2023 report “Supervision of Climate-Related Financial Risks—Office of the Superintendent of Financial Institutions Canada”, also known as OSFI.
First, our 2021 “Lessons Learned from Canada's Record on Climate Change” clearly illustrated the cost associated with weather-related events in Canada, which were equivalent to 5% to 6% of annual gross domestic product growth. These costs have real consequences for households and business owners. For example, a major lender recently announced that it would no longer accept new mortgages for homes in high-risk flood zones. The consequences of such decisions on the value of residential housing, which for many households is the main asset, could prove quite dire.
[Translation]
Our “Lessons Learned” report indicated that financial decisions in Canada must take climate change into account if climate risks are to be mitigated. To do so, it is important for households, companies and governments to be able to understand their exposure to such risks and develop plans to manage them.
Climate-related financial disclosures are necessary stepping stones toward that goal. Our 2022 Research Paper on Climate-related Financial Disclosures looked at the state of various initiatives that were under way in Canada to improve the disclosure of climate-related financial information.
We mentioned that despite the decentralized nature of the regulatory frameworks for financial disclosures more generally—with the provinces and territories responsible for securities regulations within their own jurisdictions—Canada must address the lack of transparency, inconsistencies, and the quality of climate-related financial disclosures.
Finally, financial regulators must ensure that financial institutions, as stewards of the savings of Canadians, are managing climate-related financial risks appropriately. Our 2023 report on OSFI’s Supervision of Climate-related Financial Risks examined whether the office incorporated climate-related financial risks into its risk management systems and frameworks for federally regulated financial institutions and pension plans.
[English]
In our audit, we found that OSFI made meaningful progress towards integrating climate risks into its supervisory framework, but that full implementation was still years away. We also highlighted an opportunity for OSFI to consider how to adapt its role to further Canada's whole-of-government approach to climate change and sustainable development.
Since we released that audit, we have noted some positive developments. For example, OSFI has created an information page entirely dedicated to climate risks and expanded its outreach to stakeholders by creating the climate risk forum. The development of the forum is in line with one of our audit recommendations. It also launched a public consultation on the standardized collection of climate-related emissions and exposure data. Finally, OSFI tabled its first departmental sustainable development strategy.
Mr. Chair, this concludes my opening remarks. We would be pleased to answer any questions the committee may have.
Thank you.
:
Thank you very much, Mr. Chair.
Thank you to the commissioner for joining us once again at our committee and talking about the very important issue of sustainable finance.
I want to go back to a question that's been raised about the cost of reporting, the disclosures and guidelines, and what companies would have to do to provide the transparency needed to assure investors that they are not greenwashing and they are in fact part of this sustainable transition.
Do you feel there's any merit to the concern that the reporting requirements would somehow outweigh the benefit that Canada would receive from actually being able to represent that we are confident these companies are indeed not greenwashing and that they meet the requirements of the international board?
:
Going in the right direction would be year-over-year decreases in total emissions. Recall that for 2026 Canada is just trying to get back to approximately where it started in 1990, when it ostensibly began getting serious about fighting climate change, along with its partners across the world. I would be satisfied if we were seeing year-over-year decreases that roughly match the graph line that would get us to the 2026 objective and the 2030 target of 40% to 45%.
Right now, we're still above 1990 levels. I'd like to see us at least returning to 1990 levels by 2026 and down by 40% to 45% by 2030.
To answer your question, no, we're not quite on a year-over-year steady decrease. We're seeing some major drops associated with two severe economic events, the last one being COVID. It was not just an economic event, but it certainly had an impact on emissions. I would like to see year-over-year decreases from here to 2030, and then thereafter to 2050.
:
Commissioner, thank you for being with us again. Thanks as well to the members of your team.
We discussed greenwashing at length with the first witness panel in the first hour of this meeting, and we've talked about it again in this second hour. This past January, a group of sustainable finance experts filed a complaint with Ontario and Quebec regulatory agencies regarding more than $10 billion in sustainability-related loans that had been granted to companies in the fossil fuel industry. Despite their commitments, those companies were actively increasing production.
This isn't the first time I've heard you say that there's no transparency or accountability, that there's a lack of information and that we can't rely on current data.
What will we do if we fall short in what we're doing and those companies can simply circumvent the regulations because there's no binding legislative or regulatory framework?
:
We'll have more to say on that with our fall report, which will be our second report under the net-zero act.
I haven't seen anything yet from the government that has shown it has bridged the gap between its own estimation and the measures it had in place that were mid-30%. The gap between that and 40%-45% is its target. We also had concerns that even its calculations of getting to mid-30%, whether it was 34% or 36%, were overly optimistic assumptions. We weren't even sure that 34% or 36% was bankable, especially regarding the fact that we've had 30 years of plans and targets, and not one of them has been met.
As I said last week, that may be cause for the government to go for something a little bit more than 40%, knowing that each time it's aimed for a target in the past, it's come up well short. Even the last target, which happened to fall within COVID, was not met, despite the related emissions reductions associated with the economic downturn.
I haven't seen anything yet to indicate it has bridged the gap with measures that will add up to 40%-45%, based on reasonable assumptions. We'll have more to say about that in the fall with our second net-zero act report.
What I'm going to take from that is that the federal government is not on track to meet our 2030 target.
Now, in this report, you talk about how the Office of the Superintendent of Financial Institutions is a key supervisor of Canada's financial institutions. You mention in your report that it should consider whether it's appropriate to look beyond our current approach to find ways to advance Canada's broader climate goals. Now, some governments, like the U.K. and the EU, have aligned financial supervisors' mandates with sustainability objectives.
Can you talk a little bit about the impact of Canada not doing this?
:
Canada has set out what's called a whole-of-government approach to tackling climate change. Another analogy is “all hands on deck”. It's open to Canada, as responsible for meeting its own target, to determine which institutions are going to be involved in that whole-of-government approach to meeting the target.
Most recently, the list of institutions subject to Canada's Federal Sustainable Development Act moved from only 20-something to approximately 100. The OSFI is now within that 100, and our own office is now within that 100. We all have a potential part to play in meeting whole-of-government targets or objectives, like the climate target of 40% to 45%.
We do point out in our report that, thus far, the OSFI has taken a narrow view of its mandate and stuck to the stability of the financial system, while other countries have chosen to have their equivalents of the OSFI take a more active role in contributing to climate change mitigation efforts. It's a policy question that's open to the government to answer.
:
I just asked you that question to show how greenwashing can be used to mean many things.
That's why I'm asking the most neutral authority there is in Canada, the commissioner of the environment and sustainable development, for his definition.
Personally, I think we engage in greenwashing when we take a plane, when we travel a lot and then buy credits. It leaves us with a clear conscience, and we then speechify about it, but the reality is that we're polluting. So I'd like to know your exact definition of greenwashing.
In addition, how do we determine what constitutes greenwashing? How can we know whether an investment we want to make in a business is right and whether or not that business is engaged in greenwashing?
:
Thank you very much, Mr. Chair.
Welcome to the committee, gentlemen.
Our witnesses in the first hour told us that we urgently need taxonomies and financial disclosure for the climate. I looked at the statistics and the latest data, and 250 financial institutions should soon be releasing transition plans that are consistent with the framework of the Glasgow Financial Alliance for Net Zero.
In addition, the world's leading economies are a year ahead of us, perhaps even two, in developing requirements for their financial institutions designed to establish a regulatory framework that provides certainty and promotes investment. The United Kingdom, the United States, the European Union and even Australia still produce oil. Then there's Japan, Hong Kong, Singapore and Switzerland. Canada will significantly lag behind in these areas if it doesn't act now.
I'm trying to understand what's slowing us down. I know we have a resource-based economy, but that kind of economy hasn't prevented Australia from evolving. British Petroleum is investing $65 billion in the U.K.'s transition. What's holding us back? Is it Conservatives and other voices telling us we need to hang on to our old economy and not evolve?
If we don't evolve, billions of dollars in investments will pass us by. For the moment, they're going to China, which is investing in its battery sector, motor vehicles and clean energy, for example.
What can we do to take quick action?
Welcome back to committee. We appreciate, gentlemen, your returning and providing all of your insights, perspectives and expertise.
I have a really brief question about greenwashing because I'm interested in it as well. My friend and colleague Monsieur Deltell talked about carbon credits. I've purchased carbon credits before. I don't feel like I'm greenwashing. I don't know if they're necessarily a form of greenwashing as much as when a bank suggests that their mutual funds or bonds are so much greener than another's, when they're clearly not.
Can you explain to me the difference, or the definition, between greenwashing on the side of a consumer choosing to offset versus a business tricking consumers?
:
Cool. That's super helpful. Thank you.
I have another question about bonds. Government debt is something that I think a lot of Canadians are concerned about, and rightfully so. They ought to be. They ought to have questions about government debt. I count myself among them. However, I also know that when government creates debt, it sells bonds to people. Oftentimes folks will say, “Oh, the payments that governments make on debt go off into the wind”, as if we're shooting interest into the sun or something like that. It doesn't disappear. It goes into people's portfolios. It goes into mutual funds.
I don't know how green bonds really work in that context. I've heard people talk about Canada's new green bonds in the context of our new $5-billion bond. I'd love to hear your reflections on how a green bond works in the economy and how more inclusions, or perhaps more exclusiveness, in the bond would make it more effective.
:
Thank you very much. We're out of time.
I want to thank the commissioner again for coming to see us. He always leaves us with a deeper understanding of the challenges we face on the environmental front.
Thank you again, Commissioner. We look forward to seeing you soon enough.
Before we break, colleagues, I want to give you an update on the meeting we're having with oil company CEOs. I'm pleased to report that we can get four of the five on the same date, which, from an organizational point of view, has benefits. The only CEO who cannot come on June 6 is the CEO of Enbridge. It's for scheduling reasons. They don't object to appearing. They could send somebody from the next level down to appear, in which case we'd have five out of five in one meeting. Otherwise, we would have to have Enbridge come by themselves for an hour some other time, which would probably eat into other things we're doing.
Are we all right with having a vice-president or whomever come on behalf of Enbridge and join the four CEOs of oil companies?
I'll go to Ms. Collins because it's her motion.
:
At the last meeting, we asked parties to submit a list of co-operatives they would like to hear from in the context of this study on finance. Please send to the clerk by May 14 the names of any co-operatives you would like to potentially invite. That would give us enough time.
I also want to confirm that you agree to have the bank CEOs for two hours. The motion to summons them, I think, is having its impact.
[Translation]
Since there are five CEOs, it will take us at least two hours to question them properly.
[English]
Are we good?
[Translation]
All right.
Have a good weekend, everyone. See you again in about 10 days. Thank you.
The meeting is adjourned.