Ontario will introduce 'green bonds' to help fund public transit expansion - Macleans.ca

Ontario will introduce ‘green bonds’ to help fund public transit expansion


TORONTO – Ontario will be the first province in Canada to issue so-called green bonds next year to help fund public transit expansion, Premier Kathleen Wynne said Wednesday.

The program will be unveiled in next week’s fall economic update and is an innovative tool to raise the money that’s needed to build transit across the province, she said.

“Green bonds are a great tool to raise capital for a project with specific environmental benefits,” she said.

“The worldwide market for green bonds in the last year has doubled, and it’s now estimated to be more than $346 billion — those are U.S. dollars.”

It’s the first measure Wynne has promised to help raise the billions of dollars needed to expand public transit in the heavily congested Toronto and Hamilton area.

It will require legislation and certification, said Finance Minister Charles Sousa.

But it won’t be a confidence vote that could topple the minority Liberal government and trigger an election.

The new bonds would capitalize on the province’s ability to raise funds at low interest rates, Sousa said.

It will actually save the province money over the long term because there are many investors who are prepared to pay to invest in specific green initiatives or at least give the province the benefit of doing it, he said.

Finance officials say it’s a “slice of pie” as part of the province’s regular borrowing program, but this portion will be dedicated to environmentally-friendly transit projects.

It won’t necessarily get the province cheaper financing in the short-term, but it will attract new investors to invest in Ontario bonds, said Toby Heaps, president of Corporate Knights Inc. who joined Wynne to make the announcement.

“Investors are hungry for this kind of stuff, and there’s just a drop in the bucket of the supply for that demand,” he said.

Green bonds were not among the levies recommended by the provincial transit agency Metrolinx to raise the estimated $2 billion a year that’s needed to improve transit in the Toronto-Hamilton area.

Wynne also appointed a panel last month to examine those proposals, which included a jump in the HST, a five-cent-a-litre regional gas tax, a $350-million-a-year business parking levy and $100 million a year in development charges.

Wynne said the green bonds doesn’t preempt the panel’s work, because the program addresses the broader issue of building infrastructure across Ontario. But there may be some “overlap,” she acknowledged.

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Ontario will introduce ‘green bonds’ to help fund public transit expansion

  1. Who in their right mind would invest in anything this government is offering up? They’ve proven time and time again that they’re incapable of managing anything properly. More likely this money will somehow be used to fund future Liberal Party campaigns, or outright buying votes. Wynne and her Liberal party can’t be trusted. Just look at the spending the problems plaguing Ontario since they’ve taken power.

    • Not me, by my analysis anything less than 6.5% interest is a wealth suicide bond. Returns have to be at least _real inflation+taxes or it is negative value investing.

      In fact, I am not away of any CD/GIC, government or bank bond or mortgage fund in the land that I would lend to. They are all negative value investments with no hedges on inflation. They carry a hige risk in devaluation going forward.

      Better off doing like CPP, go offshore into more stable currencies than the falling CAD.

  2. Good plan….lots of Ontarians will go for that.

    • Doubtful, too busy paying taxes and debt to save enough to buy negative value bonds. I really doubt legitimate lenders will buy this zero grade debt. What will happen is BoC will electronically counterfeit no-value inflationary money, then lend it to an immediate non-person entity to buy the debt no legitimate lender will buy. Same trick US Treasury and US Fed too to give the illusion of solvency.

      Or they may not fill at all. I wouldn’t touch them for less than 6.5% and a good inflation provision clause. As if rates even go up 1%, the resale value of these will plummet.

      • Ya know Dave…..it’s costing you a fortune to keep yourself alive.

        Apparently your taxes are so horrendous you can’t have any kind of life at all.

        You’ve moved to a cheaper province, downsized your house, refused to have children….and you’re probably eating cat food. Cut rate catfood at that.

        Consider the next step.

        • LOL @ “Cut rate catfood at that”