Canada is ‘lagging behind’ other countries on climate finance: Carney

This translated article is appearing here as part of an Election 2025 collaboration between Le Devoir and Canada’s National Observer, to share news across the language divide.

In May 2024, Mark Carney, then a member of the senior management of the investment company Brookfield, testified before a Senate committee in Ottawa about a bill on climate finance that a year later is still to be finalized. He viewed this initiative favorably, noting the country's delay in regulating the sector.

“In this respect, Canada is lagging its international peers,” said the banker, who is now prime minister of Canada and the leading candidate in polls ahead of the April 28 election.

Carney was one of some 20 experts who gave their opinion on Bill S-243, the Climate-Aligned Finance Act, proposed in 2022 by independent senator Rosa Galvez. The bill, which had support from every major political party except for the Conservative Party, died when Parliament was prorogued in January.

It is highly likely that a member of Parliament or a senator from the government or the opposition will reintroduce the bill when work resumes. The Bloc Québécois has also committed to this in its platform.

“The Government of Canada has implemented plans to reduce emissions and improve the climate resilience of several sectors of the real economy, but in the financial sector, policies still suffer from serious shortcomings,” said Julie Segal, senior program manager of climate finance at Environmental Defence Canada.

Segal, who is on the advisory committee for Bill S-243, considers this instrument to be the “missing piece” of Canada's climate plan, alongside the pricing of industrial carbon and the capping of emissions from the oil and gas sector.

Disparate efforts

Last year, Carney highlighted several elements of the bill that he considered important, including the requirement for financial institutions to establish plans for the transition to carbon neutrality. These plans must provide for the gradual reallocation of investments in line with the Paris Agreement.

“Canada should adopt, in my view, a transition planning requirement […] in line with the GFANZ framework,” he said, referring to the Glasgow Financial Alliance for Net Zero, a group Carney created in 2021 as the UN special envoy on climate action and finance.

To successfully complete this transition of the Canadian financial sector, the banker called for greater transparency. “Canadian climate disclosure efforts have been patchwork, delivered late and falling short of international standards,” he told senators.

At Brookfield, however, Carney did not support all aspects of Bill S-243. For example, he said he was opposed to changing the rules on bank capital, which would force fossil fuel investors to increase their capital reserves to counter the “risks” — from a financial point of view — posed by the transition.

Elsewhere in the world

“Our banks are among the world's largest investors in the fossil fuel sector,” said Segal, who is based in Montreal.

The European Union and the United Kingdom have clear rules on sustainable finance, which require institutions to adopt a plan for transitioning to carbon neutrality. Even Australia, which like Canada is economically dependent on resource extraction, is moving in that direction.

Since the re-election of President Donald Trump, however, progress on climate finance has slowed. At the turn of 2025, US banks Citi, Bank of America and Goldman Sachs disaffiliated from GFANZ.

In Quebec, experts have been working since 2023 on a roadmap for sustainable finance, which will be the first at the provincial level. “There will be progress by the end of the year,” promised Segal, who is also on the advisory committee for this initiative.