The first Canadian province to issue green bondsTo fund the expansion of mass transit infrastructure in the province, and especially the Toronto-Hamilton area, the government of Ontario has decided to issue green bonds. This will make Ontario the first Canadian province to go that route, but if they are successful, they probably won't be the last. Ontario Premier Kathleen Wynne said:
"Green bonds are a great tool to raise capital for a project with specific environmental benefits. 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. Investors are hungry for this kind of stuff, and there's just a drop in the bucket of the supply for that demand."
But we'll have to wait for more details on how exactly these green bonds would work, what benefits they would provide over regular government debt, and how the projects would be certified as "green" by independent third parties.
There's no such thing as a free lunch, but if green bonds can provide less expensive financing for worthy infrastructure projects, why not? Other alternatives that had been suggested were "a jump in the [provincial sales tax], a five-cent-a-litre regional gas tax, a $350-million-a-year business parking levy and $100-million a year in development charges." Some of these might still happen, since the green bonds might be for targeted projects and other measures might raise funds for province-wide infrastructure improvements.