DR. TAMMY NEMETH 

There is a renewed push for Senator Rosa Galvez’s Climate‑Aligned Finance Act (Bill S‑243), a piece of legislation that would reshape Canada’s capital‑markets rules around climate risk. Under the bill, every federally regulated financial institution – including banks, credit unions, pension funds and insurance companies – must assign dramatically higher risk‑weightings to debt tied to fossil‑fuel projects: a 1,250% weighting for new extraction or pipeline infrastructure and a minimum 150% weighting for existing assets. Those numbers far exceed the Basel III standard and would make borrowing costs prohibitive, essentially cutting off financing for new oil‑and‑gas development and severely restricting expansion of existing operations.

Proponents, led by Senator Galvez and supported by former Bank of England governor Mark Carney, argue the measure will align Canada’s financial system with net‑zero targets and protect investors from stranded‑asset risk. Critics, however, point to the sector’s historic contribution of over $4 billion annually to federal coffers and the broader economic fallout – job losses, reduced provincial revenues, and a loss of Canada’s status as an “energy superpower.” The bill’s broader governance provisions would require climate‑expert representation on boards and bar individuals with fossil‑fuel ties from senior roles unless they demonstrate alignment with climate goals. While climate‑aligned finance is essential, the blanket punitive approach of Bill S‑243 could jeopardize Canada’s energy security and fiscal stability.

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