Ontario Premier Kathleen Wynne recently announced her government’s plan to fund environmentally friendly infrastructure projects through the creation of green bonds. The introduction of green bonds would be a first for a Canadian government.

Pioneered by the World Bank in 2008, green bonds are a tool to raise capital for a project with specific energy benefits. In Ontario, the bonds would take advantage of the government’s ability to raise funds at low interest rates. The introduction of bonds could help the government address important infrastructure issues.
Ontario’s green bonds would meet international certification and disclosure standards, meaning they would be officially recognized as investments in sustainability.

The Ontario government is looking for new ways to fund infrastructure projects, including transportation. It is currently committed to investing more than $35 billion in infrastructure across Ontario in the next three years.

The Wynne government will consult with investors in Canada and around the world regarding how to best structure the green bonds. It is expected that Ontario will start issuing the bonds next year.