Statement: Climate Finance Experts React to the 2025 Budget

Toronto, Ont./ Traditional territories of several First Nations including the Williams Treaties First Nations, Huron-Wendat, the Anishnaabeg, Haudenosaunee, Chippewas, and the Mississaugas of the Credit First Nation

More needed from Prime Minister Carney on transition plans, disclosure, and fossil-free taxonomy

While this budget aspires to advance climate competitiveness, it leaves Canada’s financial system dangerously underprepared for the climate crisis.

Future-proofing the Canadian economy from the worsening economic, societal, and physical harms from climate risks, while capturing economic opportunities, requires serious policies to align Canada’s financial system with climate goals. Instead, Prime Minister Carney’s government appears to backtrack on the basics.

The sustainable finance measures announced in this budget amount to needless steps backward, undermining Canada’s global credibility on climate while limiting our ability to manage climate-related financial risks - an issue on which Prime Minister Carney had previously built a global reputation.  

The announced ending of important anti-greenwashing provisions, the ongoing lack of detail, process and guardrails for a long-delayed green taxonomy, and further back-tracking on promised basic climate risk disclosure standards for large corporations, leaves Canada without even the most basic sustainable finance infrastructure in place.

This is now the fourth time that the federal government has reannounced its intention to move forward with a taxonomy. While a renewed commitment to developing a taxonomy alongside a linked green bond program is welcome, the devil will be in the details. The ultimate value of these labelling rules rests on their credibility with climate experts and civil society stakeholders, and must not be decided by finance institutions alone. 

A taxonomy on its own is insufficient for a sustainable financial system. A complete package of sustainable finance policies is needed. Progress on disclosures, transition plans, and the advancement of the re-tabled Climate-Aligned Finance Act are essential. Experts share their analysis below.

Quotes: 

“This budget is a genuine disappointment. Such needless retreat on climate and sustainable finance policy from a government led by Mark Carney is not something many experts would have expected. With the future stability and competitiveness of Canada’s economy on the line, we need much stronger leadership in the face of relentless industry lobbying. Canada needs credible guardrails in place to ensure the stability of our financial system and the climate.” Adam Scott, Executive Director, Shift Action for Pension Wealth & Planet Health

“The reconfirmed sustainable investment taxonomy, in moving forward, has to be scientifically stringent and center independent experts outside of the financial sector. That’s foundational for it to be credible. While it’s good that this government is paying attention to sustainable finance policies as it courts greater private sector investment, advancing solely on a taxonomy remains insufficient. As Prime Minister Carney has said himself in previous roles, a cohesive package of mandatory transition plans, disclosure, and credible taxonomy is what’s needed. Until the full package of policies is delivered, it remains a missing piece of Canada’s climate plan.” Julie Segal, Senior Manager of Climate Finance, Environmental Defence Canada

“The government’s proposal to weaken greenwashing provisions means more investor risk, particularly given the reluctance of provincial securities regulators to enforce accurate and complete disclosure in climate matters.” Matt Price, Executive Director, Investors for Paris Compliance 

“The only thing remotely linked to sustainable finance in this budget is the recycling of weak measures the Liberals have committed to for years but failed to act on decisively. The removal of recent measures to curb greenwashing — despite no evidence that these rules did anything other than prevent deceptive environmental claims — is abysmally disappointing. If there is anything this budget shows, it is the urgent need to finally pass the Climate-Aligned Finance Act which was re-introduced in the Senate last week. A failure to implement stronger rules to safeguard the financial and climate systems could open the door to litigation, as illustrated by the recent case against CPP Investments alleging climate-related financial risk mismanagement.“ Karine Peloffy, Lawyer & Sustainable Finance Lead, Ecojustice

“The government should not remove the ability for Canadians to bring allegations of greenwashing directly to the Competition Tribunal, as is proposed in the budget. This would leave anti-greenwashing enforcement to the Competition Bureau, which has limited capacity, expertise, and resources. Canadians need effective tools to ensure that companies and financial institutions don’t get away with deceptive environmental claims.” Tanya Jemec, Finance Lawyer, Ecojustice

For interview requests: 

Adam Scott, Executive Director | Shift Action for Pension Wealth & Planet Health 
adamscott@shiftaction.ca, (416) 347-3858 

Shift Action for Pension Wealth and Planet Health is a charitable initiative that works to protect pensions and the climate by bringing together beneficiaries and their pension funds to engage on the climate crisis. Shift is a project of MakeWay Canada.

Julie Segal, Senior Manager of Climate Finance, Environmental Defence Canada
jsegal@environmentaldefence.ca, 613-791-9263

Environmental Defence Canada is a leading Canadian environmental advocacy organization that works with government, industry and individuals to defend clean water, a safe climate and healthy communities.

For Ecojustice: Cari Siebrits, Communications Strategist
csiebrits@ecojustice.ca, (416) 368-7533 ext. 504

Ecojustice uses the power of the law to combat climate change, defend nature, and fight for a healthy environment. Its strategic, public interest lawsuits and advocacy lead to precedent-setting court decisions, law and policy that deliver lasting solutions to Canada’s most urgent environmental problems. As Canada’s largest environmental law charity, Ecojustice operates offices in Vancouver, Calgary, Toronto, Ottawa and Halifax.