Ontario will be the first province in Canada to issue
so-called green bonds next year to help fund public transit expansion, Premier
Kathleen Wynne said Wednesday. The
program will be unveiled in next week's fall economic update and is an
innovative way of raising the money that's needed to build transit
across the province, she said. "Green bonds are a great tool to raise
capital for a project with specific environmental benefits," she
said."The worldwide market for green bonds in the last year has doubled,
and it's now estimated to be more than $3 46 billion — those are U.S. dollars."
Could save money It's the first measure Wynne has promised to help raise the
billions of dollars needed to expand public transit in the heavily congested
Toronto and Hamilton area. It will require legislation and certification,
said Finance Minister Charles Sousa. But it won't be something that will
trigger a confidence vote that could topple the minority Liberal government and
trigger an election. The new bonds would capitalize on the province's ability
to raise funds at low interest rates, Sousa said. It will actually save the province
money over the long term because there are many investors who are prepared to
pay to invest in specific green initiatives or at least give the province the
benefit of doing it, he said. Metrolinx suggested
gas tax, parking levy It won't necessarily get the province cheaper
financing in the short-term, but it will attract new investors to invest in
Ontario bonds, said Toby Heaps, president of Corporate Knights Inc. who joined
Wynne to make the announcement. "Investors are hungry for this kind of stuff, and
there's just a drop in the bucket of the supply for that demand," he
said. Green bonds were not among the
levies recommended by the provincial transit agency Metrolinx to raise the
estimated $2 billion a year that's needed to improve transit in the
Toronto-Hamilton area. Wynne also appointed a panel last month to examine
those proposals, which included a jump in the HST, a five-cent-a-litre regional
gas tax, a $350-million-a-year business parking levy and $100 million a year in
development charges. Wynne said the green bonds don't preempt the panel's
work, because the program addresses the broader issue of building
infrastructure across Ontario. But there may be some "overlap," she
acknowledged
Media from the The Canadian Press Posted: Oct 30, 2013
