By AMARACHI AMADIKE, Local Journalism Initiative Reporter
An East Toronto group concerned about the climate crisis is pleased to hear of plans by the City of Toronto to issue a $100-million green bond to finance local projects that promote environmental sustainability.
On Friday, Sept. 15, the City of Toronto announced it had issued the green bond which, like other investments in the Green Debenture Program, will be put towards financing environmentally sustainable council-approved capital projects. The move is part of the city’s goal to reduce greenhouse gas emissions to net zero by 2040.
“The City of Toronto continues to take bold climate action and this green bond – our sixth since we became one of the first Canadian municipalities to issue green bonds – will fund capital projects to make life better and more sustainable for Torontonians, improving our health, growing our economy, cultivating social equity and building our resilience,” said Mayor Olivia Chow in a news release.
With the first green bond being issued in 2018, local climate change advocates Toronto East End Climate Collective (TEECC) said the organization is “pleased to hear that the City of Toronto has a new offering” after receiving news of the latest addition to Toronto’s green bonds.
“Although green bonds carry no financial advantage over other bonds, they are a positive step because the funds raised are committed to capital projects that reduce the City of Toronto’s carbon footprint and mitigate climate change,” said TEECC in an e-mail statement to Beach Metro Community News.
“Future city councils cannot divert these funds to other projects. Green bonds show intention and commitment to climate action.”
The green bond, which has a 20-year maturity and a coupon interest rate of 4.40 per cent, will go towards agencies such as the Toronto & Region Conservation Authority, Corporate Real Estate Management,Transportation Services, and the Toronto Transit Commission who will all be tasked with projects that include “state of good repair, renewable thermal energy, Yonge-Bloor capacity improvements and cycling infrastructure”.
TEECC members believe that the prohibition of the use of these funds on anything other than climate initiatives is an efficient strategy towards reaching the city’s climate goal.
“The city is facing a severe financial crisis which affects the city’s efforts in all areas, including the fight against climate change,” said TEECC’s statement. “Green bonds are constrained by the city’s budget and laws and regulations that restrict the city’s finances. They provide no financial advantage.”
According to the City of Toronto news release, investor confidence in Toronto’s economy “continues to be strong” and the city has maintained high demand for municipal bonds “despite sustained concerns about inflation”.
With the City of Toronto and the Ontario government’s creation of a joint committee to restructure Toronto’s finances, TEECC members feel confident that “a change for the better could be just around the corner”.
“The committee could grant the city the right to create semi-autonomous agencies with the power to issue bonds,” said the TEECC statement.
TEECC members believe that the creation of such agencies would enhance the ability to raise money that can be utilized for financing emissions-free heating and cooling “in over 400,000 buildings” at a low cost.
“Emissions from heating and cooling our buildings are the number one source of greenhouse gas emissions in Toronto,” said the TECC statement.
Although the green bond’s projects are yet to be decided upon, it is expected that they will aim to address environmental objectives such as adaptation to the effects of climate change; resource recovery and a waste management approach, avoidance of GHG emissions; as well as air, water and soil pollution prevention.
A Debenture Committee meeting is set to take place on Friday, Sept. 29, at Toronto City Hall. At the meeting, committee members will discuss the passing of bylaws that will direct how the green bond funds are to be used to address climate change.
— Amarachi Amadike is a Local Journalism Initiative Reporter for Beach Metro Community News. His reporting is funded by the Government of Canada through its Local Journalism Initiative.