Deputy Prime Minister and Minister of Finance Chrystia Freeland yesterday released Budget 2022: A Plan to Grow Our Economy and Make Life More Affordable (Budget 2022). This bulletin outlines key climate, energy, and Indigenous highlights from Budget 2022, part of total new spending of $31.2B, which includes: A proposal to establish the Canada Growth Fund (initial investment of $15B over five years), directly targeted at reducing emissions and enabling the transition to a low-carbon economy. Confirmation of the government’s intention to establish a refundable investment tax credit for carbon capture, utilization and storage (CCUS) projects to the extent that they permanently store captured CO2 through an eligible use. Plans to engage with experts on establishing an investment tax credit of up to 30 per cent, focused on net-zero technologies, battery storage solutions, and clean hydrogen. Support for the co-development of an Indigenous Climate Leadership Agenda to support self-determined action in addressing Indigenous Peoples’ climate priorities. Climate Budget 2022 includes new and proposed funding supporting important climate action, as follows: Canada Growth Fund. Budget 2022 proposes establishing the Canada Growth Fund, with an initial $15B investment over the next five years and the aim of attracting substantial private sector investment supporting the following economic policy goals: reduce emissions and contribute to achieving Canada’s climate goals; diversify the economy and bolster exports by investing in the growth of low-carbon industries and new technologies across new and traditional sectors of Canada’s industrial base; and support the restructuring of critical supply chains in areas important to Canada’s future prosperity—including our natural resources sector. Clean technology. Budget 2022 proposes the following new clean technology funding and investments: engage with experts to establish an investment tax credit of up to 30 per cent, focused on net-zero technologies, battery storage solutions, and clean hydrogen; provide $2.2B over…

Ontario’s Ministry of Energy (the Ministry) this week announced its intention to develop a new voluntary clean energy credit registry (CEC) registry. The Ministry has directed Ontario’s Independent Electricity System Operator (IESO) to research and report on the design of a provincial CEC registry by July 4, 2022. The Ministry also indicated that it intends to consider the IESO report and stakeholder feedback before implementing the CEC registry by January 2023.   The Ministry stated that the CEC Registry will assist businesses operating in Ontario to meet corporate environmental and sustainability goals. The voluntary CECs would represent 1 MWh of clean electricity generated from one or multiple non-emitting sources such as solar, wind, bioenergy, hydroelectric and nuclear. Purchasers will be allowed to purchase and retire the voluntary CECs to meet corporate and individual goals and demonstrate that their electricity is generated from non-emitting sources.  Revenue from the sale of CECs could (i) be returned to Ontario ratepayers to lower the cost of electricity and/or (ii) support future clean energy generation projects. The proposed CEC registry is intended to assist businesses to reduce emissions and meet the climate targets of the Made-in-Ontario Environment Plan, Ontario’s climate and environment plan.   The CEC registry would match similar voluntary registries in Ohio, Pennsylvania, Illinois, Indiana, Wisconsin, and New England For further information or to discuss the contents of this bulletin, please contact Lisa DeMarco at lisa@resilientllp.com.

Canada and Alberta are accelerating their phase down of all coal-fired electricity generation assets and the ripple effect is evident in the actions of leading energy corporations. Yesterday, ATCO, a Calgary-based energy company, announced new ESG targets for 2030 and a commitment to achieve net zero greenhouse gas (GHG) emissions by 2050. This follows actions to reduce its operational GHG emissions by 90 per cent between 2019 and 2020, in part, through the sale of its Canadian fossil fuel-based electricity generation assets.   ATCO indicates that the company will accelerate the deployment and use of clean hydrogen, energy storage, renewable electricity, and energy efficiency technologies to achieve its net zero commitment by 2050. In addition, it will work with government to support enabling policy and regulation and identify barriers for a cost-effective decarbonization of the economy.   ATCO’s ESG targets include: reducing net operational GHG emissions to earnings intensity by 30 per cent; reducing customer GHG emissions by 2 million tonnes through participation in renewable energy, clean fuels, energy efficiency, and energy infrastructure projects; owning, developing, or managing over 1,000 MW of renewable energy; and deriving 20 per cent of revenues from transitional product categories (such as renewable natural gas and hydrogen).  These changes precede what is anticipated to be mandatory climate-related financial disclosures being announced and imposed by the Canadian Securities Administrators (see our earlier bulletin on proposed climate-related disclosure requirements here). We expect other energy corporations to also make bold announcements in the coming months.  For further information or to discuss the contents of this bulletin, please contact Lisa DeMarco at lisa@resilientllp.com.

The board of the (IOSCO) today published a series of recommendations applicable to the market for ESG ratings and data products (Ratings). IOSCO notes that the market does not typically fall within the remit of securities regulators and suggests that regulators could consider focusing greater attention on the use of Ratings and the activities of Ratings providers in their jurisdictions. IOSCO’s recommendations are as follows (emphasis added): Regulators could consider focusing more attention on the use of Ratings and Ratings providers that may be subject to their jurisdiction. Ratings providers could consider adopting and implementing written procedures designed to help ensure the issuance of high quality Ratings based on publicly disclosed data sources where possible and other information sources where necessary, using transparent and defined methodologies. Ratings providers could consider adopting and implementing written policies and procedures designed to help ensure their decisions are independent, free from political or economic interference, and appropriately address potential conflicts of interest that may arise from, among other things, the Ratings providers’ organizational structure, business or financial activities, or the financial interests of the Ratings providers and their officers and employees. Ratings providers could consider identifying, avoiding or appropriately managing, mitigating and disclosing potential conflicts of interest that may compromise the independence and objectivity of the Ratings provider’s operations. Ratings providers could consider making adequate levels of public disclosure and transparency a priority for their Ratings, including their methodologies and processes to enable the users of the product to understand what the product is and how it is produced, including any potential conflicts of interest and while maintaining a balance with respect to proprietary or confidential information, data and methodologies. Ratings providers could consider adopting and implementing written policies and procedures designed to address and protect all non-public information received from or communicated to them…