Hon. Lucie Moncion: Honourable senators, I rise today to speak to Senator Galvez’s Bill S-243, An Act to enact the Climate-Aligned Finance Act and to make related amendments to other Acts.

I am particularly drawn to this bill because it combines two issues that interest me, namely finance and the environment.

Given my past work in financial institutions, and particularly my experience as former president and CEO of L’Alliance des caisses populaires de l’Ontario, I fully understand why Senator Galvez is looking to redefine financial risk management to account for environmental risks, using a systemic approach.

[English]

This bill targets the big players, those with the greatest interest in the financial stability of our country. These are federally chartered financial institutions and other entities, including the Bank of Canada, the Office of the Superintendent of Financial Institutions and certain pension funds. In managing and assessing risk, financial institutions are concerned about so-called “black swans.” A black swan is an unpredictable event that, if it occurs, could have serious consequences on financial markets. Examples include the COVID-19 pandemic and its impact on the global economy or the 2007 commercial paper crisis, which represented a $33 billion financial risk for Canada.

In environmental matters, we use the term “green swans” to refer to the risks associated with climate change. Again, these are risks whose impacts are extremely difficult to predict or manage, but which can have catastrophic consequences for our country. These catastrophic consequences are not always of a nature to disproportionately affect financial markets; think of forest fires, floods, wind storms, ice storms and the like. Over the past five years, these climatic events have cost insurance companies more than $13 billion, but have not destabilized the financial markets. The question then becomes whether a weather event could have a high enough impact to cause a financial crisis.

[Translation]

The legislative framework Senator Galvez proposes in her bill is innovative because it covers risk management to mitigate these green swans. This is an excellent solution for financial institutions and other targeted entities.

We need to be careful, though. This proposed legislation would fit into a unique economic context in which financial institutions are resistant to change and slow to get on board with more effective environmental risk management. Why are they so resistant?

The pace of our green transition is important and needs to be evaluated in terms of transition-related risks.

Transitioning toward a new environmental risk management approach is difficult in part because major financial system players are also the entities that finance major polluters. I will come back to this.

[English]

Throughout my time in financial institutions, financial risk management was omnipresent. We had to identify significant activities and evaluate our business practices, analyze our financial position, determine our risk profile and have the funds in reserve to remain profitable under any circumstances. Over the years, and with advances in environmental science, our understanding of climate risk has evolved significantly. Today, we better understand the interrelationship between climate change and the economy, and many environmentalists are sounding the alarm — the green swan alarm.

At the same time, certain industries whose practices do not always align with climate commitments are the livelihood of many Canadians and, in the same vein, Canadians are in large part dependent on these industries. How do we reconcile this dichotomy?

[Translation]

In finance, the “transition” risks associated with an accelerated transition to a low-carbon economy coexist with climate change-related risks.

The relationship between these two types of risk factors that, on the surface, appear contradictory should be taken into account and studied by a committee so we can make sure the measures proposed in Bill S-243 will ensure a sustainable and inclusive transition. We have to try to strike the best possible balance between the risks and the opportunities presented by climate change.

[English]

Senator Galvez is proposing an ambitious, thoughtful and comprehensive legislative framework to allow the big players to manage risks upstream rather than have to pay the price downstream. Let’s remember that if we don’t compel entities to act, the status quo remains and nothing changes. Bill S-243 invites us to reflect, and proposes and invites these entities to step out of their comfort zone and act to bring about change. Thus, in order to ensure market stability in the medium- and long-term, it is incumbent upon the federally regulated financial sector to adapt their operations in a way that mitigates climate change or, at the very least, does not exacerbate it. When this bill is studied in committee, I think it will be important to consider the following elements.

One is assessing the economic impact of the transition on Canada’s GDP. Canada is an oil-and-gas-producing country and part of its economy is based on this sector. How will we finance the transition from oil and gas to other energy sources, and what will the economic impacts be? How fast can this transition take place? Are the timelines reasonable? Realistically and honestly, this transition will take longer than environmentalists would like. How long are we talking about?

The current geopolitical situation has just destabilized the global oil and gas balance. How does this affect decisions made in Canada? What role will Canada have in the global oil and gas supply market? What are the impacts of Europe’s dependence on the transition to clean energy? All of these issues deserve special attention.

While the objective of the bill is laudable, it must also be assessed in a context that takes all factors into account.

[Translation]

Assuming that Canada is serious about the environment and climate change, resistance from key stakeholders can easily put this project on hold indefinitely.

Senator Galvez’s bill proposes seven separate measures. The first concerns the consideration of climate risks. The second is about the alignment of various organizations with climate objectives. The third measure is an obligation for setting targets, planning and reporting. The fourth concerns climate expertise on boards of directors. The fifth has to do with establishing capital adequacy requirements. The sixth is about aligning financial products with climate commitments. The final measure concerns the public review processes on the progress made.

Senator Galvez did an excellent job presenting these measures in her speech, and I invite you to refer to them. I thank her for her leadership and for all the work she does to educate us about the environmental situation in Canada and elsewhere in the world. We have a duty to support her work, which can help ensure a better future for our children and grandchildren. I urge you to vote in favour of this bill at second reading and refer it to the Standing Senate Committee on Banking, Trade and Commerce for study. Thank you for your attention.

(On motion of Senator Martin, debate adjourned.)

On the Order:

Resuming debate on the consideration of the second report (interim) of the Standing Committee on Rules, Procedures and the Rights of Parliament, entitled Use of displays, exhibits and props in Senate proceedings, tabled in the Senate on April 5, 2022.

Hon. Pierre-Hugues Boisvenu: Like my colleague, Senator Gold, I rise to speak to the motion of Senator Moncion, which recognizes the importance of citizens who, often anonymously, play a key role in the Canadian justice system.

I thank the senator for supporting my Bill S-206. I also want to thank Senator Dalphond for his involvement, as he ensured that this bill was adopted without study in committee. That was an excellent decision, and I thank all my Senate colleagues for supporting this initiative. As you know, Bill S-206 is now at the other place, and it could be that members of the House have a surprise for us this afternoon and that they too are passing it without referring it to committee for study.

Bill S-206 is on its third attempt at being passed. Personally, I think we needed to protect these witnesses and not make them come back yet again to the Senate to talk about events that some may want to bury deep in their memory or that some have managed to deal with. It is a very humane decision to not refer the bill to a committee.

We must recognize the work that jurors do. We recognize that jurors need support, but now we must recognize the work that they do. I commend Senator Moncion’s initiative to designate one week a year to recognize the essential role that these people play. They are often called upon to make decisions that will have a major impact on other people’s lives. I believe that designating one week to tell them how important they are to our country and to our justice system is the least we can do.

I had limited knowledge of what jurors do. I was an observer in courtrooms when I accompanied families who had lost a loved one to murder. I observed this role at a distance and would see jurors on TV shows such as Perry Mason. Senator Moncion’s testimony was so moving and really taught me a lot about this role. She shared her own experience, as did Mr. Farrant, who testified in committee.

We heard from other witnesses, including some who served as jurors in the Bernardo trial. I couldn’t imagine being in that position, leaving every night, seeing the photos in my head, listening to . . . Basically, I think that this role is very important and very demanding. We are sending regular Canadians into the thick of the action, often without any professional or psychological training. They are being asked to deal with the worst things in the world. I think it is a big step forward that we are now telling them they can ask for help without being labelled a criminal.

The other step that needs to be taken, and that Senator Moncion is asking us to take today, is to pass her motion to have the country recognize juries every year. There is indeed a Jury Appreciation Week, and that week is recognized by the association, but not by the government. I think this motion will go a long way in getting proper recognition for that week.

I will close by saying that this motion should be passed today. To me, that is the heart of the issue, and I see nothing inconsistent about it. People who have served on juries in the past and who are serving on juries now, and those who will serve in the future, will know that the Senate has helped advance this role in the justice system. There is finally recognition that what they do is important and that they need support.

Once again, my congratulations to Senator Moncion. It has been a pleasure to speak to this motion and I urge you, colleagues, to pass it today.