Government announces next steps toward made-in-Canada sustainable investment guidelines

From: Department of Finance Canada

News release

December 18, 2025 – Ottawa, Ontario – Department of Finance Canada

The Government of Canada is committed to mobilizing public and private capital to promote investment in sustainability, as part of the transition to net-zero. Budget 2025 reconfirmed the government’s support for the arm’s-length development of made-in-Canada sustainable investment guidelines, also known as a taxonomy, and committed to the selection of an external organization to lead it by the end of the year.

Today, the Honourable François-Philippe Champagne, Minister of Finance and National Revenue, announced the selection of the Canadian Climate Institute to lead the development of these guidelines, working with Business Future Pathways, bringing together representatives of major financial institutions and technical experts.   

The Canadian sustainable investment guidelines will be built on strong and independent governance and align with global best practices. These guidelines will become an important tool for investors, lenders, and other stakeholders, by credibly identifying “green” and “transition” investments. The Canadian taxonomy will be a new, voluntary market tool that will be aligned with and broadly compatible with other major, science-based taxonomies and frameworks around the world.

Canada has the necessary resources and talent to accelerate the growth of net-zero aligned activities, including developing technology to enable significant emissions reductions in higher emitting sectors. As the global demand for low-carbon goods and processes rises, the government is seizing this opportunity to promote sustainable finance and accelerate the flow of private capital into sustainable activities across priority economic sectors.

The Canadian Climate Institute will work collaboratively with Business Future Pathways, an investor-led initiative, to establish a robust and independent governance structure to oversee the development of science-based taxonomy criteria and undertake stakeholder engagement. Immediate next steps include establishing a new independent Taxonomy Council to review and ultimately approve investment guidelines. This Council and its advisory groups will include independent experts and representatives from academia, the financial sector and civil society, climate scientists, and Indigenous representatives. As efforts get underway, working groups with specific areas of expertise in key industries and sectors will also be established to inform recommendations to the Council.

The governing council is expected to finalize investment guidelines for three priority sectors by the end of 2026 to establish the made-in-Canada taxonomy, and complete three additional priority sectors by fall 2027. The council will collaborate closely with government, industry, and other key stakeholders to determine the initial priority sectors, based on consideration of where taxonomy guidance has the greatest potential to deliver emissions reductions and promote low-carbon competitiveness in the Canadian economy. 

Quotes

“To grow our economy and meet the 2050 net-zero target, Canada must mobilize more private capital to build the 21st century clean economy. Financial markets demand clear, common standards defining science-based “green” or “transition” investments. Today’s selection of the Canadian Climate Institute, working with Business Future Pathways, accelerates achieving that essential clarity for our nation.”

- The Honourable François-Philippe Champagne,
Minister of Finance and National Revenue

“Today our government is taking a big step toward pioneering an all-Canadian sustainable finance guideline. These guidelines will attract private capital in the global race to a low-carbon economy. Together with investment, industry, Indigenous, and civil society leaders Canada will develop clear, science-based definitions of “green” and “transition” finance. Once in place, these guidelines will provide credibility to market activity aligned with Canada’s climate targets, while building a strong, competitive, sustainable economy.”

- Ryan Turnbull,
Parliamentary Secretary to the Minister of Finance and National Revenue

“The new sustainable investment guidelines will give Canada what investors have been asking for: a clear, credible, science-based system for identifying which activities in the economy are aligned with the country’s climate and competitiveness goals. Crucially, Canada’s guidelines will not just focus on defining clean technologies and investments—they will be designed to help transform emissions-intensive sectors that are central to the national economy, and guide credible pathways for them to compete in a low-carbon world.”

- Jonathan Arnold,
Director of Sustainable Finance, Canadian Climate Institute 

“As Canada works to build stronger, more diversified trading partnerships and undertake nation-building projects, globally-aligned, made-in-Canada sustainable investment guidelines will help unlock our country’s economic potential. Canada is one of the best places in the world to put green and transition capital to work. These guidelines will help direct that investment toward the opportunities that will shape our shared future.” 

- Barb Zvan,
Chair of the Financial Advisory Committee, Business Future Pathways, Former Chair of the Sustainable Finance Action Council Taxonomy Technical Expert Group

Quick facts

  • A taxonomy is a set of criteria used to identify activities and investments that are eligible for a “green” or “transition” investment label. The made-in-Canada taxonomy could be used by financial institutions or corporations to issue green or transition bonds, and by investors to evaluate the credibility of sustainable investment products. 

  • The Canadian Climate Institute produces rigorous analysis, economic modelling, and in-depth research on policy solutions to help Canada reduce greenhouse gas emissions, adapt to the effects of climate change, and compete and prosper in the global energy transition.

  • Business Future Pathways is an investor-driven initiative backed by technical expertise that equips Canadian companies with the guidance and guidelines necessary to meet investor and market expectations and drive capital to Canadian industries as the world transitions to net-zero emissions. 

  • The government also remains committed to regular green bond issuances and will explore the development of a Sustainable Bond Framework that will align with made-in-Canada sustainable investment guidelines to incorporate economic sectors as the taxonomy is being developed.

  • Budget 2025 also announced that the government will work with provinces and territories to improve climate disclosure across the economy. This work will seek alignment with international standards with consistent rules across federal-provincial-territorial jurisdictions. 

Associated links

Contacts

Media may contact:

John Fragos
Press Secretary
Office of the Minister of Finance and National Revenue
John.Fragos@fin.gc.ca

Media Relations
Department of Finance Canada
mediare@fin.gc.ca
613-369-4000

General enquiries

Phone: 1-833-712-2292
TTY: 613-369-3230
E-mail: financepublic-financepublique@fin.gc.ca

Stay Connected

Page details

2025-12-18