Thank you, Madam Chair and members of the committee.
My name is Dr. Helen Tooze. I'm a senior policy researcher with the Canada Climate Law Initiative, which is a collaboration between law faculties at the University of British Columbia and York University. The CCLI provides businesses, regulators, directors, trustees and other fiduciaries guidance on climate governance, enabling them to make informed decisions during their transition to a net-zero economy.
We appreciate the opportunity to appear before you as part of the pre-budget consultations. Our submission focuses on a central economic point. Climate-related financial risks are not abstract future concerns. They are present, material and increasingly relevant to Canada's competitiveness, investment environment and financial stability.
Canada has an opportunity in the 2026 budget to strengthen confidence, attract capital and support long-term economic resilience. To do that, we recommend three targeted measures.
First, the federal government should amend the Canada Business Corporations Act regulations to require large and mid-sized federally incorporated companies to include climate transition plans that address climate-related risks and opportunities in their financial statements. These plans help maximize opportunities by guiding business strategy, informing capital expenditures and supporting authorities' macromonitoring of transition and physical risks in the financial system, as well as in the wider economy. As mandatory financial disclosures fall under the remit of the CBCA, it is the proper vehicle through which to make these changes.
It's important to note that this is not about imposing public disclosure requirements on CBCA-registered businesses, but rather about private disclosures only to their shareholders. Moreover, our proposal will impact only the 2% of companies that already have the scale and the resources to manage climate risks and provide investors with the comparable, decision-useful information they require. This leaves the vast majority of micro and small CBCA-regulated companies unaffected.
Second, Canada should make the made-in-Canada sustainable investment guidelines mandatory. A credible taxonomy is essential for attracting private capital, reducing greenwashing and providing investors with clarity about which activities support Canada's transition. Canada will require a significant annual investment to achieve its net-zero goals by 2050. We're talking about around $140 billion annually. Voluntary guidance alone will not provide the certainty needed to mobilize capital at that scale.
Third, the government should amend the pension benefits standards regulations to require federally regulated pension plan administrators to adopt transition plans and explain their climate resilience policies and how they apply to the investment portfolios they manage. Pension fiduciaries have a duty to prudently manage risk over the long-term horizons as well as the short-term horizons. Clear, baseline standards for climate governance would help protect planned assets and beneficiaries. Together, these measures would not dictate investment choices. Rather, they would improve transparency, comparability and accountability across the financial system. They would help direct capital towards resilient Canadian businesses that support sustainable growth and align Canada with leading international markets already moving in that direction. They would also give the federal government an important opportunity to show leadership.
As Canada seeks to build new and enhanced economic relationships with middle powers and trusted partners, our climate-related financial policy should be credible, comparable and consistent with the standards emerging in those markets. Strong, clear rules on transition planning, sustainable investment and pension governance would signal that Canada is a reliable partner for long-term investment in a sustainable economy. The 2026 budget is an opportunity to make climate policy credible, predictable and economically practical.
The CCLI urges the committee to recommend these measures so that Canada can better manage financial risks, strengthen competitiveness and unlock the investment needed for a prosperous and resilient future.
Thank you. I look forward to your questions.