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Financing Greener Growth: The fall economic statement needs to accelerate green investment



Four issues continue to be responsible for private capital’s underinvestment in clean technology companies and projects.

Case study: carbon capture

Technology risk: Carbon capture is a proven technology, but has been less effective with non-concentrated emissions sources. There can also be risks of carbon leakage in sequestration. Most of the capital costs relate to point source capture where there is integration risk with existing systems.

Carbon price uncertainty: Future carbon credit prices can form a significant component of the revenue stream needed to underwrite a major capture project.

Demand risk: Carbon capture could be used in industrial applications like steelmaking or cement, where a high share of the product is exported and differentiated pricing for low-emissions products is niche.

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Regulatory risk: Pour space availability, liability for potential escape of sequestered emissions, and environmental assessment or right of way for carbon pipelines are sources of regulatory uncertainty.

With $369 billion in broad-based and time-limited incentives, IRA will address key cleantech technology and market risks and improve project economics. While the bill’s provisions face medium-term political risk from the Republicans, it provides enough certainty to spark major U.S. decarbonization investment in the power sector and among other green technologies. Incentives for domestic manufacturing will also help establish U.S.-centric green supply chains.

It’s a big push for climate action, global investment in emerging technologies, and economic opportunities for Canada. Indeed, Canadian cleantech companies will have opportunities to sell their products into the U.S. market and Canada’s proximity to the U.S. improves our potential as a key location for new energy investment in areas like critical minerals. But to rely on U.S. investment to improve green technologies is to risk falling behind on our climate targets. Despite IRA’s size, U.S. public and private investment in key technologies will still only be a fraction of what’s needed globally. And delaying our own decarbonization efforts could render Canadian industry increasingly uncompetitive as the U.S. and Europe steam ahead.

Competition for investment will be most fierce for new energy assets. These include finite hydrogen hubs, critical mineral mines, cleantech company labs and factories, or battery assembly plants that are currently shopping for the best locations to build. The subsidy-based approach engrained in IRA—rather than regulatory incentives—is likely to be a much bigger draw for these firms.

Canada’s best response to the current environment is to continue to advance decarbonization across economic sectors. Canada already has a core carbon pricing system and almost $15 billion in annual net-zero aligned federal spending.2 To succeed, we’ll need to do even more. This doesn’t mean mimicking the U.S. subsidy-first approach. But Canada’s system can be bolstered in a few areas with more regulatory certainty and a stronger public sector role in addressing clean tech risks and poor project economics.

  • Address carbon pricing uncertainty through carbon contracts for differences

Canada should make carbon contracts for differences (CCfD) a focus of the Canada Growth Fund. In these bilateral contracts, the government would compensate project sponsor counterparties when carbon prices deviate from those announced. This would help commit the government to taking the actions necessary to uphold carbon prices that support projects. The Netherlands leads the world in employing CCfDs, with a budget of €13 billion in 2022.

CCfDs are not without challenges. Some elements of carbon pricing are easier for the government to control, like raising the fuel charge rate at which heavy emitters can purchase carbon credits from the government. Others may involve greater tradeoffs. Raising the market-set carbon credit price for heavy emitters for instance, could involve imposing stronger performance standards across sectors—including those less prepared to meet them. If governments can’t follow through on actions to raise carbon prices, fiscal liability of CCfDs could be significant. These risks can be limited by focusing on the fuel charge risk the government controls, partial coverage of carbon credit prices, providing greater support to strategic projects or more uneconomic technologies, or providing shorter term contracts until 2030 to bridge to the development of better carbon markets. As sophisticated financial contracts to structure and price, the government will need to move quickly to be able to execute contracts in time for private investment to flow into emissions reductions for 2030.

The federal government can further boost the regulatory system by finalizing regulations like the Clean Electricity Standard, methane regulations, the oil and gas cap, and the heavy emitters’ system review. There should also be concerted efforts to address permitting and other regulatory hurdles to project development, in conjunction with provinces.

  • New tools to address technology and market risks

Technology risk is deterring investors from taking on large-scale projects involving technologies like carbon capture, direct air capture, or hydrogen. What’s needed is an entity to provide guarantees that the engineering, procurement, and construction of these technologies work as planned. This is a common feature in project finance, where the risk allocation helps to both draw in debt investors and improve project returns. The Canada Growth Fund should address this risk, which is too large for most entities to self-insure against. In the U.S., the Department of Energy’s Loan Programs Office provides this type of commercialization support through loans and guarantees, and was given an expanded funding envelope in IRA.

Market risk can be dealt with through offtake agreements, where a customer agrees to take a certain amount of product at a set price for a period of time. Major corporate entities are looking to secure stable supplies of critical minerals, clean hydrogen, or other materials, but may be challenged to fully bear the risks or they may have insufficient regulatory incentive to do so. Government is needed to help bridge the gap and speed the development of enabling infrastructure and technologies enabling critical minerals supply and clean hydrogen production to further decarbonize a range of sectors.

  • More tax-based support for maturing technologies

Major investment is needed now to promote innovation post-2030 to improve technologies and commercial models for decarbonizing hard-to-abate sectors. The government should make it an explicit focus for the Canada Growth Fund (CGF) and Canada Infrastructure Bank (CIB) to support innovative or first-of-their-kind projects in strategic sectors.

Tax-based incentives like the cleantech investment tax credit are equally important. When proven technologies are at an earlier commercialization phase and winning models are unknown, the tax system engages as many private actors and approaches as possible. They’ll be faster and broader-based compared to concessionary finance tools like CGF or CIB, which can complement tax incentives by covering additional project risks in strategic sectors. Concessionary finance tools should emphasize transparency so they can operate like tax tools in firming market expectations, such as around future prevailing carbon prices or market development.

  • Encouraging the provinces to step up

The provinces have an equally important role to play as taxing authorities and direct beneficiaries of their competitive industrial sectors. Yet provinces have been looking to the federal taxpayer to take the lead in decarbonization or for green industrial policy. For instance, the federal taxpayer is being called upon by Nova Scotia and New Brunswick to meet regulations ending coal use in the power sector, Alberta for carbon capture incentives to meet the oil and gas emissions cap, Ontario for development of a battery supply chain, or Newfoundland and Labrador to encourage east coast green hydrogen production. Federal incentives should smooth disparate decarbonization burdens, but provinces need to step up with their own incentives or revenue models and play a larger role in supporting industrial policy projects.

Federal incentives should encourage explicit provincial matching funds and get further traction for advancing regional economic tables. An overarching federal-provincial dialogue should advance discussions around coordinated and politically-saleable approaches to consumer and industry-pay models for decarbonization investment.

  • Strategic prioritization

With so many areas for investment, the federal government will need to prioritize. A key choice is between decarbonizing existing production and pursuing production opportunities in the new energy systems. The first could run the risk of spending too much money to decarbonize early in sectors that could have a diminished role in the future, such as fossil-fuel based industries. The second is a bet on an uncertain energy future: investments in an export-driven sector that may facilitate decarbonization globally at the cost of the Canadian taxpayer, or that doesn’t result in direct cuts in Canadian emissions or long-term economic benefits.

The federal government will need to support the private sector in decarbonizing the current energy system while also building a new one. But it will need to be clear-eyed in pursuing focused industrial policy opportunities, while supporting broad-based decarbonization strategies. Decarbonization investment can advance economic opportunities and Canada’s primary objective: to meet the emissions targets necessary to avoid climate catastrophe. The government should articulate an overarching strategy, with more specific policy objectives across the suite of government policy tools, including programs, procurement, and regulation.

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.

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My Favorite Investment Writing of 2022



With 2022 coming to a close, it’s time for my annual tradition of gathering my favorite investment writing of the year. I started this tradition in 2017, and have continued it ever since (2018, 2019, 2020, 2021).

However, unlike previous years, 2022 was painful for investors of all types. Stocks fell, bonds fell, and crypto really fell in the worst market environment since 2008. And, though this year was difficult for all of us, the silver lining is all the great investment writing that came out of it. With that being said, I present my favorite investment writing of 2022:

The first piece on this list was technically written in February 2021 (and featured on last year’s list). However, given its accuracy and level of foresight, I thought it would be the perfect way to start this year’s list as a reminder of how far we’ve come. If there’s one line that I will never forget it’s:

Eventually, everyone figured out that Galileo was right. Eventually, everyone will figure out that Cathie Wood isn’t. And it won’t take as long either.

Yes Drew. It didn’t take long at all.

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Morgan remains my favorite writer in finance because he is one of the few people that can make me re-evaluate my most cherished beliefs. In this piece he challenges our reliance on data and logic by demonstrating why people don’t always behave as rationally as we think they will. Filled with beautiful stories and counter-intuitive insights, this is another Morgan Housel classic that you won’t want to miss.

While I don’t agree with everything that Ben Hunt writes (he can be too bearish for me at times haha), I recognize that he is one of the best thinkers in our industry. In this post, he provides a brief history of financial markets during the era of declining interest rates and how 2022 flipped everything on its head. If you want to have a better understanding of monetary policy and how people respond to interest rates, this is the piece to read.

Sometimes I read a Josh Brown piece and can’t perfectly describe what it’s about, only that you have to read it. This is one of those pieces. In it, Josh walks you through the last few years in markets and explains why everything seems to have taken a sudden 180. Though there are some things that you weren’t suppose to see, thankfully, this piece isn’t one of them.

I love it when a writer provides a simple rule of thumb that makes my financial life easier. In this piece Katie does just that. Using her rule, you’ll be able to quickly calculate out how much you need to save for retirement based on how much you want to spend (each month) in retirement. Not only is this rule practical, but Katie explains it in a fun and relatable way. For anyone who wants great financial tips from one of my favorite people in the industry, look no further than Money With Katie.

With all the bullshit that there’s been in the investment industry over the past few years, this piece from Benn Eiffert is a breath of fresh air. Though Benn is mostly known for being an expert on volatility, he demonstrates his overall investment knowledge wonderfully in this scathing takedown of an industry that has, unfortunately, conned so many. While there’s a lot of bullshit in the financial world, thankfully, you won’t find any in this piece.

While many writers will discuss risk within your portfolio, far fewer think about it with regards to your income and your career. In this piece, Chris Keith teaches a lesson that took me a little too long to learn—diversification shouldn’t stop with your investments. While owning a mixture of income-producing assets can work wonders, having a mixture of different income sources is equally, if not more, important. If you want to learn how to be a little more anti-fragile with your finances in the future, read this.

Jack Raines is the fastest growing financial blogger that I’ve ever seen and this article helps explain why. In it, Jack explains the six types of wealth and why they are all important to your life. Though only in his mid-twenties, Jack writes with the wisdom of someone decades older. Don’t just take my word for it though, read this piece and find out for yourself.

Another young blogger that has taken the financial world by storm, Kyla Scanlon is the go-to person for understanding what’s happening right now in the markets and the economy. In this piece she defines a term that was since co-opted by many others—the vibecession. While she is mostly known for her TikToks, Kyla’s sometimes quirky and always insightful writing is not something to be overlooked.

Ben wrote a lot of great posts on the housing market this year, but this was my favorite because it addressed the elephant in the room—luck. Given that purchasing a home is likely to be the biggest financial decision of your life, luck plays an important role in such transactions. Ben’s piece is useful in this regard because it highlights how this plays out in the real world. If you are in the market for a house (or will be soon), this is the piece to read.

I love when Michael Batnick does posts like this because there are so few writers that can take the 40,000 foot view and summarize it in such a succinct and insightful way. This piece is no exception. In a year where there are many lessons to be learned, Michael drops 20 of them with ease. My favorite is:

Diversification is the only answer to an unpredictable future. If everything is working, you’re not really diversified.

Amen, Michael. Amen.

Last, but not least, we have The Crypto Story from none other than Matt Levine. Matt is the best daily writer in finance, which means that he tends to write about things that happened in the last 24 to 72 hours. However, with this piece Matt created an evergreen epic that dives into the history of crypto and how its future might unfold. While this piece clocks in at around 40,000 words, Matt’s simple way of explaining such complex topics make it an easier read than you might expect. Don’t miss out.

I hope you enjoyed this year’s annual review. Happy investing and thank you for reading!

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This is post 324. Any code I have related to this post can be found here with the same numbering:

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Ontario Teachers’ Announces Appointment of Sustainable Investing Leader Anna Murray



TORONTO, Dec. 6, 2022 – Ontario Teachers’ Pension Plan Board (Ontario Teachers’) announced that Anna Murray has been appointed to the role of Senior Managing Director and Global Head of Sustainable Investing effective December 5.

Working within Total Fund Management, Investment Division, Ms. Murray will play a leadership role in supporting Ontario Teachers’ long-term plan to create a lasting, positive impact while creating value for members. By working closely with senior leaders and investment teams across the organization, she will execute on the fund’s ambitious climate strategy and net-zero targets, advance its approach to impact investing and oversee corporate governance activities including proxy voting and public company engagements. She will also oversee the continued integration and assessment of Environmental, Social and Governance (ESG) opportunities and risks in the investment process.

“Sustainable investing is a key part of Ontario Teachers’ strategy as it generates positive, real-world impacts while supporting long-term value creation for our members. We look forward to Ms. Murray and her team helping us meet our impact-related commitments, as well as continue to evolve our approach and build on our leadership in sustainable investing,” said Ziad Hindo, Chief Investment Officer.

Ms. Murray has extensive experience leading and developing sustainability strategies. Most recently, she was the Global Head of ESG for Sun Life Capital (SLC) Management where she was responsible for integrating ESG risk management and value creation practices into investment decisions and management across the firm’s global investment platform. She also worked as Global Head of ESG with BentallGreenOak, SLC Management’s real estate investment manager and a globally recognized provider of real estate services.

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Ms. Murray is Co-Chair of the Principles of Responsible Investment (PRI) Real Estate Advisory Committee and of the Environmental Committee at the Pension Real Estate Association (PREA). She also serves on the Board of Directors for the Responsible Investment Association and the Canada Green Building Council. She has been named one of the Top 100 Women in Canada by the Women’s Executive Network, Top 40 under 40 and one of Canada’s Clean50, which recognizes sustainability leaders who have made exceptional contributions to the clean economy. She holds an international MBA from the University of British Columbia and a law degree from York University with a focus on environmental justice and sustainability.

About Ontario Teachers’ 

Ontario Teachers’ Pension Plan Board (Ontario Teachers’) is a global investor with net assets of $242.5 billion as at June 30, 2022. We invest in more than 50 countries in a broad array of assets including public and private equities, fixed income, credit, commodities, natural resources, infrastructure, real estate and venture growth to deliver retirement income for 333,000 working members and pensioners.

With offices in Hong Kong, London, Mumbai, San Francisco, Singapore and Toronto, our more than 400 investment professionals bring deep expertise in industries ranging from agriculture to artificial intelligence. We are a fully funded defined benefit pension plan and have earned an annual total-fund net return of 9.6% since the plan’s founding in 1990. At Ontario Teachers’, we don’t just invest to make a return, we invest to shape a better future for the teachers we serve, the businesses we back, and the world we live in. For more information, visit and follow us on Twitter @OtppInfo.

Media Contact:
Dan Madge
Phone: +1 (416) 419-1437

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Record investment in MB highways in store for 2023



MLA for Turtle Mountain, Doyle Piwniuk, says he’s looking forward the New Year as one full of accomplishments.

“I’m very optimistic, we have a very big year going forward provincially,” he explains.  “We’re looking at economic development, reconstructing of more highways, like Hwy 23 in the region, and we have more highways to fix.  Going forward in 2023 there will be a record investment in our highways.”

“It’s also going to be a good year for the Turtle Mountains area too because of the opportunities at the International Peace Garden and the economic development in the different communities. I believe we are going to have a very bright 2023,” adds Piwniuk.

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“On behalf of my family to your family, I want to wish you a very merry Christmas and a happy New Year,” he shares.  “And, any time you want to get ahold of me please contact or you can call our number at 204-552-0130.”

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