Short Title Short title 1 This Act may be cited as the  Enacting Climate Commitments Act . PART 1 Climate-Aligned Finance Act Enactment of Act Enactment 2 The  Climate-Aligned Finance Act  is enacted as follows: An Act to require certain financial and other federally regulated entities to mitigate and adapt to the impacts of climate change Whereas there is a broad scientific consensus and high confidence that anthropogenic greenhouse gas emissions cause global climate change and present an unprecedented risk to the environment — including its biological diversity — to human health and safety, to economic prosperity and to the stability of the Canadian financial system; Whereas the impacts of climate change — such as coastal erosion, thawing permafrost, increases in heat waves, droughts and flooding — and related risks to critical infrastructure and food security are being felt throughout Canada and are impacting Canadians and disproportionately affecting  Indigenous peoples, low-income citizens and northern, coastal and remote communities; Whereas the Parliament of Canada recognizes that it is the responsibility of the present generation to minimize the impacts of climate change on future generations; Whereas the United Nations, Parliament and the scientific community have identified climate change as an issue of international concern that is unconstrained by geographic boundaries; Whereas Canada has ratified the United Nations Framework Convention on Climate Change, done in New York on May 9, 1992, and in force as of 1994, and the objective of that Convention is the stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system; Whereas Canada has ratified the Paris Agreement, done in Paris on December 12, 2015, and in force as of 2016, and the aims of that Agreement include holding the increase in the global average temperature to well below 2 degrees Celsius (2°C) above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5 degrees Celsius (1.5°C) above pre-industrial levels, recognizing that this would significantly reduce the risks and impacts of climate change; Whereas the Parliament of Canada adopted the  Canadian Net-Zero Emissions Accountability Act , which requires a Government of Canada plan to achieve a prosperous net-zero-emissions future in Canada by 2050 at the latest, supported by public participation and expert advice; Whereas the Parliament of Canada adopted the  Greenhouse Gas Pollution Pricing Act  in furtherance of the "polluter pays" principle; Whereas the Parliament of Canada adopted the  United Nations Declaration on the Rights of Indigenous Peoples Act  to ensure that the laws of Canada are consistent with the Declaration and to implement an action plan to achieve its objectives; Whereas our economic and financial systems are interdependent with life-supporting ecosystem services — such as a stable climate — making the maintenance of a stable climate a matter of superseding public interest; Whereas climate-related financial risks cannot be treated as conventional financial risks because they are characterized by radical uncertainty and irreversible catastrophic consequences and therefore require a distinct approach to urgently align financial flows with climate commitments; Whereas the Bank of Canada recognizes that climate change poses significant risks to the financial system and the economy, including physical risks that arise from more frequent and severe extreme weather events and risks that stem from the transition to a low-carbon, net-zero economy; Whereas climate-related financial risk is endogenous to financial systems and continued financial support for emissions-intensive activities increases future climate-related risks to the stability of financial systems and the long-term interests of financial institutions; And whereas investment in energy efficiency, clean energy and clean technologies and the incentivization of innovation and behavioural change must replace investments in greenhouse-gas-emission-intensive activities for effective action against climate change; Now, therefore, Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows: Short Title Short title 1 This Act may be cited as the  Climate-Aligned Finance Act . Interpretation Definitions 2 The following definitions apply in this Act. climate change impact , in relation to an activity, (a) is positive if it furthers or facilitates either (i) achievement of climate commitments, or (ii) an entity’s alignment with climate commitments as described in section 4; and (b) is negative if it makes achieving climate commitments less likely, including by contributing to an entity not being in alignment with climate commitments as described in section 4. ( effet sur les changements climatiques ) climate commitments  means (a) obligations and commitments under the following, whether or not they are binding on an entity: (i) the United Nations Framework Convention on Climate Change, done in New York on May 9, 1992, including the principles of common but differentiated responsibilities and respective capabilities; (ii) the Paris Agreement, done in Paris on December 12, 2015, and in force as of 2016; (iii) amendments to the Paris Agreement made by the Conference of Parties under the United Nations Framework Convention on Climate Change, as well as any additional agreements or instruments adopted by the Conference of Parties after the entry into force of the Paris Agreement; and (iv) the  Canadian Net-Zero Emissions Accountability Act , including the national greenhouse gas emissions target of net-zero emissions by 2050 at the latest, as established under section 6 of that Act; and (b) reduction of emissions on a pathway that respects the global carbon budget and is consistent with limiting global temperature increase to 1.5 degrees Celsius (1.5°C) over pre-industrial levels, with no or low overshoot; (c) elimination of dependence on and lock-in of emissions-intensive activities, including by avoiding new fossil fuel supply infrastructure and exploring for new fossil fuel reserves and instead planning for a fossil fuel–free future; (d) preservation, enhancement and restoration of natural carbon sinks, including forests and peatland; and (e) enhancement of the capacity to adapt and reduce vulnerability to actual and expected impacts of climate change, including by increasing the resilience of socio-economic, built and ecological systems. ( engagements climatiques ) emissions  means all direct and indirect emissions of greenhouse gases set out in column 1 of Schedule 3 of the  Greenhouse Gas Pollution Pricing Act  that are associated with the full life cycle of an activity, including emissions (a) from all stages of production, from the point of resource extraction or utilization through to the completion of the activity; (b) that occur after the activity, including emissions resulting from the distribution and end use of products resulting from the activity; (c) associated with the activity that are scope 2 or scope 3 emissions as those concepts are described in guidance and standards contained in the Greenhouse Gas Protocol developed under the partnership of the World Resources Institute and the World Business Council for Sustainable Development, as updated from time to time; and (d) related to agriculture, forestry or other land-use change required for an activity. ( émissions ) emissions-intensive activity  means an activity that is a  fossil fuel activity or that does one or more of the following: (a) produces emissions in a manner that does not align with climate commitments; (b) hampers the development or deployment of low-emission alternatives; and (c) leads to a lock-in of assets that are inconsistent with climate commitments. ( activité à forte intensité d’émissions ) federal financial institution  means (a) the Bank of Canada; (b) a bank, an authorized foreign bank or a bank holding company and its subsidiaries within the meaning of the  Bank Act ; (c) a body corporate to which the  Trust and Loan Companies Act  applies; (d) an association to which the  Cooperative Credit Associations Act  applies; (e) an insurance company or a fraternal benefit society incorporated or formed under the  Insurance Companies Act ; (f) a pension plan that has been registered under the  Pooled Registered Pension Plans Act  or the  Pension Benefits Standards Act, 1985 ; (g) the Business Development Bank of Canada; (h) the Canada Infrastructure Bank; (i) the Canada Deposit Insurance Corporation; (j) the Canada Mortgage and Housing Corporation; (k) the Canadian Commercial Corporation; (l) Export Development Canada; (m) Farm Credit Canada; (n) the Canada Development Investment Corporation; (o) the Canada Pension Plan and the Canada Pension Plan Investment Board; and (p) the pension plans established under each of the following: (i) the  Canadian Forces Superannuation Act , (ii) the  Public Service Superannuation Act , and (iii) the  Royal Canadian Mounted Police Superannuation Act . ( institution financière fédérale ) financially facilitate  means to provide any assistance or services of any financial value, including (a) funds or funding of any kind, including debt and equity financing; (b) project or general corporate financing of any kind; (c) loans, loan guarantees, insurance or credit protection of any kind; (d) the issuance, purchase, transfer, securitization, arrangement, underwriting, syndication, sale or any other transaction of any security or derivative instrument; and (e) off-balance-sheet activities; and (f) the provision of any advisory, consulting or management services.  ( faciliter financièrement ) fossil fuel activity  means any activity involved in the fossil fuel supply or demand chain, including (a) exploring for or extracting, producing, exploiting, transporting, storing, exporting, refining or retailing oil, gas or coal; and (b) the combustion of oil, gas or coal for energy generation in a power plant. ( activité liée aux combustibles fossiles ) global carbon budget  means an amount calculated based on the best available science and precaution and equal to the maximum cumulative emissions into the atmosphere above which there is no longer a high probability of limiting global temperature increase to 1.5 degrees Celsius (1.5°C) above pre-industrial levels. ( budget carbone mondial ) person with climate expertise  means a person with demonstrable experience in proposing or implementing climate actions and (a) who has expertise in or knowledge of one or more of the following: (i) climate change science, including the environmental, ecological, social, economic and distributional effects of climate change, (ii) physical and social sciences experience — such as scenario analysis — or knowledge — such as knowledge of carbon sinks — that is relevant to climate change, (iii) climate change and climate policy at the international, national or subnational levels, including the likely effects and efficacy of potential responses to climate change, (iv) social innovation and technologies that contribute to decarbonization, (v) science-based energy supply-and-demand scenarios that are consistent with climate commitments, and (vi) Indigenous ways of knowing, being and doing; or (b) who has  acute lived experience related to the physical or economic damages of climate change. It does not include a person who is described in any of paragraphs 13(1)(a) to (d). ( personne ayant une expertise en matière de climat ) reporting entity  means any of the following: (a) a federal financial institution; (b) a corporation within the meaning of the  Canada Business Corporations Act ; (c) a work, undertaking or business within the legislative authority of Parliament that is described in any of paragraphs (a) to (e) or (j) of the definition  federal work, undertaking or business  in section 2 of the  Canada Labour Code ; and (d) an entity listed in schedule III of the  Financial Administration Act . ( entité déclarante ) Purpose Purpose 3 (1) The purposes of this Act are (a) to align the activities of reporting entities with the public interest objective of achieving climate commitments; and (b) to address systemic risks related to climate change. Achievement (2) To achieve its purposes, this Act limits the risks that financial institutions pose to the climate and the financial risks that climate change poses to the Canadian financial system. It does so by (a) setting baseline requirements for entities to achieve climate commitments; (b) providing greater certainty and transparency regarding entities’ respect for their responsibility relative to the global carbon budget; (c) ensuring that appropriate oversight and capital adequacy requirements are developed by supervisory and regulatory authorities; (d) requiring directors, officers and administrators to align entities with climate commitments; (e) promoting timely and meaningful progress towards the alignment of entities with the stability of both the financial system and climate in relation to systemic risks posed by emissions-intensive activities; (f) ensuring climate expertise on certain boards and prohibiting certain conflicts of interest; and (g) requiring the development of action plans, targets and progress reports for entities in respect of climate commitments through reporting requirements. PART 1 Alignment with Climate Commitments Alignment requirements 4 (1) An entity in alignment with climate commitments (a) substantially contributes to realizing climate commitments; (b) makes no decision or determination that facilitates, furthers or financially facilitates another person or entity acting in a way that is inconsistent with climate commitments; (c) does not cause, exacerbate or prolong vulnerabilities to the effects of climate change, including loss of biodiversity; (d) refrains from any land disturbance — including destruction or degradation of forests and peatland — affecting carbon sinks unless the project’s or activity’s end state will result in a positive climate change impact; (e) produces overall positive or neutral climate change impacts; and (f) does not undermine legal and other remedies available to redress climate harm or negative climate change impacts. Other considerations (2) An entity that is in alignment with climate commitments (a) respects the rights of Indigenous Peoples, including those rights enshrined in the United Nations Declaration on the Rights of Indigenous Peoples, which was adopted by the General Assembly of the United Nations as General Assembly Resolution 61/295 on September 13, 2007; and (b) in the context of its climate-related actions, (i) takes into consideration vulnerable groups, communities and ecosystems, including the biodiversity of those ecosystems, (ii) makes decisions based on  equity and the best available science and (iii) does not promote, foster or exacerbate food insecurity or inequalities in society; and (c) does not cause significant harm to social and environmental obligations recognized by Canada. PART 2 Reporting Interpretation Definitions 5 (1) The following definitions apply in this Part. climate commitments alignment report  means a report that, in relation to an entity, (a) demonstrates, with reference to the best available scientific evidence, how the entity is aligned with climate commitments as described in section 4; (b) includes (i) details of the entity’s targets with respect to climate commitments and sets out specifically how they align with a pathway that respects the global carbon budget and is consistent with limiting global temperature increase to 1.5 degrees Celsius (1.5°C) over pre-industrial levels, with no or low overshoot, (ii) the entity’s plans to reach the targets provided in subparagraph (i), (iii) details on the entity’s progress on achieving targets and implementing its plans, (iv) a description of how the entity’s targets and plans with respect to climate commitments represent responsible stewardship of an equitable allocation of the global carbon budget based on the entity’s historic emissions and the different development needs of regions and communities, (v) details of the material assumptions made by the entity in relation to climate commitments, including those related to economic life and contingent liabilities related to emissions-intensive assets, (vi) details on the entity’s emissions, specifying in particular the sources of information used to calculate the emissions, any assumptions, the methods used to verify the calculations, and any other relevant information with respect to the quality of the information being reported by the entity in respect of its emissions,  and (vii) information regarding any activity undertaken either by the entity or on its behalf that is an activity described in paragraphs 5(1)(a) or (b) of the Lobbying Act — if a reference in those paragraphs to “public officer holder” is read as a reference to “public office holder, public body, partnership, trade union or association” — on a matter related to the environment or climate; and (c) discloses for each of the entity’s directors, officers and administrators their  involvement in  any activity described in paragraphs 13(1)(a) to (d) and provides details in relation to that involvement. ( rapport sur l’alignement sur les engagements climatiques  ) plans  means a document developed by an entity in accordance with section 6 that details how the entity will achieve its targets so that it is in alignment with climate commitments. ( plans ) targets  means the goals set by an entity in accordance with section 6 for the reduction of its emissions so that it is in alignment with climate commitments (a) for each of the years 2025, 2030, 2035, 2040, 2045 and 2050; and (b) for any other year for which it establishes a target. ( cibles ) Plans and targets Plans and targets 6 (1) An entity must develop its plans and targets with a view toward aligning its actions with climate commitments as soon as possible. Plan elements (2) Plans must include (a) measures to prioritize and encourage (i) immediate and ambitious action, (ii) emissions reductions within the value chain, and (iii) change and innovation to replace emissions-intensive activities; (b) measures on operational and capital allocation for existing and new lines of business to ensure the achievement of targets; and (c) consideration of how the entity’s executive compensation, governance and strategy can be deployed to achieve targets. Restriction (3) Plans and targets cannot (a) allow for offsets to be used as a replacement for reducing emissions unless (i) the entity has undertaken the maximum feasible mitigation of emissions, (ii) the offsets are produced through proven emissions removal methods, and (iii) the offsets are strictly necessary to neutralize minimal residual emissions that cannot be abated with available technology; or (b) rely on or presuppose the future invention, discovery or large-scale deployment beyond the remit of the entity’s activities of any emissions removal, capture or storage technology, tool or technique to claim or promise reductions in emissions for the purpose of justifying continued or increased fossil fuel activities. Offset information (4) If plans or targets make use of offsets as permitted under paragraph (3)(a), they must include detailed information that sets out and explains the quality, certification and third-party assurance verification used to justify reliance on offsets and how the use of those offsets aligns with climate commitments. Removal information (5) If plans or targets rely on or assume the future invention, discovery or large-scale deployment beyond the remit of the entity’s activities of emissions removal, capture or storage within the limit of paragraph (3)(b), the entity must (a) contribute directly to making such future invention, discovery or large-scale deployment feasible and available within the relevant time frame; and (b) include detailed information, including an economic analysis, on how the reliance or assumption (i) satisfies the requirement of paragraphs (3)(b) and (5)(a), and (ii) aligns with climate commitments. Federal financial institutions (6) In respect of a federal financial institution, (a) emissions, for the purposes of developing plans and targets, include emissions that are facilitated or furthered by the entity, including by being financially facilitated by it; (b) targets must include absolute emissions targets established at the sectoral and portfolio level and for individual investment holdings across all classes of debt and equity; and (c) plans must include details of how and to what extent the institution engages with entities it financially facilitates to (i) incentivize decommissioning emissions-intensive activities, diversifying energy sources, financing zero-emissions energy and infrastructure, and developing and adopting change and innovation, (ii) escalate climate concerns regarding emissions-intensive activities of financially facilitated entities and exclude entities that are unable or unwilling to align with climate commitments, and (iii) minimize actions that have a negative climate change impact, if any. Reporting Requirements Obligation 7 (1) No later than 60 days after the end of each financial year, a reporting entity must prepare and make available to the public a climate commitments alignment report, unless it can demonstrate that it had no or negligible emissions in the preceding financial year. Make available to the public (2) For the purposes of subsection (1), an entity makes a climate commitments alignment report available to the public by making it easily accessible from the public-facing website of the entity to which it relates and by ensuring that it can be viewed free of charge and without registration of any kind. Inclusion with financial statements (3) If an enactment requires a reporting entity to provide an annual report or financial statements to any person or entity at a particular time or at particular intervals — including at an annual general meeting — the reporting entity’s most recently completed climate commitments alignment report must form part of those financial statements despite any provision of any other enactment. Assistance 8 The Minister designated under section 5 of the  Canadian Net-Zero Emissions Accountability Act  may, on recommendation of the Net-Zero Advisory Body and based on the best available international standards and science, (a) develop and provide any tool, form or guidance on which a reporting entity may rely when preparing its climate commitments alignment report, plans or targets; (b) adapt any tool, form or guidance developed under paragraph (a) to a specific sector or type of enterprise, such as small businesses or other small-scale entities; and (c) by order, define “negligible emissions” for the purposes of subsection 7(1). PART 3 Capital Adequacy Superintendent Guidelines Development 9 (1) The Superintendent of Financial Institutions must develop guidelines for capital adequacy for a bank, an authorized foreign bank or a bank holding company and its subsidiaries within the meaning of the  Bank Act , and those guidelines must account for exposures and contributions to climate-related risks and include (a) increased capital-risk weights for financing exposed to acute transition risks, considering (i) a risk weight of 1,250% for any loan, bond or derivative exposure to new fossil fuel resources or infrastructure, (ii) increasing risk weights to 150% or more for any loan, bond or derivative exposure to any fossil fuel activity, (iii) differentiation in transition-risk intensity among oil, gas and coal exposures, and (iv) the existence of short-term climate action plans aligned with climate commitments; (b) a systemic climate risk-contribution capital surcharge that (i) recognizes the extent to which the activities of financial institutions financially facilitate emissions, (ii) bolsters resilience in the face of systemic risks being contributed to through financially facilitating emissions-intensive activities, and (iii) uses an institution’s level of financially facilitated emissions as a proxy for its contribution to the systemic risk it places on the financial system; and (c) any other microprudential and macroprudential measures aimed at ensuring that financial institutions are in alignment with climate commitments. Additional guidelines (2) The Superintendent of Financial Institutions must develop guidelines for funding requirements in respect of climate commitments for the entities listed in paragraphs (b) to (f) of the definition  federal financial institutions .  These guidelines must encompass all asset classes and types of activities that those federal financial institutions undertake to financially facilitate emissions-intensive activities.  Deadline — guidelines (3) The guidelines developed under subsection (1) must be published on an easily accessible public-facing portion of the Superintendent’s website no later than one year after the day on which this section comes into force. Deadline — additional guidelines (4) The guidelines developed under subsection (2) must be published on the Superintendent’s website no later than six months after the day on which the guidelines developed under subsection (1) were published on that website. Use of guidelines (5) The Superintendent (a) must use the guidelines developed under this section to assess whether an entity over which the Superintendent has supervisory authority maintains adequate capital as required by any enactment; and (b) must develop and apply enforcement measures, within the Superintendent’s existing powers, duties and functions, that are aimed at ensuring compliance with the guidelines developed under this section. Ministerial Guidelines Report 10 The Minister of Finance and the President of the Treasury Board must study the guidelines developed under subsections 9(1) and (2), and the Minister of Finance must cause to be tabled before both Houses of Parliament, no later than six months after the day on which the guidelines developed under subsection 9(4) were published, a report that contains (a) guidelines for adequate capital, budgets or funding in respect of climate commitments for any entity that is subject to any provision of the  Financial Administration Act  but does not report to the Superintendent of Financial Institutions; and (b) an action plan to make the guidelines referred to in paragraph (a) legally binding including the list of legislative amendments that the Government of Canada intends to introduce for that purpose. PART 4 Appointments, Conflicts of Interest and Duties Interpretation Organization 11 In this Part,  organization  has the meaning assigned by section 2 of the  Lobbying Act . Appointments Appointments 12 At all times, at least one member of the board appointed under each of the following provisions must be a person with climate expertise: (a) section 5 of the  Canada Deposit Insurance Corporation Act ; (b) section 6 of the  Canada Mortgage and Housing Corporation Act ; (c) section 3.1 of the  Canadian Commercial Corporation Ac t; (d) sections 4 and 5 of the  Export Development Act ; (e) section 105 of the  Financial Administration Act , unless that board is in respect of an entity that does not need to develop a climate commitments alignment report because it had no or negligible emissions in the previous financial year; (f) section 5 of the  Farm Credit Canada Act ; (g) section 6 of the  Business Development Bank of Canada Act ; (h) section 9 of the  Public Sector Pension Investment Board Act ; and (i) section 8 of the  Canada Infrastructure Bank Act . Appointment — restriction 13 (1) No person may be appointed to the board of a reporting entity  if that person (a) controls any capital, shares, stock, voting power or voting rights or has any ownership or legal interest in an organization that does not meet the description of an entity in alignment with climate commitments as described in section 4, except to the extent that it is an asset described in paragraphs (b) to (m) of the definition  exempt asset  in section 20 of the  Conflict of Interest Act ; (b) occupies any position in an organization that is not in alignment with climate commitments unless the sole purpose of that position is to assist the organization in meeting the description of an entity in alignment with climate commitments as described in section 4; (c) has, in the last five years, engaged in any activity described in paragraphs 5(1)(a) or (b) of the  Lobbying Act  on behalf of any organization that is not aligned with climate commitments as described in section 4; or (d) provides any services to an organization that does not meet the description of an entity that is not aligned  with climate commitments as described in section 4 unless those services are for the sole purpose of enabling that organization to be an entity aligned with climate commitments as described in section 4. Consequence (2) An appointment made in contravention of subsection (1) is void from the time it is made. Application (3) Subsections (1) and (2) apply to appointments made after the third anniversary of the day on which this section comes into force. Clarification 14 For greater certainty, sections 12 and 13 apply in addition to any obligations in respect of appointments made under any enactment. Conflict of Interest Conflict of interest 15 (1) No person appointed under any provision listed in paragraphs 12(a) to (i) may accept any gift, benefit or contribution of any value or kind from or on behalf of an organization that is not in alignment with climate commitments. Exception (2) Subsection (1) does not apply in respect of any amount owed to a person by court order or by operation of law. Duties Duty established 16 (1) When acting in their official capacities, directors, officers or administrators of reporting entities have a duty to exercise their powers and functions in a way that enables the entity for which they are officers, directors or administrators to be in alignment with climate commitments. Precedence (2) The persons for whom a duty is established under subsection (1) must give precedence to that duty over all other duties and obligations of office, and, for that purpose, ensuring the entity is in alignment with climate commitments is deemed to be a superseding matter of public interest. However, this precedence does not supersede any requirement under the  Income Tax Act  or regulations made under that Act, nor does this precedence affect the eligibility of pension schemes under the  Income Tax Act  or its regulations. PART 5 Enforcement and Orders Superintendent — orders 17 (1) Despite any provision of any other enactment, the Superintendent of Financial Institutions may issue any order they consider appropriate to any entity listed in paragraphs (b) to (f) of the definition  federal financial institutions  if, in their opinion, doing so is in alignment with climate commitments or will help the entity to which the order is issued ensure that it is in  alignment with climate commitments as described in section 4. Superintendent — guidelines (2) If authorized by an enactment, the Superintendent may issue a direction or order to any entity over which they have supervisory jurisdiction, for the purpose of facilitating that entity’s respect for any guideline prepared by the Superintendent under this Act. PART 6 Financial Products Alignment Action Plan Plans 18 (1) In consultation with other relevant ministers of the Crown, the responsible Minister must prepare an action plan to incentivize financial products that support climate commitments and disincentivize those that are inconsistent with climate commitments, with a view to identifying legislative amendments to (a) taxation legislation, including exemptions under taxation legislation; (b) Schedule III to the  Pension Benefits Standards Regulations , to prohibit investments that are inconsistent with climate commitments; (c) legislation governing bankruptcy proceedings so as to (i) prioritize the repayment of bonds whose purpose is to support climate commitments, and (ii) disincentivize the repayment of bonds whose purposes are inconsistent with climate commitments; and (d) enact appropriate enforcement mechanisms, including through the enactment of criminal offences for making false or misleading statements in climate commitment alignment reports. Collaboration (2) In developing the action plan, the responsible minister must collaborate with provinces to encourage alignment with climate commitments throughout the entire Canadian financial and commercial system, including in relation to (a) securities disclosure for entities incorporated or regulated under the law of a province or territory, in order to ensure transparency and clarity of disclosure; and (b) protecting consumers from misleading information regarding climate commitment alignment reports, including through enacting related whistleblower protections. Consultation (3) In developing the action plan, the responsible minister must also consult with (a) the Superintendent of Bankruptcy appointed under subsection 5(1) of the  Bankruptcy and Insolvency Act ; (b) the Superintendent of Financial Institutions; (c) the Bank of Canada; and (d) persons with climate expertise. Content (4) The action plan must provide (a) criteria for identifying financial products whose purposes are aligned with climate commitments, taking into account this Act and the best available international standards and science and justifying any departure from them; (b) mechanisms to prevent the proceeds of financial products whose purposes are aligned with climate commitments from being used for activities that are inconsistent with climate commitments; and (c) a description of legislative amendments to federal laws — including the  Income Tax Act  and Regulations under that Act, the  Bankruptcy and Insolvency Act , the  Companies’ Creditors Arrangement Act  and Schedule III to the  Pension Benefits Standards Regulations  — to incentivize financial products that support climate commitments and to disincentivize the use of products that are inconsistent with climate commitments. Responsible minister (5) In this section,  responsible minister  means the person designated under subsection (6). Designation (6) The Governor in Council may, by order, designate a member of the Queen’s Privy Council for Canada as the responsible minister for this section. Report — action plan (7) A report containing the action plan must be completed no later than one year after the day on which this section comes into force. Report — legislative amendments (8) No later than 20 sitting days after receiving the report completed under subsection (4), the responsible minister must cause the report to be tabled in both Houses of Parliament, along with (a) a detailed analysis of the legislative amendments contained in the action plan; and (b) a proposal, including a timetable, for making the legislative amendments included in the action plan. PART 2 Related Amendments R.S., c. B-2 Bank of Canada Act 3 The preamble to the  Bank of Canada Act  is amended by adding the following after the first paragraph: And whereas the Bank of Canada must act in alignment with climate commitments; Bank of Canada Act Clause 3 : New. 4 The Act is amended by adding the following after section 18: Alignment with climate commitments 18.01 The Bank may only exercise its powers under this Act in a way that permits it to be an entity that is in alignment with climate commitments as described in section 4 of the  Climate-Aligned Finance Act . Clause 4 : New. R.S., c. E-20  Export Development Act 5 (1) Subsection 10.1(1) of the  Export Development Act  is amended  by adding the following after paragraph (a): (a.1) whether the project is likely to have adverse environmental effects or a negative  climate change impact  — as that term is defined in section 2 of the  Climate-Aligned Finance Act  — despite the implementation of mitigation measures; and Export Development Act Clause 5 : (1) Relevant portions of subsection 10.1(1): 10.1 (1) Before entering, in the exercise of its powers under subsection 10(1.1), into a transaction that is related to a project, the Corporation must determine, in accordance with the directive referred to in subsection (2), (a) whether the project is likely to have adverse environmental effects despite the implementation of mitigation measures; and . . . Text (2) Section 10.1 of the Act is amended by adding the following after subsection (2): Climate commitments (2.1) A directive may only be issued under subsection (2) if it enables the entities involved in the project to be entities that are in alignment with climate commitments as described in section 4 of the  Climate-Aligned Finance Acts . Revision (2.2) The Corporation must, as soon as practicable, revise any directive issued under subsection (2) — including those issued before the coming into force of paragraph (2.1) — with a view to mitigating any negative  climate change impacts  as defined in section 2 of the  Climate-Aligned Finance Act . (2) New. 6 The Act is amended by adding the following after section 10.1: Climate commitments 10.2 The Corporation may only exercise its powers in a way that enables it to be an entity that is in alignment with climate commitments as described in section 4 of the  Climate-Aligned Finance Act . Clause 6 : New. R.S., c. F-11 Financial Administration Act 7 Subsection 89(3) of the  Financial Administration Act  is replaced by the following: Climate commitments (3) Despite subsections (1) and (2), the Governor in Council is deemed to have given each parent Crown corporation listed in schedule III a directive to be an entity that is in alignment with climate commitments as described in section 4 of the  Climate-Aligned Finance Act . Financial Administration Act Clause 7 : Text of subsection 89(3): (3) [Repealed, 1991, c. 24, s. 23] R.S., c. 18 (3rd Supp.), Part I Office of the Superintendent of Financial Institutions Act 8 Section 4 of the  Office of the Superintendent of Financial Institutions Act  is amended by adding the following after subsection (3): Climate commitments (3.1) The Office must pursue its objects in a way that enables it and every entity it regulates or supervises to be in alignment with climate commitments as described in section 4 of the  Climate-Aligned Finance Act . Office of the Superintendent of Financial Institutions Act Clause 8 : New. 9 Subsection 6(1) of the Act is replaced by the following: Duties, powers and functions of the Superintendent 6 (1) The Superintendent has the powers, duties and functions assigned to  them  by the Acts referred to in the schedule to this Part  — and the  Climate-Aligned Finance Act  —  and shall examine into and report to the Minister from time to time on all matters connected with the administration of the provisions of those Acts except those that are consumer provisions as defined in section 2 of the  Financial Consumer Agency of Canada Act . Climate (1.1) The Superintendent must exercise their powers, duties and functions in a way that aligns with climate commitments as that term is defined in section 2 of the  Climate-Aligned Finance Act . Clause 9 : Text of subsection 6(1): 6 (1) The Superintendent has the powers, duties and functions assigned to the Superintendent by the Acts referred to in the schedule to this Part and shall examine into and report to the Minister from time to time on all matters connected with the administration of the provisions of those Acts except those that are consumer provisions as defined in section 2 of the  Financial Consumer Agency of Canada Act . 10 The Act is amended by striking out “and” at the end of paragraph 38(a) and by adding the following after that paragraph: (a.1) for the purpose of ensuring that financial institutions, when engaging in activities described in paragraphs 6(2)(a) to (c), are in alignment with  climate commitments  as that term is defined in section 2 of the  Climate-Aligned Finance Act ; and Clause 10 : Text of relevant portions of section 38: 38 The Governor in Council may make regulations (a) prescribing anything that is required or authorized by this Act to be prescribed; and 1994, c. 24 Public Sector Pension Investment Board Act 11 The  Public Sector Pension Investment Board Act  is amended by adding the following after section 5: Climate commitments 5.1 The Board may only exercise its powers and carry out its objects so that  it and the pension plans for which it invests are in alignment with climate commitments as described in section 4 of the  Climate-Aligned Finance Act . Public Sector Pension Investment Board Act Clause 11 : New. 1995, c. 28 Business Development Bank of Canada Act 12 The  Business Development Bank of Canada Act  is amended by adding the following after section 22: Climate commitments 22.1 The Bank may only exercise its powers in a way that enables it to be in alignment with climate commitments as described in section 4 of the  Climate-Aligned Finance Act . Business Development Bank of Canada Act Clause 12 : New. 2017, c. 20, s. 403 Canada Infrastructure Bank Act 13 Section 7 of the  Canada Infrastructure Bank Act  is amended by adding the following after subsection (2): Climate commitments (3) The Board may only exercise its powers in a way that enables it  and the Bank to each be an entity that is in alignment with climate commitments as described in section 4 of the  Climate-Aligned Finance Act .  Canada Infrastructure Bank Act Clause 13 : New. 2021, c. 22 Canadian Net-Zero Emissions Accountability Act 14 Section 29 of the  Canadian Net-Zero Emissions Accountability Act  is replaced by the following: Section 23 29 Section 23 comes into force on  the  day on  which  a  bill entitled  An Act to enact the Climate-Aligned Finance Act and to make related amendments to other Acts , introduced in the 1st session of the 44th Parliament, receives royal assent . Canadian Net-Zero Emissions Accountability Act Clause 14 : Text of section 29: 29 Section 23 comes into force on a day to be fixed by order of the Governor in Council. PART 3 Reviews and Reports Interpretation 15 (1) In this Part,  climate commitments  and  persons with climate expertise  have the meanings assigned by section 2 of the  Climate-Aligned Finance Act . Provisions enacted by this Act (2) For the purposes of this Part, the provisions enacted by this Act (a) do not include any provision enacted by this Act that is repealed or spent at the time the review is undertaken; and (b) include any provision enacted by this Act that is subsequently modified except by way of repeal. Documents — Bank of Canada 16 (1) Within two years after the day on which this Act receives royal assent, the Minister of Finance must cause to be tabled in each House of Parliament (a) a report regarding Indigenous Peoples’ perspectives on the activities of the Office of the Superintendent of Financial Institutions and the Bank of Canada —  including in respect of long-term investments, adaptation and resilience of the Office and the Bank within the financial system and the stewardship of the financial system by the Office and the Bank for future generations — that is (i) co-developed with the Office of the Superintendent of Financial Institutions, the Bank of Canada and representatives of Indigenous Peoples, and (ii) based on consultations with Indigenous Peoples on these matters; (b) a report prepared by the Bank of Canada and developed in consultation with persons with climate expertise that evaluates whether monetary policy established by the Bank aligns with climate commitments described in section 2 of the  Climate-Aligned Finance Act  and makes recommendations to entities' being in alignment with climate commitments as described in section 4 of the  Climate-Aligned Finance Act . Consultation (2) The reports described in paragraphs (1)(a) and (b) must include details on the consultations and co-development that occurred in their preparation. Independent review 17 (1) The Governor in Council may, by order, designate any federal minister to be the Minister responsible for this Act, and that Minister must cause to be conducted, every three years beginning on the day on which this section comes into force, an independent review of the provisions enacted by this Act and their administration. Deadline (2) The Minister referred to in subsection (1) must cause a report on the independent review conducted under that subsection to be laid before each House of Parliament on any of the first 15 days on which that House is sitting after the review is completed, which must be no later than nine months after the review was commenced. Parliamentary review 18 In every third year after the year in which this section comes into force, a comprehensive review of the provisions enacted by this Act and their operation is to be undertaken and completed by a committee of the Senate, of the House of Commons or of both Houses of Parliament that is designated or established for that purpose. Implementation review 19 (1) Every year after this section comes into force, a report on the implementation of the provisions enacted by this Act must be completed by (a) the Superintendent of Financial Institutions, in respect of entities over which the Superintendent has supervisory oversight; and (b) the Minister of Finance, in respect of parent Crown corporations as defined under subsection 83(1) of the  Financial Administration Act . Tabling (2) The Minister of Finance must cause any report developed under subsection (1) to be laid before both Houses of Parliament no later than 10 sitting days after the report is completed. PART 4 Canada Pension Plan Investment Board Climate-Aligned Finance Act 20 Section 12 of the  Climate-Aligned Finance Act  is amended by adding the following after paragraph (b): (b.1) section 10 of the  Canada Pension Plan Investment Board Act ; Canada Pension Plan Investment Board Act Clause 20  : New. 1997, c. 40 Canada Pension Plan Investment Board Act 21 Section 5 of the  Canada Pension Plan Investment Board Act  is renumbered as subsection 5(1) and is amended by adding the following:   Climate commitments (2) The Board may only carry out its objects in a way that ensures that both it and the Canada Pension Plan align with climate commitments as described in section 4 of the  Climate-Aligned Finance Act . Canada Pension Plan Investment Board Act Clause 21 : New. PART 5 Coming into Force First anniversary 22 (1) The provisions of this Act, other than Part 4, come into force on the first anniversary of the day on which it receives royal assent. Part 4 (2) Part 4 comes into force on a day or days to be fixed by order of the Governor in Council, but that order may not be made and shall not in any case have any force or effect unless the lieutenant governor in council of each of at least two-thirds of the included provinces — within the meaning of subsection 114(1) of the  Canada Pension Plan  — having in the aggregate not less than two-thirds of the population of all of the included provinces, has signified the consent of that province to the enactment.