Toronto is one of the first municipalities to establish a Green Debenture Program in Canada – issuing its first green bond on July 18, 2018. The City’s Green Debenture Program will leverage the City’s low borrowing interest rates to help finance the City’s transit and other capital projects that contribute to environmental sustainability. The expected growth of green capital projects will allow the City to be a regular issuer of Green Debenture.
The City of Toronto has an ambitious goal of reducing GHG emissions by 80% by 2050. While the City is already considered a global leader, renewed investment into the City’s core urban systems – buildings, energy supply, transportation, natural environment and waste management – will be necessary to realize its low-carbon future.
The first Green Bond newsletter released in August 2019 provides more information about the City’s green initiatives and the program.
The proceeds of each green debenture will be applied exclusively to finance or re-finance, in whole or in part, new and/or existing capital projects under the City of Toronto Green Debenture Framework.
“Eligible Projects” means identified capital projects that meet the City’s environmental objectives. The selection of these projects is generally guided by the prevailing plans, policies and strategies as approved by Toronto City Council. The environmental objectives supported by these projects generally include:
Without limitation, capital projects across the following categories will be considered eligible for financing from green debenture proceeds:
 Excludes the production and distribution of hydropower exceeding 25MW and nuclear power
The selection of Eligible Projects is the responsibility of the Corporate Finance Division (CFD) in consultation with internal and external expert stakeholders, which may include the combined effort of Environment & Energy, City Planning, Solid Waste Management Services, Parks, Forestry and Recreation, Toronto Water and Legal Services Divisions and other City Divisions, Agencies and Corporations, as required.
CFD will select the eligible capital project(s) that meet the guidelines for use of proceeds as described above. Projects must also comply with all applicable laws and regulations, and policies of the City of Toronto, including assessments of the social and environmental risks of a given project.
CFD will verify the suitability and eligibility in collaboration with the Environment & Energy Division. Then the City will follow its current debt issuance procedure in accordance to the City of Toronto’s Financing of Capital Works Policy and Goals. The Mayor or the Mayor’s Alternate and the CFO are authorized to issue debt within the annual limit approved by Council. The internal or external legal representative(s) will draft a debenture by-law outlining the use of proceeds, amongst other items, that includes a schedule to the by-law listing the capital projects to be financed by the debenture, and the list of capital projects will also be shared on the City’s website. The debenture by-law shall be passed by the City’s Debenture Committee.
The majority of capital projects to be funded by a debenture issued by the City have been completed or substantial completion criteria met. In these common instances, the proceeds of the debenture will be applied directly to the project to repay the City’s temporary funding for the project.
Where substantial completion has not been met on an Eligible Project, the funds will be held in an account of the City and invested in holdings with maturities aligned with substantial completion of the projects identified in the schedule to the by-law.
In the rare case where substantial completion has been achieved and excess funds exist, the funds will be applied to other projects classified as Eligible Projects under this Green Debenture Framework.
CFD will coordinate with relevant City divisions to collect reporting metrics and provide an annual newsletter on its website addressing both funding allocation and sustainability impact reporting that will cover:
|Project Category||Potential KPIs|
|Renewable Energy||Installed renewable energy generation capacity (MW)
GHG emissions reduced/avoided (tCO2e)
|Energy Efficiency|| Annual energy saved per year (ekWh/year)
GHG emissions reduced/avoided (tCO2e)
|Pollution Prevention and Control and utilizing waste as a resource||Reduction in Particulate matter concentration (PM2.5/PM10)
Waste recovery and landfill diversion rate (%)
|Sustainable Clean Transportation||Cycling and Walking trips (% of modal share)
Bike lanes installed (kms)
|Sustainable Water & Waste Water
|Increase in permeable surface area (%)|
| Climate Change Adaptation &
|Avoided cost of basement flooding ($), increase in tree canopy (%), green roof space (m2)|
|Eco-efficient and Circular
|Value of eco-efficient procurement ($)|
|Green Buildings|| Number of eligible buildings that received third
party-verified green building certification (LEED Gold or Platinum) or
Toronto Green Standard (Tier 2,3 & 4)
Prior to the first anniversary of a green debenture issuance, CFD will review the projects financed by the City’s green debenture in order to assess the compliance of the projects with the Green Debenture Framework. This review will be conducted annually until full allocation of the net proceeds from the City’s green debenture. The CFO will provide a report of the review, which the City will publish on its website.
In an unlikely event that the annual review identifies allocations made to activities that do not comply with the Green Debenture Framework, the City will allocate the corresponding amounts to different lending activities that are compliant with the Green Debenture Framework.
The issuance of debentures pursuant to this Framework will be implemented in accordance with the City of Toronto Act and directives issued by City Council as applicable.
The City of Toronto issued its first-ever green bond on July 18, 2018.
|Settled Date||Coupon||Maturity Date||Currency||Issue Amount||CUSIP||Total Bond Size|
|Sept 24, 2019||2.6%||Sept 24, 2039||CAD||$200 million||891288DT6||$200 million|
|Aug 1, 2018||3.2%||Aug 1, 2048 (new)||CAD||$300 million||891288DR0||$300 million|
Sustainalytics, a leading Green Bond second-party opinion provider, was engaged to review the Green Debenture Framework and provide a second-party opinion on the City’s environmental credentials and the framework’s alignment with the Green Bond Principles, as administrated by the International Capital Market Association.
The City reviews projects financed by the City’s green debenture to ensure compliance of the projects with the Green Debenture Framework. A review of these projects will be conducted annually until the net proceeds are fully allocated.