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For the full story, see part 1 and part 3 of the #ForceForNature blog series.
In the second part of our three part series on the federal government’s recently announced nature strategy, we’re exploring the government’s proposed Expert Taskforce on Natural Capital Accounting on Nature Finance. Can the Expert Taskforce deliver on Target 19 and mobilize billions of dollars for biodiversity?
Staying on Task for Target 19
Pillar 3 of the federal government’s newly minted Nature Strategy commits to driving partnerships that will steer private investment to nature positive outcomes.
Implementation advice for this pillar is anticipated to come from an Expert Taskforce on Natural Capital Accounting and Nature Finance.
At this juncture, there is a fair amount of uncertainty on the scope and duration of the Expert Taskforce’s mandate, whether members will be chosen based on appointment or an application process, and whether their focus will be on recommended actions purely within the government’s purview, or whether a more market-facing scope that mimics the 2018 Expert Panel on Sustainable Finance will be advanced.
In line with the Nature Investment Hub’s focus on scaling private finance for nature to close Canada’s biodiversity funding gap, three market shaping factors we hope will be considered when crafting the Taskforce’s mandate follow.
1. A wider breadth of financial instruments should come into play
First, where the Trudeau government’s 2024 nature strategy fore-grounded programmatic investments, the Federal Green Bond Program and Project Finance for Permanence (PFPs) as key financing levers, the new nature strategy’s Pillar 3 is less precise. This may be a blessing in disguise as it leaves the door open for a wider range of financial instruments to come into play, not all of which may require a federal capital contribution to animate.
For instance, while Pillar 1 continues work on increasing Indigenous Protected and Conserved Areas (IPCAs), PFPs, and Other Effective area-based Conservation Measures (OECMs), the billion dollar question of how to actually fund these mechanisms in sustainable ways that lower the burden on the federal purse is not explained.
A helpful contribution from the Taskforce will be to signal which instruments the federal government can productively help to de-risk across the short-to-medium term in order to crowd in private investment at scale in Canada. Groundtruthing a menu of instruments offered in the World Economic Forum’s 2025 report Finance Solutions for Nature: Pathways to Returns and Outcomes for Canada is one practical strategy. These should be considered for the respective role they can play along the capital continuum, recognizing that our nature finance market is still relatively nascent.
2.Leveraging federal leadership to activate sub-national bond markets for nature finance
Although not explicitly stated, mobilizing sub-national governments will be key to attracting private finance at scale. The TaskForce should be sensitive to this market pathway, given jurisdictional responsibilities for nature are differentiated in Canada’s federated structure, and overlaid with Indigenous stewardship responsibilities.
At the Hub, we are actively engaging with provincial and territorial governments to look at the role sub-sovereign bond issuance can play, particularly as there is high investor demand for these products from international investors. These investors increased their holdings of Canadian provincial bonds by $6.8 billion in January alone, the highest level since May 2025. Investing in Canada is popular. In 2026, Canadian provinces are expected to raise around $150 billion via the bond markets.
Our work is focused on enabling more sustainability-linked debt issuance in this growing sub-sovereign market, creating stable sources of patient capital earmarked for nature finance across the country. In this regard the TaskForce can amplify and clarify what leadership and convening role the federal government can play to help move provinces and territories to capitalize on this market opportunity.
3.Dedicated Large-scale Technical Assistance Facility (TAF) is needed on the supply side
The new Nature Strategy also did well to reinforce that engagement with Indigenous leadership is non-negotiable in building up Canada’s nature finance market. While high-profile federal investments in PFP models are important, those working directly on these agreements—as well as within Guardians programs—consistently point out that large-scale private investment remains difficult to structure and deploy in Canada.
In particular, integrating private capital into existing financial vehicles and associated technical assistance facilities—at the scale seen in international development finance (i.e., billions in capitalization)—continues to be a significant challenge. This must change. Echoing calls from Indigenous partners, similar TAF structures are needed for nature project developers to ensure that investment vehicles can both satisfy the high-bar of community priorities and commercial-grade investment risk-return profiles.
These enablers are especially crucial in light of the strategy’s nod to the Liberal Party’s Build Canada Strong platform. The more benevolent ‘Building Canada Well’ (Pillar 2) of the nature strategy offers some hope that the Carney Liberals may be open to ensuring strong guardrails akin to the UK’s Biodiversity Net Gain standards or the Australian Nature Repair Market Bill are stood up in Canada. These would be in addition to the existing impact assessment and permitting regimes, as means to ensure nature positive outcomes and clarifying how nature positive investments will be recognized by the market.
TAFs of the kind mentioned above will be vital to ensure there is sufficient project supply at scale for investors to make capital allocation decisions that matter. Having the Taskforce weigh in on TAF structures that are best suited to domestic market needs for nature-related private investment in priority sectors would be a helpful signal check for the federal government.
Policy coherence will increase predictability for all ecosystem players, not just investors.
While the above three points draw attention to market dynamics that should be considered in the Expert Taskforce’s mandate, it is important to note that these dynamics do not occur in a vacuum. There is certainly a broader policy ecosystem at play as well.
In addition to the issue of natural capital accounting, it is imperative that the Expert Taskforce’s mandate also has sensible policy crosswalks to pressing issues in Canada’s sustainable finance architecture and job creation priorities among others. This means leveraging their expertise to help drive policy coherence across nature finance markets as it relates to the Sustainable Jobs Action Plan, where nature fits into ‘Invest in Canada’ approaches, the federal green bond program, other provincial, territorial and municipal sustainable bond frameworks, Canada’s disclosure and prudential risk regime (especially voluntary Taskforce on Nature-related Financial Disclosures (TNFD)-related disclosures) and the anticipated sustainable investment taxonomy. Rethinking Canada’s regulatory regime for Donor Advised Funds could also be explored as a lever to incent more philanthropic capital allocation to nature.
Policy coherence from a systems lens is especially vital if Canada is going to buck global trends that suggest that for every dollar spent on protecting nature, thirty dollars are spent degrading it. The script needs flipping here. And soon. Enabling the Task Force to have access to a dedicated cross-departmental table on nature finance that can inform their recommendations could be part of the solution.
In closing, the Taskforce’s contributions certainly have the potential to drive transformational and systemic change in Canada’s capital markets in favour of nature, but only if it is mandated to do so. Governance design choices for this Taskforce will be very important to avoiding consensus gridlock, as will ensuring diverse technical views across the nature finance ecosystem are considered. This will be no easy task, and ultimately will need government guardrails and ambitious policy leadership to get the mandate and scope right.
While this blog post sets out considerations for the Taskforce, it is also clear that pressing progress on the government’s commitments to crowd in more private finance for nature need not wait for the Taskforce’s recommendations. Indeed there are already a plethora of proven solutions that are already working towards this goal. Our final blog in the #ForceForNature series will lay out a range of activities that are already underway under the auspices of the Nature Investment Hub and our partner network to help meet Canada’s nature finance ambitions. Stay tuned!
For the full context, read part one of the series here and part three here.
