In late October 2025, Senator Rosa Galvez introduced a new and improved Climate-Aligned Finance Act (a.k.a. CAFA or Bill S-238) after the last version died at the end of Parliament. The bill would make banks and Crown corporations create climate action plans and set targets. It would make company leaders responsible for following climate commitments, require climate experts on boards, and make banks hold more reserves if they take bigger climate risks. With climate change “already starting to wreak havoc on our financial system,” Galvez said in a media release, “CAFA is not radical, it is simply inevitable. It is the next logical step to protect Canadians, our economy, and our climate. Voluntary pledges have failed to shift capital at the scale and speed required.” The bill “is essential because Canada’s reliance on fossil fuel financing is increasing systemic risk,” she added. “We need structural rules, not wishful thinking.” The release says the new version of CAFA, Senate Bill S-238, was “strengthened through expert consultations” by removing references to specific capital risk-weights for financing of fossil fuel activities, requiring disclosure but not removal of board members with “climate conflicts,” and “deeming those complying with the new duty to align with climate commitments to carry out their duties under any other enactment.” Galvez introduced the previous version of CAFA, Bill S-243, on March 24, 2022. It was endorsed by 89 investment firms, academic organizations, and environmental groups, referred to the Senate Committee on Banking, Commerce and the Economy in June, 2023, and finally received a brief hearing the following November. In March, 2024, as supporters marked the bill’s second anniversary with social media posts, a Senate source reported no immediate plans on the part of committee chair Pamela Wallin (CSG-Saskatchewan) to bring the legislation forward for detailed study. ADDENDUM APRIL 21. 2026: Senator MacDonald made an intervention on Bill S238 in the Senate. ADDENDUM MAY 2026: MP Eric St-Pierre put forth a motion (M-34) on the House of Commons in support of climate aligned finance. Progress on the New Climate Aligned Finance Bill
ADDENDUM JANUARY 2026: A January 2026 House of Commons ENVI Committee report recommended moving foward on climate aligned-finance regulations.
