What Would Have to Change Inside a Canadian Bank

Banks lend to fish plants, shipyards, aquaculture sites, port tenants, and marine technology firms, and companies put their own capital into ocean projects on all three coasts. The August reading of the Blue Register held at 29 out of 100 for a second month. Public capital committed sits at $1.1348 billion, Indigenous-led finance at $335.0 million, and marine protected area coverage at 15.5 percent, all three in Developing. Private capital committed and deployed is zero, and instruments in market is zero. Both are Nascent.

Those zeros need care. The Register is counting blue finance commitments and live instruments, so a zero means I have not found a private Canadian transaction that qualifies. It does not mean private capital is absent from the ocean economy, and anyone who has driven through Yarmouth or Prince Rupert knows better. Money reaches ocean businesses here. What I set out to understand is why almost none of it arrives as blue finance, and whether something about the credit decision itself explains that.

Before accepting it I went looking for a Canadian transaction that would break it. The closest I found was Scotiabank, joint bookrunner on Mexico's first blue bond in December 2024, a MXN 4.5 billion issue by the agricultural trust FIRA financing sustainable fishing and aquaculture. The following year Scotiabank structured Chile's first local corporate blue bond, for the water utility Esval. A Canadian bank has structured blue transactions twice, and both were somewhere else.

Nothing in the Canadian frameworks rules out a Canadian blue finance transaction, though. The big banks publish sustainable bond frameworks listing what qualifies for green funding, and several of those lists reach the water. CIBC's Sustainability Issuance Framework and Scotiabank's Sustainable Bond Framework both name Terrestrial and Aquatic Biodiversity Conservation, and Scotiabank's says it may lend to qualifying companies in sectors including agriculture, forestry, and fisheries. BMO and TD each carry a category for sustainable management of living natural resources. RBC's framework has no biodiversity category, and reaches salt water only through tidal generation and municipal water and wastewater infrastructure. In TD's use of proceeds report for 2022, the amount allocated against living natural resources was nil, and the amount allocated against sustainable water and wastewater management was nil. The whole green allocation went to renewable energy, energy efficiency, green buildings, and clean transportation. The category was open and nothing was in it.

Canada does have a live instrument whose proceeds reach the ocean. The federal green bond program allocated $188.18 million to Terrestrial and Aquatic Biodiversity in 2024-25, including $26.60 million to Fisheries and Oceans Canada's Marine Conservation Targets initiative. Fisheries and Oceans Canada sits on the committee that selects the expenditures. Five of Canada's largest banks, along with HSBC Canada, were lead managers on the inaugural $5 billion issue, so Canadian banks can clearly sell one. What sits behind it is federal spending. Across the whole 2024-25 allocation, 83 percent went out as grants and contributions and 11 percent as loans.

Canada's banking regulator, OSFI, has done this once already, for climate. Annex 1-2 of Guideline B-15 sets out the channels directly. Damage to collateral produces a higher loan to value and a higher loss given default. Borrowers facing higher costs in a transition produce a higher probability of default, and stranded assets produce a higher loss given default again, and a bank holding more of either has to hold more capital against it. The guideline also requires institutions to put climate risk into their risk appetite framework and to report where their climate exposures are concentrated, by geography, sector, product, and counterparty. That is a physical process converted into the numbers a lender actually runs on, and it took one of the largest consultations OSFI has run, more than 4,300 submissions. It is in force.

Biodiversity does not appear in B-15. The word nature appears once, describing a type of carbon offset. On January 29, 2026, OSFI opened a consultation on a new Credit Risk Management Guideline that would pull its scattered credit guidance, including the mortgage underwriting guideline and the commercial real estate notice, into one document, with chapters to follow through 2026 and 2027. The consultative document says what those chapters will cover: underwriting and approval, collateral valuation, covenants and internal triggers, annual loan reviews, and portfolio limits. Climate does not appear in that document. Neither does nature, nor B-15. The consultation closed on July 29, 2026.

The frameworks describe their own machinery plainly enough. RBC runs a Sustainable Bond Working Group drawn from treasury, capital markets, the commercial bank, and sustainability, drawing on Group Risk Management as required. Eligible assets get tagged in RBC's systems and reviewed each quarter. BMO's working group confirms eligibility at the time an asset is selected. A borrower qualifies where 90 percent or more of its revenue comes from an eligible activity, or 95 percent at TD. What all of that describes is eligibility, tagging, and asset selection. I could not find, in any of the frameworks I read, marine dependency changing a probability of default, a loss given default, a collateral value, a price, a term, a covenant, a limit, or who has to sign. A fish plant can keep meeting its revenue threshold in a year when the stock it buys from is in trouble, because the test asks where the revenue comes from and not what it rests on.

The system has been here before in a narrow way. In 2008 the Supreme Court decided Saulnier v. Royal Bank of Canada. A Nova Scotia fisherman held lobster, herring, swordfish, and mackerel licenses worth more than $600,000. His business failed, and the bank, holding a general security agreement over his intangible property, went after the licenses. The Court held that a commercial fishing license is property for the purposes of the Bankruptcy and Insolvency Act and the provincial personal property security legislation. Canadian banking learned how to recognize and secure the economic value attached to access to a fishery. Whether it has an equivalent way of recognizing the condition of the fishery underneath that value is a different question, and I cannot find where it would be asked.

Take the advance rate against that license. It is set from what comparable licenses have sold for recently, and those prices already assume the fishery stock is there, so the security is marked against an ecological condition the valuation never states. Suppose the science turns. I cannot find the path by which that would reach the loan file.

Nor is there an obvious place to put it. A borrower risk rating runs off an industry, and a dependency on a marine ecosystem sits across several industries at once. Sector limits are drawn the same way, so a dependency shared by a harvester, a processor, and a port tenant would not register as a concentration in the first place, which is the question behind an earlier post here. A covenant would need something measurable, tested on a date, certified by somebody the lender is willing to rely on, and that is a question I have looked at separately.

The scale numbers make all of this look smaller than it is. In the first quarter of 2026 the Bank of Canada reported $1.414 billion of chartered bank lending to fishing and trapping, which is the category the ocean gets, against $58.983 billion for agriculture. Some of that gap is industry size and some is classification, and a good deal of it is who does the lending. The Nova Scotia Fisheries and Aquaculture Loan Board is a provincial Crown corporation under the Fisheries and Coastal Resources Act, and it has been lending to harvesters, sea farmers, and boat builders for more than eight decades. In parts of Atlantic Canada the province is the fisheries lender.

What I can establish is narrower than the argument I started with. Canadian banks can classify an ocean asset, sell a federal bond that funds marine conservation, and arrange a blue transaction in Mexico. What I cannot see anywhere is the condition of a marine ecosystem, or a dependency on one, arriving inside the ordinary mechanics through which private credit is decided. The climate version of that translation exists, and somebody had to sit down and write it.