Biodiversity Finance for Cities

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In early-2020, I wondered how financial markets could help achieve positive conservation outcomes. I worried about disappearing forests and animals. I approached my manager at Sustainalytics pitching an article about conservation finance. Global green bond issuances had come off another record-breaking year reaching USD 257.7 billion (CAD 342.5 billion).[1][2] What if part of that could be channeled towards conservation? The seed was planted for my Master’s in Planning Major Research Paper (MRP).


My MRP, The Time is Ripe: New financial tools for the City of Toronto’s Parkland Dedication Rate, documents over 25 financial tools that municipalities could use for parkland acquisition. It focusses on Section 42 of Ontario’s Planning Act, where development proposals must either convey parkland or cash-in-lieu contributions. In-depth formal interviews were conducted with five practitioners in government, real estate and civil society. The MRP also highlights how the City of Toronto can improve the parkland acquisition process.

The Situation

Municipalities across Ontario have reserve funds with cash-in-lieu contributions. The City of Toronto had $237 million (2019) in uncommitted funds that could be used for parkland acquisition. Meanwhile, Toronto has seen significant residential construction activity, especially from the onset of the COVID-19 pandemic. At the same time, many sought refuge in parks during this period. A 2021 Park People report found an 82% increase in park use during the pandemic by people surveyed. According to Toronto’s Parkland Strategy Refresh 2022, the average parkland provision per person is projected to decline 10% from 28 m2 in 2019 to 25 m2 in 2034. High-density neighbourhoods are likely below the average and may be in areas considered parkland deficient. (Figure 1) I estimate that Toronto has an annual biodiversity funding gap of CAD 1.5-2 billion. With these trends, the opportunity exists for new tools to address the gap.

Figure 1 – Parkland Study and Acquisition Priority Map in Toronto

Credit: City of Toronto

The Challenges

Using existing cash-in-lieu reserve funds is not an easy task. The City of Toronto, for instance, must save up funds to purchase parkland. It cannot finance the acquisition. In other words, it cannot go to a bank and say: “We are $20 million short. Can you give us a loan to buy this parkland, please?” Plus, the City does not move as fast as private actors. These challenges were pointed out by practitioners across all sectors. It was the top theme from the five formal interviews that I conducted during the MRP’s Phase 2 between Fall 2021 and Winter 2022. (Figure 2) The silver lining is that it provides a starting point in the conversation for all parties to address the problem of moving faster to acquire more parkland.

Figure 2: Themes in Practitioner Interviews

Credit: Jean-François Obregón

Homegrown Innovations and The Opportunities

The City of Toronto has issued four green bonds cumulatively valued at $780 million since 2018. Proceeds have been used to fund actions like tree planting at a streetcar yard and flood protection in the Port Lands. Payments to investors are funded through municipal general revenues.

What if we put a twist on it and issued an Urban Green Space Bond? (UGSB) Conservationist Jeremy Guth has come up with this idea. A UGSB would be cash-in-lieu-backed. If we took the Parkland Acquisition Reserve Funds as of 2019 to back it, which was $31.2 million, the City could borrow $623.7 million and afford to pay a 5% annual coupon. The bond could be used for the City to acquire parkland in a way that connects green space corridors and improves biodiversity. It is worth noting that current provincial legislation does not allow for such a bond to be issued. However, now is a time for bold ideas.

An UGSB should have social benefits. Areas of Toronto close to equity-deserving groups and with parkland need can be prioritized. An Indigenous Protected and Conserved Area (IPCA) allows Indigenous Peoples to use their knowledge to conserve land in partnership with governments. An IPCA could be established with the City of Toronto and an Indigenous nation. So far, five IPCAs have been established in British Columbia, New Brunswick, and Nova Scotia. The blue dots represent IPCAs in Figure 3.

Figure 3 – Indigenous Protected and Conserved Areas in Canada

The blue dots are IPCAs. Credit: Government of Canada

We can take inspiration for a UGSB from Carolinian Canada Coalition’s Deshkan Ziibi Conservation Impact Bond. The DZCIB was created to reverse habitat loss and accelerate growth of healthy landscapes in southwestern Ontario. It was launched in 2020 by the Deshkan Ziibiing (Chippewas of the Thames First Nation), VERGE Capital, Thames Talbot Land Trust, Ivey Business School, and 3M. As of July 2021, the DZCIB pilot has supported 69 hectares (171 acres) of habitat have been improved, 39,000+ native plants have been planted, and 450 people have been engaged.

The Way Forward

New tools are being developed in finance to address longstanding environmental issues. Why can’t municipalities do the same? After all, cities are often on the frontlines of climate change. We are fortunate to see animals like deer, owls and great blue herons in Toronto’s parks. Without vision in parkland acquisition, those sightings may become rare. I want to keep seeing animals in parks. The time is ripe to do things differently.

With Special Thanks

The MRP builds on research assistant position with Prof. Nina-Marie Lister at Toronto Metropolitan University’s School of Urban and Regional Planning in summer 2021. Together with the Ecological Design Lab, we released the first version of “The Time is Ripe” in November 2021. (Previous blog) Massive credit goes to Prof. Nina-Marie Lister for the original idea. Thank you to the Consecon Foundation and the Woodcock Foundation for your support of this research.


[2] 1 USD = 1.3289 CAD on February 5, 2020. (Bank of Canada,

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