The unprecedented levels of government debt brought by the COVID-19 pandemic have Canadians questioning how this debt can be managed. The federal government’s Debt Management Strategy forecasts financial requirements of $469-billion for fiscal 2020-21 alone.
What is not reflected on the government’s balance sheet, however, is a significant source of wealth: the country’s natural infrastructure. The economic value of our abundant network of forests, wetlands and green spaces is not reflected in financial statements, even though it could be higher than our debt. Nature’s ability to capture carbon dioxide in the atmosphere – known as carbon sequestration – helps to slow down the rate of climate change. In coastal regions, dunes, reefs and coastal marshes reduce the impacts of storm surges, flooding and erosion. Elsewhere, wetlands, ponds and other green spaces protect communities from flooding, while providing a range of other valuable benefits – cleaner water, enhanced habitat and recreational space.
Bailey Church is partner of Accounting Advisory Services at KPMG LLP and Natalia Moudrak is director of climate resilience at the Intact Centre on Climate Adaptation at the University of Waterloo.