Ontario is planning to sell “green bonds” to pay for improved public transit as Premier Kathleen Wynne continues searching for billions of dollars in funding.

With opposition parties against new taxes, Wynne said her minority government will turn to the little known but fast-growing field of green bonds, earmarked to fund environmentally friendly projects.

“I look forward to funding many important transit projects . . . with this tool,” she told reporters Wednesday while standing in front of a GO Transit locomotive in the west end, citing a downtown relief subway line as one possibility.

The new push comes as Wynne awaits a report froma panel headed by Anne Golden to assess other ways of raising revenue for transit expansion to ease gridlock.

“The government seems to be in a bit of a scramble . . . throwing ideas out there and seeing what’s going to stick,” said NDP Leader Andrea Horwath, who dubbed the bonds “not a bad idea.”

Progressive Conservative Leader Tim Hudak said he needs more detail.

Any green bond issues would require legislation to be passed with support of one or both opposition parties in the minority parliament.

Finance Minister Charles Sousa, who will include the green bonds in his fall economic statement next week, had few answers on how much money Ontario is seeking and what interest rates would be offered, saying he must consult with investment dealers first.

Experts in the field said rates would likely be comparable to Ontario’s general bonds but attract a new breed of socially responsible investor.

Some questioned how Wynne’s idea would work given that special purpose bonds typically rely on a pure revenue stream — such as road tolls in the case of a highway bond — to pay the interest. With transit subsidized by governments already, interest costs would have to be borne by taxpayers.

“The thing here is where are the revenues?” said Laurence Booth, a finance professor at the University of Toronto’s Rotman School of Management. “This looks a bit like a gimmick.”

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“With any luck we’ll get more detail,” said Travis Shaw, who rates Ontario’s debt as vice-president of public finance at Dominion Bond Rating Service.

Transit projects are not listed under the criteria for green bonds set out by the International Finance Corp., an arm of the World Bank that has pioneered the bonds to finance projects that reduce greenhouse gas emissions, such as renewable energy.

But that does not mean Ontario could not try because transit involves “some degree of green,” Evelyn Hartwick, head of the IFC’s socially responsible bond projects, said from Washington, D.C.

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