Question Period Note: Low Carbon Economy Fund

Low Carbon Economy Fund

• The Government of Canada, in partnership with provinces and territories, is taking strong action to address climate change and support sustainable economic growth. Through the Low Carbon Economy Fund, the Government has set aside the following:
o Over $1 billion under the Leadership Fund for provincial and territorial priorities to help fund projects that reduce greenhouse gas emissions, create jobs, save Canadians money, and support our transition toward a clean-growth economy.
o Up to $500 million for the Challenge Fund, a merit-based program to fund projects that reduce emissions at the best value for money from provinces, territories, municipalities, Indigenous governments and organizations, businesses, and not-for-profits as well as for-profit organizations.
o Over $250 million for various initiatives in Ontario, such as the Energy Savings Rebate program, Forests Ontario’s 50 Million Tree Program, and a City of Brampton electric bus project.

SUPPLEMENTAL

• The Leadership Fund is only available to Pan-Canadian Framework signatories. As a result, Saskatchewan’s allocation was transferred to the Challenge Fund.
• A portion of Ontario’s allocation was paid out for partially implemented programs that were cancelled and the remaining funding has been reallocated to the other initiatives in Ontario.

• On December 9, 2016, to respond to international commitments, such as the Paris Agreement, and to take action on climate change, Canadian First Ministers adopted a national climate plan – the Pan-Canadian Framework on Clean Growth and Climate Change. The Framework reaffirmed the importance of collaboration between the Government of Canada and provinces and territories to address climate change.
• The Low Carbon Economy Fund is an important part of the national climate plan. It supports its implementation by leveraging investments in projects that will generate clean growth and reduce greenhouse gas emissions towards meeting or exceeding commitments under the Paris Agreement (i.e., 30% reduction in greenhouse gas (GHG) emissions below 2005 levels).

• The Low Carbon Economy Fund is split into two parts:

• The Low Carbon Economy Leadership Fund provides $1.4 billion to provinces and territories that have adopted the national climate plan to help them deliver on leadership commitments to reduce greenhouse gas emissions. Provinces were eligible for funding of a base amount of $30 million plus funding based on population. Two provinces are not participating in the Leadership Fund:

Saskatchewan chose not to adopt the national climate plan and its $62 million was reallocated to the Challenge.

The Ontario funding agreement was terminated in the fall of 2018 after Ontario cancelled all programs receiving funding through he Leadership Fund. Ontario was reimbursed for eligible expenditures ($168 million) and the remaining funding ($252 million) was reallocated to the following programs: The Energy Savings Rebate (ESR) program, Forest Ontario’s 50 Million Tree Program and A City of Brampton electric bus project. Saskatchewan never joined the PCF.

• The Low Carbon Economy Challenge made over $500 million available to support ambitious projects that can be submitted by all provinces and territories, as well as municipalities, Indigenous governments and organizations, businesses and both not-for-profit and for-profit organizations. The Challenge is divided into two streams:

The $450 million Champions stream is providing funding to provinces and territories, municipalities, Indigenous communities and organizations, businesses and not-for-profit organizations. The deadline for submitting formal proposals was September 28, 2018, and this stream is now closed.

The $50 million Partnerships stream provides funding through two separate opportunities: First intake: $40 million to smaller applicants such as Indigenous communities and organizations, small municipalities, small and medium-sized businesses, not-for profit organizations. The deadline for submitting applications was March 8, 2019. Second intake: up to $10 million for small and medium businesses in Canada with 1 to 499 employees. The application process will be open from August 13 to November 15, 2019.

• Combined, the two parts of the Low Carbon Economy Fund support projects that reduce greenhouse gas emissions, create jobs and save money, such as:

o Making our homes and buildings more efficient;
o Helping companies innovate and access technologies to reduce their emissions and grow sustainably; and,
o Supporting the forest and agriculture sectors to enhance stored carbon in forests and soils.

Question Period notes as provided by the Department to the Minister’s Office