Question Period Note: Low-Carbon Economy Fund

Low-Carbon Economy Fund

• The Government of Canada is taking strong action to address climate change and support sustainable economic growth.
• A significant investment is the Low-Carbon Economy Fund. The program includes:
o Up to $1.4 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 Approximately $500 million for the Challenge Fund, a merit-based program, to fund projects that reduce emissions from provinces, territories, municipalities, Indigenous peoples, businesses and not-for-profit organizations.
SUPPLEMENTAL
• Originally launched in 2017, the Low-Carbon Economy Fund continues to be implemented.
• The Government of Canada looks forward to sharing more information on strengthened climate action, including as relates to the Low-Carbon Economy Fund.

• In December 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 Canada’s climate efforts. It supports implementation by leveraging investments in projects that will generate clean growth and reduce greenhouse gas emissions progress towards commitments under the Paris Agreement. Canada submitted an updated commitment in July 2021 to reduce greenhouse gas (GHG) emissions 40-45% below 2005 levels by 2030 and the Low-Carbon Economy Fund will support progress towards this goal. The Low-Carbon Economy Fund includes:

o The Low-Carbon Economy Leadership Fund provides up to $1.4 billion to provinces and territories that have adopted the Pan-Canadian Framework on Clean Growth and Climate Change 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 Pan-Canadian Framework and its $62 million was reallocated to the other part of the program (the Challenge).

 The Canada-Ontario funding agreement was terminated in the fall of 2018 after Ontario cancelled all programs receiving funding through the Leadership Fund. Ontario was reimbursed for eligible expenditures ($168 million) and the remaining funding ($252 million) was reallocated to support other climate related activities in Ontario.

o The Low-Carbon Economy Challenge made approximately $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 not-for-profit organizations. The Challenge is divided into two streams:

 The approximately $450 million Champions stream provides merit-based funding to provinces and territories, municipalities, Indigenous communities and organizations, businesses and not-for-profit organizations.

 Two intakes of the Partnerships stream provide up to $50 million in funding. The first intake was for smaller applicants such as Indigenous communities and organizations, small municipalities, small and medium-sized businesses, and not-for profit organizations. The second intake was for small and medium businesses in Canada with 1 to 499 employees.

• The Low-Carbon Economy Fund supports projects that reduce greenhouse gas emissions, create jobs and save money, such as:

o Making 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.

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