Low Carbon Economy Challenge

Introduction

The Low Carbon Economy Challenge is part of the Low Carbon Economy Fund. It will leverage Canadian ingenuity to reduce greenhouse gas emissions and generate clean growth in support of Canada’s clean growth and climate action plan, (the Pan-Canadian Framework on Clean Growth and Climate Change). The Challenge is broken into two streams:

Champions stream

The $450 million Champions stream will provide funding to all eligible applicants

  • Provinces and territories
  • Municipalities
  • Indigenous communities
  • Organizations
  • Businesses
  • Not-for-profit organizations

 The deadline for submitting formal proposals was September 28, 2018.

Applicants will be notified of funding decisions in the coming months.

Partnerships stream

The $50 million Partnerships stream is limited to:

  • Indigenous communities and organizations
  • small and medium-sized businesses
  • not-for-profit organizations
  • small municipalities

The Partnerships stream opened for applications on December 20, 2018.

You are invited to submit an application outlining your project proposal and providing detailed information about estimated costs and greenhouse gas emission reductions.

We will thoroughly review all applications. Projects will be selected primarily on the basis of their ability to reduce greenhouse gas emissions. We will also consider a project’s potential contribution to clean growth, energy savings and job creation, overall risk and feasibility, and cost-effectiveness.

Note: If you applied to the Champions stream and wish to also be considered for the Partnerships stream, please submit a new application for the Partnerships stream.


How to apply for funding

Use the online application tool to submit your application. You will need a GCKey to access the online application tool.

If you do not already have a GCKey and Single Window Information Management (SWIM) account, you can follow this step-by-step walkthrough to complete a user profile.

  Key steps include:

  • using GCKey to sign up to create an account
  • setting up your profile in SWIM
  • connecting your profile to an organization
  • managing access for your organization
  • selecting the Low Carbon Economy Fund from your SWIM home page

Applicant guide

The applicant guide provides details on the eligibility criteria and the process for submitting an application. Please review the applicant guide, which is available in the online application tool, before submitting your application.

Frequently asked questions

The frequently asked questions section will be updated on a regular basis.

How will projects be selected to receive funding through the Low Carbon Economy Challenge?

Potential applicants will be invited to submit an expression of interest to Environment and Climate Change Canada. These expressions of interest will be reviewed, and applicants with the most promising projects ideas will be invited to submit a formal proposal. The best projects will be those that prioritize low-cost domestic greenhouse gas reductions while also encouraging other benefits that contribute to clean growth by reducing emissions, saving energy, and creating jobs. Criteria for assessing proposals will include:

  • Cumulative greenhouse gas emissions reduced per dollar of federal funding
  • Greenhouse gas emissions reduced in 2030 per dollar of federal funding
  • Project feasibility and risk
  • Other benefits that contribute to clean growth and a clean environment

Emission reductions must also be:

  • material (measurable and verifiable)
  • complementary to existing actions
  • in-line with Canada’s 2030 climate target
  • cost-effective
Can applicants apply to both the Champions and the Partnerships streams?

Yes. Applicants from the Champions stream, who are eligible for the Partnerships stream can apply with the same project. However, a project can only be funded by one stream of the Low Carbon Economy Challenge.

If an applicant who is eligible to seek funding through the Partnerships stream applies to the Champions stream, will the application also be automatically considered as part of the Partnerships stream?

No. Eligible applicants are welcome to apply for funding through both the Champions and Partnerships streams, but it is the responsibility of the applicant to apply through both streams if they wish to have their application considered as part of both streams.

Can an applicant receive funding from both the Low Carbon Economy Leadership Fund and the Low Carbon Economy Challenge?

No. Projects that were funded through the Low Carbon Economy Leadership Fund cannot receive additional funding through the Low Carbon Economy Challenge.

How much is the Government of Canada going to contribute to individual projects?

The minimum federal contribution to any project funded through the Low Carbon Economy Challenge is $1 million through the Champions stream and $500,000 through the Partnership stream. The maximum contribution to any project funded through the Champions stream will be $50 million, while the maximum contribution to a project funded through the Partnerships stream will be $10 million.

For the Partnership stream federal grants of no less than $100,000 and no more than $500,000 per project and per recipient are available for First Nations, Métis and Inuit governments, communities and organizations. This does not include Indigenous-owned or operated businesses or not-for-profit non-governmental organizations (NGOs).

Additionally, the maximum percentage of total project costs the federal government can contribute toward a project varies depending on the recipient of the funding. The maximum federal share for specific recipients is as follows:

  • 25 percent for businesses
  • 40 percent for municipalities
  • 40 percent for not-for-profit organizations
  • 50 percent for provincial governments
  • 75 percent for territorial governments
  • 75 percent for Indigenous communities and organizations

It is important to note that this program will fund the best projects and most cost-effective projects that reduce as many greenhouse gas emissions as possible. In other words, the smaller the federal contribution, the greater the chance a project has of being selected.

How can Indigenous Peoples benefit from the Low Carbon Economy Challenge?

Indigenous communities and organizations will be able to apply directly for funding through the Low Carbon Economy Challenge, for example, to support projects that reduce reliance on diesel and deploy energy-efficient technologies in homes and businesses. Additionally, Indigenous communities and organizations are eligible applicants for funding through the Partnerships stream of the Low Carbon Economy Challenge.

What are the co-benefits that will be considered as part of the application review? How should these co-benefits be communicated?

Generally speaking, co-benefits include progress towards other clean growth objectives (such as creating jobs, reducing energy use) or supporting other environmental outcomes (such as reducing air pollution). Detailed information on how to demonstrate a project’s co-benefits is available in the applicant guide.

Formal proposals for the Challenge Champions Stream were due September 28, 2018. Will there be additional opportunities to apply (e.g. will this be an annual process)? Or are you expecting to approve all the funds for this program based on this initial set of proposals?

Currently, there will only be two opportunities to apply to the Challenge: the Champions stream (closed September 28, 2018) and the Partnerships stream (launched December 20, 2018 and closing on March 8, 2019). We anticipate that all of the available funding will be allocated via these two streams.

Is there a threshold for cost-effectiveness, such as a maximum program cost per tonne, or a minimum greenhouse gas emissions threshold?

No. Program cost per tonne (both annual tonnes in 2030 and cumulative tonnes over the lifetime of the project) will be key criteria in assessing final proposals, and the best projects will be chosen. However, no pre-determined thresholds have been set.

Since your program can only fund projects until March 31, 2022, does that mean that a project that generates greenhouse gas emission reductions beyond 2022 does not get to report on those?

No. Project implementation must be completed by March 31, 2022 – i.e., the approved project funded by the Low Carbon Economy Fund must be complete and any eligible expenses incurred before that time. If the project is part of a bigger initiative, that initiative does not need to end by March 31, 2022 unless it is also funded by the Challenge. In either case, the greenhouse gas emission reductions generated from the project can and likely will extend past the implementation phase.

The period that the project generates greenhouse gas emission reductions is referred to as the project lifetime. For example, a project might involve retrofitting several buildings to increase their energy efficiency. These retrofits could occur between 2019 and 2022; however, the project could be expected to achieve greenhouse gas emission reductions for many years going forward (as measured against a baseline scenario where the retrofits did not occur). The project lifetime in this case would be the lifetime of the equipment and materials installed – e.g., 10-20 years for a new furnace or 20-40 years for new insulation.

Can I combine Low Carbon Economy Fund funding with funding from other federal programs or provincial, territorial or other funding (e.g., academic, foundation)?

Challenge funding can be combined with other federal funding aside from federal funding administered under the Pan-Canadian Framework on Clean Growth and Climate Change. This exception refers to the Green Infrastructure funding stream under the Investing in Canada Infrastructure Program; the Disaster Mitigation and Adaptation Fund; and Clean Technology funding through the Innovation and Skills Plan. The maximum funding to an approved project under the Challenge from all federal sources cannot exceed the limits set out in in section 4.4 of the Applicant Guide.

The Challenge does not have limitations on the use of non-federal funding. When considering other funding sources, you may wish to consult the terms and conditions of each program to determine whether stacking is permitted. Applicants should also note that some provincial or territorial climate change programs may have received funding from the Low Carbon Economy Leadership Fund. Challenge projects cannot also receive funding from these provincial/territorial programs.

Can in-kind contributions be counted towards a province’s total contribution? If so, what proportion would be acceptable?

Under the Low Carbon Economy Challenge, in-kind contributions will not be counted towards the project’s total eligible costs or be counted towards an applicant’s total contribution.

Will the Government of Canada retain ownership of the greenhouse gas emission reductions from projects funded through the Challenge?

Projects registered and/or generating credits under an existing GHG offset system are ineligible to receive funding under the Challenge. Project proponents must choose either funding from the LCEF or offsets, but may not choose both. Similarly, proponents of projects funded by the Challenge will be required, in the program funding agreement, to convey ownership of all environmental attributes related to any GHG emissions reductions or removals that arise as a result of activities that received funding from the Challenge (including potential emission offsets) to ECCC.

Are post-secondary institutions considered not-for-profits under the Challenge?

When determining their applicant type, applicants must self-identify based on the information provided in the Applicant Guide as well as their governing legislation. The maximum cost-share for post-secondary institutions will depend on their ownership and governing legislation.

The maximum level of federal assistance to public sector bodies or boards that are established by or are under provincial or territorial statute or by regulation or are wholly owned by a province, territory or local or regional government will not exceed 50% of the total eligible expenditures for provincial bodies/boards, and 75% for territorial bodies/boards. The maximum level of federal assistance to Canadian not-for-profit non-governmental organizations (NGOs), such as provincial and territorial, municipal associations, professional and industry associations, and educational institutions in partnership with a provincial or municipal government will not exceed 40% of the total eligible expenditures. For-profit institutions would have a maximum cost-share of 25%.

What does "own-use" mean in terms of fuel or energy production? Can a project qualify as "own-use" if it is also connected onto a distribution system (e.g., electricity grid or natural gas network)?

“Own-use” refers to energy or fuel that is produced and used within the organization’s own operations. To be considered as “own-use”, the entity using the energy must also have an ownership stake in the energy production asset(s). For electricity generation projects to qualify as “own-use”, electricity consumption must occur at the same site as electricity generation. A project can also qualify as “own-use” if it is connected onto a distribution system, as long as the majority of the energy produced is “own-use”.

Note that the incrementality requirement must also be met, both from the financial perspective and the emissions reduction perspective.

  • Incrementality from the financial perspective means that this project cannot proceed without LCEF funding.
  • Incrementality from the emissions reduction perspective means that this project will result in additional emissions reductions (ie above and beyond those from any other actions, requirements, regulations, standards or commitments).

What other programs are available if my proposal is not accepted by the Challenge?

Applicants who have been unsuccessful in the Challenge are invited to consult the following links for further information on other funding programs that support investments in clean technology and energy efficiency:

  • Provincial and territorial programs funded by the Low Carbon Economy Leadership Fund: Provinces and territories that have announced programs funded, in-part, by the Low Carbon Economy Leadership Fund, are listed in the “News releases” section of this website. Interested parties are encouraged to consult this page frequently as new announcements are added regularly. Provincial and territorial climate change websites will also have information about their programs.
  • The Clean Growth Hub: The Clean Growth Hub is a concierge service for proponents looking for federal assistance at all stages of the innovation spectrum. Their website includes a comprehensive list of federal funding programs.
  • Innovation Canada: Innovation Canada operates a helpful platform that assists proponents in finding solutions to a variety of funding and capacity-related needs.
Why does funding for the Partnerships stream extend to March 31, 2024 when funding for the Champions stream ends March 31, 2022?

In recognition of the timelines associated with emissions reduction projects and the size and scope of those funded under the Partnerships stream, we have extended the project implementation timeline to March 31, 2024. This ensures recipients have sufficient time to implement their approved project(s) and mitigate risks associated with construction delays and weather impacts.

Why is the Partnerships stream launching before decisions related to proposals submitted under the Champions stream have been announced?

ECCC is launching the Partnerships stream prior to announcing funding decisions under the Champion stream in an effort to maximize the amount of time potential applicants have to submit applications under the Partnerships stream. While this may result in some duplication, eligible applicants are encouraged to apply to the Partnerships stream if they are eligible.

I am looking to meet with an Environment and Climate Change Canada official concerning the Challenge. Can you advise?

The Low Carbon Economy Fund Secretariat is not meeting directly with applicants or potential applicants at this time. Questions can be sent via email to ec.lcef-fefec.ec@canada.ca.

Key dates

Champions stream

  • March 14, 2018: Champions stream open for expressions of interest
  • May 14, 2018: Deadline for Champions expressions of interest
  • Early summer 2018: Champions stream invitation to submit formal proposal
  • Late summer 2018: Deadline for formal proposal
  • Fall 2018 to winter 2019: Final funding decisions for the Champions stream

Partnerships stream

  • December 20, 2018: Launch of Partnerships stream
  • March 8, 2019: Deadline for Partnerships Applications
  • Spring 2019: Final funding decisions for the Partnerships stream

Challenge roadshow 2018

Representatives from the following departments travelled across Canada in March and April 2018 to hold information sessions on the application and selection processes, and answer questions related to the Challenge and other funding programs.

  • Environment and Climate Change Canada
  • Natural Resources Canada
  • Infrastructure Canada
  • Innovation, Science and Economic Development
  • other federal organizations

At the moment, we do not anticipate undertaking a second roadshow to promote the Partnerships stream.

Contact

If you have any questions, please contact the Low Carbon Economy Fund Secretariat via email at ec.lcef-fefec.ec@canada.ca. Please include your name, contact information, and the organization you are representing.

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