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 and organizations, businesses and not-for-profit organizations). The deadline for submitting initial project proposals was
May 14, 2018.
Partnerships stream
The $50M Partnerships stream is limited to Indigenous communities and organizations, small and medium-sized businesses, not-for-profit organizations and small municipalities. The Partnerships stream will help ensure a broad range of Canadians are able to participate in the Challenge. The Partnerships stream will be open for applications later in 2018.

Potential applicants for the Partnerships stream will be invited to submit an Expression of Interest to Environment and Climate Change Canada once the application process opens later in 2018. If you applied to the Champions stream and wish to also be considered through the Partnerships stream, you will need to submit a new Expression of Interest for the Partnerships stream.

Expressions of Interest will be reviewed and applicants with the most promising project ideas will be invited to submit a formal proposal. Those proposals will undergo a thorough review by Government of Canada officials. Successful projects will be selected based primarily on their ability to reduce greenhouse gas emissions. The evaluation will also consider a project’s potential contribution to clean growth, energy savings and job creation.

How to apply for funding

Low Carbon Economy Challenge application process infographic

For each stream there is a two-step application process.

  1. Expression of Interest

    Applicants need to submit an initial Expression of Interest (EOI) using the online application tool. The EOI will be used to screen projects for eligibility based on the program parameters described in the Applicant Guide. Projects may also be screened out due to concerns around cost-effectiveness (for example, high costs per tonne of greenhouse gas emissions reductions achieved) and/or significant concerns about project feasibility and risk. The EOI period for the Champions stream has closed and the EOI period for the Partnerships stream will open later in 2018. Please send an email to ec.lcef-fefec.ec@canada.ca if you would like to be notified when the Partnerships stream opens.
  2. Formal Proposal

    Successful applicants will be invited to submit a more detailed Formal Proposal. Environment and Climate Change Canada will undertake a complete review and assessment of the Formal Proposal, including project work plan, costing, and projected greenhouse gas emissions reductions.

Applicant guide

The Low Carbon Economy Challenge Applicant Guide provides details on the eligibility criteria for the Challenge and the process for submitting the Expression of Interest. Applicants must review the Applicant Guide before submitting their Expression of Interest. Applicants that have been selected to submit a Formal Proposal will be provided with the specific guidance and application forms at that time.

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 who are eligible for the Partnerships stream can maximize their chance of success by also applying to the Champions stream with the same project.

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. 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.

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 Expression of Interest review? How should these co-benefits be communicated as part of the Expression of Interest?

Detailed information on co-benefits of the proposal is not required at the Expression of Interest phase, as the Expression of Interest screening will not consider these factors. More information will be provided at the Formal Proposal stage on the types of benefits that will be considered in reviewing proposals. Generally speaking, co-benefits include progress towards other clean growth objectives (e.g., creating jobs, reducing energy use) or supporting other environmental outcomes (e.g., reducing air pollution).

How is the project selection criteria weighted during the assessment of the Expression of Interest phase?

The Expression of Interest phase will primarily be used to screen projects for eligibility, and will not be formally reviewed against evaluation criteria. However, some projects may be screened out if there are concerns about cost-effectiveness (e.g., very high program costs per tonne of greenhouse gas emissions reduced or project feasibility and risk). More information will be provided on assessment criteria as part of the invitation to submit formal proposals. Refer to the project selection section of the Applicant Guide (2.3.3) for an outline of the four key elements that will be considered.

The first Expression of Interest for the Challenge closes May 14, 2018. Will there be subsequent 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 (closing May 14 2018) and the Partnerships stream (timing to be announced later in 2018). 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 – e.g., 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.

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

Under the Low Carbon Challenge Fund, 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?

With respect to ownership of any offset credits or other environmental attributes with a market value derived from the project, the Low Carbon Economy Fund Secretariat will provide further guidance on this to applicants at the Formal Proposal stage. Please note that the Low Carbon Economy Fund will report on the full amount of greenhouse gas emission reductions associated with projects it contributes to. Our reporting will recognize the fact that other funding programs may also be contributing to the same project and that there may be some overlap between greenhouse gas emission reductions reported by the Low Carbon Economy Fund and these programs.

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 (that the electricity generation project cannot go forward without LCEF funding) and the emissions reduction perspective (that the project would be in addition to existing actions and not to support compliance with existing regulations, standards and policies). Additional guidance will be provided at the formal proposal stage regarding the minimum percentage threshold for "own-use", the treatment of energy sold on the market, both in terms of GHG reductions and eligibility of associated costs; and the demonstration of "own-use" eligibility.

Key dates

  • 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
  • Later in 2018: launch of Partnerships stream
  • March 31, 2022: deadline for spending federal funding

Challenge roadshow 2018

Environment and Climate Change Canada staff, as well as officials from Natural Resources Canada, Infrastructure Canada, Innovation, Science and Economic Development’s Clean Growth Hub and other federal organizations, travelled across Canada in March and April 2018 to hold information sessions in order to clarify the application and selection processes and answer questions related to the Challenge and other funding programs.

The slides from the Challenge information sessions are now available in the form of a pre-recorded webinar on this page.

Contact

If you have any questions or would like to be notified when the Partnerships stream launches, please contact the Low Carbon Economy Fund Secretariat via email at ec.lcef-fefec.ec@canada.ca. Please provide your name, contact information, and the organization you are representing.

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