Nature Smart Climate Solutions Fund - Reverse auction pilot stream overview

1. Background

The climate and nature crises are inextricably linked and natural climate solutions are required to tackle these crises. Natural climate solutions help to remove greenhouse gases (GHG) from the atmosphere, preserve the adaptive potential of our earth reducing risk from natural disasters, and enhance the resilience of communities. Canada is committed to natural climate solutions to build resilience and help Canada meet its 2030 and 2050 climate change objectives.

The Nature Smart Climate Solutions Fund (NSCSF), administered by Environment and Climate Change Canada (ECCC), supports partner-led projects that result in the reduction of GHG and increased carbon sequestration on Canadian soil using activities that also have biodiversity benefits.

NSCSF activities during 2021-22 to 2030-31 will seek to reduce 2-4 megatons of GHGs per year from 2030 to 2050 and onwards. Ecosystems will continue to sequester carbon for many years after the initial investment ends.

The fund has three streams:

• Place-based actions
• Sector-based policy
• Reverse auction pilot

Note that the information provided here is related to the 2021 Call for Letters of Intent for the Reverse auction pilot program only. For questions related to the implementation of the Indigenous component of the NSCSF, please contact gardiensautochtones-indigenousguardians@ec.gc.ca

2. Stream objectives and expected results

The Reverse auction pilot stream is seeking proposals from organizations that will propose the use of a reverse auction method to achieve place-based actions on agricultural lands.

Applicants may apply as individual organizations or a collaborative groups. Organizations are encouraged to form collaborative groups to have the capacity to run reverse auctions in multiple places under one proposal project. Depending on the proposals received, ECCC may invite individual proponents to collaborate.

Actions that will be considered are:

1. restore degraded grassland and wetland ecosystems
2. conserve carbon- and biodiversity-rich ecosystems at high risk of conversion to other uses that would release their stored carbon

In a “reverse auction”, landowners are invited to bid on agreements to avoid conversion or to restore natural habitats on annual crop land. Under this funding stream, successful applicants will develop a reverse auction program to solicit bids from agricultural landowners in high priority areas. Using a reverse auction method, landowners will tender bids for conserving land or restoring it based on their site-specific costs. The resulting bids are a means of discovering landowners’ costs for achieving a specified menu of conservation results. The auction is termed “reverse” because the resulting bids are ordered from lowest to highest cost. This leads to the most cost-effective bid that contributes to the desired ecological results.

Expected Results

Projects under this initiative will contribute to the following results:

• Canadian greenhouse gas emissions are reduced
• Canada’s wildlife and habitat is conserved and protected

3. Eligible recipients

Eligible funding recipients are:

• domestic or international not-for-profit organizations, such as:
  • charitable and volunteer organizations
  • professional associations, and
  • non-governmental organizations
• domestic or international Indigenous organizations, governments, individuals, boards, commissions, communities, associations and authorities, including
  • Indigenous not-for-profit organizations
  • district councils, Chiefs councils and Tribal councils
  • Indigenous research, academic and educational institutions
  • Indigenous for-profit organizations
• domestic or international research, academic and educational institutions
• Canadian and foreign individuals
• domestic or international for-profit organizations, such as:
  • small businesses with less than 500 employees, companies, corporations, and industry associations
• local organizations such as:
  • community associations and groups
  • seniors’ and youth groups, and
  • service clubs
• provincial, territorial, municipal and local governments and their agencies

In cases where recipients further distribute funds, the ultimate recipients must be included in the list of eligible funding recipients.

4. Stream priorities

For this open call, the program will prioritize funding activities:

1. taking place in the following places
   • Habitat Joint Venture Priority Areas
   • Federal-Provincial-Territorial Priority Places and Community Nominated Priority Places
   • Critical habitat for SARA or COSEWIC-listed threatened and endangered species
   • Designated important habitat in a SARA management plan
   • Important habitat for SARA or migratory birds based on other sources of evidence, e.g., conservation data centre records, provincial or territorial data, published information; or
   • Areas that meet the Ecological Gift Program Eco-Sensitivity criteria, such as if they are in a Key Biodiversity Area
2. that engage the agricultural sector

5. Eligible activities

Designing and running a reverse auction focused on:

• securing ecosystems in agricultural landscapes that currently store significant amounts of carbon or the loss of which would result in major GHG emissions and have biodiversity benefits
• restoring annual cropland to grassland or wetland or riparian habitats on agricultural landscapes to increase their ability to sequester and store carbon and provide habitat for migratory birds, species at risk and other species of cultural and/or socio-economical importance to local communities

6. Consolidating projects and multi-year funding

Projects must be completed within 3 - 5 years of the signed Funding Agreement.

7. Matching contributions

• For non-Indigenous applicants,1:1 matching contributions (from non-federal sources) are sought ($1 confirmed match for $1 NSCSF funding). Preference will be given to projects with contributions that match or are in excess of 1:1 and to projects with higher cash-matching contributions in relation to in-kind contributions
• For Indigenous applicants, 0.20:1 matching contributions (from non-federal sources) of the NSCSF funding amount are sought ($0.20 match for each $1 of NSCSF funding). Preference will be given to projects with contributions that match or are in excess of 0.20:1 and to projects with higher cash-matching contributions in relation to in-kind contributions

8. Project funding and eligible expenses

Fund use requirements

Proposals received by the deadline must satisfy all Fund Use Requirements below in order to be eligible for funding.

• Funds are to be used to run a reverse auction for two types of place-based projects that will prevent GHG emissions or increase carbon sequestration and storage. The project types are those that will:
  1. secure ecosystems in agricultural landscapes that currently store carbon that are at imminent threat of loss; and/or
  2. restore annual cropland to grassland, wetland or riparian habitats on agricultural landscapes
• Projects should also occur where they will provide habitat for migratory birds, species at risk and other species of cultural and/or socio-economical importance to local communities
• Proposals must clearly identify how they can help prevent GHG emissions or increase sequestration, for example by demonstrating that the site or sites are threatened by a land use change that would release the stored carbon and reduce future sequestration, or by providing evidence that similar sites, when restored, sequestered more carbon. Applicants should also be able to describe how the GHG benefits of the activities will be maintained from 2030 to 2050 onwards
• Proposals must also clearly demonstrate how they are meeting the biodiversity criteria. This could include securing or restoring areas identified:
  1. in Habitat Joint Venture implementation plans, Federal-Provincial-Territorial Priority Places and Community Nominated Priority Places, given their demonstrated importance to migratory birds and species at risk
  2. critical habitat for SARA or COSEWIC-listed threatened and endangered species; designated important habitat in a SARA management plan, or important habitat for species at risk or migratory birds based on other sources of evidence, e.g., conservation data centre records, provincial or territorial data, published information; or
  3. how they meet the Ecological Gift Program Eco-Sensitivity criteria, such as if they are in a Key Biodiversity Area

Project funding

The minimum funding request for the Reverse auction pilot stream is $ 1,000,000 per project. Projects can be 3 to 5 years long. Organizations may not receive more than $25 million per fiscal year for any individual or combination of applications across all NSCSF funding streams.

Eligible expenses

For all eligible expenses, only those deemed to be a reasonable share for completing the project shall be considered eligible.

Eligible expenses may include reasonable and properly itemized costs for:

• human resource costs, including salaries and benefits
• management and professional service costs, such as accounting, monitoring, communications, official languages translation, audit and legal charges
• hospitality, travel (including field costs), and venues/conference expenses in accordance with the Treasury Board Secretariat’s Directive on Travel, Hospitality, Conference, and Event Expenditures
• material and supplies costs
• printing, production, and distribution costs
• equipment and Capital Assets purchase or rental, capital asset purchase is not an eligible expenditure for for-profit recipients
• lease of office space
• vehicle rental and operation costs
• contractors required to perform activities related to the Project, including carbon quantification related activities
• cost associated with land acquisition or other means of land securement (i.e. leases, easements, covenants, or servitudes), land acquisition costs are not eligible expenditures for for-profit recipients
• a reasonable share (10% or less) of overhead and/or administrative costs which are directly attributable to the carrying out of the project
• any GST/HST that is not reimbursable by Canada Revenue Agency and any PST not reimbursable by the provinces

9. Other requirements

To be eligible for funding, applicants will be required to

• indicate their understanding that emission reductions achieved via the proposed project cannot be sold as offsets at this time
• commit to tracking key results and providing the project data required to quantify emission reductions and integrate the project information into the National Inventory Report. This may require field activities such as collecting soil samples to measure soil organic carbon (SOC), or determining the type of wetland and its flood frequency
• commit that, if funded through the current process, directly affected Indigenous communities will be engaged prior to implementing place-based actions on the ground

10. To apply

Review the various funding opportunities, and confirm you are applying to the correct fund. Review fund use requirements and ensure your project’s activities satisfy those requirements.

1. Log into the Grants and Contributions Enterprise Management System (GCEMS), and check out the Technical Guide for help with this process. Accessing GCEMS requires applicants to create a GCKey and access the Single Window Information Manager (SWIM). Accessing the on-line application the first time may require three business days for a password to be provided. Make sure you sign up for a password through the SWIM portal as early as possible, after which you can access GCEMS to fill out an application for this and other ECCC funding programs. Once in GCEMS, ensure all proposed project activities are eligible NSCSF expenditures. For questions or clarification, please contact the NSCSF office at ec.fscan-nscsf.ec@ec.gc.ca

2. Prepare your funding application using GCEMS. Visit the GCEMS application instructions page for technical assistance documents, tutorials, and support throughout your application preparation. This funding application requires filling out a supplemental PDF and excel spreadsheet. Be sure to attach these to your funding application. Applications without this PDF and spreadsheet will not be considered for funding
3. Submit you Letter of Intent in GCEMS. All applications must include the supplemental spreadsheet and additional documents referenced to provide evidence for the questions asked

Your application must be submitted in GCEMS portal before the stated deadline.

11. How projects are reviewed

Your Letter of Intent is reviewed to verify eligibility and to assess technical and scientific merit. All project proposals are subject to the same evaluation criteria. Project applications are reviewed by the NSCSF program to confirm that:

• the project is eligible for funding
• the project addresses the NSCSF’s objectives related to GHG emissions reductions (or increased carbon sequestration) and the provision of co-benefits for biodiversity
• the proposal describes realistic and eligible activities; and
• the proposal has been submitted by an eligible NSCSF applicant

Following this administrative assessment, your project proposal is examined by a technical review team in order to evaluate your application for its scientific and technical merit and to finalize the overall analysis of each of the project applications received.

Successful applicants will be contacted by ECCC to discuss next steps. The Reverse auction pilot is new, therefore ECCC intends to work with screened in applicants to clarify the program requirements prior to seeking approval in principle.

12. For approved applications

If your Letter of Intent is accepted, you will be contacted about next steps. Federal Members of Parliament and/or their team may be advised about approved projects and may be provided with the applicant’s name, project title, project description, project location, funding amounts and contact information.

If your application is not approved, you will also be informed in writing.

Once confirmation of approval of the project has been received, applicants will be required to submit additional information, including but not limited to the following:

Cash flow statement

A detailed cash flow statement of all sources of revenue (including all in-kind contributions) and expenditures that are part of the approved project will be required.

Reporting obligations

The Contribution Agreement, between the recipient and ECCC, will specify project report deadlines and will include the required forms. Recipients will need to provide regular progress reports, annual reports (for multi-year projects) as well as a final report at the end of the project.

These reports will describe project revenue, expenses, accomplishments and detailed descriptions/quantifications of project outputs and outcomes. Project expected results are basic quantifiable project achievements while project intermediate outcomes include longer-term indicators of effectiveness of project activities in supporting the recovery of species and their habitats.

Project expected results for annual or final project reports could include:

Additional indicators may be required.

Successful applicants will also be provided with a reporting template to capture the data needed to quantify the GHG benefits of the project. Example data types are listed below (please note this is not an exhaustive list).

• Above ground vegetation (e.g., for forests: dominant tree species, average age, average diameter at breast height, average tree height)
• Below ground carbon (e.g., soil order and great group, %sand and %clay, Soil Organic Carbon)

Survey data sharing

Recipients will be required to provide species occurrence or habitat data collected in the context of the project to the respective provincial/territorial wildlife data repository centre or to ECCC or Parks Canada, as relevant to your project. Recipients will be asked to confirm in their final report the submission of data.

Intellectual property rights

Any Intellectual Property Rights created by the Recipient in association with their obligations and responsibilities under this Agreement shall vest in and remain the property of the Recipient. ECCC shall have no rights to this intellectual property for any purpose without the express written permission of the Recipient.

Permitting

Recipients will be responsible for obtaining the appropriate permits associated with the project from relevant federal and/or provincial authorities (including those required under SARA, the Migratory Birds Convention Act, and any other provincial or territorial wildlife acts that may apply) wherever the project triggers the need for a permit (for example, it could impact target species).

As permits take time to arrange, Recipients should address this need several months before the project start date to reduce delays once a funding announcement is made (see the SARA registry).

Public acknowledgment

Recipients are responsible for providing ECCC with final copies of any document or material utilizing the ECCC identifier, wordmark and/or acknowledgment statements prior to printing or distribution, for ECCC approval of the use of said logos and/or acknowledgement statements. The Regional NSCSF Coordinator will need to be consulted prior to making any communications products such as publications, public information releases, advertising, promotional announcements, activities, speeches, lectures, interviews, ceremonies and websites. All such communications products originating from the project must acknowledge ECCC’s contribution by displaying the ECCC identifier with the public acknowledgement text, along with the ECCC wordmark.

Official languages

The Official Languages Act (Part VII) requires that the Government of Canada promote both official languages and enhance the vitality of Official Language Minority Communities (OLMCs) across Canada. It is recognized that projects or organizations funded by ECCC through a grants and contributions program may:

• have an impact on OLMC; and/or
• provide potential opportunities to promote the use of both English and French; and/or
• make it possible to promote Canada’s bilingual nature

Applicants whose project may be delivered in a geographic area with OLMCs or which includes any public events, signage, promotional or other communications may need to consider official language requirements. For example, a project may be required to:

• offer materials produced with project funds brochures, kits, handouts, newsletters, reports, etc.) in both official languages
• have directional and educational signs produced in both official languages
• offer workshop facilitation in both official languages

Cost directly related to official language translation required under the Official Languages Act for a project is an eligible cost under the program.

Applicants will be required to complete the Official Language Questionnaire for Funding applicants (included in the application form) in order to assess the official language requirements that may apply to the project. Applicants should discuss any potential official language requirements and opportunities with their Regional NSCSF Coordinator.

Note: Overlap with other federal funding programs

You can only receive funding from one federal funding program for each proposed activity. Any application submitted to other Environment and Climate Change Canada funding programs (for example, AFSAR, EcoAction, etc.) must be for activities that are different from those submitted in the NSCSF application. Organizations should review information from other Environment and Climate Change Canada funding programs to determine which program is the best fit for their project.

13. Main links

Please see the following websites for additional information that may be useful for applicants:

• Nature Smart Climate Solutions Fund
• Natural Climate Solutions
• please see the Grants and Contributions Enterprise Management System website to register an account
• Treasury Board Travel Directive
• National Joint Council Travel Directive
• Official Languages Act
• Impact Assessment Act

For any further questions, please contact us at ec.fscan-nscsf.ec@ec.gc.ca.