Climate Action Incentive Fund (CAIF) – Eligibility & How to Apply

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Part of the Pan-Canadian Framework on Clean Growth and Climate Change, the Climate Action Incentive Fund (CAIF) was announced by the Federal Minister of Environment and Climate Change on May 30, 2019. 

Purpose

The purpose of the fund is to help small and medium-sized businesses in Saskatchewan, Manitoba, Ontario, and New Brunswick, such as restaurant owners, farmers, truck drivers, and convenience and grocery store owners become more energy-efficient, reduce pollution and save money on their energy bills by providing rebates for investing in new equipment and retrofits. 

Projects that apply for funding will likely be mostly solar power systems, energy efficient lighting, heating and air conditioning. The government also expects this to create jobs, grow the clean energy economy and help fight climate change.

Funding

Funding for the program comes from a portion of the revenue generated from the federal fuel charge that came into effect April 1, 2019 in Saskatchewan, Manitoba, Ontario, and New Brunswick. The Government of Canada committed to return the vast majority of the direct proceeds collected from the federal fuel charge through Climate Action Incentive payments to individuals and families in those provinces and the rest is being allocated for the Climate Action Incentive Fund (CAIF).

The funding available in each province is based on the revenue generated by the federal fuel charge in that province. Over the next 5 years, the incentives are estimated to be:

  • Saskatchewan – $295 million
  • Manitoba – $130 million
  • Ontario – $975 million
  • New Brunswick – $55 million

Funding Streams

The Fund includes 3 streams:

SME Project Stream 

The Climate Action Incentive Fund (CAIF) SME Project stream provides support to small- and medium-sized enterprises (SMEs) for retrofit projects in sectors such as Building, Transportation, Industry, Waste, Agriculture, and more – including solar power systems.

MUSH Retrofit Stream (Later in 2019-2020)

For municipalities, universities, schools, hospitals to undertake energy saving and efficiency projects

Rebate Stream (Coming Soon)

For not-for-profit organizations to purchase Energy Star appliances.

Benefits of CAIF

  • Distributing up to $150M in its first year (2019-2020) based on the percentage of carbon revenues collected in Saskatchewan, Manitoba, Ontario, and New Brunswick.
  • Rebate of up to 25% of a project’s total eligible costs
    • Minimum of $20,000
    • Max of $250,000 per project and per applicant.
  • A $250,000 funding cap will apply to the group of applicant franchisees who operate under the same franchise trade name in each eligible province

Eligibility Requirements

  • Incorporated small or medium-sized enterprises (SME)
  • Fewer than 500 employees
  • In provinces where the federal fuel charge applies: Saskatchewan, Manitoba, New Brunswick, and Ontario.
  • Project must be completed by March 31, 2021

Eligible Project Categories and Sample Projects

Electricity

  • Solar photovoltaic, wind energy, micro-hydro, stand-alone storage systems that are on-site and for own-use 
  • Combined heat and power for own use 
  • Low-emission fuel production for own-use 
  • District energy (heating and/or cooling)

Agricultural Retrofits

  • Changes to agricultural processes to improve energy efficiency 
  • Fuel switching to lower-emitting energy sources in agricultural operations 
  • Other energy efficiency measures in the agricultural sector
  • Building retrofits 
  • Enhancements to building envelope (with direct energy savings), including energy-efficient windows/doors/skylights, increased insulation, weatherproofing, and glazing 

Energy-efficient Lighting System 

  • Heating, ventilation, and air conditioning (HVAC) equipment/systems/controls 
  • Water heating retrofits, including high efficiency condensing water heating 

High-efficiency Motors and Controls 

  • Energy management controls, including building automation systems 
  • Fuel switching to lower-emitting energy sources in existing buildings
  • Industrial process improvements 
  • Retrofitting and upgrading of existing equipment used for industrial processes 
  • Fuel switching to lower-emitting energy sources 
  • Process changes 
  • Waste-heat recovery

Transportation Retrofits 

  • Heavy-duty vehicle retrofits, including energy efficiency and/or fuel switching to lower-emitting sources 
  • Marine vehicle retrofits, including energy efficiency and/or fuel switching to lower-emitting sources

Waste 

  • Energy efficiency measures in waste management

Accelerated Investment Initiative

In addition to the funds provided by the CAIF, these projects may also be eligible for the benefits from the Accelerated Investment Initiative which made changes to the Accelerated Capital Cost Allowance in 2018. The initiative allows businesses to immediately write off the full cost of specified clean energy equipment in the first tax year, including solar energy and energy storage equipment.

How to Apply

CAIF Application Deadline

Note: The application period opened July 17, 2019 for a period of 90 days, or until funding is exhausted. The deadline to apply to CAIF is October 15, 2019.

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