Deep Retrofit Accelerator Initiative – Application Guide for the second call for applications

Purpose

The Deep Retrofit Accelerator Initiative (DRAI) provides funding to projects that facilitate the development of deep retrofits in commercial, institutional, and mid- or high-rise multi-unit residential buildings in Canada, and that drive market transformation in a given region or market segment.

The objectives of the program are to:

• build capacity for, and address barriers to, deep retrofit project development and implementation;
• facilitate the development of deep retrofit projects in Canada;
• contribute to transforming the buildings sector in support of the Government of Canada’s climate goals.

The second call for applications provides a non-repayable contribution for projects that include at least one of the following priorities:

• developing tools, resources, and/or other capacity building activities to support the Canadian financial sector in efforts to finance deep retrofit projects;
• developing tools, resources, and/or other capacity building activities to support workforce development and capacity related to deep retrofits;
• developing tools, resources, and/or other capacity building activities to support the development of deep retrofit business cases (not limited to a specific project or building owner/manager).

The contribution is to be accounted for and is subject to audit.

Note: Capital expenditures to undertake retrofits (e.g. equipment, materials, or construction) are not eligible. Also, funded activities associated with specific buildings shall always be performed at the request of the building owners. The Government of Canada does not approve nor endorse any specific product or service provider.

Definitions

Capacity building

Activities that increase the abilities or capabilities of organizations to achieve a goal, such as developing deep retrofit projects. This may include activities pertaining to the development of novel, standardized, or replicable approaches, tools or resources.

Deep retrofit

A holistic approach to upgrading buildings and optimizing energy and carbon performance.  A “deep retrofit” involves upgrades to multiple building systems and equipment such as:

• replacing roofs
• adding, upgrading, or rearranging windows
• adding or increasing insulation
• replacing or improving building envelope or cladding
• replacing the heating, ventilation, and air-conditioning system with more efficient ones
• switching from fossil fuels to electricity or other energy sources for space and water heating (e.g., heat pumps)
• upgrading the lighting system or using day lighting and controls
• installing or harnessing renewable energy systems (e.g., photovoltaic panels)
• installing or upgrading building control or energy management systems
• other measures that improve the energy efficiency of the building

Deep retrofits typically save at least 50% in energy consumption – and up to 70% or more – and/or up to 80-100% in GHG emissions. Deep retrofits may also include measures to improve resiliency and adaptation to climate change.

Mid- or high-rise multi-unit residential buildings

Mid- or high-rise multi-unit residential buildings include buildings that contain 2 or more units sharing a common building entrance and interior hallways; and are either 4 or more storeys above ground or have a horizontal footprint greater than 600 m2 measured within the exterior walls and firewalls.

Retrofit accelerator

An organization that helps building owners in the development of deep retrofit projects and helps build capacity for deep retrofit projects in Canada’s building sector.

Eligibility

Eligible recipients

• Legal entities validly incorporated or registered in Canada, including for-profit and not-for-profit organizations
• Provincial, territorial, regional and municipal governments and their departments and agencies, including public sector bodies, crown corporations or boards that are established by or under provincial or territorial statute or by regulation or are wholly owned by a province, territory or local or regional government
• Indigenous governing bodies, for-profit and not-for-profit organizations and communities

Note: The Recipient is not an agent, an employee, or a partner of the Government of Canada, and shall not represent itself (including in any agreement with a third party) in a manner that could lead a member of the public to believe that the Recipient is an agent, employee, or partner of the Government of Canada.

Eligible projects

Eligible projects reduce barriers to deep retrofits and support deep retrofit market transformation, and focus on at least one of the following priorities:

• Developing tools, resources, and/or other capacity building activities to support the Canadian financial sector in efforts to finance deep retrofit projects.

  Projects must help to address barriers to deep retrofit financing, such as project evaluation, risk assessment, and verification of results.

• Developing tools, resources, and/or other capacity building activities to support workforce capacity and development related to deep retrofits.

  Projects must help to address workforce supply shortages and workforce knowledge and skills gap around deep retrofits.

• Developing tools, resources, and/or other capacity building activities to support the development of deep retrofit business cases (not limited to a specific project or building owner/manager).

  Projects must help to streamline the development of business cases for a market segment as a whole.

Eligible activities

Eligible activities funded include, but are not limited to:

• Developing best practice guides, third party verification protocols, standards, and other tools regarding the financing, implementation, or evaluation of deep retrofits, that are not limited to one jurisdiction and can be utilized across Canada
• Developing “how to” guides, modelling software, protocols, standards, templates, case studies, and other tools to support deep retrofit business plans
• Developing curriculums, training materials, or education programs for trades, architects, engineers, energy managers, or other relevant fields that are under-capacity or that require new skills or information in order to better participate in the deep retrofit ecosystem
• Developing and refining financial models and tools to assist lenders and investors in evaluating the financial viability of deep retrofit projects
• Developing and implementing tools that help financial institutions assess and mitigate associated risks with deep retrofit projects
• Designing and implementing outreach programs to promote careers in skilled trades related to deep retrofit projects
• Developing programs/initiatives to attract and retain skilled tradespeople in the retrofit sector
• Developing standardized templates and guidelines and other tools for developing business cases for deep retrofits that can be used across various market segments

Eligible expenditures

Eligible expenditures must be directly related to the implementation of the project and reside in the following categories:

• Salaries and benefits on the payroll of the Recipient for actual time spent by the employees on the project
• Professional, scientific, technical, management, data collection and contracting services
• Travel expenditures, including meals and accommodation, based on National Joint Council Rates
• Advertising, recruitment and training (including trainer fees, costs of training development, promotion, deployment and evaluation)
• License fees, data purchases, certification costs, and permits
• Capital expenditures – informatics hardware and software (note: capital expenses for retrofits are ineligible)
• Material, supplies and equipment rental (note: equipment installed as a part of a building retrofit is ineligible)
• Rental of facilities, audio and visual services and other related costs (excluding hospitality and prizes) associated with delivering workshops, delivering training, conferences, meetings and other events
• Overhead expenditures, provided they are related to the conduct of the project and can be attributed to it. Overhead expenditures may be included in the total project costs up to 15% of eligible expenditures
• GST, PST or HST, net of any tax rebate to which the Recipient is entitled

Ineligible expenditures include, but are not limited to:

• Capital costs (e.g. equipment or materials purchase, or lease and other deep retrofit implementation costs)
• Land acquisition; leasing land, buildings and other facilities; leasing equipment other than equipment directly related to the administration of activities in a proposal; real estate fees and related costs
• Financing charges, legal fees, and loan interest payments, including those related to easements (e.g., surveys)
• Provincial sales tax and Goods and Services tax/HST, for which the recipient is eligible for a rebate, and any other costs eligible for rebates

Merit selection criteria

The project will be assessed against the merit selection criteria described below:

Relevance of the project

The Program will assess the extent to which the project:

• meets the objectives for the Program and this second call for applications;
• has a clear rationale for funding, as expressed by a description of goals, objectives, outputs/outcomes, and performance indicators.

Relevant experience and capacity

The Program will assess the extent to which the applicant has the resources, personnel, and expertise to complete the project, such as:

• mandate and/or experience and expertise
• demonstrated commitment based on past or current projects
• a qualified project delivery team with roles and responsibilities clearly established
• institutional, management/organizational structures, financial controls, and other supports required to successfully deliver the project

Work plan and budget

The Program will assess the extent to which the project has:

• a realizable project plan, including clearly defined activities, deliverables, budget and timelines
• a detailed risk analysis and mitigation strategy
• an information dissemination plan

Quality of the application

The Program will assess the quality of the application, such as completeness, attention to detail, and clarity. The evaluation process may favour projects that include:

• A plan to address Equity, Diversity and Inclusion (EDI) considerations. Applicants are encouraged to outline how they plan to foster participation of under-represented and/or under-resourced people and communities as part of their project.

Final funding decisions will take into consideration the evaluation results, and other criteria such as the total funding requested per year and program budget availability, and the distribution of funding to projects across Canada.

Available funding

The amount of funding available for the second call for applications is approximately $8 million over two years (2025/26 to 2026/27). Funding may be cancelled or reduced in the event that departmental funding levels are reduced by Parliament.

The total available funding will reimburse recipients up to:

• 100% of total eligible expenditures for:
  • provincial, territorial, regional and municipal governments and their departments and agencies where applicable
  • Indigenous governments or organizations (e.g. band councils, land claim organizations)
  • not-for-profit organizations, including and public health, educational and cultural organizations
• 75% of total eligible expenditures for:
  • for-profit organizations (organizations are not to make profit from federal funding)

Recipients will be required to disclose all anticipated sources (Canadian and non-Canadian) of funding for the project, including approved in-kind funding, clearly identifying contributions from other Canadian government sources (federal, provincial/territorial, and municipal).

In the event that actual total government funding to a recipient exceeds the eligible expenditures, the Program will adjust its level of funding so that the maximum funding limit is not exceeded.

Further distribution of the contribution by recipients is not an eligible activity under the Program.

The maximum level of total Canadian government funding (federal, provincial/territorial,
and municipal) authorized under this initiative will be one hundred percent
(100%) of Total Project Costs.

Contribution agreement

Upon favourable review of an application and approval for funding, NRCan will negotiate a Contribution Agreement with the Recipient. The Contribution Agreement will outline the rights, roles, and obligations of each of the respective parties. Until a contribution agreement is signed by all parties, no obligation exists on the part of NRCan to contribute funding to a project.

Performance conditions

A non-repayable contribution is subject to performance conditions specified in the Contribution Agreement. A contribution is to be accounted for and is subject to audit.

Note that the expected result of the second call for applications is increased capacity for deep retrofit project development and implementation. Recipients of successfully funded projects must report to NRCan quarterly and annually to ensure that project targets and objectives are being met. The reporting requirements will be specific to each project and determined during the Contribution Agreement negotiation stage.

Intellectual property

All intellectual property that arises during a project shall vest in, or be licensed to, the recipient. The recipient will grant to Canada a non-exclusive, irrevocable, worldwide, royalty-free licence in perpetuity to use the data and information contained in reports and modify such reports and documents for non-commercial governmental purposes.

Privacy and confidentiality

Subject to the Access to Information Act and Privacy Act, all information provided under this program is public information and may be disclosed to third parties upon request under the relevant Act.

How to apply

Please direct all enquiries relating to this funding or request an application package, by emailing drai-iarm@nrcan-rncan.gc.ca.

• Deadline to submit an application for this second call for applications: February 12, 2025