Up-front multi-year funding

• Clean technologies and energy efficiencies enhance economic performance
• Canada’s natural resources are sustainable

The GMF is a revolving fund administered by the Federation of Canadian Municipalities (FCM). It provides municipalities and municipal partners with grants, loans, and loan guarantees to encourage innovative environmental municipal projects. The Government of Canada provided the FCM with a total of $1,625 million^{Footnote 1} for this initiative through a series of budget decisions beginning in 2000 through to 2019. Each investment was provided as an up-front multi-year payment. While some funds were provided as concessional for granting and operating expenses, FCM is responsible for maintaining a nominal value of at least $1,012.5 million for the GMF endowment.

The GMF was established to enhance Canadians’ quality of life by improving air, water, and soil quality, and protecting the climate while delivering economic and social benefits to communities. Eligible projects may take the form of plans, feasibility studies, pilot projects, and capital projects. The GMF Core Offer supports projects in five sectors: brownfields, energy, transportation, waste and water. The Signature Initiatives offer supports highly innovative projects that cross sectors or do not fit those categories. The Budget 2019 investment was aimed at supporting energy efficiency and GMF has used it to launch three new funding streams to increase building efficiency and reduce greenhouse gas emissions: Sustainable Affordable Housing; Community Efficiency Financing; and Community Buildings Retrofit. The GMF also houses the National Office for the Low Carbon Cities Canada (LC3) Network. As the final part of Budget 2019 investment, FMC provided grants to seven climate centres in major cities across Canada, for each centre to establish its own endowment from a total envelope of $177 million.

The Funding Agreement allows GMF to provide grants and loans for municipal projects totalling between $62 and $182 million in a given year, with additional grant funds available for the first five years of the new funding streams under the Budget 2019 investment. The amount of funding available for any one project is directly related to the environmental benefits or innovativeness of the project, while taking into account economic and social considerations. For the carrying-out of studies, assessments, sustainable community plans, and pilot projects: grants up to eighty percent (80%) of Eligible Project Costs are available. For the execution of any other Eligible Projects where environmental, economic or social benefits are deemed to be exceptional, as defined by the FCM Board of Directors on the recommendation of the Council: grants, loans (at fixed interest rates no lower than the Government of Canada bond rate for equivalent terms up to thirty (30) years minus two percent (2%)) and/or loan guarantees to an Eligible Recipient in respect of an Eligible Project may, in combination, be up to (80%) of Eligible Project Costs. For greater certainty, for the purposes of these exceptional circumstances, the value of the grants shall not exceed fifty percent (50%) of Eligible Project Costs.

As stipulated in the GMF Funding Agreement between the FCM and the Government of Canada, the FCM has created two advisory bodies: the GMF Advisory Council and the Peer Review Committee. The GMF Council’s role is to assist the FCM Board of Directors, the decision-making body for the GMF, in approving projects proposed by municipalities. The eighteen member GMF Council includes six federal members: two from Environment and Climate Change Canada (ECCC), two from Natural Resources Canada (NRCan), one from Infrastructure Canada (INFC) and one from Canada Mortgage and Housing Corporation (CMHC). Members of the Peer Review Committee, up to ten of whom are NRCan representatives, provide financial and technical reviews of all project applications that are used to inform Council recommendations. All federal members are appointed by the FCM Board of Directors based on recommendations from the responsible Minister.

As stipulated in the Canada-FCM Funding Agreement (FA), FCM will provide an Annual Statement of Plans and Objectives (ASPO) to NRCan, ECCC and INFC Ministers by April 1st, 2023. This document will detailed planned activities, key results area objectives, and financial targets for 2023-24.

GMF is also developing a new multi-year Strategic Plan with a three-year timeframe and it will work to align GMF activities with the broader goal of Net-Zero by 2050.

Details of the new ASPO are planned to include design of an adaptation stream, creation of GHG mitigation measurement framework, and aligning investment approach with climate objectives. These would build on the 2022-23 ASPO objectives of maximizing the impact and reach of current GMF programming, supporting further transformation of the sector, and starting integration of Anti-Racism and Equity (ARE) Principles and Practices.