Up-Front Multi-Year Funding

Sustainable Development Technology Canada (SDTC) - SD Tech Fund™

Start date: March 26, 2001
End date: March 31, 2022

Website: (www.sdtc.ca)

Strategic Outcome: 2 – Natural Resource Sectors and Consumers are Environmentally Responsible

Program and Sub-program: 2.2 – Technology Innovation and 2.2.3 – Clean Energy Science and Technology

Description: 
The SD Tech FundTM provides financial support to projects for the development and demonstration of innovative Canadian technological solutions that address climate change, clean air, clean water and clean soil.

To date, the Fund has received $550 million in Government of Canada funding (up-front multi-year grants), half from Natural Resources Canada and half from Environment Canada. An additional $40 million announced in Budget 2011 and $325 million announced in Budget 2013 have been made available beginning in 2015-16, with all transfers to SDTC in the form of a contribution, half from Natural Resources Canada and half from Environment Canada.

Comments on variances:
No funding was transferred from the Government to SDTC during 2014-15. There were delays in finalizing a new funding agreement, which was signed on December 10, 2014. The delays necessitated adjustments to the funding profile. The 2014-15 planned funds of $12.5 million from NRCan and an equivalent amount from Environment Canada have been made available for future years.

Significant audit findings by the recipient during the reporting year, and future plan
No audits were conducted in 2014-15.

Significant evaluation findings by the recipient during the reporting year, and future plan
No evaluations were conducted in 2014-15. An evaluation of the SD Tech Fund program is planned for 2016-17.

Summary of results achieved by the recipient: 
As in previous years, two calls for proposals and two funding rounds were completed by SDTC during 2014-15 resulting in future allocations totalling $71.1 million to new and modifications to existing projects. SDTC raised awareness of its available funds by hosting workshops that reached 1000 stakeholders and 30 regional partners. The Foundation also launched a new fund in collaboration with the Canadian Gas Association, the SD Natural Gas funds, to further leverage federal funding for the development and demonstration of clean technologies.

Performance Information (dollars)

2012–13 Actual spending	2013–14 Actual spending	2014–15 Planned spending	2014–15 Total authorities available for use	2014–15 Actual spending (authorities used)	Variance (2014–15 actual minus 2014–15 planned)
0	0	12,500,000	12,500,000	0	(12,500,000)

Green Municipal Fund (Statutory)

Start date: March 31, 2000
End date: Perpetuity

Website: (www.fcm.ca/home/programs/green-municipal-fund/about-gmf.htm)

Strategic Outcome: 2 – Natural Resource Sectors and Consumers are Environmentally Responsible

Program and Sub-program: 2.1 – Energy–Efficient Practices and Lower-Carbon Energy Sources and 2.1.4 – Energy Efficiency

Description: 
The Green Municipal Fund (GMF) is a revolving fund administered by the Federation of Canadian Municipalities (FCM). The GMF supports grants, loans and loan guarantees to encourage investment in environmental municipal projects. The Government of Canada (GoC) endowed the FCM with a total of $550 million for this initiative through a series of budget decisions from 2000 to 2005.

The GMF was established to enhance Canadians’ quality of life by improving air, water and soil quality and protecting the climate. Eligible projects may fall into one or more of the following categories: brownfields, energy, transportation, waste, water in the form of sustainable neighbourhood action plans, community brownfield action plans, greenhouse gas (GHG) reduction plans, feasibility studies, field tests and capital projects. At least 30% of the value of the Fund Assets is dedicated exclusively to supporting brownfield remediation and redevelopment.

The amount of GMF financing available for municipal projects is directly related to the environmental benefits or innovativeness of the project, while taking into account economic and social considerations. Grants of up to 50% of eligible costs are available for plans, studies and field tests, to a maximum of $175,000. Low-interest loans of up to 80% of eligible costs are available for capital projects, to a maximum of $10 million, typically combined with a grant amount for 15% of the loan amount, to a maximum of $1.5 million. Brownfield projects are eligible for below-market loans only, with no specified funding limit.

As stipulated in the GMF Funding Agreement between the FCM and the GoC, the FCM has created two advisory bodies: the GMF 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 15-member GMF Council includes five federal members: two from Environment Canada, two from Natural Resources Canada and one from Infrastructure Canada. All federal members are appointed by the FCM Board of Directors based on recommendations from the Minister of the Environment or the Minister of Natural Resources.

Comments on variances:
No funds appear because the FCM received endowments from the GoC beginning in 2000 and as a result the GoC does not carry planned or actual spending.

Significant audit findings by the recipient during the reporting year, and future plan
An independent performance audit was performed by Ernst and Young in early 2014 in tandem with a review of the GMF. The Performance Audit concentrated on aspects related to GMF’s economy, efficiency and effectiveness as well as overall Funding Agreement compliance. Recommendations included:

• Develop and implement “basic training” in financial literacy for new Council members, focussing on ongoing challenges associated with Fund sustainability.
• Continue ongoing review of disbursement processes scheduled for March 31, 2015.
• Conduct a formal review of the project approvals process to clarify workflows and identify potential efficiencies.
• Make service-level targets for project applications explicit and monitor progress.
• Continue to improve system-wide monitoring and measurement of stakeholder engagement.

FCM is pleased with the results of the audit, and is in agreement with the findings and recommendations. An action plan detailing how to address the recommendations was put forward for future Council meeting approval. 

A copy of the performance audit of the GMF is available at: http://www.fcm.ca/Documents/reports/GMF/2014/Federation_of_Canadian_Municipalities_Performance_Audit_of_the_Green_Municipal_Fund_Final_Report_EN.pdf

Significant evaluation findings by the recipient during the reporting year, and future plan
An independent review was performed by Ernst and Young in early 2014 in tandem with a performance audit of the GMF. The Review focussed primarily on the continued relevance of the Fund and outcomes achieved by the GMF. Recommendations included:

• GMF should conduct funding recipient interviews and surveys 3-5 years after GMF receives the project completion and environmental results report to better understand the full spectrum of benefits that GMF-funded projects provide to stakeholders.
• Knowledge Services should continue to develop and promote tools and enablers targeted to areas of strategic focus for GMF, encourage local capacity development, and drive leading practices across sectors.

FCM is pleased with the results of the review, and is in agreement with the findings and recommendations. An action plan detailing how to address the recommendations was put forward for future Council meeting approval. 

A copy of the review of the GMF is available at: http://www.fcm.ca/Documents/reports/GMF/2014/Federation_of_Canadian_Municipalities_Review_of_the_Green_Municipal_Fund_Final_Report_EN.pdf

Summary of results achieved by the recipient: 

According to the FCM, as of March 31, 2014, the GMF has approved funding for 180 capital projects, which are expected to generate over $3.7 billion of economic activity in 134 communities. When all 180 projects are completed they are expected to save municipalities more than $96.8 million per year in addition to providing direct environmental benefits. The FCM reports that environmental benefits include the annual reduction of an estimated 358,000 tonnes of carbon dioxide from 100 completed capital projects.

An annual report for fiscal 2014-15 is available at http://www.fcm.ca/Documents/corporate-resources/annual-report/Green_Municipal_Fund_Annual_Report_2014_2015_EN.pdf

Performance Information (dollars)

2012–13 Actual spending	2013–14 Actual spending	2014–15 Planned spending	2014–15 Total authorities available for use	2014–15 Actual spending (authorities used)	Variance (2014–15 actual minus 2014–15 planned)
0	0	0	0	0	0

Sustainable Development Technology Canada (SDTC) for the NextGen Biofuels Fund™

Start date: April 1, 2007
End date: September 30, 2027

Website: (www.sdtc.ca)

Strategic Outcome: 2 – Natural Resource Sectors and Consumers are Environmentally Responsible

Program and Sub-program: 2.1 – Energy-efficient Practices and Lower-carbon Energy Sources and 2.1.3 – Alternative Transportation Fuels

Description: 
SDTC is managing the NextGen Biofuels Fund™ (NGBF), which will support up to 40% of eligible project costs to a maximum of $200 million per project for the establishment of first-of-kind, large-scale demonstration next-generation renewable fuel production facilities to encourage the future sustainability and success of renewable fuels. Next-generation renewable fuels are produced with non-conventional conversion technologies and derived from non-traditional renewable feedstocks, such as forest biomass, fast-growing grasses, and agricultural residues.

Since next-generation biofuels technologies are capital equipment intensive, they constitute a greater debt financing risk than common technology development. The support provided by the NGBF will encourage the retention and growth of technology expertise and innovation capacity for next-generation renewable fuels production in Canada.

Of the $500 million in total funding announced in Budget 2007, $200 million is statutory funding, and the remaining $300 million was made available by Parliament through a series of grants over the period 2008-09 to 2014-15. Government funding to SDTC’s NGBF is provided in equal amounts by Natural Resources Canada and Environment Canada. There remains $225 million from the original NGBF fund as $275 million in transfer payments to the NGBF have been returned to the fiscal framework over multiple years due to lower than anticipated program uptake.

To date, SDTC has received payments totalling $66.3 million. Each department has $18.6 million in statutory funding available to be spent in future years, subject to SDTC’s cash flow requirements.

Comments on variances:
No funding was transferred from the government to SDTC during 2014-15. Two projects were approved by SDTC during 2014-15 for funding, but associated contracts were not signed.. In 2014-15, the remaining $50 million in unused appropriated funds had been returned to the fiscal framework (half by NRCan and half by Environment Canada) due to lower than anticipated program uptake.

Significant audit findings by the recipient during the reporting year, and future plan
No audits were conducted in 2014-15.

Significant evaluation findings by the recipient during the reporting year, and future plan
No evaluations were conducted in 2014-15. An evaluation of the NGBF program is planned for 2017-18.

Summary of results achieved by the recipient: 
In 2014-15, the Next Generation Biofuels Fund transitioned to a project construction focus. Five applications for funding were received, and two projects were approved by the SDTC Board of Directors for final NGBF funding commitments of $90.6 million (half from NRCan and half from Environment Canada).

Performance Information (dollars)

2012–13 Actual spending	2013–14 Actual spending	2014–15 Planned spending	2014–15 Total authorities available for use	2014–15 Actual spending (authorities used)	Variance (2014–15 actual minus 2014–15 planned)
0	0	25,000,000*	25,000,000*	0*	(25,000,000)*
0	0	79,338,000**	0	0**	(79,338,000)**

Notes:

• *   Annual appropriated funds
• ** Statutory (non-lapsing) funding