There are very few funding programs that have ever surfaced to assist companies with upgrading their facilities or assisting with the purchase of new equipment. With the global trend toward reducing greenhouse gas emissions and increasing energy efficiency the federal government opened a program last year providing funding in just these areas. The federal government’s three year, $1.45 billion Climate Action Incentive Fund (CAIF) began July 2019 and every business out there needs to pay attention to how this funding program can assist them.
CAIF is available in Ontario, New Brunswick, Manitoba and Saskatchewan. Funding amounts for 2019-2020 are as follow:
Ontario – $72 million
New Brunswick – $4 million
Manitoba – $21 million
Saskatchewan – $9 million
In February 2020, the first round of CAIF approvals were announced. Funding will be opening again sometime after April 1st, 2020. If you have any building upgrades or equipment purchase projects on the horizon you will want to be ready when the next round of CAIF opens.
What types of projects does the Climate Action Incentive Fund cover?
CAIF covers a broad array of building retrofits, including:
- Enhancements to the building envelope that lead to energy reduction. This includes installing energy efficient windows, doors and skylights, increased insulation, weatherproofing, and glazing.
- Installing energy efficient lighting systems.
- Installing energy efficient heating, ventilation, and air conditioning (HVAC) equipment, systems and controls.
- Water heating retrofits, including high efficiency condensing water heating.
- Installing high-efficiency motors and controls.
- Installing energy management controls, including building automation systems.
- Fuel switching to lower emitting energy sources in existing buildings.
The fund also covers retrofitting and upgrading to existing equipment. This includes:
- Equipment upgrades and retrofits
- Machinery upgrades and retrofits
- Replacing compressors with variable speed compressors
CAIF will also cover ancillary costs of a project. For example, a company is purchasing a new printing press for $700,000 with the following ancillary costs:
- Shipping $30,000
- Brokerage $1,000
- Installation $25,000
- Electrical Upgrade $20,000
- Set-up $10,000
- Training $15,000
- Trial Runs (Scrap Material) $12,500
- Total: $113,500
The $113,500 in ancillary costs can be included as part of the total costs bringing the total purchase of the new printing press to $700,000 + $113,500 = $813,500.
How much funding does a company receive through the Climate Action Incentive Fund?
The Climate Action Fund Incentive covers up to 25% of the project’s total eligible cost. The minimum project cost is $80,000 which would result in a $20,000 incentive. While there is no maximum project cost the maximum amount of funding that will be given per project is $250,000. $250,000 in funding is also the maximum that a company will receive per province. Therefore, if your company has locations in Ontario, New Brunswick, Manitoba or Saskatchewan you can apply for up to $250,000 per province.
Using the above example the company making a purchase of $813,500 would qualify for $813,500 x 25%= $203,375 in funding.
How does my company qualify for CAIF?
In order to qualify for CAIF your company needs to have a facility in Ontario, New Brunswick, Manitoba or Saskatchewan. Also you need to have fewer than 500 T4 employees.
When should I apply for funding?
In order to receive funding, a company must wait for approval before starting the project. If a project is started before the CAIF application is approved the company will automatically be disqualified from receiving funding. Lastly, as with all CAIF programs, only after you have completed the project and submitted proof of payment to the federal government will you receive your refund.
When do I need to complete my project?
In order to receive funding for your approved project the project will need to be completed and proof of purchase submitted to the federal government by March 31, 2021.
To learn more about applying for CAIF: