Feb 22, 2022

Canada Fund to Reinvest Carbon Pricing Proceeds into GHG Reduction Projects

A healthy environment, good jobs, and a growing economy. In the fight against climate change, the Government of Canada is committed to supporting workers, while building a strong, resilient economy for everyone. Key to this plan is Canada’s price on carbon pollution.

Today, the Minister of Environment and Climate Change, the Honourable Steven Guilbeault, launched the Output-Based Pricing System Proceeds Fund, a new program to support industrial initiatives that reduce greenhouse gas (GHG) emissions and deploy clean technology and green energy.

The program will use the proceeds of Canada’s carbon pollution pricing system for heavy industry—collected in Manitoba, New Brunswick, Ontario, and Saskatchewan—to support low carbon technology projects in those provinces. Approximately $161 million from the 2019 compliance period will go towards projects that reduce carbon pollution.

The Output-Based Pricing System Proceeds Fund has two program streams:

The Decarbonization Incentive Program

The Decarbonization Incentive Program (DIP) is a merit-based program to support clean technology projects that will help decarbonize industrial sectors over the long term and reduce GHG emissions. The amount of funding available through the DIP for each province varies depending on the carbon pricing proceeds collected from facilities in each respective province where the federal OBPS currently applies or applied in the past. The DIP is currently accepting applications for project funding to return OBPS proceeds collected in the 2019 compliance period.

The Future Electricity Fund

The Future Electricity Fund (FEF) will support clean electricity projects and/or programs. Proceeds collected from electricity generating facilities covered by the OBPS (such as utilities) will be returned through funding agreements with governments of jurisdictions where the federal carbon pollution pricing system currently applies or applied in the past.

To mark the launch of the new program, Minister Guilbeault and Viviane Lapointe, Member of Parliament for Sudbury, participated in virtual tours of Vale Mining’s operations in Sudbury Ontario, and NOVA Chemicals, to see first-hand their latest initiatives to reduce operating emissions.

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