”Show Me The Money”

(Helping Canadians Access Funding For Environmental Technologies)

Ray KliciusInnovative Solutions Division

Environment Canada

Energy & Environment Innovations – Opportunities to Save Money & the Environment

Kleinberg, Ontario

November 2004

Outline

• SFT/Budget• Drivers• What’s Hot • Funding Spectrum• Funding in Action • Summary• Contacts

Speech-from-the-Throne (SFT)& Budget 2004

The Feb. 2004 SFT committed to “making Canada a world leader in developing & applying path-breaking environmental technologies”

The Oct. 04 SFT reiterated Canada’s commitment with an increased focus on energy efficiency and energy R&D, and commercialization

Budget 2004, supports this commitment through the following new initiatives:

• $1Billion over the next 7 years for environmental technologies

• $39M/yr to NSERC towards increasing resources for research, development and demonstration of innovative ETs,

• $250M for Venture Capital, via BDC, to create access to capital for the commercialization of technologies in environment, health, and others.

• Improving tax treatment for SMEs (e.g. SR&ED )

Canadian EnvironmentIndustry

Where are we now?7967 Companies, 93% SMEs

Employment: 160,000 High Level (Eng/Sc)

Industry Make-up: Goods: 42% Services: 44% Construction: 14%

*source: Environment Industry Survey Business Sector, 2000, Statistics Canada

ATLAN10%

QC21%

ONT31%MB

3%

SK4%

ALTA14%

BC16%

TERR1%

ATLAN

QC

ONT

MB

SK

ALTA

BC

TERR

HotHot FundsFunds ($M) Program Duration

~1000

550

63

170

110

430 *

Budget 04–Support for dev & comm of new ETs*

Sustainable Development Technology Canada

Technology Early Action Measures (new funds)

CBRN Research and Technology Initiative

Cdn. Fdn. For Climate & Atmospheric Sciences

Venture Capital Funding via Business Development Bank of Canada

* As of March, 2003

2004-2011

2002-2009

2004-2008

2002-2006

2000-2010

1975-

Other Key Funds ($M) Program Duration

100

*

(2.4B) **

30 *

50 200

850 *(2.7B) 700M-1B N/A N/A

Industrial Research Assistance Program (IRAP)Technology Partnerships Canada (TPC)TPC - IRAPGreen Municipal Enabling FundGreen Municipal Investment Fund Natural Sciences & Eng. Research Council of Can.Canada Foundation for InnovationWind Power Production IncentiveSci. Research & Experimental Dev. ProgramRenewable Energy/Conservation Tax Incentives

* = $ for 2004 / 2005 ** = as of Mar., 04; 19%>ETs

ContinuousRevolvingRevolving2000-2007RevolvingContinuous1997-20102002-2007PermanentPermanent

Funding SpectrumFe

dera

l Fu

nd

ing

Pro

gra

ms

Climate Change Investments

(Budget 2003) Funding Blocks $Million

• Technology & Innovation 270• Individual Canadians 131• Industry & Business

o Energy Efficient Buildings 129o Energy Efficient Transportation 154

• Governments & Communities 321Total 1005

Sustainable Development Technology Canada (SDTC)

• Established in 2001 as a response to Kyotoo Total of $550 Mo $350 M + $200 M (Budget 2004)o $72 M Allocated as of Sept 04

• Climate Change & Clean Air, Water & Soil Techso Development & demonstrationo Emphasis on strong partnerships

• Funding Specifics:o 33% on average, up to 50% for any one projecto No specific min/max amountso Max 5 years of Funding per projecto Funds allocated from 2002 to 2009

SDTC - Eligible Technologies

• Hydrogen economyfuel cells, hydrogen infrastructures, transition fuels

• Cleaner Fossil FuelsCO2 capture and sequestration, oil sands production

• Air Quality improvementtoxics recovery, particulate control, acid rain

• Energy end-use technologiestransportation, buildings, ground level ozone reduction

• Renewable energy technologiesbiomass, solar, wind, wave, tidal

• Budget 2004 expanded mandate to incl. Clean Water & Soilo Water quality and quantity improvemento Waste managemento Soil quality improvement

Technology Early ActionMeasures (TEAM)

• Technology demonstration and late stage development in support of early action to reduce GHG emissions

• Initial Investment of $60M (1998-2001, 1st Round of CCAF) o Renewed at $35M for 3 years (2001-2004, 2nd Round of

CCAF)o Renewed at $63M for period 2004-2008, from

Budget 2003• Co-chaired by NRCan, EC and IC.• Technology Focus Areas:

o Cleaner Fossil Fuelso Advanced Energy Efficiencyo Biotechnologieso Hydrogen Economyo Decentralized Energy Production

• Project delivery through existing Federal departments & programs (incremental funding)

• 5 year, $170M interdepartmental initiative • Purpose: strengthening preparedness, prevention &

response to CBRN threats & attacks• Environmental Investment Priorities (EIP):

• Immediate Reaction & Near-Term Consequence Management:

• Surveillance, early detection & analysis• Containment, countermeasures & decontamination

•Longer-term:•Assessment, remediation & recovery (environmental, human, agro-systems)•Decontamination in urban settings

• An additional EIP may be announced in the 4th Call for Proposals (Nov. 2005)

CBRN* Research & Technology Initiative (CRTI)

(* Chemical, Biological, Radiological, Nuclear)

Industrial Research Assistance Program (IRAP)

• Established in 1947 to stimulate wealth-creation through technological innovation.

• Supports more than 12,000 SMEs/year • $100M budget for client contributions in 2004-05• Delivered through national network of Industrial

Technology Advisors• Cost-shared contributions possible for projects in:

o R&D, 30-50% of costs, up to $500K non-repayableo Precommercial activities like manufacturing

engineering, pilot plant trials, 1/3 of eligible costs up to $1M repayable

o Youth Employment, up to $12K to support salary of hiring a recent graduate

Technology Partnerships Canada (TPC)

• Contributes to GoC’s objectives:o Economic growth, job creation, sustainable development

• Shares the cost of industrial R&D projects• 3 Funding Areas

o Enabling, 15-20% environmental, aerospace & defence

• No upper limit; SME projects<$3M by IRAP-TPC• 25 - 30% of eligible R&D costs• Repayments only if commercially successful…

TPC• Level of repayment depends on extent of

commercial success• TPC shares in risks and rewards!

TPC-IRAP

• $30M per year, funded 50-50 by TPC and IRAP

• Targets Canada’s 2 Million SMEso Pre-commercial development of new products/processes,

demonstration or pilots

• Funding:o Same funding areas as TPC, including Environmentalo Total eligible project costs must not exceed $3 milliono Available to SMEs with less than 500 employees

• IRAP- ITAs offer knowledge-based assistance

• Upfront repayment plans negotiated

Panel for Energy Research and Development (PERD)

• Ensures a sustainable energy future for Canada• Annual budget of approximately $58M• Forwards many Policy Agendas• Program Strengths:

o Collaborative approach to R&Do Encourages partnershipso Emphasizes peer-review & assessmentso Responds to new policieso PERD MOU signed with 12 participating

federal departments & agencies (e.g., CMHC)

• Operating for almost 30 years

Federation of Canadian Municipalities

Green Municipal Funds• Purpose:

To help municipal governments and their partners improve air, water or soil quality, protect the climate and promote the use of renewable resources.

• Green Municipal Investment Fund (GMIF) (Loan) $200M for innovative environmental projects

• Green Municipal Enabling Fund (GMEF) (Grant) $50M for feasibility studies & field tests Max $350,000/project: Up to half of eligible costs

NSERC(Natural Science and Engineering Research Council of

Canada)

• Invests in university and company R&Do $850M in investments in 2004-2005o Includes additional $39M/yr in 2004 Budget

• Students (over 10000/yr.)• Researchers (over 10000/yr.)• Companies (1000/yr)

o Jointly fund collaborative R&D between companies and universities

o Many Programs: Industrial Research Fellowships (IRF) Program. Industrial Postgraduate Scholarships (IPS) Program Collaborative Research and Development (CRD) Program Strategic Projects Program (SPP) Industrial Research Chairs (IRC) Program Idea to Innovation (I2I)

Canada Foundation for Innovation (CFI)

• Established in 1997o Funds research infrastructure at universities, colleges,

research hospitals and non-profit research institutions o $2.7 billion committed to date

• Funding Programs:o Many different funding programs (See notes)o Innovation Fund: funds up to 40% of infrastructure costso Promotes collaboration with the federal granting

agencies, provincial and municipal governments, and the private and volunteer sectors

Renewable and Electrical Energy(NRCan)

• Renewable Energy Deployment Initiative (REDI)o 9 year, $51 M renewable energy incentive programo Qualified systems: Active solar air & water heating

systems; high efficiency/low emissions biomass combustion systems and ground-source heat pumps

o Refund of 25%, up to $80K ($250,000 per corporation)

• Wind Power Production Incentive (WPPI)o Provides financial support to electricity producerso Incentive on productiono 5 year program, $260M, incentive lasts 10 years

• Market Incentive Program (MIP)o Encourages experimentation in renewable electricity o Provides incentives to distributors for sales to residential

& small business marketso Available until March 2006

Federal Economic Development Initiative for Northern Ontario

(FedNor)• $40 M/year• Mission: increasing the overall competitive position of

the North and to accelerate its movement to a knowledge-based economy

• Works with stakeholders & community partners * to improve access to capital, information & markets

• Innovation Fund supports R, D & D projectso Eligible Recipients :

• Northern SMEs (repayment required)• Northern Municipalities & First Nations• Community Economic Development Corps.

Contributions up to 50% of elig. costs to max. $500K

• All assistance normally repayable - contributions to non-profit organizations will be deemed non-repayable unless revenue streams may be generated

Scientific Research & Experimental Development

(SR&ED) Program• Federal tax incentive program for R&D • Two levels:

o 35% on the first $2M in qualifying expenditures for SMEs with less than $300K in income (for post 2003 taxation years)

Refundable (i.e., Cash-back) for Canadian-controlled, private corporations that are SMEs

o 20% for publicly traded companies Non-refundable *

o 40% cash back on qualified capital expenditures **

• Eligible Project Areaso Experimental Development; Basic Research; Applied

Research• Complementary programs in 7 of 10 provinces ***

o From 10% (e.g., ON) to 40% (e.g., QC)

Renewable Energy / Conservation

Tax Incentives

Accelerated Capital Cost Allowance (Class 43.1)

Tax incentive for renewable energy and energy conservation equipment

Canadian Renewable & Conservation Expenses (CRCE)

For the non-capital costs associated with the start-up of renewable energy & energy conservation projects

• Report on technology innovation

• Overview of Environment Canada success stories.

• Highlights Partnerships:o Private sector,

academia, research centres, etc.

Funding In ActionBrokering Partnerships

Summary

• Billions available over the next 5 years• Emphasis on strong proposals & partnerships• Available Programs:

Larger National Funding Programso SDTC, TEAM, IRAP, TPC, TPC-IRAP, GMF, NSERC

Smaller National Funding Programso REDI, IERD, ETP, RETP

Regional Funding Programso AIF, CED/DEC, WD

Tax Incentive Programso SR&ED; Renewable Energy / Conservation Tax Incentives

Innovative Solutions Division, Environment Canada

351 St. Joseph Blvd. Hull, Quebec, Canada, K1A 0H3

E-mail: isd@ec.gc.ca Web: http://www.ec.gc.ca/

Contact InformationSustainable Development Technology Canada (SDTC)

230 Queen St, Ottawa ON K1P 5E4; (613) 234-6313; www.sdtc.ca; applications @sdtc.ca

Industrial Research Assistance Program (IRAP)Bldg M55, Montreal Rd, Ottawa ON K1A OR6; 1-877-994-4727; publicinquiries.irap@nrc.ca; www.nrc.ca/irap

Technology Partnerships Canada (TPC)300 Slater Street, 10th Floor, Ottawa ON K1A 0C8; 1-800-266-7531; http://tpc.ic.gc.ca

Federation of Canadian Municipalities (FCM)24, Clarence St, Ottawa, ON K1N 5P3; (613) 241-5221; application@fcm.ca ; www.fcm.ca

Canada Foundation for Innovation (CFI) 230 Queen St, Suite 450, Ottawa ON K1P 5E4; (613) 947-6496; info@innovation.ca;

www.innovation.ca

Technology Early Action Measures (TEAM):Suite 230 - 55 Murray Street, Ottawa ON K1A 0E4, Tel: (613) 996-6220, Email: rudy.lubin@nrcan.gc.ca, www.climatechange.gc.ca/english/team/

CBRN Research and Technology Initiative (CRTI)305 Rideau St., Ottawa, ON K1A 0K2; (613) 996-2350; crti-irtc@drdc-rddc.gc.ca http://www.crti.drdc-rddc.gc.ca/

Natural Science and Engineering Council of Canada (NSERC)350 Albert St; Ottawa ON K1A 1H5 (613) 995-5992; comm@nserc.ca; www.nserc.ca

Scientific Research and Experimental Development (SR&ED)www.ccra-adrc.gc.ca/sred

Renewable Energy Tax IncentivesAdministered by NR Can, Mr. Tom Jewett, Industrial Applications Officer, CANMET Energy Technology Centre, NRCan, (613) 996-0890, Tom.Jewett@nrcan.gc.ca ; www2.nrcan.gc.ca/es/erb/

Contact InformationEnvironment Canadao Funding Program Guide: http://www.ec.gc.ca/fund_e.html o C2T2 contact: Tony Kosteltz, (613) 953-2844, tony.kosteltz@ec.gc.cao ISD email: isd@ec.gc.caIndustry Canadao Guide to Programs: http://www.ic.gc.ca/cmb/welcomeic.nsf/icPages/Programs o Atlantic Canada Opportunities Agency: http://www.acoa.ca/o Federal Economic Development Initiative for Northern Ontario: http://www.fednor.ic

.gc.cao Assistance for S&T Research:

http://strategis.ic.gc.ca/epic/internet/inrti-rti.nsf/en/h_te02568e.htmlo Guide to Government Services and Support for Small Business:

http://strategis.ic.gc.ca/sc_mangb/smeguide/ Natural Resources Canadao Contact: Rudy Lubin, Technical Info Officer, NRCan, (613) 996-6220, rudy.

lubin@nrcan.gc.ca o Programs:

Renewable Energy Deployment Initiative (REDI): www2.nrcan.gc.ca/es/erb/english/View.asp?x=469&oid=111

Wind Power Production Incentive (WPPI): http://www.canren.gc.ca/wppi Industry Energy R&D Program (IERD):

www.nrcan.gc.ca/es/etb/cetc/cetc01/htmldocs/funding_programs_ierd_e.html Emerging Technologies Program (ETP):

www.nrcan.gc.ca/es/etb/cetc/cetc01/htmldocs/funding_programs_etp_e.html Renewable Energy Technologies Program (RETP):

www.nrcan.gc.ca/es/etb/cetc/cetc01/htmldocs/funding_programs_retp_e.html Market Incentive Program (MIP):

http://www2.nrcan.gc.ca/es/erb/english/View.asp?x=457 Canada Economic Development (for Quebec Regions): http://www.dec.gc.caWestern Economic Diversification Canada: http://www.wd.gc.ca