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Federal government support for small and medium sized business

Federal Minister of Environment and Climate Change Catherine McKenna yesterday announced two new proposed programs that will help owners of small and medium-sized businesses be more energy-efficient, save money, and take action to reduce pollution.
Under the Climate Action Incentive Fund (CAIF), small and medium-sized businesses (e.g. restaurant owners, farmers, truck drivers, convenience and small grocery store owners) in Saskatchewan, Manitoba, Ontario and New Brunswick -- the four provinces where the federal price on pollution, (a.k.a. Carbon Tax) applies -- will be able to apply for:
•    Refunds between 25% and 50% on the cost of new energy-saving equipment such as appliances, which could include fridges, dishwashers, heating and cooling equipment, anti-idling devices and high efficiency boilers;
•    Funding of up to 25% of eligible costs for energy-efficient retrofits and other projects to improve energy efficiency, reduce their energy use and save money.

The Minister plans to release details about the CAIF Rebate program in the next few weeks but it is expected that the rebate will be limited to a maximum amount of $20,000 per applicant, with no minimum amount per application. In addition, the Government will soon open up a new call for proposals for smaller projects from small and medium-sized businesses across the country under the Low Carbon Economy Fund Partnerships stream. Approximately $10 million will be available to help those businesses make investments to improve energy efficiency, reduce pollution and save money. This program will offer more options to smaller business by allowing applicants to propose smaller projects and to bundle similar projects together. Funding levels will range between $20,000 and $250,000. Small- and medium-sized businesses in all sectors and in all provinces and territories will be eligible to apply to the fund, which will be open for applications in the coming weeks.  

These programs are subject to Royal Assent of the Budget Implementation Act and subsequent decisions from the Minister of Finance. When the Government of Canada announced details of its carbon pollution pricing system in October, the plan included a provision that for the provinces where the carbon tax would apply, proceeds would be returned to the jurisdictions in which they are collected. In provinces that have either requested the federal system or have not proposed a system that meets the federal standard (currently Manitoba, New Brunswick, Ontario and Saskatchewan), 90 percent of proceeds from the carbon tax will be returned directly to individuals and households through Climate Action Incentive payments when they file their tax returns. The remainder of the revenues (10%) is earmarked to be deployed to support small and medium-sized businesses, municipalities, universities, colleges, schools, hospitals, not-for-profit organizations and Indigenous peoples through the Climate Action Incentive Fund (CAIF).

Funds available through the CAIF for small- and medium-sized businesses in 2019-20 will come to about $150 million, based on the percentage of revenue collected within each province:  
•    $13 million in Manitoba
•    $5 million in New Brunswick
•    $102 million in Ontario
•    $30 million in Saskatchewan

Under the program plan, it is expected that between 2019 and 2024 nearly $1.5 billion will be available to support energy efficiency efforts by small- and-medium-sized businesses. These funds would be in addition to tax benefits from the Accelerated Capital Cost Allowance changes [see previous story on this] announced in 2018.
Environment and Climate Change Canada plans to establish an External Advisory Committee for the Climate Action Incentive Fund, made up of experts and representatives of business associations, to provide advice on outreach to small- and medium-sized businesses and continuous improvements to the delivery of funds. HRAI is in discussions with the Minister’s office on how the HVACR sector can be properly represented.