Investment in Low-Carbon Transition for SMEs is Key to Net-Zero by 2050

2020-2021 Federal Budget Submission

In a Federal Pre-budget Submission delivered Feb 20th, 2020 to government MPs and officials, Green Economy Canada has emphasized the need to accelerate the transition to a low-carbon economy particularly for the Small and Medium Enterprise Sector (SME).

The Pan-Canadian Framework on Climate Change and Clean Growth lays out a pathway to reduce Canada’s GHG emissions by 30% from 2005 levels by 2030 through a variety of regulation and government action. While the framework lays out an ambitious plan for change at the large industry level, and adjustments to major sources of GHG emissions including energy generation, the transition of Canada’s sprawling SME sector is not well addressed. 

To meet these ambitious goals, the federal government must invest to accelerate the transition for the small and medium enterprise (SME) sector, the largest share of the Canadian economy.

Read the full Submission Here

Summary of Recommendations:

Recommendation #1: Invest $10M over 5 years to help establish and support Green Economy Hubs in 20 Canadian communities, with a projected 1MT of GHGs reduced by 2030. Green Economy Hubs are a proven and effective model for supporting local businesses, particularly SMEs, to reduce their greenhouse gas emissions (GHGs) while increasing their profitability and growing the low-carbon economy.  Enabling the launch and growth of these community-based Hubs will build the capacity of Canadian businesses to take meaningful climate action while becoming more economically competitive. 

Recommendation #2: Increase the Climate Action Fund to $30M/year.  The Climate Action Fund is a valuable funding source to support NGOs in advancing climate action initiatives, yet it is currently too small and oversubscribed, leading to many worthwhile projects being unfunded. An expanded fund will activate transformative projects to support the goals of the Pan-Canadian Framework on Climate Change. 

Recommendation #3: Expand the Low Carbon Economy Fund to include a $100M program with smaller project thresholds accessible to more SMEs.  Project incentives make a difference to businesses taking action. An investment in reliable, appropriately scoped Canada-wide incentives will allow SMEs to take action in GHG reduction projects. 

Recommendation #4: Include funding for the role of intermediaries in emissions reductions programs broadly.  We also strongly advocate for the inclusion of capacity-building support as eligible costs in funding programs like the Low Carbon Economy Fund.  Funding the work of intermediaries to help increase uptake and the accessibility of these programs has been a key gap in government funding programs that if addressed, could greatly accelerate the reach and adoption of behavioural and technological practices for the low carbon transition.