How do they fund the Climate Gulags? Introducing the Green Municipal Fund.

Jan 27, 2025

“Digging deep to build high

Together, FCM and LC3 centres in seven of Canada’s largest cities are working to overcome the challenges of climate change in urban centres and chart an equitable path to net-zero by 2050.

This past year has been a critical one for LC3, as the network completed foundational work on multiple fronts. The LC3 Network hit a milestone in January 2022, with the successful transfer of $177 million in federal endowment assets from GMF into the hands of the local boards of network members:

Halifax Climate Investment, Innovation and Impact Fund (HCi3)
Greater Montreal Climate Fund (GMCF)
Ottawa Climate Action Fund (OCAF, housed within the Ottawa Community Foundation)
The Atmospheric Fund (TAF) serving Toronto
the Climate Innovation Fund serving Calgary and Edmonton (CIF-AEF, housed within the Alberta Ecotrust Foundation)
Metro Vancouver Zero Emissions Innovation Centre (ZEIC), formally launched in April 2021

LC3 centres will use their assets to generate their own operating funds, provide grants, and undertake impact investing to stimulate carbon emission reductions and other local benefits in their communities. The network wasted no time in mobilizing its funds, seeding more than $4.5 million in climate mitigating, multi-solving projects leveraging an additional $20 million from the public, private and philanthropic sectors in project support.

Strong foundations are now in place at each local LC3 centre with impressive executive directors, volunteer boards and/or advisory committees having been onboarded.

From coast to coast, LC3 has attracted seasoned executive directors who know how to drive positive change at the local level. Half of these come from the municipal sector, where they were champions of innovative environmental actions in their cities. Others come from the finance sector, environmental non-government groups, and international development agencies. Each of these leaders is impressive in its own right, and as a group of closely networked peers, they are a formidable team spanning a wide range of skills.

This impressive and diverse leadership is further bolstered by each local LC3 centre’s board and/or advisory committee, which include representatives from various backgrounds such as municipal government, investing, academia, environmental action, impact analysis, economic development and more.

A consistent way to measure impact

Following the premise that ‘if you want to build high, you need to dig deep’, the LC3 network also committed significant time this past year to complete and implement a shared Theory of Change and performance measurement framework. This framework will be used by all centres to guide their work with common vision and desired impact, allow apples-to-apples comparison of work and facilitate rapid co-learning through six shared indicators. With seven entities in the mix across the country, it was a significant achievement to co-develop consistent metrics that could be applied in diverse contexts. The centres will begin implementing the shared framework in the selection of their projects in 2022 – 2023.

A number of the indicators are not yet commonly used in the climate action sector., including new metrics for assessing the potential of funded work to achieve full-scale adoption and generate multiple community benefits – acknowledging the inter-connectedness of climate action with other community priorities and helping accelerate the pace and durability of climate actions in cities.

In the coming year, two more indicators will be designed to assess the extent to which funded climate actions support social equity and mobilize new capital in support of low-carbon initiatives. These will be applied transparently in all LC3 decision-making on grants, loans and program selection, while supporting and stimulating local partners to take innovative approaches to create high-impact local models that are ready to be scaled out nation-wide.

Solving multiple challenges at once

LC3 created the Multi-Solving Design Challenge last year in partnership with the Centre for Social Innovation. This online training game gives program designers from various fields the chance to work in groups on quick prototype ideas that could drive carbon reduction outcomes while generating valuable community benefits. More than 100 people tried the game and the insights have been captured in a findings report.

The LC3 network, including all seven local centres and the national office hosted within FCM’s Green Municipal Fund, has put down strong roots, working carefully to firmly embed innovative new approaches within its programmatic DNA. Driven by local inspiration, supported by a networked team of strong leaders, and ready to leverage collaborative approaches when needed, LC3 is eager to do its part to enable the achievement of Canada’s net-zero ambitions.

LC3 in action: Snapshots

Propulsion Quebec’s school bus electrification project

To reduce the microparticulate pollution spread by school buses, Quebec passed legislation and regulatory plans to replace 65% of the province’s school bus fleet with electric buses by 2030 — up from just 1% today. To reach that ambitious goal, Greater Montreal Climate Fund (GMCF), which was incorporated to deliver the LC3 mandate in the greater Montreal area, and Propulsion Quebec co-developed a digital decarbonization guide for operators that helps plan migration from diesel to a zero-emission vehicle fleet. The GMCF is also examining financing mechanisms for fleet operators, leveraging related initiatives and private investment. The success of the electrification project could result in significant reduction in GHG emissions and deliver as much as $151 million in cost savings for Quebec’s health care system while generating jobs and career development opportunities.

Green Development Standards for new buildings 

Buildings are the top source of carbon pollution in the Greater Toronto and Hamilton Area (GTHA), accounting for 45% of the region’s total emissions. In 2021-2022, The Atmospheric Fund (TAF) helped GTHA municipalities adopt Green Development Standards for socially, economically and environmentally responsible new construction. For what is typically a 3 per cent incremental cost to implement features such as quality doors and windows, water-efficient fixtures, and high-efficiency heating and cooling, buildings consume less energy and gain resilience to flooding, extreme temperatures and weather. Last year, TAF engaged in public advocacy to promote green standards and collaborated with the Clean Air Partnership on municipal capacity building. It also developed recommendations to ensure policies are informed by best practices and harmonized across the region. Today, several GTHA municipalities have tiered, mandatory standards, taking either a points-based approach or actively pursuing new or better Green Development Standards.

Accelerating retrofits in commercial buildings

The Climate Innovation Fund (CIF) hosted by LC3 member Alberta Ecotrust Foundation, set out in 2021 to build a better business case for commercial building energy efficiency retrofits. In Calgary and Edmonton, the building stock accounts for 40–60% of total greenhouse gas emissions, however, property owners are often dissuaded from undertaking retrofits due to the high costs and unclear returns on investment. With support from RBC Foundation – Tech for Nature as well as private donors, CIF partnered with data innovation company Audette.io to enable improved business modelling to support energy efficiency upgrades in commercial buildings.

The innovative initiative provides rapid digital auditing of commercial buildings using machine learning, artificial intelligence, data extrapolation and visualization. Digital audits produce for faster, cheaper and more comprehensive results compared to traditional site-specific energy audits. Fifty-five buildings participated in the pilot last year, and projects valued at $1 million up to $25 million will be aggregated and promoted to investors interested in advancing low-carbon solutions in Alberta.

Alberta Ecotrust is using the rapid digital audit results to connect commercial building owners to low-cost, low-carbon financing through SOFIAC Canada, which provides innovative off-balance sheets and pay-as-you-save financing for commercial building retrofits. Data from CIF will help identify large-scale energy efficiency improvements and aggregate them to catalyze investment.