The Federation of Canadian Municipalities’ Green Municipal Fund (GMF) will take a multi-solving approach to sustainability priorities in cities, while aiming to secure C$300 million in leveraged capital investments over the next three years to support its climate mitigation and adaptation solutions.
“Cities, communities, and municipalities have an essential role to play as economic centres, knowledge hubs, product and material consumers, and waste producers,” the GMF writes [pdf] in its newly-minted three-year plan. “Big cities have direct and indirect control of 70% of global greenhouse gas (GHG) emissions.”
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To help Canada halve its emissions by 2030 and reach net-zero by 2050, the GMF says it has already made significant progress in financing, launching, and expanding municipal energy projects since its inception in the year 2000. With diverse forms of capital entering GMF-funded projects, “the next step is exploring and scaling other innovative finance mechanisms that can make more financing available to municipalities and relieve the pressure on their balance sheets.”
“Now is the time for GMF to move from project support to transformation,” the plan adds, “and from a role as a funding and capacity-building organization to one as a catalyst for broad-based investment in municipal sustainability.”
To deliver on its first strategic objective, to “empower transformation through a complete set of programs”, the GMF is setting out to put net-zero performance targets at the centre of all its offers. It also aims to fully allocate funding from its programs for community energy efficiency financing, sustainable and affordable housing, and building retrofits, as well as for its Low-Carbon Cities Canada (L3C) network, over the next three years.
The GMF will align its core offerings with investment priorities for sub-sector strategies like water, energy, circular economy, transportation, and land use sectors. “These strategies identify key problems municipalities face, solutions they can deploy, and a range of barriers to implementation.”
The fund will also design and launch programs to begin deploying the $530 million the Government of Canada invested in GMF through its climate adaptation plan.
Its second objective—to “accelerate transformation by mobilizing capital through leverage”—is rooted in the recognition that “achieving national and community climate change objectives requires collaboration with funders in the investment and financial sectors,” the plan says, “as municipal needs far outstrip the resources available in public funds.”
The GMF identifies green bonds as one of the “innovative financing tools” it will use to increase private capital’s appetite for investing in municipal climate solutions.
Small and mid-sized communities “generally lack” the expertise and capacity to navigate the world of private finance, so the GMF will work to build municipal capacity to transact with private sector investors and provide financial advisory support.
The GMF also “aims to achieve $300 million in private, philanthropic, and other non-governmental forms of leveraged capital investments over the next three years.”
The plans third objective—to “advance numerous sustainability priorities with a multi-solving approach”—recognizes that “climate change mitigation and adaptation initiatives cannot focus on singular outcomes while ignoring or even impeding progress on other critically important issues,” the GMF writes. “Municipal budgets will go farther when they take integrated approaches to climate change investments, and when such investments are not siloed from other societal needs and national objectives.”
That means promoting and supporting “truly exceptional projects that are resilient, that produce the greatest GHG emission reductions, and that solve for a broad range of sustainability and inclusivity outcomes.” The plan pledges to embed and measure anti-racism, equity, inclusion, and reconciliation principles, plus incentivize and measure biodiversity efforts, in all GMF and LC3 capacity-building and funding offers.
Finally, the GMF will “build on success and create momentum”, using the strength of its brand to influence others to scale opportunities, while “handing over opportunities to partners that have the means and market to take solutions to broad adoption” and create public demand and support for those solutions.
As part of the effort to boost its “brand strength”. the GMF will “model the way” by “aligning its operational performance targets and reporting with best-in-class standards” like the United Nations Race to Zero campaign.
Alert to the sheer human power required to “bring the highest-impact opportunities to scale,” GMF pledges to collaborate with stakeholders like colleges and trade school associations, suppliers, and manufacturing associations as it “champions opportunities for investments (to the federal government and other actors) that target jobs and economic development in the highest-impact opportunity areas.”
Success for this objective will mean increasing the fund’s influence in the sector “by a factor of five,” demonstrating best-in-class climate performance, and “packaging and delivering at least four highly scalable opportunities through partnerships.”
