Funding Snapshot

Maximum Award:
$10,000,000

Maximum of $10 million per project. Up to 25% as a grant and the remainder as a loan. Combined loan and grant for up to 80% of eligible project costs.

 

Open To:

All Canadian municipal governments (with the exception of Low Carbon Cities Canada (LC3) namesake municipalities; Municipal government project partners.

 

Application Deadline:

Applications are accepted year round, though this offer will close when all funding has been allocated.

 

Eligible Costs:

See the application guide for a list of eligible costs.


NOTE:
If your project involves a building conversion or addition, your project might be considered a new building OR a retrofit and would require further consideration by GMF. Please contact GMF for clarification: gmfinfo@fcm.ca

Apply for funding for multi-measure, long-term projects that reduce energy use and greenhouse gas emissions over time—modernizing your community buildings, lowering operating costs and freeing up resources for essential services. These retrofits will contribute to a Green Buildings Pathway while enhancing comfort, resilience and quality of life for your community.

Eligible projects can focus on a single community building or take a portfolio approach—saving staff time and resources by submitting one funding application for multiple buildings. A portfolio can include:

  • multiple community buildings within the same municipality  
  • one or more community buildings combined with other municipal buildings in the same municipality  
  • similar types of community buildings across multiple municipalities (subject to GMF review) 

Please note: The guides for applying to this grant have recently been updated. Ensure you download the latest versions to access the most current information.

Application guideGreen Buildings Pathway guide

What is a Green Buildings Pathway?

A sequence of GHG reduction measures that allow local recreational and cultural facilities to achieve 50% GHG reductions within 10 years and achieve best practice energy targets within 20 years. Green Building Pathway capital projects are conducted in phases towards near-net zero, supported by an ongoing strategy to ensure existing equipment and systems operate optimally. An example of the pathway could include: 

  • Phase 1: Improvements are made to a community building envelope that also address critical building upgrades (e.g., insulation, energy efficient windows, etc.) in year 1
  • Phase 2: Focus on high rate-of-return GHG reduction measures in years 5 – 6, such as the addition of solar PV depending on the province.
  • Phase 3: HVAC system is replaced at end-of-life in year 10

This is just one example of a Green Buildings Pathway. Each pathway will reflect unique objectives, constraints and preferred measures. Funding applications must consist of at least one phase in support of a Green Buildings Pathway. Funding recipients may then re-apply in the future for further Green Buildings Pathway retrofit capital project funding for subsequent phases subject to funding availability. 

Best practice energy targets

For the retrofit of community buildings, the best practice energy targets are based on the following energy use and fossil-fuel phase-out requirements.

  • For office and office-like buildings (including but not limited to libraries), the Energy Use Intensity (EUI) requirement for building energy consumed per year, per unit floor area, must be met and measured in kWh/m2/y. To determine the EUI requirement, see the Green Buildings Pathway Guidance Document.  
  • Thermal Energy Demand Intensity (TEDI) – calculate and report only. Projects are not required to meet a TEDI target for any building type. However, TEDI must be calculated for all projects by an energy modelling professional.
  • Renewable measures (such as installation of solar panels) are permitted, but the project must meet the EUI targets without factoring in any net energy use reductions from renewable systems. However, GHG reductions from renewable energy installations can be counted toward meeting the 50 percent GHG reduction target over 10 years.
  • For non-office buildings (including but not limited to recreation centres, pools and arenas), the building must achieve 25% energy savings compared to the National Energy Code for Buildings (NECB) 2020 baseline.
  • Other mandatory requirements, as described in the Green Buildings Pathway Guidance Document.
  • For all building types in climate zones 4 and 5, a complete fossil-fuel phase-out is required. Backup fossil-fuel use is not permitted.
  • For all building types in climate zones 6 and above, a complete fossil-fuel phase-out is required when outdoor temperatures are -15 C and above. Backup fossil-fuel space heating is allowed only when outdoor temperatures are below -15 C.

Please read our technical guide before submitting your application.

Eligible buildings

To be eligible for this combined loan and grant, projects must include at least one community building that is owned by a municipality or not-for-profit organization.

A community building is an enclosed public place or an enclosed workplace that is:

  • owned by a municipal government or not-for-profit;
  • primarily used for the purposes of providing athletic, recreational, culture and community programs or services to the local community;
  • widely accessible to everyone offering services designed to enhance the health and well-being, skills development, and economic development of individuals and communities.

Community buildings include:

  • indoor ice rinks, indoor sports arenas, indoor swimming pools,
  • community and recreational centres (e.g., community centres, clubhouses, seniors’ centres and clubs, recreation centres, gyms, halls, and curling rinks),
  • arts and culture facilities (cultural facilities, performing arts facilities, art galleries, and auditoriums),
  • libraries, and
  • multi-purpose buildings which include one or more of the above community functions as well as other services/administrative functions.

For full project scope and eligibility, please read our application guide.

Prerequisites

Capital projects must be supported by a Green Buildings Pathway feasibility study or an equivalent feasibility study. Capital projects must consist of GHG and energy reduction measures sequenced in alignment with the Green Buildings Pathway. Read our application guide for full details.

Notes

There is no limit on Green Buildings Pathway capital projects supported per municipality provided they are all part of the same Green Buildings Pathway. Only one type of capital project, Green Buildings Pathway or GHG reduction impact, is eligible per municipality regardless of whether the building or buildings are owned by the municipality or a not-for-profit organization.

Funding is subject to availability. We reserve the right to make changes to eligibility criteria and the types of projects funded through this offer.


How to Apply

  1. Download and review the application guide.
  2. Review the eligibility criteria and required document sections.
  3. Reach out to a GMF representative to discuss your project at gmfinfo@fcm.ca or 1-877-417-0550.  
  4. Visit the FCM funding portal. Follow the portal instructions to prepare and submit your application.
  5. Eligible projects will be invited to submit a full application.
Are you seeking guidance to you get the most of your CBR initiative?

GMF now offers a new CBR Advisory Service and is intended to help municipalities maximize the potential of their CBR project by matching them to industry leaders who understand best practices in energy retrofits of community buildings and who can help municipalities achieve their energy goals.

Learn more here.

SIGN UP, LEARN MORE, STAY UP TO DATE

Sign up to Connect and stay up to date with GMF news and the latest resources, e-courses and funding opportunities.

Need help to see if this is the right funding for you?

Contact our Outreach team who can answer any questions you have relating to this funding opportunity.

Discover the members of the Peer-to-Peer Network

On July 20, 2022, the CCRI announced the 15 local governments and communities selected to participate in their new Peer-to-Peer (P2P) Network. Located from Squamish, British Columbia, to Haute-Yamaska and Granby, Quebec, members of this Network have direct access to leading experts in the field and connect with local governments and communities across the country, develop their own circular economy roadmaps for their local regions, and much more. Learn more about the participants and the P2P Network today.

Local communities have a unique role to play in accelerating the transition to a circular economy. Cities and regions are leading the way in this transition, acting as hubs for innovation and culture, and engines of economic activity.

The Circular Cities & Regions Initiative (CCRI) aims to advance circular economy knowledge sharing and capacity building in Canadian cities and communities of all sizes. This one-year pilot was created and developed by the Federation of Canadian Municipalities’ Green Municipal Fund (GMF), the National Zero Waste Council, the Recycling Council of Alberta and RECYC-QUÉBEC.

Through direct support, locally focused guidance tailored to their needs, and access to a peer network that encourages and fosters collaboration amongst participants, those taking part in CCRI have the opportunity to:

  • learn how to get started and to embed circular economy approaches in their respective communities;
  • access one-on-one mentoring and workshops offered by circular economy experts in Canada and worldwide, to support and advise on the development of their local circular economy roadmap; 
  • identify benefits to the members of their communities, challenges to overcome and opportunities during this transition;
  • collect lessons learned and best practices to support the future transition of other cities and regions to a circular economy;
  • access monthly peer-to-peer (P2P) workshops that bring together participating communities to exchange ideas with peers across the country, while embarking on their own unique circular economy journey.

Want to learn more about circular economy?

Interested in learning more about how the circular economy can come to life in cities and regions? Review the CCRI webinar recordings featuring speakers from leading organizations and global cities. Webinars are delivered in English with French simultaneous interpretation. Watch the recordings today.

For more information on CCRI, please visit canadiancircularcities.ca

Still have questions?

For more information about CCRI and the Peer-to-Peer (P2P) Network, please contact info@canadiancircularcities.ca.

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Funding Snapshot

Maximum Award:
$175,000

Grants of up to $175,000 to cover up to 80% of eligible costs.

Open To:

All Canadian municipal governments; Municipal partners applying in partnership with a municipal government.

The following entities are not eligible to receive funds directly:

Homeowners
Federal government entities and any organizations established by those entities
Provincial and territorial government entities and any corporation that they own or control

Application Deadline:

Applications are accepted year round, though this offer will close when all funding has been allocated.

Eligible Costs:

See the application guide for a list of eligible costs.

Explore and assess options for a financing program for home energy upgrades that can achieve triple-bottom-line benefits within your community.  

Your study should include one or more of the following elements: 

  • A baseline assessment of a community’s housing stock and energy upgrade potential, including:
    • Assessing building types, energy use profiles and opportunities for energy upgrades to support GHG emissions reductions
    • Assessing the potential uptake for energy efficiency and renewable energy in terms of the number of anticipated projects and level of investment required
    • Projecting the local benefits that could be achieved from energy upgrades (e.g., energy cost savings for residents, energy and GHG reductions, water savings, etc.)
  • An analysis of how financing may address:
    • Homeowner barriers to energy efficiency and renewable energy upgrades (e.g., high upfront cost, split incentives, information gaps)
    • Homeowner barriers to participation in existing efficiency programs, such as those offered by a utility company or regional efficiency agency
  • An evaluation of available financing models within the context of municipal law, including the feasibility of establishing PACE-enabling legislation, or another innovative financing instrument, in a given province or territory
  • Engagement with key municipal and external stakeholders on shared goals for a local program 

Multiple municipalities and partners are encouraged to collaborate on regional opportunities, where appropriate. 

For full details, please read our application guide.

Prerequisites 

A community energy, sustainability or climate action plan, or similar, that identifies energy efficiency and renewable energy in the residential sector as a priority area for action.
 

Notes

Feasibility studies (or equivalent) are a prerequisite when applying for capital project funding

Funding is subject to availability. We reserve the right to make changes to eligibility criteria and the types of projects funded through this offer. 


How to Apply

  1. Download and review the application guide.
  2. Review the eligibility criteria and required document sections.
  3. Reach out to a GMF representative to discuss your project at gmfinfo@fcm.ca or 1-877-417-0550.
  4. Visit the FCM funding portal. Follow the portal instructions to prepare and submit your application.
  5. Eligible projects will be invited to submit a full application.

If you are not eligible to apply, sign up for our e-newsletter  to stay informed about other funding opportunities.

Need help to see if this is the right funding for you?

Contact our Outreach team who can answer any questions you have relating to this funding opportunity.

Funding Snapshot

Maximum Award:
$10,000,000

Two funding options are available:

Capital loan combined with grant
Loan to a maximum of $10 million
Grant of up to a maximum of 50% of the loan amount to support start-up and operating costs
The combined loan and grant can cover up to 80% of total eligible program costs

Credit enhancement:
Credit enhancement of $2 million pledged by GMF to support third-party financing
Applicant must demonstrate a minimum leverage ratio of 5:1 (credit enhancement to third party capital)
Grant of up to $5 million (not to exceed 50% of total eligible costs and not to exceed total start-up and operating costs)

Open To:

All Canadian municipal governments; Municipal partners applying in partnership with a municipal government.

The following entities are not eligible to receive funds directly:

Homeowners
Federal government entities and any organizations established by those entities
Provincial and territorial government entities and any corporation that they own or control

Application Deadline:

Due to strong demand, CEF funding is nearing full commitment and will close to new Capital Program applications on September 1, 2025. If you have any questions about this change, please contact our Outreach team at gmfinfo@fcm.ca.

Eligible Costs:

See the application guide for a list of eligible costs.

About CEF funding 

CEF funding prioritizes projects that maximize community impact and innovation while ensuring balanced access across Canada. Applications for capital project funding are assessed based on the following criteria:

  • Geographic balance: Supporting diverse regions and increasing uptake in provinces and territories where fewer CEF-funded programs currently exist.
  • Innovation in program design: Encouraging the adoption of diverse financing models beyond traditional PACE, such as utility on-bill financing and third-party lender partnerships.
  • Depth of impact: Prioritizing programs that:
    • Target deeper energy retrofits.
    • Achieve higher greenhouse gas (GHG) reductions.
    • Include new capacity-building or stakeholder partnership models.
    • Integrate climate resilience and adaptation measures.

Applications for CEF capital funding are reviewed through a competitive intake process to ensure fair and strategic allocation across all regions and sectors.

  • CEF funding is nearing full commitment, and new Capital Program applications will close on September 1, 2025, or earlier if funding is fully allocated.
  • Funding decisions are based on merit, with priority given to projects that demonstrate innovation, regional balance, and strong potential for community impact.
  • Due to strong demand, full funding amounts may not always be awarded, and some applications may not receive funding.

We encourage applicants to carefully review the intake criteria and consider these factors when deciding whether to proceed with a full application.

Questions?

Contact our Outreach team who can answer any questions regarding the CEF update.
gmfinfo@fcm.ca

 

JUMP TO:

We offer two options to capitalize a local financing program for home-energy upgrades: 

  • Loan combined with grant
  • Credit enhancement combined with grant 

Loan combined with grant 

Access a competitive-rate loan in combination with a grant to implement a local financing program for home-energy upgrades. Funding is intended to support start-up, operating and capital costs over a four-year implementation period. 

  • Loan details: Up to $10 million per local program provided for on-lending within the community for home-energy upgrades on private property and associated costs. Up to 30% of the approved loan amount can be used for approved non-energy improvements (e.g., water conservation, climate adaptation, alternative energy) at the individual participating home
  • Grant: Up to 50% of the GMF loan amount to cover program start-up costs (e.g., legal services, procurement of IT tools, website development) and multi-year operating costs (e.g., staffing, marketing and promotions)

This option also includes a loan loss provision to mitigate the default risk of participating homeowner loans. A dedicated loss reserve is established for each program to cover any individual loan losses that might be realized. Amounts committed to the loss reserve are considered an eligible cost and funded by the grant allocation. 

For full details, please read our application guide
 

Credit enhancement combined with grant 

A credit enhancement option is available to incentivize private investment into local financing programs for home-energy upgrades. This involves a municipality working in partnership with a third-party lender (e.g., financial institution, impact investor, or utility company) who provides or arranges capital to finance home-energy upgrades.  

Applicants partnering with participating lenders can access this funding to offset the lenders’ risk by providing partial coverage for losses that may arise, while also unlocking preferential financing products for homeowners that would otherwise not be made available in the absence of the credit enhancement (e.g., below-market interest rates, extended repayment terms, or expanded underwriting criteria). 

To be eligible, applicants must demonstrate that they have secured capital commitments from lenders to satisfy a minimum 5:1 leverage ratio (i.e., ratio of loan capital to credit enhancement). For example, a $1 million loss reserve pledged by FCM must mobilize at least $5 million in third-party loan capital.

For full details, please read our application guide.

Prerequisites 

  • A community energy, sustainability or climate action plan, or similar, that identifies energy efficiency and renewable energy in the residential sector as a priority area for action
  • Evidence of having completed detailed program design work 
     

Notes

Funding is subject to availability. We reserve the right to make changes to eligibility criteria and the types of projects funded through this offer. 


How to Apply

  1. Download and review the application guide.
  2. Review the eligibility criteria and required document sections.
  3. Reach out to a GMF representative to discuss your project at gmfinfo@fcm.ca or 1-877-417-0550.
  4. Visit the FCM funding portal. Follow the portal instructions to prepare and submit your application.
  5. Eligible projects will be invited to submit a full application.

If you are not eligible to apply, sign up for our e-newsletter  to stay informed about other funding opportunities.

Need help to see if this is the right funding for you?

Contact our Outreach team who can answer any questions you have relating to this funding opportunity.

Funding Snapshot

Maximum Award:
$500,000

Grants of up to $500,000 to cover up to 50% of eligible costs.

Municipalities and municipal partners with a population of 20,000 or under may qualify for a grant of up to 80 per cent of eligible project costs under certain conditions. Contact us to find out if your municipality is eligible.

Open To:

All Canadian municipal governments; Municipal partners applying in partnership with a municipal government.

The following entities are not eligible to receive funds directly:

Homeowners
Federal government entities and any organizations established by those entities
Provincial and territorial government entities and any corporation that they own or control

Application Deadline:

Applications are accepted year round, though this offer will close when all funding has been allocated.

Eligible Costs:

See the application guide for a list of eligible costs.

We fund exceptional pilot project proposals that demonstrate clear market transformation potential and are otherwise ineligible for capital funding. This funding supports implementation of a small-scale version of a local financing program for home energy upgrades. 

For full details, please review our application guide

Prerequisites 

  • A community energy, sustainability or climate action plan, or similar, that identifies energy efficiency and renewable energy in the residential sector as a priority area for action
  • Evidence of having completed detailed program design work 

Notes

Funding is subject to availability. We reserve the right to make changes to eligibility criteria and the types of projects funded through this offer.


How to Apply

  1. Download and review the application guide.
  2. Review the eligibility criteria and required document sections.
  3. Reach out to a GMF representative to discuss your project at gmfinfo@fcm.ca or 1-877-417-0550.
  4. Visit the FCM funding portal. Follow the portal instructions to prepare and submit your application.
  5. Eligible projects will be invited to submit a full application.

If you are not eligible to apply, sign up for our e-newsletter  to stay informed about other funding opportunities.

Need help to see if this is the right funding for you?

Contact our Outreach team who can answer any questions you have relating to this funding opportunity.

Funding Snapshot

Maximum Award:
$175,000

Grants of up to $175,000 to cover up to 80% of eligible costs.

Open To:

All Canadian municipal governments; Municipal partners applying in partnership with a municipal government.

The following entities are not eligible to receive funds directly:

Homeowners
Federal government entities and any organizations established by those entities
Provincial and territorial government entities and any corporation that they own or control

Application Deadline:

Applications are accepted year round, though this offer will close when all funding has been allocated.

Eligible Costs:

See the application guide for a list of eligible costs.

Program evaluation studies help municipalities with existing financing programs for home-energy upgrades to:

  • Assess the historical performance of those programs, and
  • Identify opportunities to improve them 

These studies are often undertaken at an interim stage or when the program concludes to determine the overall effectiveness and market receptivity of a financing program for home-energy upgrades and point to ways the program can better meet market needs. The findings also help to provide and justify recommendations to stakeholders and municipal decision makers.  

Program evaluations include a consideration of the program impacts, as well as the program implementation processes, including the following elements:

  • An evaluation of program processes to indicate if the program is being delivered as intended and recommend adjustments to improve effectiveness
    • A review of the program logic model and comparison to the actual program delivered
    • Information-gathering from relevant program stakeholders, including program staff, participants, non-participants, partners and trade allies (i.e., registered contractors)
  • An evaluation of program impacts to provide insights on program performance to all stakeholders by comparing stated goals against actual performance (i.e., environmental, energy and economic impacts)
    • Quantification of the program’s key performance indicators, such as energy savings, GHG emissions reductions, number of participants, and type and sizes of upgrades supported
  • Recommended strategies for increasing uptake, investment and the scaling of environmental and energy performance impacts

Prerequisites 

  • A community energy, sustainability or climate action plan, or similar, that identifies energy efficiency and renewable energy in the residential sector as a priority area for action
  • Documented results from at least one year of implementation of an existing program

Notes

Funding is subject to availability. We reserve the right to make changes to eligibility criteria and the types of projects funded through this offer. 


How to Apply

  1. Download and review the application guide.
  2. Review the eligibility criteria and required document sections.
  3. Reach out to a GMF representative to discuss your project at gmfinfo@fcm.ca or 1-877-417-0550.
  4. Visit the FCM funding portal. Follow the portal instructions to prepare and submit your application.
  5. Eligible projects will be invited to submit a full application.

If you are not eligible to apply, sign up for our e-newsletter  to stay informed about other funding opportunities.

Need help to see if this is the right funding for you?

Contact our Outreach team who can answer any questions you have relating to this funding opportunity.

Funding Snapshot

Maximum Award:
$175,000

Grants of up to $175,000 to cover up to 80% of eligible costs.

Open To:

All Canadian municipal governments; Municipal partners applying in partnership with a municipal government.

The following entities are not eligible to receive funds directly:

Homeowners
Federal government entities and any organizations established by those entities
Provincial and territorial government entities and any corporation that they own or control

Application Deadline:

Applications are accepted year round, though this offer will close when all funding has been allocated.

Eligible Costs:

See the application guide for a list of eligible costs.

Lay the groundwork for a home-energy upgrade financing program by documenting the details needed to obtain approval from your local government. A design study builds upon market intelligence and research, including feasibility studies, by advancing a program design that meets local community needs and municipal priorities.  

Based on the needs of the applicant, a program design study may address the following design considerations: 

  • Eligibility criteria and target audience
  • Program delivery models
    • A program theory logic model outlining how the program will intervene to address local barriers, generate energy savings, and support market transformation
    • Application of the EnerGuide Rating System and relevant requirements for program participants
  • Program setup and administration
    • Program implementation plan
    • Client journey and application process
  • Legal and risk issues 
    • Risk identification and management strategies
    • Contracting and procurement
  • Financing terms and conditions 

For a full list of considerations, please review our application guide

Prerequisites 

  • A community energy, sustainability or climate action plan, or similar, that identifies energy efficiency and renewable energy in the residential sector as a priority area for action
  • A completed feasibility study (or equivalent) that recommends one or more financing options for detailed program design 

Notes

Program design studies are a prerequisite when applying for capital project funding.

Funding subject to availability. We reserve the right to make changes to eligibility criteria and the types of projects funded through this offer. 


How to Apply

  1. Download and review the application guide.
  2. Review the eligibility criteria and required document sections.
  3. Reach out to a GMF representative to discuss your project at gmfinfo@fcm.ca or 1-877-417-0550.
  4. Visit the FCM funding portal. Follow the portal instructions to prepare and submit your application.
  5. Eligible projects will be invited to submit a full application.

If you are not eligible to apply, sign up for our e-newsletter  to stay informed about other funding opportunities.

Need help to see if this is the right funding for you?

Contact our Outreach team who can answer any questions you have relating to this funding opportunity.

GMF’s Municipal Energy Roadmap meets you where you’re at – and helps you get where you want to go. 

The report offers timely and specific guidance in identifying the best solutions for Canadian communities to achieve significant GHG emissions reductions in their municipal and community buildings and meet their long-term sustainability objectives. It supports working with residents, businesses and other stakeholders to create jobs, lead economic recovery, lower emissions and significantly improve quality of life.

GMF Municipal Energy Roadmap

No matter where you are in the process, the Energy Roadmap provides practical advice you can use to make the right decision for your community.

Read the report and learn about the solutions that are best-suited to your municipality.

GMF’s Municipal Energy Roadmap helps you:

  • Recognize the most critical and impactful solutions for reducing GHG emissions in municipal and community buildings, including homes, office buildings and municipal arenas.
  • Discover technologies and strategies that lower the costs of projects, and keep energy dollars and jobs in the community.
  • Increase your understanding of the business case and key considerations for implementation.
  • Find municipal examples, funding opportunities, and resources to help bring sustainable energy projects to life.
  • Prioritize your municipality’s efforts and find local solutions you can implement today.

For targeted solutions and strategies to achieve your sustainability goals, read our factsheets

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To inform planning for future urban development and climate change adaptation, the City of Saskatoon completed a pilot project to assign measurable value to its natural assets. The Natural Capital Asset Valuation pilot project generated an inventory of local natural assets, identified the specific ecosystem services they provide and assigned financial value to those services. The project, which received funding from the Municipalities for Climate Innovation Program (MCIP), provided valuable information for the management of Saskatoon’s natural assets.

Read this case study to understand how assigning measurable value to natural assets can inform municipal strategies for asset management and climate change.

Key success factors

  • The project raised awareness and increased appreciation of the ecosystem services provided by natural assets.
  • The evolution of the project was an example of successful adaptive management: with the departure of a key staff member and other challenges to achieving the original project scope, the team refocused the project to a more manageable scope.
  • Getting started on a new aspect of asset management, even when a municipality is not ready to complete an ambitious set of goals, can yield tangible progress, generate valuable knowledge and lay the groundwork for next steps.

What was the aim of the project?

A municipality’s green infrastructure—the water, soil, plants and animals that provide various services to residents—is largely made up of its natural assets, or natural capital. Within Saskatoon’s city limits are more than 1,400 wetlands, a portion of the South Saskatchewan River, grasslands and forest or shrublands. These natural assets provide important services to the community but have not traditionally been recognized for their value. As a result, they may not be included in municipal strategies for asset management or managing climate change risks.

The City of Saskatoon needed a way to assign measurable value to its natural assets, enabling planning for future development and for climate change impacts. The city tackled the Natural Capital Asset Valuation pilot project to evaluate the ecosystem services provided by the city’s natural assets and measure their financial value. Through the pilot project, the city set out to develop an accounting and reporting framework, create an inventory of natural assets, assess their vulnerability and complete a valuation.

What steps were involved in the project?

The pilot project had three phases, completed by municipal staff with assistance and input from internal and external subject matter experts. While the municipality had originally intended to use accounting metrics—such as life cycle costing, maintenance costs and replacement costs—to value natural assets, the plan changed due to the departure of the team member with the expertise to establish those metrics. Staff realized that the accounting framework originally proposed, whose application would have been a first in Canada, was too ambitious. The project was reframed, moving from a detailed accounting framework to a simplified one focusing on ecosystem services.

In the first phase, the city worked with the Meewasin Valley Authority, a non-profit organization, to compile an inventory of natural assets. The project dealt only with natural assets larger than 2.5 ha in size and located within the city limits to keep the project scope manageable and to leverage key existing partnerships within that area. The city chose two natural assets for the initial detailed valuation portion of the project: the Small Swale, a glacial channel scar that connects to the South Saskatchewan River and includes a native grassland and wetland, and the Richard St. Barbe Baker Afforestation Area, which consists of wetlands, native grasslands and forest. The two assets included a representative mix of habitat types, have been studied previously and have been discussed often in council in relation to ecosystem vulnerabilities and nearby development.

The second phase involved identifying the specific ecosystem services that would be used for the valuation of the two chosen natural assets. To do this, the city drew guidance from a number of sources, including the framework set out by the United Nations in the Millennium Ecosystem Assessment, the Economics of Ecosystems and Biodiversity initiative and discussions with subject matter experts. An advisory committee with internal and external stakeholders helped to identify ecosystem services, collect data and review the final report. In this phase, the city—through an extensive consultation process—also completed a vulnerability assessment to determine the climate change risks facing the natural assets in its inventory.

In the third phase, the city used the value transfer method to assign value to the ecosystem services identified. This involved reviewing literature and consulting with a diverse group of subject matter experts to find values established for similar ecosystems in other studies. The priority was to first use any values already established within Saskatchewan; for example, values from Saskatchewan were obtained for nutrient removal and wetland/grassland carbon sequestration. If unavailable at the provincial level, the team then sought data from Canada (e.g. for cultural services) as well as from a global ecosystem service valuation database (e.g. for the supporting services value for wetlands). The city completed a full valuation of the two natural assets selected for this project and extrapolated the results to the other assets in the inventory, calculating average value per hectare.

 Aerial map of Saskatoon’s city limits, broken down into individual neighbourhoods. The grey map features blue, brown, and green areas, representing aquatic assets, grasslands, and forests & shrubbery, respectively. Aquatic assets make up 7% of the map, grasslands make up 5%, and forests shrubbery make up 2%.

What was achieved?

A core benefit of the project was increased awareness and appreciation of ecosystem services as well as greater understanding of the knowledge gaps that must be addressed to properly value and manage Saskatoon’s natural assets.

The work yielded a number of technical and operational findings, such as the amount of carbon dioxide equivalent (CO2e) stored in the soil and biomass of the city’s natural assets, the recreational services provided by key natural assets and the identification of at-risk areas to be prioritized for asset management planning.

The city was able to assess the annual financial value of the ecosystem services generated by the two assets evaluated in the pilot, as well as their habitat value in financial terms. The project also roughly estimated the total annual value of the natural assets in the city’s inventory: $48.2 million per year.

Overall, the project was the first step toward the implementation of a valuation system for the city’s natural assets. The natural asset inventory completed for the project established a baseline for the ongoing identification of significant natural assets within city limits. Although it wasn’t possible to set up a full valuation framework using accounting metrics, the project increased the city’s knowledge and expertise enough to enable a high-level cost-benefit analysis for managing natural assets.

Insight and lessons learned

  • There is value in getting started, even when circumstances are not ideal: Although the city did not have all the data or expertise needed, the process of creating the inventory and completing the pilot valuation laid the groundwork for further progress.
  • The use that will be made of project outputs should inform the choice of project methodology: In the end, the simpler method the city adopted yielded results that were at the right level of detail for this initial step.
  • Lack of federal accounting standards can limit the ability to value natural assets, depending on internal municipal capacity and readiness: Natural assets are not yet a reporting requirement under Public Sector Accounting Board (PSAB) standards. Without PSAB guidance, it can be difficult for Canadian municipalities to establish consistent standards for financially valuing natural assets. This posed a challenge for the City of Saskatoon (where buy-in was not universal across the corporation) and contributed to the decision to use the value transfer method.
  • When assigning numerical value to ecosystem services, it’s important to include the caveat that the numbers are not complete: The project team faced information gaps and the challenge of extrapolating values from other studies—and ultimately knew that all the values established were just estimates and that the totals were under-valued.
  • Stakeholders and experts should be involved as much as possible from the beginning: Input from internal and external subject matter experts and stakeholders with different views on ecosystem services (including cultural services) helped define and value those services.
  • Time constraints and limited data may impact the level of detail that is achievable: The short time frame for completing phases two and three of the project, and the limited data available on some of the services provided by the natural assets, contributed to the city’s decision to transfer values from other studies of similar areas rather than establish its own method for calculating the value of natural assets.
  • Staff turnover and departmental silos can impact project scope: The scope of the project had to be altered following the departure of a key staff member. Departmental silos and varying states of readiness also limited the city’s capacity to assemble a multidisciplinary team with the full range of expertise (as well as a centralised data bank) needed to complete the project as planned.
  • Learning from other municipalities contributes to success: Knowledge shared by other municipalities, through publications and a webinar hosted by the Municipal Natural Asset Initiative, helped staff define and scope the city’s natural assets.

"You can’t always wait for every piece of information to be in place before you start. The main thing is to get started and keep the ball rolling, while identifying gaps along the way."

– Twyla Yobb, Watershed Protection Manager, City of Saskatoon

Next steps

Incorporating accounting metrics into natural asset valuation is a longer-term goal that is linked to the development of national standards through the Public Sector Accounting Board. Until such a time, the City of Saskatoon is moving ahead with building its knowledge about ecosystem services and taking steps to incorporate the valuation into the management of natural assets.

The city’s Corporate Asset Management Plan (2019) and the Green Infrastructure Strategy (2020) are the main documents through which the team will further its work on natural assets. Under these strategies, city staff will request funding in 2022 to develop management plans for natural assets—although COVID-19 may affect the availability of funding.

The recognition of natural capital is also influencing changes to the land use designation process, and the natural asset inventory will be used to inform future city Sector Plan amendments. The inventory will identify natural assets that the city may wish to conserve and will provide preliminary boundaries for consideration in the planning process. 

The city has been working with Meewasin Valley Authority, which maintains the riverbanks of the South Saskatchewan River, to explore how to move forward with management of the natural assets in the inventory.

By the numbers

Green piggy bank

$125,000

MCIP grant

Green topographical map

3461 hectares 

size of Saskatoon’s main natural assets

Green Calendar icon

2017-2020

from initiation to completion

Green hand holding a sapling

2

assets chosen for the detailed valuation

Green XY chart showing upwards growth.

$48.2 million/year

total value of ecosystem services

Green leaf

137,000 t CO2e

stored by the two pilot assets

Related resources

City of Saskatoon’s Natural Capital Asset Valuation Pilot Project

Contact

Twyla Yobb
Watershed Protection Manager, City of Saskatoon
twyla.yobb@saskatoon.ca

This project was part of the Municipalities for Climate Innovation Program (MCIP), a five-year, $75 million program funded by Infrastructure Canada and delivered by the Federation of Canadian Municipalities (FCM).

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