MARKHAM, Ont. – On July 16, the Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, visited Markham District Energy the city’s public energy utility and Canada’s fastest growing energy utility to highlight how federal investments are expanding Markham’s affordable, low-carbon energy network to more residents and businesses.
Markham District Energy’s network is already delivering reliable, cost-efficient heating and cooling to over 15 million square feet across 240 buildings. Through a system of underground pipes, energy is delivered to buildings in the form of hot water and chilled water to heat and cool building space. This innovative clean energy network is attracting major new investments to Markham and reducing greenhouse gas emissions by 35 per cent, with a target of net-zero by 2050.
“We are empowering homegrown innovators, like Markham District Energy, to turn their ideas into economic success stories. By investing in cutting-edge technology, we are making energy more affordable saving residents and businesses money on their energy bills while also reducing emissions and creating good-paying jobs, ” said Freeland.
To expand the world’s largest wastewater energy transfer facility so more residents and businesses can benefit from affordable, low-carbon energy, the federal government today announced an additional investment of $24.9 million in Markham District Energy. This investment will significantly reduce the energy network’s natural gas consumption with a new 18.5-megawatt wastewater heat recovery system and a new 500 kilowatt biomass pellet boiler, which will reduce emissions by over 700,000 tonnes of CO2e over the projects’ lifetimes.
“The Federation of Canadian Municipalities’ Green Municipal Fund acts as a vital bridge to enable innovative projects, like Markham District Energy’s, to move forward while reducing risk and making them more attractive to investors. By unlocking more private investments, we can make our communities cleaner, more innovative, and more prosperous. Together, we’re moving toward achieving net zero,” said Geoff Stewart, president of the Federation of Canadian Municipalities.
The investment builds on federal support already delivered to Markham District Energy, including:
- The Canada Growth Fund’s novel carbon contract for difference with Markham District Energy Inc., first announced in June. This carbon contract for difference will help Markham’s public energy utility generate more clean energy by using Noventa Energy Partners Inc.’s Wastewater Energy Transfer (WET ) technology to extract thermal energy from wastewater. Over the 10-year carbon contract for difference, the project has the potential to reduce more than 177,000 tonnes of CO2e emissions with an initial price of $100 per tonne of CO2e.
- The Canada Infrastructure Bank’s $135 million low-cost loan, announced in November 2022, which was matched by CIBC. This combined $270 million in financing will help expedite the large-scale expansion of Markham District Energy to more buildings and ensure its long-term reliability and cost-efficiency, reducing emissions by 33,700 tonnes of CO2e.
Combined, federal investments in Markham District Energy will reduce emissions by 910,700 tonnes of CO2e by enabling the affordable, low-carbon energy network to expand to more residents and businesses in Markham’s downtown core.
Markham District Energy is just one example of how the federal government’s economic plan is growing the economy, reducing the cost of energy bills, and creating good-paying jobs today and for the next generation. Through initiatives like the Canada Growth Fund, Low Carbon Economy Fund, and Green Municipal Fund, the federal government is empowering entrepreneurs and innovators to turn their ideas into success stories, helping to unlock a brighter, more prosperous future for every generation.
Quick Facts
- The $24.9 million investment in Markham District Energy, which de-risks the adoption of cutting-edge clean technology, is sourced from two funds:
- $16.7 million from the federal government’s $2 billion Low Carbon Economy Fund; and,
- $8.2 million, consisting of $1 million in grants and $7.2 million in loans, from the federal government’s $2.4 billion Green Municipal Fund, which is administered by the Federation of Canadian Municipalities.
- Carbon contracts for difference accelerate investment in decarbonization and clean technologies by providing the carbon price certainty needed for industry to make investments that are intended to reduce emissions on a cost-effective basis.
- Carbon contracts for difference guarantee a fixed minimum price of carbon when a company, such as Markham District Energy Inc., undertakes a project to abate its emissions in line with Ontario’s industrial carbon pricing system.
- If the carbon price per tonne of emissions in Ontario’s carbon market is lower than the strike price set out in the contract for difference, the Canada Growth Fund will pay the difference to Markham District Energy Inc., helping to de-risk its investment in low-carbon energy solutions.
- If the carbon price per tonne of emissions in Ontario’s carbon market is higher than the strike price set out in the contract for difference, Markham District Energy Inc. would pay the difference to the Canada Growth Fund.
- The 2023 Fall Economic Statement announced that the Canada Growth Fund will be the principal federal entity to issue carbon contracts for difference (CCFDs), including allocating, on a priority basis, up to $7 billion of its current $15 billion in capital to issue all forms of contracts for difference and offtake agreements.
- Budget 2024 announced that the Canada Growth Fund is developing an expanded range of CCFD offerings tailored to different markets and their unique risks and opportunities. The Canada Growth Fund will continue offering bespoke CCFDs and carbon offtake agreements, with a focus on provinces contributing significantly to greenhouse gas emissions reductions.
- Budget 2024 also announced that the Canada Growth Fund will explore ways to broaden its approach, for example, by developing off-the-shelf contracts for certain jurisdictions and ways to offer these contracts on a competitive basis for a set amount of emissions reductions.
