Canada’s industrial carbon pricing system delivers nearly $150 million in new support for dozens of innovative Canadian clean technology projects across provinces, originating from pollution proceeds
Backgrounder
On March 21, 2025, Environment and Climate Change Canada announced that nearly $150 million from the Output-Based Pricing System (OBPS) Proceeds Fund is being used to benefit 38 projects from the Decarbonization Incentive Program (DIP). These projects focus on supporting the development of clean technology and green energy to help reduce greenhouse gas (GHG) emissions.
Funding through the OBPS Proceeds Fund comes from the federal Output-Based Pricing System. The program returns money collected from heavy industry in the provinces where the federal OBPS applies. Following its launch in February 2022, the OBPS Proceeds Fund has seen two intakes under its DIP funding stream targeting support for projects at OBPS-regulated facilities. Other proceeds are directed toward strengthening Canada’s grids, the backbone of Canada’s economic future, through the Future Electricity Fund.
Proceeds from industrial carbon pricing are driving innovative job-creating Canadian technology projects across regions and sectors. To date, the Decarbonization Incentive Program has supported total investments of over $874 million in 53 emissions reductions projects, helping eligible facilities to achieve greater energy efficiency, adopt sustainable solutions, and reduce their emissions to help build a low-carbon world.
Note: In the following table, the federal OBPS applied or applies in Ontario from 2019 to 2022; in Saskatchewan from 2019 to 2023; and in Manitoba from 2019 to current. The Government of Canada has confirmed proceeds collection amounts up to 2023; 2024 amounts will be confirmed in 2026.
| Province | Recipient | Total DIP amount | Project Description | Projected 2030 GHG Reductions (tCO2e) |
|---|---|---|---|---|
| Manitoba | McCain Foods | $662,000 | The project will retrofit the dryer used in the McCain Foods manufacturing line at the Carberry facility. Implementation of this project would offset natural gas usage, resulting in GHG emission reductions for the facility. | 2,600 |
| Manitoba | Koch Fertilizer Canada, ULC | $713,000 | The project will replace the ammonia convertor on-site to improve energy efficiency and reduce associated methane emissions. This, in turn, will help the company remain competitive in global markets. | 12,600 |
| Manitoba | Tundra Oil & Gas Limited | $4,325,000 | Tundra Oil and Gas Ltd will complete seven projects under the program that will see various fuel switching and carbon management activities take place at facilities in Manitoba. Electrification activities would include replacing routine fuel combustion equipment, such as facility heating elements, with modern electric components. Carbon management activities will see some facilities implement processes and technologies to eliminate routine flaring and capture natural gas emitted through production. | 61,900 |
| Ontario | Western University | $500,000 | The project will complete deep energy retrofits that use innovative technology to optimize ventilation, electrify heating, and enable buildings to participate in the low temperature district energy loop on campus, helping drive down carbon pollution. | 1,500 |
| Ontario | Stelco Inc. | $500,000 | Stelco’s Z-Line uses innovative technology to produce high quality, value-added galvanized steel sheet for the automotive and construction markets. This project will support installation of a state-of-the-art Level 2 furnace model for the Z-Line furnaces, thereby improving furnace efficiency and reducing natural gas consumption. | 800 |
| Ontario | Ingredion Canada Corporation | $510,000 | The project leverages technology to implement three waste heat recovery activities that will reduce the amount of steam required to be produced by natural gas-fired boilers, lowering natural gas consumption and therefore overall carbon pollution from the Cardinal plant. | 2,000 |
| Ontario | Sofina Foods Inc./Aliments Sofina Inc. | $740,000 | The project will leverage technology to replace the facility’s existing hot water system with a direct contact heating system, resulting in an increased thermal efficiency rating from approximately 69% to 99.7%, while driving down carbon pollution. | 2,000 |
| Ontario | York University | $798,000 | The project will leverage technology to replace existing pneumatic thermostats with wireless thermostats in 12 buildings across the Keele campus to implement a digital direct control system for the HVAC equipment in each building. With the new wireless thermostats, the university will implement a series of automated energy savings strategies. | 800 |
| Ontario | Maple Lodge Farms Ltd. | $1,033,000 | The project will leverage technology to replace 40-year-old natural gas-fired boilers with a new and more efficient electric boiler which will operate on weekends to provide steam to the plant, while driving down carbon pollution. | 1,200 |
| Ontario | Maple Lodge Farms Ltd. | $8,309,000 | The project leverages technology to anaerobically digest poultry processing waste products into carbon neutral biogas. This will reduce the demand for steam by about 70% by burning biogas in a new boiler to meet the remaining steam load, and by upgrading biogas into renewable natural gas to be used in the existing Cogeneration system, helping drive down carbon pollution. | 23,000 |
| Ontario | Lafarge Canada Inc. | $1,151,000 | The project will upgrade the existing low-carbon fuel system to add dosing equipment and increased storage capacity that will provide a significant increase in feed rate capacity, resulting in a significant decrease in carbon pollution. | 34,000 |
| Ontario | Rain Carbon Canada Inc. | $1,251,000 | The project will leverage technology to replace the existing natural gas-fired boiler with a new electric boiler to reduce carbon pollution at Rain Carbon. | 8,600 |
| Ontario | 3M Canada Company | $1,351,000 | The project will implement a new absorption chiller powered by recovered waste heat emitted during the manufacturing process. The implementation of this project will reduce electricity and natural gas usage, resulting in significantly less carbon pollution from the facility. | 2,300 |
| Ontario | Atlantic Packaging Products Ltd. | $1,500,000 | Atlantic Packaging Products’ New Forest mill produces sustainable packaging products out of recycled paper. The project will capture waste heat and steam from dryers and reuse it to generate hot water used in the manufacturing process. This is projected to result in a 98% reduction in natural gas used for heating water. | 3,600 |
| Ontario | ARLANXEO Canada Inc. | $1,664,000 | The Flare Reduction Project comprises several smaller projects that significantly reduce the flaring of natural gas and carbon dioxide emissions from the site. | 3,000 |
| Ontario | ARLANXEO Canada Inc. | $5,723,000 | ARLANXEO Canada Inc. will reduce the carbon pollution associated with steam stripping, which is required to recover an industrial solvent in their rubber cement production process. The project would replace solvent with isopentane, a chemical that has a lower boiling point and requires less steam for recovery and thus, less natural gas. | 23,800 |
| Ontario | ARLANXEO Canada Inc. | $550,000 | ARLANXEO currently operates three air compressors to supply compressed air to the unit. This project would replace the existing compressors with new, more efficient compressors, resulting in a net energy savings from the natural gas cogeneration facility. | 1,000 |
| Ontario | IGPC Ethanol Inc. | $2,196,000 | The project would install Whitefox membrane separation technology to decrease the amount of steam used in their manufacturing process. This will reduce natural gas consumption and associated carbon pollution on a per gallon of ethanol basis. | 5,200 |
| Ontario | FCA Canada Inc. | $2,250,000 | The project will replace the Etobicoke Casting Plant’s gas-fired furnaces, which they use to melt metal for use in auto manufacturing, with electrically powered furnaces, eliminating on-site carbon pollution through the leveraging of innovative technology. | 6,500 |
| Ontario | FCA Canada Inc. | $2,473,000 | The FCA facility uses steam generated through natural gas combustion in a variety of processes. The project will implement heat recovery processes, as well as replace gas-fired equipment with electric equipment. These improvements will completely decarbonize the HVAC system and significantly reduce emissions across other systems. | 5,500 |
| Ontario | FCA Canada Inc. | $747,000 | The project will install point-of-use hot water and steam boilers in the paint shop, increasing efficiency by eliminating the long transmission of steam from the nearby gas-fired power plant, helping drive down carbon pollution. | 4,400 |
| Ontario | Owens Corning Insulating Systems Canada | $2,509,000 | The project will replace gas-fired incineration of volatile organic compounds (VOCs) with a “wet scrubber” process, which chemically removes VOCs at an earlier stage of fibreglass production. | 7,100 |
| Ontario | Ivaco Rolling Mills 2004 L.P. | $3,542,000 | The project will replace an old natural gas furnace used for reheating with modified and upgraded equipment to reduce natural gas consumption and carbon pollution. | 16,400 |
| Ontario | Ferrero Canada Limited | $4,735,000 | The project will decarbonize and modernize Ferrero’s energy profile and thermal heating system through fuel switching and energy efficiency measures. Electricity generated by a gas turbine cogeneration system will be replaced with cleaner electricity from the grid, while leveraging new electric boiler technology, and water-to-water heat recovery heat pump technology to replace old gas-fired boilers. | 16,100 |
| Ontario | Cabot Canada Limited | $5,634,000 | The project will recover thermal energy from the tail gas produced by the carbon black process and provide the facility with its own power through cogeneration, helping to drive down carbon pollution. | 51,100 |
| Ontario | University of Toronto | $5,754,000 | The project will replace the natural gas unit that is used to heat the St. George Campus with grid electricity, as well as replace some gas-fired boilers with high-efficiency electric boilers. | 46,600 |
| Ontario | Federal White Cement Ltd. | $15,054,000 | The project will deploy heat recovery to reduce tCO2e; reduce the carbon intensity of cement formulations; retrofit energy-consuming equipment and systems with non-emitting, energy-efficient upgrades; and reduce on-site medium-duty, diesel-fueled vehicle travel. | 61,600 |
| Ontario | Roseburg Forest Products Canada Ltd. | $17,890,000 | The project will install new biomass furnaces and waste fibre and product handling systems equipment to offset a large proportion of gas usage by using more rejected fibre from the process and purchasing biomass from local wood industry facilities. This project innovatively uses heat generated by the new furnaces for certain manufacturing processes. | 26,600 |
| Ontario | Agnico Eagle Mines Limited | $25,000,000 | The project will deploy “trolley assist” equipment, modifying the trucks along with haul ramps to use electric power to haul materials out of the mine. This innovative project would represent the first commercial use of trolley assist in Ontario and only the second in North America. | 68,300 |
| Ontario | Redpath Sugar Ltd. | $25,000,000 | The project will install new equipment and technology to make the sugar refining process more efficient and reduce thermal energy consumption through the recovery and use of waste heat, helping drive down carbon pollution. | 38,100 |
| Saskatchewan | SaskEnergy Incorporated | $674,000 | SaskEnergy installed Spartan Controls’ SlipStream vent gas conservation technology on 10 natural gas mobile compressors. The SlipStream system captures vent gas and routes it to the engine to be used as fuel. SaskEnergy also installed 100 kW of solar arrays at three of SaskEnergy’s transmission facilities, helping drive down carbon pollution. | 2,200 |
| Saskatchewan | SaskEnergy Incorporated | $1,015,000 | SaskEnergy will install flare systems at three compressor stations to combust vented methane from regular operations. Converting from methane to carbon dioxide by flaring will result in lower GHG emissions. | 3,700 |
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