On the surface, the logic seems undeniable: Why put up funds when a public program can cover part of the cost? Be careful — this reasoning can be costly because subsidies never come before projects. This does not mean ignore available subsidies, it is about seeing them for what they are, a helpful boost, not the starting line.
REALITY #1: The subsidy comes later, and every month of waiting comes at a cost
All public programs assume projects are already underway and are based on technical proposals and strict eligibility criteria. Between the proposal review, technical validation, and payment processes, actual timelines can stretch from six to 18 months depending on the program. Meanwhile, rates are rising, savings are not being realized, and the window of opportunity is shrinking. However, incorporating third-party financing enables you to launch projects and start saving as soon as the decision is made.
REALITY #2: Partial coverage hides an ongoing risk
Public programs generally cover 30 to 50% of costs, but never the full amount. The remaining balance is still due and must be financed through other means. What the subsidy does not make evident is that the company still bears a performance risk and a significant cash flow burden. Conversely, financing models like SOFIAC enable you to plan ahead by including subsidies in your financial structure while also financing the entire project and ensuring project monitoring and optimization without straining your cash flow.
REALITY #3: Public budgets are uncertain
Government programs are renewed based on government budget priorities, not your project timeline. A program can be modified, capped, or simply discontinued between the time a company plans a project and the time it submits an application. Building a transition strategy on an external promise means taking the risk of delegating your own agenda to a political decision.
REALITY #4: The luxury of waiting no longer exists
New climate disclosure requirements are being adopted, notably with the ISSB/IFRS S2 standards and the CSA’s proposed Regulation 51-107. Scope 3 emissions, a greenhouse gas category used to measure the amount emitted by organizations across the entire value chain and that can account for over 70% of a company’s carbon footprint, are now included in the mandatory reporting scope. Delaying the transition, therefore, amounts to delaying compliance, creating reputational and regulatory risks. While these obligations primarily target publicly traded companies, clients, investors, and financial institutions are already applying similar pressure on their suppliers and partners, whether listed or not.
VERDICT: Align rather than oppose
In a context of mandatory reporting and rising costs, the order in which a company acts has become a strategic decision in its own right. The search for subsidies and the integration of a sustainable financing model must be pursued simultaneously. Models such as those offered by SOFIAC and subsidies are not mutually exclusive; they need to be strategically sequenced to maximize their impact.
