The fund will be spent over five years with $650 million going toward carbon capture and storage (CCS) projects to offset Canada's carbon-intensive oilsands development by storing CO2 emissions underground.

$200 million will be used for smaller-scale demonstration projects for renewable and alternative energy technologies. The remaining $150 will fund research initiatives that include new technologies to address oilsand's tailings ponds and water use.

Environmentalists say the Canadian government is attempting to 'green' the oilsands industry with CCS. Experts say CCS is largely unproven, is at least two decades from commercialization, and continues to have unknown costs.