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editor’snote
PERCEIVED THREATS TO THE ENERGY STAR Portfolio Manager program have prompted similar responses from the commercial real estate and facilities management sectors on both sides of the Canada-United States border. Landlords, operators and asset managers all expressed alarm at the prospect of losing an effective, cost-free tool for monitoring and benchmarking building performance from year-to-year, and across their own portfolios or against a vast trove of anonymized national data.
Administrators of certification and ESG assessment programs like LEED, BOMA BEST and GRESB have likewise come to rely on ENERGY STAR scores as a credible and consistent standard for confirming and rating asset-level energy use, water use and greenhouse gas (GHG) emissions output. Those scores are also the foundation for various voluntary and mandatory reporting exercises, labelling schemes and performance standards.
The mandatory side of that — such as municipal and state-level building emissions performance standards (BEPS) — could be why ENERGY STAR Portfolio Manager has provoked foes within the U.S. administration and among elected representatives. However, it could be just as likely that the program was indiscriminately ambushed in the general antagonism toward its oversight body, the U.S. Environmental Protection Agency.
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For now, it’s looking like decision-makers in the U.S. Senate and House of Representatives will grant at least another year’s reprieve for the program’s funding. (The USD $32 million allocation is so miniscule in the context of the total federal budget that it probably doesn’t even rank as a drop in the bucket.) Meanwhile, a longer legislative process would be required to outright dismantle ENERGY STAR.
We examine more of the nuances and what-ifs in this issue, but it’s all illustrative of the sometimes clanging discord between what politicos believe will appeal to business interests and what those business interests actually are.
In this case, the Building Owners and Managers Association (BOMA) International emerged as a champion for ENERGY STAR Portfolio Manager, while earlier this summer, a coalition of prominent real estate industry associations lobbied against a proposed U.S. “revenge tax” on corporations and individuals from countries that apply a digital services tax or the undertaxed profits rule associated with the Organisation for Economic Co-operation and Development’s majority agreement around a minimum global tax. In the latter case, the associations argued the contemplated tax penalties would discourage foreign investment in U.S. real estate, reduce domestic investors’ access to capital and drive up financing costs.
That’s the sort of depoliticized explanation of cause-and-effect that the commercial real estate industry may increasingly be called upon to provide in the months and years ahead. The same is true on this side of the border, where many building owners/managers are waiting to see how the Canadian government’s promise that “other measures will continue to incentivize emissions reductions” will unfold in the absence of the consumer carbon price.
Barbara Carss barbc@mediaedge.ca
6 Neigbouring on Uncertainty: ENERGY STAR status in flux as the U.S. administration voices disfavour with various energy and environmental programs.
14 Undoing Dominance: Competition Bureau of Canada clarifies its crackdown on property controls.
18 Persistent Portfolio: The Canadian government trails its targets for office space reduction.
24 Enticing AI Enablers: Data centre investment increasingly contingent on assurances of adequate electricity supply and connections.
30 Modular Momentum: Housing rises from the factory floor.
34 Fraught Funding: Poor conditions are common in Canada’s subsidized housing inventory.
36 Targeted Tax Breaks: Ontario promises new options for municipalities to reduce property tax on affordable multifamily rental housing.
40 Good Faith Renewal: Places of worship undertake new missions.
42 Partnership Path: Meaningful consultation helps forge a foundation for project success.
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NEIGHBOURING ON UNCERTAINTY
ENERGY STAR Status in Flux
By Barbara Carss
ENERGY STAR ADOPTERS are now among the many Canadians wondering where their close alignment with the United States will lead them. The suite of labelling, certification and benchmarking products — which Natural Resources Canada (NRCan) is licensed to administer in Canada — is under threat as the U.S. White House targets various programs within the Department of Energy (DOE) and Environmental Protection Agency (EPA).
That could mean funding cuts in the near term or even outright dismantlement at some point later in the administration’s tenure, but neither of those outcomes is necessarily straightforward to achieve. Both require the agreement of the U.S. House of Representatives and Senate.
The President’s 2026 budgetary recommendations, released earlier this spring, urged legislators to eliminate the current USD $100 million allocation for the EPA’s Atmospheric Protection Program, of which roughly one-third (USD $32 million) is channelled to ENERGY STAR. Those budget deliberations are now in progress. Meanwhile, the program itself is referenced in the U.S. Energy Policy Act so that statute would have to be amended before ENERGY STAR could be irrevocably cancelled.
Canadian registrants in ENERGY STAR Portfolio Manager — the benchmarking tool that underpins in-house energy management, voluntary certification programs and mandatory reporting exercises — have the assurance their data is separate and secure in
a digital repository that NRCan manages in this country.
“Natural Resources Canada collaborates closely with the U.S. Environmental Protection Agency (EPA) to deliver and maintain the ENERGY STAR Portfolio Manager tool and its associated web services in Canada,” an NRCan spokesperson confirms. “The EPA does not have access to Canadian data. NRCan maintains oversight of this environment to ensure continued protection and privacy of Canadian information.”
Thus far, the U.S. administration’s aim seems largely focused on easing equipment and appliance performance standards that it perceives as hindrances for manufacturers and consumers. However, a collateral hit to
NEIGHBOURING
ENERGY STAR Portfolio Manager (ESPM) would significantly undermine ability to track energy/water use and calculate greenhouse gas (GHG) emissions in the buildings sector.
More than 35,000 commercial, institutional and multifamily buildings in Canada are currently registered for the program. This likewise makes them eligible for ENERGY STAR certification, which is awarded to buildings that score at least 75 on the 1-to-100 scale, placing them in the top quartile of performers.
Portfolio Manager is also:
• the reporting platform for Ontario’s mandatory energy and water reporting and benchmarking (EWRB) initiative and the City of Toronto’s equivalent bylaw for buildings larger than 50,000 square feet;
• the official yardstick tied to prerequisites and credits in the LEED and BOMA BEST certification programs; and
• a recognized option for North American participants to report asset-level data to the GRESB global assessment and benchmark for commercial real estate portfolios.
“ENERGY STAR Portfolio Manager is valued because it is free and it allows comparison against a massive pool of consistent, anonymized data. It can be leveraged for government and private
programs with very low friction,” observes Eric Chisholm, Co-founder and Principal of the engineering and sustainability consultancy, Purpose Building Inc.. “There is nothing else like it. The alternatives that exist don’t accomplish all of those things.”
PERFORMANCE TRACKING
Portfolio Manager was launched in the U.S. in 2000 and became available in Canada in 2013 through a Canada-U.S. government agreement. Since then, there has been steadily growing uptake of a program that provides
CANADA STEELS FOR INFRASTRUCTURE BUILDING BOOM
The Canadian government has pledged to rely extensively on domestically produced construction materials and products for its envisioned infrastructure building boom. A recently unveiled three-pronged strategy to support the beleaguered steel industry also promises new restrictions on steel imports and financial assistance for manufacturers and workers.
“Our steel industry will be central to Canada’s competitiveness, our security and our prosperity,” Prime Minister Mark Carney maintains.
It’s proposed the government will wield its influence to ensure Canadian steel and other construction materials are prioritized for major infrastructure projects and home building. New rules for government procurement will also require contractors to source steel from Canadian companies wherever practically possible.
Exceptions would only be granted if contractors can show that no Canadian suppliers are capable or willing to meet project specifications, or that the use of Canadian steel would escalate costs prohibitively or delay the delivery of equipment/projects related to defence, national security or other national imperatives.
“By prioritizing Canadian steel and other materials in our projects, we are taking important steps to prioritize Canadian suppliers, protect well-paying jobs, strengthen our supply chain and support our industry in the face of unjustified U.S. tariffs,” says Joël Lightbound, Canada’s Minister of Government Transformation, Public Works and Procurement.
The directives related to steel followed just days after a new interim policy on reciprocal procurement came into effect for Lightbound’s department, Public Services and Procurement Canada (PSPC). As of July 14, prospective bidders may be blocked from access to federal tenders if they are based in a country where Canadian companies face restrictions or are prevented from bidding on government contracts. This replaces the heretofore open-by-default procurement system, in which foreign bidders were only barred if they were subject to international sanctions or other specified policies or conditions.
“The policy on reciprocal procurement will help leverage our purchasing power to support Canadian businesses and workers impacted by unjustified American tariffs,” Lightbound says.
The newly announced restrictions on steel imports lower the threshold for the application of tariffs and introduce a new measure. A 50% tariff will apply on incoming steel and steel products from countries with which Canada has no free trade agreement once imports surpass 50% of 2024 levels. The same 50% tariff will apply on steel imports from countries with which Canada has a free trade agreement once they surpass 100% of 2024 levels, with the exception of Mexico and the United States.
“Existing arrangements with our CUSMA partners will remain the same, including no changes to our current trade measures with the U.S.,” a release from Prime Minister Carney’s office states. “Canada will reassess its existing trade arrangements with respect to steel, consistent with progress made in the bilateral discussions with the U.S. and taking into account broader steel negotiations.”
As well, an additional 25% tariff will be applied on steel imports from all countries, except the U.S., that contain steel that has been melted or poured in China before Aug. 1, 2025. –REMI Network
cross-bordercomplications
the means to monitor energy/water use and emissions output from building-to-building, and year-to-year, across a portfolio. Within a portfolio, it can assist in spotting the best candidates for retrofit investment, and tracking and verifying the results of such work, all while building a historical chronicle of performance. At a national scale, both NRCan and the U.S. EPA pull statistics from the larger database to identify average, best and worst performance in various different building types so that owners/managers can
compare their buildings to those thresholds. As a platform for mandatory reporting exercises like EWRB, it gives administrators both easy access to, and comparative capabilities for, a large number of obliged participants. A Portfolio Manager shutdown would likely disrupt or derail various reporting and performance standards initiatives in jurisdictions across Canada and the United States, including the building emissions performance standards (BEPS) now in development stages in Toronto.
SOFTWOOD ASSIGNED MATERIAL ROLE IN HOUSING PLAN
Canadian softwood lumber is expected to play a material role in hitting the federal government’s target for nearly 5 million units of new housing over the next decade. A recently announced package of federal supports for the softwood lumber sector repeats last spring’s election promise for an ambitious new package of incentives and programs to encourage investment and procurement within Canada.
“Once established, Build Canada Homes will provide financing to innovative private sector home builders in Canada that use Canadian technologies and resources, like mass timber and softwood lumber,” states a release from Prime Minister Mark Carney’s office.
That pending initiative is highlighted with other measures to address barriers that producers confront in selling to customers in the United States. Typically, nearly 60% of Canadian softwood lumber is exported to the U.S., where it is now subject to a doubling in duties since July.
The Canadian government has also pledged $700 million in loan guarantees for the forestry and softwood lumber sector; a $500-million investment to “super-charge product and market diversification”; and $50 million to be channelled to affected workers through temporary enhancements to employment insurance (EI) and retraining supports. This is similar to supports announced earlier in the summer for the steel industry, which also included a commitment that Canadian manufactured steel and other construction products would be prioritized for national infrastructure projects and in government procurement.
“Canada’s forestry sector is a cornerstone of our economy,” observes Minister of Finance and National Revenue François-Phillipe Champagne. “It supports nearly 200,000 good jobs in both urban and rural communities and accounts for billions in contribution to Canada’s GDP and exports every year.”
If, as envisioned, the pace of home building could double to roughly 500,000 new units per year, it’s estimated an extra 2 billion board feet of lumber would be needed to meet demand during a 10-year period. As well, it’s projected that demand for structural panels could increase by 1 billion square feet.
“In the face of a changing global landscape, we are focused on what we can control — building Canada strong with Canadian expertise, using Canadian lumber,” Carney maintains.
–REMI Network
“The City is going to need to look at backup plans or different scenarios for what might happen in the U.S.,” reflects Bryan Purcell, Vice President, Policy and Programs, with The Atmospheric Fund (TAF), a regional agency that supports climate-related programs in the Greater Toronto and Hamilton Area. “It would be a big effort to transition to new tools, not just for private industry that uses it in their buildings, but also for the broader ecosystem. The governments and institutions that do the training and awareness-building would have to really get to work to enable the industry to transition to a new approach.”
Should the U.S. EPA cease to offer the program, he speculates that nongovernmental organizations serving the sustainable buildings sector might be able to take it over, or NRCan might continue operating it in Canada. There are some forprofit, private sector providers of similar services, but none are clear leaders in the market and there would be more likelihood of inconsistent data with the introduction of multiple players into Portfolio Manager’s void.
LEED and BOMA BEST would also require adjustments.
“They would need to reestablish some other point-based system. Before adopting ENERGY STAR, each of them had a different way of awarding points and then came to the conclusion that ENERGY STAR was a better way,” Chisholm recalls. “So, this would mean moving back in time for those programs.”
The spectre of more fragmentation conflicts with the efforts of the global organization, Open Standards Consortium for Real Estate (OSCRE), to develop and promote environmental data standards to guide consistent collection, management, interpretation and reporting of sustainabilityrelated data. That’s become increasingly necessary to meet regulatory and investor demand for reliable information for gauging asset value and risk exposure, and to train the artificial intelligence (AI) models expected to open up new predictive and analytic capabilities.
“If ESPM were removed from the market, certainly having global standards for how to do benchmarking and tracking and defining variables is really helpful,” Purcell says. “The emissions tracking piece is more complicated, which is what makes it important to have a common approach for the sake of comparability. There is only one method of tracking your electricity or your gas use; it’s more-or-less straightforward how many kilowatt-hours or cubic metres you’re using. Emissions require more calculations; there are different factors that can be applied,
especially around electricity. So if we were to fracture into multiple, smaller platforms, there’s a risk they’d all be calculating emissions differently and it would be tough to compare performance across different owners and geographies.”
POLITICAL NAVIGATION
None of those prospective dilemmas appear to rank as a concern for the U.S. administration. To justify its proposal to eliminate the Atmospheric Protection Program it states: “The Atmospheric Protection Program is an overreach of Government authority that imposes unnecessary and radical climate change regulations on businesses and stifles economic growth.”
Conversely, supporters like the U.S. Green Building Council (USGBC) note that the entire ENERGY STAR program costs about USD $32 million annually, while enforcing performance standards and encouraging consumer choices that engender billions of dollars of annual energy cost savings across the U.S. economy.
“Thousands of product manufacturers, utilities, real estate companies and local governments rely on the program to create value, adopt energy efficiency practices and manage energy use,” maintains Elizabeth Beardsley, a Senior Policy Counsel at USGBC. “Shuttering it would only cause confusion and raise costs.”
The constitutional division of powers in the U.S. does not give the President the authority to do that unilaterally, but the executive branch can reorganize government departments. During a recent webinar sponsored by the U.S. Airconditioning, Heating and Refrigeration Institute (AHRI), Scott Segal, a partner and specialist in energy, environment and natural resources law with Bracewell LLP, based in Washington D.C., theorized that’s the marginalization tactic in play within the EPA’s Office of Air and Radiation, which houses the Atmospheric Protection Program and ENERGY STAR.
“They are reducing some programs, expanding other programs,” Segal said. “Even if they didn’t try to reorganize it out of existence, they can always slow it down.”
Meanwhile, any move to cut ENERGY STAR’s 2026 budget must be done with the agreement of the House of Representatives and Senate. Appropriations bills to allocate funds for government departments and programs are currently on the legislative schedule and, for now, elected officials don’t appear to be in a defunding mood.
Spending decisions for the upcoming year could theoretically be locked down by Oct. 1, but, in practice, that rarely happens. In a recent online advisory, John Boling, Vice President of
Advocacy and Building codes, with the Building Owners and Managers Association (BOMA) International, noted that it’s possible that ENERGY STAR could continue to be funded by default at 2025 levels up to Sept. 30, 2026.
“There are 12 appropriations bills Congress must pass every year to fund the government. The House of Representatives and the Senate must pass their bills and if there is a single difference, (there always is) then it must be resolved before the bill can be
sent to the President for his signature or veto,” he explains.
A continuing resolution comes into play if consensus is not reached before Oct. 1. As the name suggests, this simply prolongs funding at existing levels until the appropriations bills are passed.
“It can be for 24 hours or the whole year,” Boling advises. “If Congress ends up with a full-year continuing resolution, like last year, we can expect the ENERGY STAR program to receive roughly $32 million.”
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cross-bordercomplications
For its part, BOMA International — which encompasses more than 90 local BOMA chapters in the United States under its umbrella — is lobbying policy-makers in Washington D.C. and urging members to appeal directly to their own elected officials. It has produced a model letter, available on its website, that members can send to their Representatives and Senators in an effort to head off both the both the near-term threat of reduced funding and the possibility that ENERGY STAR could be outright dismantled.
“Constituent letters showing support for the program are critical for our advocacy efforts to work,” Boling reiterates. “BOMA and others maintain that because ENERGY STAR was initiated under the ’92 Clean Air Act Amendments and then officially stood up in the 2005 Energy Policy Act, the only way to end the program is to introduce legislation and move it through the process. This takes time, and BOMA will be there at every step educating why the ENERGY STAR Portfolio Manager program serves America’s interests.”
VIGILANCE PROMISED
Canadian registrants are promised forewarning of potential upheaval. They may also want to consider downloading their data as an extra precaution.
“Should there ever be any anticipated changes to the operation or availability of ENERGY STAR Portfolio Manager, NRCan would communicate proactively with Canadian stakeholders, including building owners and utilities, to provide timely and transparent updates,” the NRCan spokesperson pledges. “NRCan backs up Canadian user data on a quarterly basis in secure Canadian locations. While the system is designed with strong safeguards, NRCan also recommends that users periodically back up their data for additional assurance.”
Purcell suggests the Canadian government should be exploring further possibilities.
“Could there be ways to take over the ESPM and grow it within Canada if the U.S. does follow through on withdrawing its support?” he asks. “I’m not sure how feasible that is, but it would be good to know that the federal government is taking this seriously and looking at contingency plans because many of our national energy efficiency efforts are also tied to ENERGY STAR.”
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FOUR DISPENSER FACTS FACILITY LEADERS NEED TO KNOW The unsung hero of the restroom:
Author: Katrin Ferge, Regional Marketing Manager, Commercial at Essity
While restroom dispensers might blend into the background, they are actually critical lifelines of any facility, essential for improving hygiene and user satisfaction. These often-overlooked fixtures are the backbone of proper hygiene practices, ensuring restroom users have the resources they need for a clean and positive experience.
Guest experience is paramount, impacting everything from tenant satisfaction and employee morale to operational efficiency and overall facility reputation. Keeping dispensers well-stocked and ensuring ease of access are critical to reducing user complaints. Let’s explore four key facts that highlight the hidden power of the humble restroom dispenser.
1. Dispenser design: Thinking beyond functionality to accessibility and inclusivity
The assumption that all dispensers are created equal is a common misconception. While basic functionality is essential, thoughtful design features can significantly enhance usability, accessibility, and the overall user experience. Consider, for example, the force required to dispense paper towels or toilet paper. This seemingly minor detail is
a crucial factor for users of all abilities, including children, the elderly, and those with limited hand strength or dexterity. While the Americans with Disabilities Act (ADA) sets specific pull force standards in the United States, similar considerations are essential for promoting inclusivity and accessibility in Canadian facilities.
Choosing dispensers with ergonomic designs and appropriate pull force can significantly improve the restroom experience for everyone. Furthermore, design elements like clear product visibility windows and intuitive refill mechanisms can simplify maintenance and reduce the likelihood of outages.
2. Better packaging: A small change with a big impact on staff efficiency
The packaging of dispenser refills is likely not top-of-mind for many facility managers, but it has a direct impact on staff efficiency. Ergonomic features, such as perforated handles for easier carrying and clearly marked product information, can streamline the refill process, reducing physical strain on cleaning staff and saving valuable time. This seemingly small improvement can significantly
enhance workflow efficiency, allowing staff to focus on other essential tasks.
Moreover, providing staff with easyto-handle and efficient refill systems demonstrates a commitment to their wellbeing and can contribute to a more positive work environment, particularly crucial in today’s competitive labour market. Products like the Tork PeakServe® Continuous™ Hand Towel Dispenser with the highest capacity on the market, holding up to 2,100 towels, and the Tork OptiServe® Coreless Toilet Paper Dispenser, with its high-capacity coreless system holding up to twice as much paper, contribute to reduced refill frequency and increased staff efficiency. Investing in smart packaging is a small investment that yields significant returns in terms of staff satisfaction and operational efficiency.
3. The rise of the smart dispenser: Data-driven efficiency and optimized restroom management
Smart technology is revolutionizing restroom management, and the rise of the smart dispenser is at the forefront of this transformation. Large facilities across Canada are increasingly adopting connected dispenser technology like Tork Vision Cleaning that provides real-time usage data, enabling proactive refills, preventing frustrating outages, and optimizing cleaning schedules. These intelligent systems
monitor product levels and alert cleaning staff when refills are needed, eliminating the need for time-consuming manual checks and ensuring consistent product availability.
This data-driven approach empowers cleaning teams to prioritize their efforts, focusing on areas with the highest demand and ensuring a consistently clean and hygienic restroom environment. The insights provided by smart dispensers can also inform purchasing decisions, helping facility managers optimize inventory and reduce waste.
4. Sustainability in the restroom: Meeting the growing demand With a growing awareness of environmental responsibility, sustainability is no longer a trend but a necessity. Research indicates that 67% of guests would like public restroom managers to be more considerate about sustainability and the environment when it comes to restroom solutions or management*. Choosing dispensers and products made from recycled materials is a crucial first step. Equally important is considering the entire product lifecycle, from production and packaging to disposal, minimizing the environmental impact at every stage. Opting for coreless products or refills with optimized packaging further reduces waste and contributes to a circular economy.
By prioritizing sustainability in the restroom, facility managers demonstrate a commitment to environmental responsibility, meeting the growing demand for eco-conscious practices and enhancing their facility’s reputation.
Restroom dispensers are far more than just functional fixtures; they are integral components of a well-managed and user-centric facility. By considering user experience, operational efficiency, and environmental sustainability, facility managers can leverage these oftenoverlooked elements to enhance their facilities, optimize resource allocation, and create a positive and efficient restroom experience for everyone. Choosing the right dispensers, optimizing refill processes, and prioritizing sustainable practices are crucial steps towards achieving these goals. Discover how Tork can help you deliver on a better guest experience at torkglobal.com/ca/en.
Tork, an Essity brand, is a global leader in professional hygiene and a committed partner to customers worldwide. Tork products include dispensers, paper towels, toilet tissue, soap, hand sanitizers, napkins, wipers, as well as software solutions for data-driven cleaning. For more information, visit torkglobal.com
Competition Bureau Clarifies Crackdown on Property Controls UNDOING DOMINANCE
COMMERCIAL LANDLORDS are less exposed than retailers to the Competition Bureau of Canada’s crackdown on property controls, but investigators will be considering whether lease or transaction agreements contain a “significant purpose” to weaken other market players. Recently released guidance on how the Bureau interprets abuse of dominance also clarifies that reprieve could be given for exclusivity clauses in leases, while there will be little tolerance for restrictive covenants on land titles.
The guidance was published in June following a public consultation, and in the midst of an ongoing investigation into the use of two property-related mechanisms that could be helping some grocery retailers to undermine prospective competition. Those are:
• clauses within commercial leases that restrict the landlord’s ability to lease space to a retailer’s competitors and/or to retailers selling certain designated types of products; and
• restrictions on land that prevent new owners from opening or accommodating ventures that compete with the business interests of a previous owner.
“In most cases, we consider the party who proposed or benefits competitively from the competitor property control to be a potential target of an abuse of dominance investigation,” the guidance advises. “Restricting competition is the source of a competitor property control’s value. Competitor property controls may prevent competitors from entering markets in locations that would be
competitively significant or exclude them from a market entirely.”
The Competition Bureau and Tribunal are the joint investigative and enforcement bodies authorized to ensure compliance with Canada’s Competition Act. For a first violation, organizations found to be engaging in practices that hinder or block market competition could be subject to administrative monetary penalties (AMPs) of up to $25 million and three times the value of benefits derived from thwarting competition, or 3% of their annual worldwide gross revenues if the value of gains can’t be calculated. AMPs could then jump to up to $35 million and three times the value of misbegotten gains or 3% of annual worldwide gross revenues for subsequent offences.
In considering abuse of dominance, the Competition Bureau examines the power that
Such clauses might also help insulate protected retailers to make investments that, in turn, enhance the overall social and business environment. That might apply for a particular development or within a designated economic development or community improvement zone.
The Competition Bureau confirms that it will consider such factors, but cautions that controls should apply:
• for a limited period;
• on select products/services so that competitors are not comprehensively blocked from business opportunities; and
• within the tightest geographic boundaries possible.
Property owners and local planning officials are also advised to consider if there are other ways to encourage investment or if there are other potential tenants that would not demand an exclusivity clause.
“We recognize that whether a different tenant would be appropriate may depend on a variety of factors, including the nature of their business, how they would fit within the mix of retailers in the area and how effective they would be at attracting customers to the development,” the guidance states.
DOMINANCE
a company wields within a market — local, regional or national — and the tactics that help achieve that status. The investigation into property controls was launched after an earlier market study, published in 2023, flagged concerns about concentrated corporate ownership in Canada’s grocery retailing industry and its impact on food costs and consumer choice.
The study’s accompanying recommendations also urged provincial/territorial governments, which have constitutional oversight of commercial property transactions, to review and possibly disallow exclusivity clauses and restrictive covenants. Manitoba recently became the first province to do so (see sidebar).
SCRUTINIZED MECHANISMS
The new guidance acknowledges that exclusivity clauses can sometimes be “procompetitive” if, for example, they draw a retailer that would not otherwise have opened a business in a particular locale or vicinity.
“Considering whether a competitor property control is justified because of a credible procompetitive rationale is a key part of our analysis. We will not take enforcement action against competitor property controls that we believe are pro-competitive.”
There is far less latitude for restrictive covenants, which are characterized as an entrenched competitive advantage for business operators that have historically owned land in commercial districts. In such cases, retailers could move to new locations with assuredness that competitors could not set up on their former sites, or they could prevent competing infill businesses on portions of their land sold off to other investors.
“Restrictive covenants used by firms with market power are more likely to attract scrutiny. We do not consider their use to be justified outside of exceptional circumstances,” the guidance reiterates.
GROCERY INDUSTRY RESPONSES
Last year, the Competition Bureau obtained a federal court order compelling Empire Company Limited and George Weston Limited — the parent companies of Sobeys Inc. and Loblaw Companies Limited — to hand over documentation pertaining to their leases and land titles in the Halifax Regional
competition
Municipality. That’s one of the Bureau’s investigative procedures, which entails looking for evidence of intended anticompetitive behaviour. However, the new guidance notes that it also has flexibility to “infer that firms intended the reasonably foreseeable consequences of their actions”.
Both the scrutinized parties have since made moves to revise some of their practices. In January, Empire Company Limited, agreed to remove property controls in Crowsnest Pass, Alberta.
In February, Loblaw announced plans to eliminate exclusivity clauses in leases for its stores in the Halifax Regional Municipality; to review similar clauses in all of its existing leases across Canada; and to reduce the scope and duration of exclusivity clauses in its new leases. It has also committed to removing or refraining from enforcing existing restrictive covenants and avoiding new ones in the future.
For its part, the Competition Bureau has said it will monitor those commitments. It urges other retailers to follow suit, and
continues to gather public reports of possible anti-competitive property controls via an online submissions portal.
UNACCEPTABLE AGREEMENTS
Situations in which a commercial landlord could be implicated in an investigation fall under the section of the Competition Act addressing anti-competitive collaboration. That’s generally applied to two or more competitors suspected to have colluded through mechanisms such as price-fixing, allocating markets to specified retailers or controlling the supply of goods/services coming onto the market. However, it also pertains to agreements or arrangements between non-competitors that have a “significant purpose” to harm competition.
In the latter case, the Competition Bureau may infer culpability from the outcome. All parties to the agreement — landlords and tenants related to exclusivity clauses; property buyers and sellers in the case of restrictive covenants — could then potentially be scrutinized.
MANITOBA TAKES LEAD IN NIXING PROPERTY CONTROLS
Manitoba consumers could see the distance shrink between competing grocery stores. Legislation to prohibit the imposition of restrictive covenants and exclusivity clauses, and allow for the removal of such controls where they currently exist, received all-party support and was passed into law into earlier this spring.
The new Property Controls for Grocery Stores and Supermarkets Act is in line with the urgings of the Competition Bureau of Canada, which has called on provincial/territorial governments to implement measures to restrict or outright ban lease and land title mechanisms that give benefitting grocery store operators dominance within a mall or larger trade area. Manitoba is the first Canadian jurisdiction to take that step, which is constitutionally authorized through provincial/territorial responsibility for the oversight of commercial property transactions.
The Act addresses both restrictive covenants, which are registered on land titles to prevent certain types of commercial operations, and exclusivity clauses, which are enacted through leases to prevent landlords from renting space to potential rival businesses selling similar products or services. It will apply to retail establishments larger than 3,000 square feet that primarily sell food products for off-site preparation and consumption.
Following Royal Assent of the legislation, on June 3, 2025, retailers that do not register existing property controls with provincial administrators within 180 days will automatically forfeit their entitlements. Even beyond that date, legacy property controls can be challenged and subject to a Manitoba Municipal Board hearing to determine their legitimacy.
The latter action could occur if the Minister of Public Service Delivery directs the Board to consider it, or if a member of the public submits a request for a review and it is deemed in the public interest to proceed with a hearing. In determining the public interest, the legislation instructs the Board to consider whether property controls benefitting existing grocery store operators have reasonable geographic boundaries, time horizons and designated protected offerings to consumers, and whether they hinder residents of the community from gaining convenient and affordable access to food products.
“When assessing an agreement that contains a competitor property control, we focus on if the agreement has the effect of harming competition. If the agreement has the effect of harming competition, it will likely also have a significant purpose to do so,” the guidance states. “We may seek different remedies from different parties to an agreement, depending on the circumstances.”
At the moderate end of the spectrum, the Competition Tribunal can simply nullify the property controls in question. The more onerous possible remedies include AMPs of up $10 million and three times the value of the benefit derived from the agreement for a first occurrence or up $15 million and three times the value of the benefit derived from the agreement for subsequent occurrences.
The Competition Bureau’s guidance on property controls can be found at https://competition-bureau. canada.ca/en/how-we-foster-competition/ education-and-outreach/publications/competitorproperty-controls-and-competition-act.
“In essence, the Board must ask whether the restriction serves a legitimate public purpose or whether it primarily functions as a private commercial protection — with a clear legislative directive to strike down restrictions that fall into the latter category,” Nick Noonan an associate with Winnipeg-based Fillmore Riley LLP, observed in a summary the firm released after the legislation was initially tabled in Manitoba’s legislative assembly. “Even landlords and tenants who successfully navigate the registration process and preserve existing restrictions will remain exposed to future challenges and ongoing uncertainty about the enforceability of those rights.”
Holders of property controls who are subject to a Municipal Board hearing will have an the opportunity to make written or oral submissions. However, the Act stipulates that there will be no compensation for the loss of, or adjustments to property controls, either due to failure to register within the legislated 180-day period or a Municipal Board decision to rescind or alter them.
Noonan suggests commercial real estate owners should audit their leases, development agreements and title documents for embedded property controls they may not be aware of. They should also assess whether existing property controls could stand up to the test of public interest.
PERSISTENT PORTFOLIO
Federal Government Trails Targets for Office Space Reduction
THE CANADIAN GOVERNMENT has made slow progress in downsizing its real estate portfolio and is carrying hundreds of millions of dollars in undue annual costs for sparsely occupied and obsolete office space. A recently released report from the Auditor General of Canada highlights the mere 2% reduction in the federal government’s office inventory during the period from 2019 to 2024, falling far short of a target to shed 50% or nearly 32 million square feet. However, the Auditor General’s investigative team maintains that momentum has picked up since Public Services and Procurement Canada (PSPC), the government’s de facto property
manager, was allotted dedicated funding for the task in the 2024 federal budget, resulting in an updated implementation plan. Recommendations accompanying the auditors’ findings now suggest that better data, more stringent tenant accountability and a coordinating focus within the Treasury Board of Canada Secretariat could help push the process along.
PSPC currently estimates the government could realize nearly $4 billion in savings over the next 10 years if it could dispose of excess office space, after which this smaller footprint would deliver ongoing operational savings of about $900 million per year. That’s been the notional objective since soon after a 2017 study decreed
that 50% of the government’s office inventory was underused.
Beginning in 2019, one element of PSPC’s space reduction campaign aimed for the annual conversion of 4% of office space to an open plan format — to replace individual offices and assigned desks with a more efficient configuration with a lower space-per-employee ratio. To date, the transformation has unfolded at a slower pace of about 2.4% of office space annually between 2021 and 2024, which the auditors attribute to a combination of tenant resistance, impediments due to building conditions and lease considerations, and inadequate funding in sync with inflationary costs.
That’s in keeping with a general hypothesis that PSPC had sound intentions and a credible plan at an earlier stage, but faced constraints that prevented it from making much headway until last year.
In reaching that conclusion, auditors studied PSPC and Treasury Board documents for the period from April 1, 2018 to Oct. 31, 2024 (also extending to PSPC’s implementation plan, which was formally finalized in Feb. 2025) to track the evolution of the government’s downsizing ambitions. Under the direction of principal auditor, Markirit Armutlu, they also conducted a survey of the 100+ federal departments that are tenants within roughly 63.5 million square feet (5.9 million square metres) of office space across Canada, and interviewed various third party real estate and property management specialists.
“We found that, mainly because of a lack of funding since 2019 to implement the original reduction plans, Public Services and Procurement Canada was able to achieve only a slight reduction in office space,” the report states. “Budget 2024 announced that the government would provide $1.1 billion over 10 years, starting in 2024-25, for Public Services and Procurement Canada to reduce its office portfolio by 50% to 2.95 million rentable square metres. The funding is intended to help accelerate the termination of leases and disposal of vacant or underused federal properties and reduce maintenance and operating costs.”
HOUSING BEGINNING TO TRICKLE ONTO SURPLUS LAND
The effort to unlock surplus federal land for housing is further away from welcoming residents than the touted numbers may indicate. A new report from the Auditor General of Canada urges administrators of the Federal Lands Initiative to draw a clearer distinction between units that are planned and those that will actually be built before the end of 2028. However, the auditors conclude that Canada Mortgage and Housing Corporation (CMHC) is making progress on the targets the government has set for the program.
“If well managed, repurposing surplus federal land and buildings can help increase the supply of sustainable, accessible and affordable housing,” the report observes.
The audit primarily focuses on the program’s first phase, launched in 2018 with a budget of $200 million over 10 years and a goal to obtain commitments for 4,000 housing units, including 1,200 that meet affordability criteria. More recently, the 2024 federal budget topped that up with an extra $113 million meant to underwrite an additional 1,500 homes over five years, including 600 affordable units.
As the overseeing administrator of the initiative, CMHC is tasked with securing development proponents for sites that are either in the Canada Lands Company’s inventory or have become available from other federal departments and agencies. These can be sold or leased, at a discount or no cost, for the conversion of existing buildings on the site, new construction or a combination of those two activities.
COMPLICATIONS AND OBSTACLES
The updated space reduction strategy begins with the identification of buildings to be removed from or retained in the federal portfolio. PSPC will take the lead in deciding
A range of non-profit, communitybased and Indigenous housing providers are encouraged to participate. Under phase one, there are also expectations that:
• all new housing will meet stipulated energy performance standards;
• projects will be barrier-free and reflect universal design principles, and at least 20% of units will comply with CSA and Accessibility Standards Canada’s standards for accessible design for the built environment; and
• at least 30% of units will be available at no more than 80% of median market rents for a minimum of 25 years.
As of Sept. 2024, the auditors found that CMHC had secured commitments for 3,946 units. Thus far, 309 units have been built; 1,642 are expected to built by 202728; and 1,995 are slated to be built after that time period. The auditors also quibble with some double-counting related to 856 units that one proponent had agreed to build under another federal program, but have been included in CMHC’s tallies.
Although CMHC’s mandate is simply to obtain commitments, not completed units, the auditors recommend a more detailed breakdown of statistics be made available on a quarterly basis. They suggest it would be in the public interest to report: the number of units built and occupied; the number of units that have been delayed; and the number of units linked to joint agreements that are affiliated with other government housing programs.
where various federal departments should be located, but with a promise to work with tenant representatives to determine their (presumably reduced) space requirements. That’s expected to involve renovations, particularly given the
downsizing&conversion
federal government’s green operations mandate and the possible need for temporary swing space to accommodate government workers during the process.
Ultimately, PSPC will dispose of vacated buildings, but auditors warn that a circa-2024 government directive to prioritize the disposal of office buildings that have potential to be converted to housing complicates that process and could eat into projected cost savings over the longer term.
Separate of the policy intentions to boost housing supply, it could mean the government is forced to hold some mothballed properties for an extended time period if they aren’t suitable for conversion. That would also necessitate longer-term costs for basic building services, maintenance and payments in lieu of property tax to host municipalities.
Since 2024, PSPC has established a new division dedicated to building disposal and is currently testing what’s promised as a streamlined sell-off process on 10 buildings in the Ottawa-Gatineau region. However, there are no results yet to prove that supposition.
“Information provided by the department on pre-2022 disposals showed that once a property had been declared surplus, disposing of it took
six to eight years. Moving forward, the department anticipates it will be able to dispose of real properties in three years,” the auditors note. “The longer the disposal process, the more it costs the government to maintain the buildings slated for disposal.”
Negotiations with tenants have also added to PSPC’s timelines. That began in earnest in June 2024 when the 37 federal departments with the largest footprints, accounting for about 90% of federal office space, were asked to commit to space reduction agreements. Fifteen of those departments, representing about 41% of the affected workforce, had not yet signed an agreement nearly a year later as the auditors finalized and prepared to release their report.
“Tenants have expressed a variety of reasons to explain why office space reduction agreements have not been signed, including funding and growth concerns, the need for specific accommodations to deliver on their mandate and an unwillingness or disagreement to move into the new locations that Public Services and Procurement Canada proposed,” the auditors report.
Drawing other inferences, they advise that, in most cases, accommodation costs are not linked to departmental budgets, but, instead, come out of general government revenues.
“Of the 15 tenants cited who did not agree to the reduction of the space they occupy, 13 (or 87%) had no financial incentives to reduce the space. In total, 93 federal tenants (89%) do not reimburse the department (PSPC) for the space they occupy,” the auditors observe. “Of the 12 federal tenants with financial incentive to reduce the space they occupy, nine (or 75%) had agreed to the requested reduction of space or were finalizing their reduction plans.”
SUPPORTING THE PROCESS
The auditors call for standardized tracking of office occupancy to better inform PSPC’s decision-making, and for the public release of more information about the government’s real estate portfolio, such as:
• occupancy rates;
• market values of buildings;
• transactions and sale values;
• housing units gained through conversion of disposed buildings; and
• building-level greenhouse gas (GHG) emissions.
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Current information sharing — which includes percentage of space modernized, accessibility compliance and GHG emissions reduction — is compared to the wider scope of information that other countries, such as Australia, release about their government office space.
“Parliament and the public need additional relevant information to be better informed on the progress being made and on how office space is being used. Furthermore, if made publicly available, information such as cost per square metre, cost per employee and square metre per employee by federal tenant may incentivize federal tenants to optimize their use of office space,” the auditors reason.
Finally, the auditors commend, and lament the subsequent dismantling of, the Centre of Expertise for Real Property, which was temporarily established within the Treasury Board Secretariat earlier in this decade. That body arose from a $5-million allocation in the 2021 budget and a three-year mandate to oversee the implementation of recommendations from a comprehensive review of all of the government’s fixed assets (going beyond office space to include national parks, national defence holdings, correctional facilities, RCMP detachments, interprovincial bridges, ports of entry, etc.) and to help government departments
“The longer the disposal process, the more it costs the government to maintain the buildings
slated for disposal.”
respond to COVID-19 related facilities management issues.
The auditors conclude that the Centre “played an important role in providing leadership and oversight” and that momentum within government has slowed since it was dissolved in March 2024. They urge its reactivation or the establishment of a similar body that could coordinate the effort centrally and leverage Treasury Board’s government-wide clout.
For its part, the Canadian government has accepted and agreed with the Auditor General’s recommendations.
“In particular, I welcome the recommendation that PSPC improve its
public reporting on progress toward achieving the 50% reduction of its office portfolio by 2034. The department recently shared an update on its website and will provide updates on results annually going forward,” Joël Lightbound, the Minister of Government Transformation, Public Works and Procurement, said in a June 10 statement. “My department also remains committed to working with federal departments and agencies to improve data collection so that we can better achieve our office space portfolio targets.”
Reports from the Auditor General of Canada can be found at www.oag-bvg.gc.ca.
Data Centre Investment Rests on Solid Energy ENTICING AI ENABLERS
By Barbara Carss
CANADA COULD BE well positioned to capture more data centre investment if the United States government continues to antagonize its trade partners. A new report from the International Energy Agency (IEA) tracks soaring power requirements to enable artificial intelligence (AI) applications and underscores several potential supply vulnerabilities in the U.S.
Global electricity demand for data centre operations is projected to jump nearly 128% over the remainder of this decade, climbing from 415 terrawatt-hours (TW-h) or 415 million megawatt-hours (MW-h) last year to 945 TW-h (945 million MW-h) by 2030. In 2024, data centres accounted for 186.75 TW-h of electricity load in the U.S., far surpassing data centre consumption in China
(103.75 TW-h) and Europe (62.25 TW-h).
The largest share of new data centre development is likewise set for the United States. If the manufacturing sector remains relatively static, it’s anticipated data centres will be consuming more energy by 2030 than the combined production processes for aluminum, steel, cement, chemicals and all other energy-intensive goods.
However, that’s a scenario contingent on adding generation and transmission capacity in an environment of rising costs, increased competition for key materials and equipment, and eroding goodwill of offshore suppliers if the U.S. government’s tariff regime remains in place.
The U.S. data centre development pipeline is set to channel about half of planned new
facilities into five regions where such infrastructure is now prominently clustered, creating still more pressure on an already constrained transmission system. In north Virginia, for example, IEA analysts point to timelines of up to seven years for a new data centre to obtain a connection to the electricity grid. Meanwhile, AI diminishes one heretofore major influence on site selection that could prompt prospective developers to look farther afield.
“Data centres used for training AI models are less latency-sensitive. They don’t need to be located as close to the end-user. However, they do require a lot greater computational power,” Daniel Thorpe, a Research Director with JLL and co-author of the firm’s recent report on global data centre trends, advised
during a webinar earlier this year. “As a result, we’re starting to see a shift in sitefinding strategies. We’re seeing a bring-thedata-centre-to-the-power approach.”
COSTS AND CONSTRAINTS
The IEA projects that additional power capacity to serve growth in data centre demand will primarily come from solar, onshore wind and gas-fired sources throughout the remainder of the 2020s since those generating facilities can typically be developed in less than five years. However, to be adequately reliable, the variable renewable sources will need to be paired with energy storage, which, for now, comes with cost premiums, technological challenges and other possible hindrances given the U.S. government’s retreat from its predecessor’s green energy agenda.
Natural gas costs could be increasing since 99% of U.S. imports come from Canada and a 10% tariff is threatened. As well, IEA
“We’re starting to see a shift in site-finding strategies. We’re seeing a bring-the-data-centre-tothe-power approach.”
ONTARIO CONNECTS DATA CENTRES TO ECONOMIC PLANNING
Data centre development that aligns with Ontario’s economic development priorities has been promised a preferential place in the queue to connect to the electricity grid. The recently released provincial energy plan sets out the new policy, which is coupled with proposed amendments to Ontario’s Electricity Act introduced shortly before the legislative assembly began its summer recess in mid-June.
As proposed, grid connection requests for new data centres and other designated energy-intensive loads made after June 3, 2025 would be subject to an approvals process that considers both the merits of the new venture and its likely impact on electricity capacity and other consumers in the vicinity. This would replace the existing automatic approval for applicants that has each new candidate joining at the back of the line.
“As we experience increasing energy demands — not only from our energyintensive industries, but also from the pressures of attracting new investment to the province — we have to ensure we are taking action to prioritize projects that create good jobs and get these projects connected to the energy they need,” says Sam Oosterhoff, Ontario’s Associate Minister of Energy-Intensive Industries. “This policy will protect and promote data centres, while also protecting our ability to attract large manufacturing facilities to our province.”
Province-wide electricity demand is projected to increase by 75% by 2050 to keep up with growth and the ongoing transition to electric vehicles, heating
sources and industrial processes. Data centres are expected to be a significant chunk of that, accounting for 13% of new electricity demand over the next ten years. Already, requests for grid connections to serve data centres that are currently in the development stage amount to 6,500 megawatts (MW) or the equivalent of the Bruce nuclear generating station’s output.
At the same time, economic development strategists are striving to capture soaring worldwide investment in data centres and the smart technologies they enable. Northern Ontario and rural communities are particularly identified in the new energy plan as areas where data centres would be welcome to potentially “anchor new high-tech ecosystems”, create jobs and diversify the economic base. The plan also places a priority on “domestic data hosting”.
The proposed legislation generally sets out the intent of the new approvals process, but leaves much of the detail for still-to-be-developed regulations. The latter will establish the criteria for when the approvals process is required, the steps that must be taken and the entities that will be authorized to make the decisions.
“These measures will ensure we’re not just plugging in servers — we’re powering Canadian opportunity, protecting Canadian data and jobs, and making sure energy is used where it delivers real value to our country,” maintains Stephen Lecce, Ontario’s Minister of Energy and Mines. – REMI Network
infrastructureinvestment
CANADA-EU DIGITAL TRADING CONTEMPLATED
Digital trading channels could forge more connections between Canadian and European markets. A recent public consultation sought input on a potential digital trade agreement to complement the Canada-European Comprehensive Economic and Trade Agreement (CETA).
“By concluding a Canada-EU digital trade agreement, Canada could address emerging technology issues, promote its interests in inclusive trade and be at the forefront of the development of international rules governing digital trade,” an advisory from Global Affairs Canada states. “Early input from stakeholders is essential to identify Canadian priorities, interests and concerns in order to help define the scope of a potential agreement with the EU.”
Interested parties were invited to weigh in on the barriers to cross-Atlantic digital commerce they may currently encounter and/or comment on a range of issues related to access to and security of digital marketplaces, data transfer logistics and interoperability standards, artificial intelligence, and protecting intellectual property and personal information and privacy.
analysts warn of supply chain disruptions that could significantly lengthen the schedule for project development.
Based on information from the three leading manufacturers of gas turbines — GE Vernova, Siemens Energy and Mitsubishi Power — orders are now so backlogged that developers of new power plants may face
waits of “several years” for this essential component.
“These extended delivery timelines cast doubt on the ability of utilities and energy companies to scale up natural gas-fired generation as quickly as planned to meet rising demand, especially in the near term. They are also driving up capital costs for the
developers of new gas-fired plants,” the IEA report states. “High demand and constrained supply increase the pricing power of the turbine manufacturers. Longer delivery timelines lead to increased financing costs and can disrupt construction schedules, increasing the risk of cost overruns.”
Perhaps the most ambitious expectations are attached to small modular nuclear reactors (SMRs) among other types of generating facilities with generally longer development horizons. The technology is still in early stages of commercialization, worldwide, and the first projects are not slated to come online until at least 2030, but the concept is considered highly promising for producing a scalable output of 1.5 to 300 megawatts (MW), which could be connected to dedicated power loads, at much lower development costs than conventional nuclear power.
“If SMRs materialize as a credible power alternative, they could provide data centres with abundant green energy,” JLL’s report observes. “Several notable agreements were reached in 2024 between SMR companies and data centre operators. In 2025, look for an acceleration of SMR announcements, with the total amount of gigawatts committed likely to double.”
–REMI Network
ALBERTA’S COOL FACTOR EMBEDDED IN DATA CENTRE STRATEGY
The Alberta government is strategizing to lure investment in artificial intelligence (AI) and data centres to the province with a promise of power capacity, sustainable cooling and economic growth. The strategy promotes the availability of water licences, which are expected to be key for the liquid cooling systems that hyperscale facilities with power loads surpassing 100 megawatts increasingly require. As well, cold winter temperatures are highlighted as a natural amenity that could reduce reliance on artificial cooling in some months.
The strategy was developed through consultations with researchers and businesses currently involved with AI endeavours and data centre ventures in Alberta. Beacon AI Centres is one such player, which has envisioned six campuses throughout the province and has enlisted Stantec to oversee design and construction, drawing on the expertise of an integrated team with experience in building hyperscale data centre facilities. Construction is expected to begin next year.
“We are proud to play a critical role in helping position Alberta as a leading global hub for data-driven AI innovation,” says Leonard Castro, Stantec’s Executive Vice President for buildings.
“Beyond its natural advantages, Alberta boasts a robust AI ecosystem anchored by world-class research and talent, maintains Cam Linke, the Chief Executive Officer of the Alberta Machine Intelligence Institute (Amii). “Many of the algorithms the world’s data centres are running on have been pioneered by Amii researchers right here in Alberta. The opportunity for those companies to be close to the source of some of the leading AI research gives them a competitive advantage in being at the forefront of what is coming next.”
It’s projected that worldwide investment in data centres will double, to surpass $820 billion, by 2030. “Data centres are economic growth engines that provide the computing power AI companies need to develop and deploy their innovations. grow their companies and stimulate the local economies,” Linke says.
JLL identifies Canada as one of the world’s most active players for commercial SMR facilities, albeit none of which are yet under construction. Canada ranks third — behind the United States and Russia and ahead of China — for SMRs in the planning stages, while only Russia, China and Argentina have facilities under
construction and only Russia and China host operational SMRs.
Drilling down to an imperative element of SMR operations, Canada is the world’s second most prolific exporter of uranium (after Kazakhstan) and the top supplier to non-military nuclear reactors in the United States. The U.S. Energy Information
Administration confirms that American nuclear power plant operators have imported almost all of their uranium fuel since 1992, and the most recently available stats show Canada as the source of 27%, or nearly 11 million pounds, of incoming supply in 2022.
Importers now face a threatened 10% surcharge as part of the U.S. government’s
–REMI Network
infrastructureinvestment
“We’re seeing joint ventures becoming the most popular route to the market for many investors.”
currently paused tariffs on Canadian energy. As well, an added tax burden is now in place on uranium imports from four other prevalent sources — Kazakhstan, Russia, Uzbekistan and Australia — under the U.S. government’s separate reciprocal tariff manoeuvres.
EMPOWERING POLICY INSTRUMENTS
The U.S. government’s continued tariff machinations could conceivably trigger electricity supply constraints in certain U.S. regions since some Canadian provincial government leaders have hinted that they will consider curtailing electricity exports in retaliation. In turn, Canadian power producers might be looking for new customers for surplus baseload, while data centre development and related energy projects should align with various federal, provincial
and municipal strategies to spur innovation and economic development.
For example, the Manitoba government recently directed Manitoba Hydro not to renew an expiring contract for 500 MW of power with the U.S. based publicly traded private utility, Xcel Energy. An accompanying media release characterizes the move as repatriating and redeploying power to serve domestic priorities and ambitions.
“There is no better time to be partnering with other Canadian provinces and territories to build the infrastructure we need for a strong domestic economy,” asserts Manitoba Premier Wab Kinew.
Nor are governments alone in looking for partners.
“We’re seeing joint ventures becoming the most popular route to the market for
many investors,” JLL’s Daniel Thorpe told webinar attendees. “These are very specialized sectors so there can be a lot of benefits gained if you partner with an experienced data centre operator or a developer.”
Ted Betts, a lawyer and head of the infrastructure and construction group with Gowling WLG in Toronto, suggests governments can play a strategic role in de-risking infrastructure investments — citing Canada Infrastructure Bank’s approach to inducing investment through assurance of more viable returns, or Infrastructure Ontario’s track record in fostering publicprivate partnerships. He also commends governments, in general, for their response to recent upheaval.
“They are genuinely trying to find ways to get confidence back in investment and to ease the burden, harm and damage being caused by the tariffs,” Betts reflects. “It’s one of those times, I think, government is stepping up to fulfill its proper role.”
The International Energy Agency’s Energy and AI report can be found at www.iea.org/reports/energyand-ai. JLL’s 2025 Global Data Center Outlook can be found at www.jll.ca/en/trends-and-insights/ research/data-center-outlook#form.
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MODULAR MOMENTUM
Housing Rises from the Factory Floor
By Erin Ruddy
AS CANADA’S HOUSING crisis persists, technology and innovation are increasingly viewed as critical elements of potential solutions. Factory-built housing has advanced significantly in recent years, transcending its origins in backyard sheds and single-family homes to include multi-unit structures.
The recent opening of a three-storey modular housing development in Toronto demonstrates just how quickly a 26-unit residential building can be erected. Led by the non-profit organization St. Clare’s, and supported by the City of Toronto and CMHC’s Rapid Housing Initiative, the affordable housing project was constructed using sustainable mass timber technology and finished in under three weeks.
“Twenty-six lives are being transformed as they move into their new homes on Ossington Avenue — a bed, a safe place to eat, to heal and
find community,” Toronto Mayor Olivia Chow said at the project’s grand opening in February. “Astoundingly, through the partnership with St Clare’s and the federal government, this housing was built in just 17 days.”
Designed by Smart Density and McCallum Sather, and developed in partnership with Toronto-based Assembly Corp, the project showcases innovative architectural features while exemplifying the potential of using prefabricated components and sustainable materials in multi-unit construction.
Geoff Cape, Chief Executive Officer at Assembly Corp, sees his company’s product as an instrument for “gentle density” that’s affordable and environmentally friendly. It primarily relies on domestically cultivated, harvested, and processed wood for building components.
These are broken into five kits: decks and beams; load-bearing walls; facades; interior finishings; and technical installations. Semiautomated manufacturing techniques are employed to convert the wood into standardized products.
In general, a modular building is a prefabricated structure composed of repeated sections known as modules. Permanent modular construction (PMC) buildings are produced in a controlled environment and can be constructed from wood ,steel or concrete.
Modular components are usually assembled indoors on assembly lines. The construction of these modules typically takes between ten days and three months. Modules can be integrated into site-built projects or stand alone, and they can be delivered with mechanical, electrical, and plumbing (MEP) systems, fixtures, and interior finishes.
Cranes are typically used to install the prefabricated sections, which can be arranged side-by-side, end-to-end or stacked — allowing for various configurations and styles. Once placed, the modules are joined together using inter-module connections, which link the individual modules to form the complete building structure.
HOLISTIC APPROACH
“We take a holistic approach to sustainability, tackling both urban density and climate change by reducing construction’s carbon footprint,” Cape submits. “Our Canadian supply chain is a key part
PRIZE-WINNING HOUSING TECH SET TO BUILD SCALE
Artificial intelligence (AI) and robotics are central to prize-winning technology tapped to accelerate new housing production on a nationwide scale. Promise Robotics has been awarded Game-Changer Gold in the fifth round of Canada Mortgage and Housing Corporation’s (CMHC) Housing Supply Challenge, focused on readily replicable and logistically effective approaches for reducing conventional construction timelines.
The Toronto-headquartered company uses AI-programmed robots to produce building components in its facilities located in Calgary and Edmonton. The industrialized home-building model streamlines design, procurement and project management into a single AI-informed platform, enlists the speed and precision of robotized production and centralizes it in a weather-controlled venue. The resulting factory-built components can then be assembled in advertised times of six hours for a single-family home or 14 days for a 64-unit apartment building.
“The goal is to help the industry to significantly increase its capacity in home building,” Ramtin Attar, Co-founder and Chief Executive Officer of Promise Robotics, told a gathering during Toronto Tech Week earlier this summer. “So imagine: whether you’re doing single-family or multi-storey, you submit the design and we turn those designs into robotic instructions to manufacturers that are deployed across warehouses located anywhere. They integrate with local trades and supply chains and they produce and assemble all the components within the area where you are located.”
The recently announced CMHC prize arises from a 15-month process beginning with more than 250 applicants. Adjudicators were looking for endeavours that could mobilize innovation, better integrate various segments of housing production and unplug bottlenecks that prolong and complicate planning, financing and construction. (Other rounds of the challenge have focused on: data management; pre-construction issues; Northern and remote communities; and construction processes and materials to support affordability and resilience.)
The field was first narrowed to 18 semi-finalists that each received $1 million to further their business development. From there, nine finalists each received a $3 million award and the final four Game-Changers collectively received an additional $15 million.
Besides the top honour for Promise Robotics, three companies were named GameChanger Silver recipients:
• Tapestry Community Capital, an advisory for community bonds and related investment and capital-raising services for affordable housing;
• mddl, an advisory supporting capacity building for residential infill, particularly mid-rise development; and
• One Bowl, a modular housing company, specializing in energy-efficient, cost-effective turnkey housing for First Nations communities.
“Innovators across the country have answered the call of the housing supply challenge, and I’m thrilled to see the work these game-changers are doing to accelerate housing production,” says Gregor Robertson, Canada’s Minister of Housing and Infrastructure.
Speaking during Toronto Tech Week, Attar argued the evolution from on-site to in-factory production will bring more cost certainty and address labour shortages in “an industry that has experienced 0% productivity gains in four decades”. While citing support from community colleges and some trade unions, he acknowledged that the approach may not sit well with custom builders.
“We have generalized blueprint construction. There’s less customization. Our robots can build a home today, an apartment tomorrow, a townhome the next. And they don’t care,” Attar said. “We need solutions that can mobilize the entire sector and create jobs of the future on the scale that we really need. We need tools that can fundamentally retool the entire home building industry.”
Photos courtesy of Assembly Corp.
of this strategy, and with our new manufacturing facility opening at Downsview in Toronto in 2026, we will be able to produce 960 units annually, with the potential to scale further.”
Cape credits the recent partnership with the Swedish company Lindbäcks for accelerating the expansion, advising that it enabled Assembly to acquire manufacturing equipment and benefit from critical knowledge-sharing. With nations such as Sweden, China, and Japan at the forefront of the modular timber industry, accessing their expertise has proven invaluable. However, there is still progress to be made.
“Advancing industrialized construction requires product development, policy support and cultural acceptance — and Canada is on the right track,” he says.
Ontario’s building code was updated in January 2025 to permit modular wood construction up to 18 storeys. A decade ago, the limit was four storeys. Nonetheless, he expects Assembly Corp will continue to concentrate on mid-rise infill projects, which fit with the objective of reducing urban sprawl.
“Our factory-designed, pre-clad panels and pre-site plans enable us to build on previously infeasible sites,” Cape says. “We prioritize Canadian-sourced materials to reduce our reliance on foreign markets, and with ongoing U.S. trade uncertainties, our new factory will create local jobs.”
Assembly Corp isn’t the only prefabricated housing manufacturer pushing the industry
forward. Montreal-based student housing provider, UTILE, recently completed a project in Rimouski, Quebec, featuring 155 rental units. A finalist in CMHC’s Housing Supply Challenge (see sidebar), the goal of the project was to “push the boundaries of what modular housing could achieve” and showcase the findings in an upcoming white paper, scheduled for release this fall.
LOGISTICAL PLUSES AND LIMITATIONS
Other key benefits come from using computeraided design to ensure efficient use of building materials and bulk purchasing capabilities. At the back end, manufactured housing offers the advantage of quick and easy installation on urban properties with limited space, environmentally sensitive sites or remote rural regions.
But that’s not to say there aren’t a few cons. CMHC identifies some of the current challenges. Design limitations: the need to transport modules to the construction site often restricts their size and shape, which can limit architectural creativity and flexibility.
Transportation and logistics: moving large modules requires careful planning, special permits, and sometimes even custom routes, which can increase costs and complexity.
Lack of industry standards: modular construction is still evolving, and the absence of standardized practices can lead to inconsistencies and inefficiencies.
Financing challenges: securing funding for modular projects can be difficult due to
unfamiliarity with the method and perceived risks. Perception issues: some stakeholders may view modular construction as less durable or highquality compared to traditional methods, which can hinder its adoption.
Despite these hurdles, the momentum is growing. Currently, the federal government is actively supporting modular construction, offering funding and loans to encourage its adoption. For instance, $500 million in loans have been earmarked for apartment builders using modular construction techniques.
Erin Ruddy is Editor of Canadian Apartment.
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Provincial/territorial breakdown of surveyed subsidized housing inventory. Source: CMHC.
Poor Conditions Prevalent in Subsidized Housing FRAUGHT FUNDING
CANADA’S SOCIAL and affordable rental housing stock is increasingly falling into disrepair as it ages, while vacancy rates are generally tightening. Recently released survey findings from Canada Mortgage and Housing Corporation (CMHC) provide a snapshot of the structural condition, financial stability and occupant demographics of nearly 593,000 subsidized units stretching across 10 provinces and three territories.
This is derived from both administrative data and individual survey responses, primarily capturing the stock in Canada’s largest cities. Notably, nearly 30% of surveyed housing units are located in Toronto, with another 17% split roughly evenly among Vancouver, Ottawa and Montreal.
Across the entire survey base, 43.5% of units are deemed to be in good-to-excellent condition; 37.3% are rated in fair-to-poor condition, but with the largest share of those — 23% — categorized as poor; and the remainder are considered to be average.
More than 77% of units built during the past 20 years earn the good-to-excellent rating.
However, about 83% of all the examined units are more than 30 years old and 49% were built prior to 1980.
Within the next five years, it’s anticipated that 18.5% of the buildings will need repairs to the building envelope (cladding and/or windows); 17.7% will need repairs to suite interiors; and 16% will need repairs in interior common areas. Where features to promote accessibility exist, they are most likely to be barrier-free building entrances and doorway widths that accommodate wheelchairs, but 37% of the surveyed buildings lack any accessibility features.
A vacancy rate of 2.9% at year-end 2024 was down 20 basis points (bps) from 2023, but 130 bps looser than CMHC’s survey results for 2019. Housing operators predominantly rely on a rent-geared-to-income (RGI) formula, with 84% of tenant households contributing a set percentage of their monthly household income toward the rent. The remainder of units most commonly have rents fixed at a percentage of what’s calculated to be the lower end of market rents within the region.
Housing operators have funding agreements with some level of government that provide a budget for 70% of surveyed units. Municipalities fund the largest share (30%), with provincial/territorial governments funding 23% and the federal government acting as the sole funder for 17%.
Non-governmental organizations, often drawing on some component of government funding, are the sponsoring bodies for 11% of surveyed units.
Municipal and provincial/territorial governments most often bridge the gap between operating costs and revenues — for 32.4% and 24% of surveyed units, respectively — but other organizations or a combination of organizations and various levels of government pick up the slack for 5.6% of the units. As well, the federal government provides operational deficit funding for 1.5% of units.
Government-sponsored operators most often have a mandate to provide housing for seniors and families with children. The proportion of non-senior single men and women accommodated in this housing stock varies significantly from province to province, with
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the smallest complement — 1 to 5% — in Alberta and Saskatchewan.
“Families with children and youth were slightly more likely to receive services from government organizations, while seniors were equally served by both government and non-profit organizations,” CMHC analysts report. “Clientele groups including veterans, persons with disabilities, First Nations, Métis, Inuit, immigrants, refugees, victims of domestic violence and persons
exiting homelessness were twice as likely to receive services from non-profit organizations.”
More information about Canada Mortgage & Housing Corporation’s social and affordable housing survey can be found at www.cmhc-schl.gc.ca/ observer/2025/cmhc-releases-5th-cycle-social-affordable-housing-surveyresults.
COLOURING TORONTO APARTMENT RATINGS
Toronto’s municipal licensing and standards department is working to develop a colour-coded sign system to signal how rental housing buildings rate in complying with the City’s apartment standards. Staff is expected to report back on how this requirement could be integrated into the existing RentSafeTO inspection and evaluation regime in time for City Council’s October meeting.
The directive arises from a motion that
Toronto Councillor Josh
Matlow introduced at the July Council meeting, which advocates colourcoded signs — similar to those Toronto Public Health uses to denote ratings of dining establishments — as an effective way to communicate a message about building conditions to the public. The motion also calls for changes in the weighting of the various elements that contribute to RentSafeTO scores and the introduction of administrative monetary penalties (AMPs) for property standards violations in apartment
“Landlords and others have claimed that a red sign would ‘stigmatize’ people in apartment buildings, but tenants have repeatedly told Council that mould and cockroaches are stigmatizing, not a sign. In fact, a 2020 survey conducted by the City found that 81% of respondents agreed with implementing the sign program,” Matlow’s motion states.
As dictated in the motion, licensing staff will be exploring how to realign the RentSafeTo scoring system to attach greater emphasis on “high risk” categories related to health and safety, with fewer points attributed to “cosmetic” categories. That includes instructions to deduct more points in cases where orders, notices of violation or emergency orders have been placed against a property. As well, staff will consider how evaluators should be trained and supported to ensure that ratings are consistent from building to building.
“There are buildings receiving scores of 70 to 80% despite having
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Ontario Promises Options for Existing Multifamily Units TARGETED TAX BREAKS
By Barbara Carss
THE PROSPECT of two different property tax rates applying on the same multifamily building looms for the 2026 tax year in Ontario. The 2025 provincial budget signals the pending introduction of an optional property tax subclass that would allow municipalities to reduce the property tax rate on qualifying affordable rental units by up to 35%.
“Eligible properties could be either existing or newly built and would be required to meet the definition of affordable rental units in the Development Charges Act, 1997,” the budget document states.
Thus far, there are few other details, but the Development Charges Act defines affordable rents as no more than 30% of income for residents at the 60th percentile of all renter households’ gross annual
income within a given municipality. In private rental accommodations, those might be units that are reserved for low-income tenants through an agreement with social agencies. Or, they might be units that have not turned over in several years, with allowable annual increases still pegged to tenants’ initial rent.
The announcement follows hints in the Ontario government’s 2024 fall economic statement, which identified a new optional property tax for affordable rental housing as one of three priorities emerging from an ongoing review of the property tax and assessment system. Advocates for the rental housing industry commend the initiative.
“Lower property taxes on affordable rental units will mean more affordable living for families across Ontario. This will
make a difference in keeping down the cost of living, which is something everyone can support,” maintains Tony Irwin, President and Chief Executive Officer of the Federation of Rental-housing Providers of Ontario (FRPO). “FRPO supports the proposed optional property tax subclass contained in the Ontario Budget.”
Property tax rates are applied on the assessed value of multifamily buildings, which the Municipal Property Assessment Corporation (MPAC) determines based on factors such as overall rental income and operating expenses. It would presumably be up to municipalities to determine which units qualify as affordable and how to apply the discount.
“There are still unknowns on implementation, but this does address
DEVELOPMENT CHARGE DUE DATE RESET FOR CONDO PROJECTS
New Ontario legislation that defers the due date for development charges is expected to ease upfront costs for condominium developers, but create cash flow headaches for some municipalities. The City of Toronto projects that a longer wait to collect development charges that were previously payable with the issue of building permits will translate into a $1.9 billion budgetary void over the next 10 years.
A package of recent amendments to Ontario’s Development Charges Act brings a new remittance schedule for builders of ownership housing, allowing them to split development charges into annual installments to be paid during the five years following initial building occupancy. Rental housing and institutional buildings already qualified for deferred development charges prior to this adjustment, but another legislative amendment now eliminates municipalities’ ability to charge interest on outstanding balances.
These changes were introduced through the omnibus Bill 17 — containing amendments to eight different provincial statutes related to housing and infrastructure development — which was tabled and adopted over the course of four weeks this spring. Other new measures pertaining to development charges:
• ensure that developers will pay the lower of either the development charge rate at the time they submit a complete application or the rate at the time building permits are issued;
• clarify where developers may be entitled to credits; and
• exempt for-profit long-term care homes from development charges.
A recent report to Toronto Council notes that the changes will significantly shift the timing of when the City receives development charges. In response, Toronto officials are asking the Ontario government for more scope in how they can spend both development charge revenues and provincial infrastructure funding in order to address anticipated cash flow interruptions.
“While these funds will ultimately be recovered, the delayed revenue will affect the City’s short-term financial capacity to deliver additional critical growth-related infrastructure and will require the City to reprioritize planned capital projects,” the report states. “In addition, the City will experience higher DC collection risk upon payment deferral to occupancy, in the absence of further Provincial actions.”
To address the latter possibility, the report calls for an “appropriate collection mechanism” with enforcement tools to guard against unpaid development charges flowing through to condominium unit owners. It suggests that full payment could either be a requirement for registering a condominium or be secured by an agreement that’s registered on the land title.
The legislative amendments also clarify that residential developers will continue to have the option to voluntarily pay development charges in full ahead of the required due date.
existing affordable housing where most other programs have focused on newly developed units,” observes Ryan Fagan, Principal and the lead on complex property tax with the consulting firm, Ryan ULC. “There are existing programs in Toronto and Vancouver that fully exempt affordable housing, but it is not uniform across all units and not found in the majority of municipalities across Ontario.”
ENVELOPE OF INITIATIVES
This would be the third optional property tax subclass the Ontario government has created in recent years. The small business subclass, introduced for the 2022 tax year, allows an up to 35% discount on the commercial property tax rate for ratepayers who meet criteria that adopting
municipalities specify. The subclass for new multifamily rental development, authorized in a 2024 regulation, allows municipalities to set a tax rate on new multifamily rental developments with seven or more units that’s as much as 35% lower than the residential property tax rate for a period of up to 35 years.
Several Ontario municipalities have now enacted the small business subclass, while Toronto, Mississauga and York Region are among the earliest adopters of the optional subclass for new multifamily rental developments.
Toronto will convey a 15% property tax reduction to new multifamily rental, which is on par with the 15% discount that ratepayers in its small business subclass receive. Mississauga and York Region have
opted to aim for the full 35% reduction, but have built in flexibility for Councils to adjust that during annual budget deliberations.
Regardless, the municipalities won’t be collecting or foregoing any revenue from specified landlords for awhile. Under provincial rules, the subclass comes into force for building permits issued after a municipality has passed a bylaw to adopt it. No eligible buildings have yet been built and occupied.
The Ontario government has also addressed two other priorities for assessment reform — related to student housing and demand for improved access to MPAC’s trove of information — highlighted in the 2024 fall economic statement.
taxes&fees
An amendment to the Assessment Act to clarify that land that accommodates university-operated student housing is exempt from property taxation even if it is located separately from that university’s main campus, was passed as part of the Budget Measures Act (Bill 216) in November. The latest budget bill, which received Royal Assent in June, includes amendments to allow MPAC to convey notices electronically to consenting property owners, and to set up a framework for how municipalities, school boards and roads and local services boards can use assessment information for operational planning or other research.
The budget document does not indicate when a province-wide property reassessment may occur, but does highlight two more initiatives in progress.
“Potential tools are being evaluated to help municipalities manage their assessment base,” it reports. “Work is also underway with MPAC on plans to enable them to provide centralized online access to assessment roll information rather than requiring on-site viewing in municipal offices.”
INSTITUTIONAL PAYMENTS STUCK IN THE ‘80s
Ontario municipalities are again asking for an upward adjustment to the payments that health care, post-secondary and correctional facilities make in lieu of property tax. Toronto finance officials calculate that a nearly 144% increase is needed to account for inflation since 1987. That’s the last time the $75 per capita rate for accommodated individuals — known as the heads-and-beds levy — was increased.
Toronto Council passed the enabling by-law to collect the annual levy at its July meeting, and also agreed to ask the Ontario government to boost the fee to $182.79. Pleas for increases have similarly been forwarded to Queen’s Park since the 1990s.
“If the rates had been increased to reflect increases in the Consumer Price Index in each year from 1987 to 2025, an additional $29.9 million in tax revenue would be received in 2025,” a staff report to Toronto Council observes. “This is an issue faced by all Ontario municipalities.”
Instead, the City will collect roughly $20.8 million, based on the number of beds for students, patients and detainees in formal student residences, in-patient health care units and detention centres. This has already
been accounted for in the 2025 Toronto budget, but, under provincial rules, the subject public institutions are not required to pay it until after July 1 each year.
Several other municipalities and their umbrella organization, the Association of Municipalities of Ontario (AMO), have also been lobbying for a boost to the institutional levy.
“Municipal governments have long felt this payment to be insufficient to account for the fact that provincial facilities, while providing economic benefit, also place a burden of added wear and tear on local infrastructure, increased demand for public transit, policing and EMS services and so on,” AMO reported in a 2021 submission to the provincial government’s pre-budget consultations.
Although a review of Ontario’s property tax and assessment system has been in progress for two years, this issue does not appear to be on the agenda.
“To date, the Province has not committed to any review of the legislative or regulatory provisions that govern the levy on provincial institutions,” the Toronto staff report notes.
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GOOD FAITH RENEWAL
Places of Worship Undertake New Missions
CANADIAN CHURCH congregations are dwindling, while the cost to maintain places of worship steadily increases. A 2019 study from the historic places foundation, National Trust for Canada, projected that nearly one-third of the country’s roughly 27,000 religious buildings could close down by 2030.
However, the threat also poses an opportunity to redevelop this consecrated real estate for community amenities and/or affordable housing. A new report from the Canadian Urban Institute (CUI) documents the consequences of this loss and underscores the civic and community promise these buildings hold.
Sacred Spaces, Civic Value: Making the Case for the Future of Faith-Built Assets
primarily focuses on the Christianaffiliated properties that are experiencing the sharpest decline in congregant numbers. With that, comes ongoing financial struggles.
Many of these aging assets are found along main streets and downtown areas that are under redevelopment pressure, but are also strategically located to provide accommodation for a range of nonreligious, community-oriented programs. CUI defines this as a form of “resilience infrastructure” that provides affordable space in which new organizations, partnerships, financial models and civic movements can form and strengthen.
“The barriers to adaptation of faithbased assets are many, but the alternative
— a loss of thousands of buildings, tens of thousands of square feet of community space, and hundreds of thousands of hours of community-focused programming — makes it an urgent problem worth solving,” the report states.
“Ownership of any problem is shared across sectors and jurisdictions, and finding courageous first-movers to try new approaches and inform useful models is difficult,” adds Mary Rowe, CUI’s President and Chief Executive Officer. “As federal, provincial and local governments establish investment priorities for community strengthening, there is a prime opportunity to demonstrate the critical role that these civic assets play.”
Higher utility costs and insurance premiums, years of funding shortfalls, fewer skilled trades in historic craftsmanship, growing uptake of online worship and a dearth of donors all add to the challenge. However, the CUI argues that the broader public has an investment stake in such properties, which have received “decades of tax abatements” and has a claim on how they should be used into the future.
“If we do nothing, the real estate market will turn them into condos,” observes Reverend Graham Singh, Chief Executive Officer of Relèven, a Montreal-based not-for-profit organization promoting preservation and community use of historic churches. “The real question is: How can we better understand community needs, and use their social impact to build new structures for change?”
Current policies and regulations often pose obstacles. For instance, in zoning bylaws, “places of worship” are identified as an institutional use. This limits creative and flexible uses, co-location with other kinds of ventures and development opportunities, or necessitates lengthy, costly or risky policy changes.
Meanwhile, CUI finds that faith communities are rarely involved as stakeholders in the municipal planning process so they lack knowledge of its permutations and how to influence outcomes. The report lays out a set of actions to adapt these spaces for the wider community, while continuing to serve traditional congregations.
GUIDING RESOURCES
To begin, it will be important to track closure trends. A publicly accessible national inventory of faith properties, including their location, type and ownership status is recommended. Other analytical tools are needed to assess socioeconomic and demographic impact and consider the kind of new uses that could be in demand and a good fit for cohorts of users.
For example, Église Christ-Roi, a Gothic Revival style church with vaulted ceilings in Sherbrooke, Quebec has been transformed into a climbing gym by Vertige Escalade.
Partnering with trade schools and professional trades associations could transform heritage faith buildings into hands-on apprenticeship opportunities to teach historic restoration and upgrades, or space could be used for Indigenous-led cultural, spiritual and economic uses.
CUI calls on municipal planning authorities to see faith-based communities as stake-
holders and to establish protocols for including them in consultation and collaborative redevelopment strategies. In turn, faith-based organizations need to build a stronger network of partners and resources.
A guidance document is a recommended to point prospective proponents on a stepby-step path through financing, planning and operational considerations. Savvy organizations may need to get up to speed on a range of possibilities, including: land title transfers; leases for public goods activation; density bonusing; and transfer of development rights.
Funds for building maintenance and revenue sources throughout redevelopment will be important. As well, effective asset management entails cost/benefits and risk analyses of various redevelopment scenarios. Climate-related risk assessment and greenhouse gas emissions calculations should be part of that exercise.
“Building the capacity to pursue adaptation requires significant upfront funding, which presents the greatest hurdle to transforming faith-built assets,” the report advises. “Adaptation requires major feasibility studies involving assessment of properties, buildings, and space; multisectoral consultation and engagement; and servicing and impact studies. This all requires funding to recruit expertise and build capacity to navigate pre-development, planning and approvals, construction and property management.”
SUCCESSFUL EXAMPLES
CUI offers some examples of successful adaptations that may inspire future project, including West Broadway Commons in Winnipeg. The 12-storey, mixed-market housing development replaced the All Saints Anglican Church parish hall, which was in dire shape and deemed too expensive to rehabilitate.
The new facility features common areas and 110 residential units, including 56 affordable and 23 barrier-free apartments. Commercial spaces are located at ground level, and is predominantly leased to the Canadian Mental Health Association for a youth hub. A second space is intended for a local café, restaurant or shop.
Initial funding was secured with the assistance of an architect who helped the church secure $10,000 in Canada Mortgage and Housing Corporation (CMHC) seed funding for organizations involved in the initial phases of creating an affordable
housing project. With this lever, All Saints could tap into expertise and launch a request for proposals process to attract a social impact-focused development partner for a joint-venture.
All Saints now holds the majority share in a 51-49% partnership, and the revenue generated from commercial and residential rents has allowed the congregation to continue its church operations.
In Victoria, B.C., a master-planning initiative is underway to redevelop the site of Christ Church Cathedral. It encompasses three historic structures — the Cathedral itself, the Memorial Hall housing the Christ Church Cathedral School and Yarrow Chapel — now collectively dubbed, Cathedral Commons.
Recent structural assessments estimated that necessary repairs and seismic upgrades to heritage buildings on the property could cost up to $50 million. The proposed development will introduce new residential and commercial uses and amenities, with the generated revenue used to underwrite a phased heritage revitalization and other amenities.
“Departing from the past when property decisions were considered strictly case-bycase and independent of each other, the Diocese recently conducted a feasibility analysis of every property within its portfolio,” recounts Brendon Neilson, Executive Director of the Diocese. “Strategic sites were identified for the Diocese to develop, partner on, or use differently. Cathedral Commons is one site in a potential 15-year project pipeline.”
To support a future where more developments are possible, CUI urges governments to scrap outdated rules, and embrace new approaches to land use and lending.
“They need to support (and not impede) new forms of stewardship and development, and ensure that crucial civic uses, such as affordable housing, small business incubators, and creative and collaborative spaces, are central to the future use of properties that have served and benefited from communities for generations,” the report submits. “Such initiatives can be supported by all orders of government: municipal, regional, provincial, and federal.”
The complete text of Sacred Spaces, Civic Value: Making the Case for the Future of Faith-Built Assets can be found at https://canurb.org/ publications/sacred-spaces-civic-value.
LIVING DOCUMENT June 2022
PARTNERSHIP PATH
Meaningful Consultation Forges Foundation for Project Success
CALL TO ACTION 92 presents an opportunity for the commercial real estate and land development industry to realize many social, economic and project-specific paybacks linked to respectful relationships and economic reconciliation with Indigenous peoples. Newly released guidance, sponsored by the Urban Land Institute (ULI) Toronto chapter, arises from a three-year initiative exploring the industry’s role in Canada’s truth and reconciliation efforts.
Participants from 33 real estate and affiliated organizations worked with Indigenous advisors and other facilitators to consider what is involved in “meaningful consultation” and “equitable access” to benefits in the context of project development and broader business operations. Those are
key concepts in Action 92 — one of 94 recommendations the Truth and Reconciliation Commission released in 2015 following the national inquiry into the residential schools system — which are also grounded in the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP), to which Canada is a signatory.
“This guide is more than a resource — it’s a call to leadership,” asserts Richard Joy, ULI Toronto’s Executive Director. “It challenges our industry to go beyond land acknowledgements and make reconciliation a living, measurable part of how we build and operate.”
Shared Path Consultation Initiative, a notfor-profit advisory focused on the intersection of land use changes and Indigenous treaty
rights, led a series of workshops that informs the new guidance. Bob Goulais, President and senior principal with Nbisiing Consulting, a firm that facilitates Indigenous relations, was among other key advisors and contributors to the document.
It is organized around four action areas to advance reconciliation: governance and co-development; education; equity and economic opportunity; and relationship building. The guide also provides illustrative insight on Northcrest Developments’ memorandum of understanding (MOU) with the Mississaugas of the Credit First Nation and the process the two parties have undertaken around the redevelopment of the former Downsview Airport lands within Toronto.
ACTION #81 TAKES FORM
The future Indian Residential Schools National Monument (First Nations, Métis and Inuit) is moving into the design selection stage after three years of collaborative work to define objectives and choose a site. The National Centre for Truth and Reconciliation and Canadian government are now seeking new steering committee members to guide the next steps, which will also include the development of outreach materials and on-site programming.
“Survivors and intergenerational survivors hold the truths that this country must never forget. Their voices are essential in shaping this monument — not just as a place of remembrance, but as a living testament to strength, resistance and the ongoing journey of healing,” says Stephanie Scott, Executive Director of the National Centre for Truth and Reconciliation.
Like the inaugural steering committee, which has now completed its mandate, the new steering committee will be composed of First Nations, Métis or Inuit attendees of residential schools, or their children. They will have a two-year term to build on the foundation the predecessor steering committee forged for the monument, which is meant to give form to the Truth and Reconciliation Commission’s recommended Action #81.
That recommendation calls on the Canadian government to commission and install a highly visible monument in Ottawa, to be conceived in collaboration with residential school survivors, their organizations and other stakeholders. It will formally be known as the Indian
Residential Schools National Monument (First Nations, Métis and Inuit) to preserve the historical truth of how “Indian” was understood and perceived within Canadian legislation and society, and is intended to:
• educate about Canadian government and church-led efforts to erase Indigenous culture;
• honour the children who died, often without notice given to their families, while sequestered in residential schools;
• provide spaces for reflection, gatherings and ceremony; and
• celebrate the cultures, strengths and resilience of First Nations, Métis and Inuit peoples, and their contributions to Canada.
The monument will be located on the ancestral lands of the Algonquin Anishinabeg Nation on the west terrace of Parliament Hill. The site was chosen with consensus from the Algonquin Anishinabeg Nation, whose Elders bestowed a blessing in a special ceremony.
“The Indian Residential Schools National Monument (First Nations, Métis and Inuit) is a response to a profound truth in our shared history, one that calls for remembrance, accountability and healing,” affirms Steven Guilbeault, Canada’s Minister of Canadian Identity, Culture and Official Languages.
More information about the National Centre for Truth and Reconciliation can be found at https://nctr.ca.
“Our hope is that this guide is used as a tool to foster more collaboration and inclusion of Indigenous voices across the land development industry,” observes Carolyn King, President and board chair of Shared Path. “We see it as a tool to inspire corporate Canada to embrace true collaboration, co-development and Indigenous leadership.”
RELATIONSHIP BUILDING
Users of the guide are advised to look inward, to educate themselves and their employees, find ways to incorporate Indigenous perspectives into decision-making and make efforts to learn about the specific First Nations and/or Metis or Inuit group or groups with whom they’re seeking to engage. There are a range of resources that can help
companies on this learning journey, and many of the suggested elements to help the commercial real estate and development industry fulfill Call to Action 92 are relevant to more than one of the four proposed action areas.
An understanding of UNDRIP and its concept of “free, prior and informed consent” and Section 35 of Canada’s Constitution Act, which affirms the rights of Indigenous peoples, are essential to engagement and reconciliation. Companies are also advised to consult documents like the National Indigenous Economic Strategy (NIES) and various Band Councils’ websites and publications, and to examine the commitments and action steps that government bodies, other industry associations and public interest organizations have made.
Relationship building and fostering equity and economic opportunity are largely parallel steps that require inclusivity within real estate organizations and a willingness to provide technical supports and financial arrangements that could enable Indigenous partners to attain an equity stake in projects.
That also means employing Indigenous workers, suppliers and service providers. Given that Indigenous peoples make up roughly 5% of Canada’s population, it’s suggested this could be a starting target for company-wide procurement and hiring, regardless of any project-specific considerations.
In associated advice, Goulais reiterates that relationships differ from deals, and the best ones involve interaction that is respectful, meaningful and collaborative.
“Far too often, the only time Indigenous people hear from the Crown, municipalities, agencies or proponents is when they need something from us. We need to begin the practice of developing relationships first, long before we need them,” he maintains. “Relationships serve us well when undertaking challenging projects or situations.”
BENEFICIAL COLLABORATION
Notably, the MOU between Northcrest Developments and Mississaugas of the Credit First Nation (MCFN) evolved from two formative years of relationship building and two subsequent years of joint work on the tenets of the agreement. The resulting MOU outlines the two parties’ shared agreement on their commitments and responsibilities, which are tied to strategic objectives, work plans and accountability measures.
This establishes expectations and sets the course for MCFN to participate in and gain economic development benefits from the massive redevelopment project. That also includes the integration of MCFN history and culture into the project design, landscape and on-site features and events programming. The MOU is not legally binding, but is defined as a “clear point of reference” for a
mutually beneficial working relationship.
“Proactive and collaborative problemsolving through early engagement allows Indigenous Peoples and companies alike to avoid disagreements and potential conflicts later in a project’s lifecycle,” the guidance document states. “It is a risk mitigation strategy with many additional upsides like equity partnership and procurement.”
INDIGENOUS PARTNERSHIPS ON INFRASTRUCTURE AGENDA
Canada’s leadership has endorsed Indigenous ownership stakes in energy and infrastructure projects, underscoring that they will be pivotal to economic development and national cohesiveness.
A First Ministers’ statement, representing the Prime Minister and the 13 provincial/ territorial Premiers, sets out five key principles for major projects, including that they should rank as high priorities for Indigenous leaders and draw on clean technologies and sustainable practices.
“First Ministers also agreed to build cleaner and more affordable electricity systems to reduce emissions and increase reliability toward achieving net zero by 2050,” the June 2 statement affirms. “In order to generate economic and social benefits, this work must be done by bringing together the right conditions, including Indigenous equity and participation, and deferring to provincial and territorial environmental assessments, where applicable.”
This follows soon after the federal Speech from the Throne confirmed the doubling of backstop funds available through the federal Indigenous loan guarantee fund, which will expand that pot to $10 billion. As well:
• the 2025 Manitoba provincial budget outlined plans for a new $300-million Indigenous loan guarantee program;
• the 2025 Ontario provincial budget announced a $3-billion Indigenous opportunities financing program to replace an existing $1-billion loan guarantee fund; and
• Newfoundland and Labrador’s Finance Minister reiterated in her 2025 budget address that the new Newfoundland and Labrador Hydro and Hydro-Québec memorandum of understanding (MOU) for the Churchill River’s energy resources would present economic opportunities for Indigenous peoples.
In sync with those initiatives, the First Nations Major Projects Coalition (FNMPC) released a primer on Indigenous-owned electrical utilities earlier this spring. The Coalition’s more than 170 members — including elected councils, hereditary Chiefs, Tribal Chiefs and development corporations affiliated with First Nations — are focused on project development and/or facilitating ownership stakes for host communities where resource/infrastructure projects are located on First Nations’ lands.
That’s currently taking form in 18 projects, located in British Columbia, Alberta, Yukon, Northwest Territories, Ontario and Newfoundland and Labrador, collectively totalling more than $45 billion worth of investment.
The new primer highlights the role Indigenous equity partners could play in generating low-carbon electricity and expanding the transmission grid to help meet national and provincial/territorial expectations for future power needs. However, Canada’s fragmented and often restrictive regulatory landscape poses some obstacles. Provinces/territories hold authority over electricity generation, transmission and distribution within their borders, creating a patchwork of differing rules and market structures across Canadian jurisdictions.
All markets have at least some monopoly elements, which constrain how prospective producers sell to customers and gain access to the transmission grid, but Indigenous project developers face some extra complications. The federal government holds the title for and retains regulatory oversight of reserve lands, depriving First Nations of collateral for raising project capital and the standard approvals path.
“This regulatory gap can make it harder for some First Nations to form or
The full text of Answering the Call to Action 92: A Guide for Truth and Reconciliation in Corporate Responsibility and Land Development can be found at https://toronto. uli.org/getinvolved/truth-and-reconciliation/. More information about the National Indigenous Economic Strategy can be found at https://niestrategy.ca.
regulate utilities because the regulatory and legislative structures do not exist at the federal level and provincial laws may not extend to federal lands,” the FNMPC primer observes. “Financing challenges are a significant barrier to Indigenous equity participation in infrastructure projects in Canada. The Indian Act has long prevented Indigenous nations from access to capital for investment and economic development.”
Indigenous participation was likewise identified as a must-have, along with speed, reliability and affordability, for ensuing the electricity system can support the electrification of heating, transportation and industrial processes that is envisioned in Canada’s goal for reducing greenhouse gas (GHG) emissions. The 2024 final report from the Canada Electricity Advisory Council, a 19-member expert panel tasked with exploring how best to decarbonize the electricity grid, underscored the need for infrastructure and the expectation that much of it will be built on Indigenous lands.
“Ownership of assets, revenuesharing agreements, equity partnerships, job creation and supplychain opportunities contribute to the economic well-being of Indigenous communities and allows them to assume a stronger role in decisionmaking,” the report states. “Indigenous participation also supports the diversification and growth of the Canadian electricity sector, while enhancing certainty and decreasing risk. In remote regions, this approach can also help reduce reliance on dirty and expensive diesel.”
More information about the First Nations Major Projects Coalition can be found at https://fnmpc.ca.
