F O R B U I L D I N G O W N E R S , A S S E T A N D P R O P E RT Y M A N A G E R S
VOL. 32 NO. 2 • MAY/JUNE 2017
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TEL: (416) 512-8186 • FAX: (416) 512-8344 Published and printed eight times yearly as follows: March, April/May, June, Aug/Sept, Oct, Nov/Dec by MediaEdge Communications Inc. 5255 Yonge St., Suite 1000, Toronto, Ontario M2N 6P4 (416) 512-8186 Fax: (416) 512-8344 e-mail: circulation@mediaedge.ca Subscription Rates: Canada: 1 year, $60*; 2 years, $110* Single Copy Sales: Canada: $12* Outside Canada: US 1 year, $85 International $110 *Plus applicable taxes Reprints: Requests for permission to reprint any portion of this magazine should be sent to info@mediaedge.ca. Copyright 2017 Canada Post Canadian Publications Mail Sales Product Agreement No. 40063056 ISSN 0834-3357 Authors: Canadian Property Management Magazine accepts unsolicited query letters and article suggestions. Manufacturers: Those wishing to have their products reviewed should contact the publisher or send information to the attention of the editor. Sworn Statement of Circulation: Available from the publisher upon written request. Although Canadian Property Management makes every effort to ensure the accuracy of the information published, we cannot be held liable for any errors or omissions, however caused. Printed in Canada
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editor’snote SLY TITLES FOR LEGISLATION appear to be the new fashion in political assemblies across the country. Perhaps reacting to polling data that reveals the electorate values accountability, prosperity, stability and other qualities generally associated with leading good lives, the spindoctors are proactively weaving such words into policy documents. Ontario demonstrates this trend through two recent provincial government initiatives brazenly labelled with the antonym of bias and guile. The new policies amount to a package of tax measures for housing and some electricity price adjustments so their alleged ability to undo wrongs is certainly yet to be proven, but, in any case, this fairly pathetic effort to manipulate voters' nobler sentiments will not be given headway in Canadian Property Management or on the REMI Network. Instead, we'll continue to paraphrase potentially misleading titles to sidestep not-so-subliminal messaging. In contrast, Alberta's Specified Gas Emitters Regulation might have been named to appeal to the latent 12-year-old in all of us. It's probably understandable if unfamiliar readers conclude it applies to some public transit riders, but it, too, figures in electricity prices. Fossil-fuel fired power plants — which, in Alberta, means both coal and natural gas — are among the regulated emitters mandated to purchase carbon allowances. This issue's Focus on energy management reports on political developments in both provinces that have repercussions for commercial real estate. In Alberta, building owners/managers are getting a first look at the energy efficiency incentives that were promised as part the new carbon pricing system. In Ontario, there are still more machinations around the enigmatic Global Adjustment. Elsewhere, the Manitoba government is preparing to launch a new Crown agency to oversee demand-side management of electricity and natural gas, while leaving options open to add future programs for water and transport fuel. Our retrofit case study also comes from western Canada, where Rebecca Melnyk finds impressive paybacks at Saskatoon's Royal University Hospital. In tune with legislators' tactics — or more likely explaining why the public doesn't fall for them — we examine the psychological motivations for conservation. Researchers found that public engagement campaigns more successfully prompt sustained behaviour change when participants reap intrinsic rewards like a sense of satisfaction, pride or higher purpose. That calls for more than just a word game.
Barbara Carss barbc@mediaedge.ca @BarbaraCarss
contents
Focus: Energy Management 6
Rebates on Efficiency: Alberta's promised conservation incentives begin to roll out.
12 Peak Adjustments: Large commercial customers are newly eligible for Ontario's Industrial Conservation Initiative, but it's not a straightforward decision. 17 Psychology of Saving: Engagement strategists leverage the intrinsic appeal of energy efficiency. 18 Low-carbon Innovation: Generation, transmission and distribution are becoming more costcompetitive. 26 Retrofit Paybacks: Saskatoon's Royal University Hospital on track to recoup investment through sustained savings.
Articles: 20 Electric Vehicle Chargers: Encouraging space turnover and conflict-free parking accommodations. 22 Environmental Assessment Review: Federal expert panel recommends broadening the scope to cover five elements of sustainability. 28 Property Tax Hit: Ontario municipalities prepare to discontinue partial refunds of taxes paid on vacant space
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ALBERTA LAUNCHES
ENERGY CONSE PROGRAMS First Incentives Largely Focused on Rebates for Lighting Products By Barbara Carss
ALBERTA'S NASCENT FORAY into province-wide energy conservation programs is heavily weighted to rebates on LED lighting and lighting controls. Commercial business operators and broader public sector entities such as health care facilities, schools, universities and colleges can claim for partial refunds of applicable purchases made since March 24 of this year. These include 45 designated lighting or lighting control products and a smaller number of furnace/boilers, water heaters and variable frequency drives for pumps and motors. Condominium corporations and rental housing landlords could also see some marginal benefits from a smaller selection of free product giveaways for the residential sector. Condo corporations qualify for LED replacements of 60-Watt incandescent bulbs in common areas, while all buildings that are bulk metered for electricity and/or water stand to gain if unit owners or tenants take
advantage of the offered LED bulbs and nightlights, advanced power bars, smart thermostats, and water-efficient shower heads and faucet aerators. Funding for both these initiatives and other elements of the prov i ncia l conservation program comes from Alberta's carbon levy. The coordinating agency, Energy Efficiency Alberta, and its five-year $645-million budget, were among the ameliorating measures the Alberta government promised as it unveiled its carbon pricing strategy in the spring of 2016. Consumers have been paying the levy — currently adding an extra $1.01 per gigajoule (GJ) on natural gas purchases — since January 1. The energy efficiency incentives are now becoming available. CAPITAL BUDGET CONVERSATIONS The complete list of eligible products was just posted in mid-May, but commercial and institutional owners/managers were given a
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broad outline of the pending rebates earlier this year and advised to keep their receipts. Rebates for lighting and controls will be allocated per bulb/fixture/sensor, ranging from $1.50 per bulb for LEDs to replace incandescent bulbs in small general service lamps up to $300 per fixture for outdoor LEDs with an output of 15,000+ lumens. Rebates for heating equipment and variable speed drives are calculated on a $ per installed heating capacity or horsepower basis. "I think there will be a high take-up for the lighting incentives," predicts Julien Poirier, a Project Manager with the engineering consulting firm, WSP Group. "We're working with a lot of property managers here in Calgary and elsewhere in Alberta. When we do energy audits and list the measures that will require some capital investment, lighting tends to be at a point either just outside the payback requirements or it's the case that the tenant, not the
MANITOBA TO LAUNCH EFFICIENCY AGENCY
ERVATION
property manager, controls the lighting. I think this will be an opening to get lighting upgrades into the capital budget or at least get the conversation going." In the absence of incentives, current LED technology typically promises a three- to seven-year payback. "Once we start pushing beyond a five-year payback, the conversation won't go very far," he acknowledges. The array of rebates also presents options for buildings at different stages of their capital programs. Poirier notes that owners/ managers who are reluctant to replace lamps and ballasts after a relatively recent upgrade from T12s to T8s may be more open to a straightforward bulb replacement. For once-in-a-generation purchases, the rebates offered for both condensing and near-condensing boilers could help make the business case for a costlier investment that delivers a higher level of efficiency. Would-be investors may not want to ponder too long before submitting their
applications given that there is just $13.3 million in the rebate kitty for the first year of the program — 38% less than what's been earmarked for product giveaways in the residential sector. It's expected rebate recipients will kick in approximately $15 million for their share of product costs, and this will deliver nearly $33 million in energy savings over the life of the measures. Program designers foresee somewhat lower returns from the free product giveaways with a $21.5 million year-one investment garnering about $28 million in energy savings. QUICK PAYBACKS PRIORITIZED Rebates are also offered on a range of products for residential households — from low-cost clotheslines and dimmer switches to big-ticket items like insulation, windows and tankless water heaters — to complete Energy Efficiency Alberta's inaugural trio of programs. As explained in the provincial
The Manitoba government's plans for a Crown corporation to oversee energy conservation took many observers by surprise when Bill 19, the Efficiency Manitoba Act, was tabled in early March. The move, based on a 2014 recommendation from the provincial Public Utilities Board, skirts Manitoba Hydro's longstanding role in promoting demand-side management to establish distinct new oversight for the development and implementation of electricity and natural gas savings plans. As proposed, the new agency would be responsible for meeting targets to reduce province-wide electricity consumption by 22.5% and natural gas consumption by 11.25% over a 15-year period. This would be achieved through a series of three-year efficiency plans outlining demand-side management initiatives to be pursued, and backed up with cost/benefits analyses and projections for greenhouse gas (GHG) reductions. The legislation also includes leeway for the agency to take on responsibility for water conservation and demand-side management of fossil fuels used in transportation. "The proposed Efficiency Manitoba Act would set out the structural, reporting and operational details of a new demand-side management Crown Corporation," Ron Schuler, the Minister of Crown Services, explained as he introduced the Bill for first reading. "Creating an organization dedicated to energy conservation and clean growth opportunities will allow us to invest more in energy efficiency, building on Manitoba's clean, green energy advantage." Manitoba Hydro will provide operational funding for the new agency, which, the Bill's explanatory note states, is "in recognition of the benefits received by Manitoba Hydro from the efforts of Efficiency Manitoba". Toward this end, the legislation provides the authority to implement on-meter financing to allow Manitoba Hydro and its customers to negotiate loan agreements for energy efficiency upgrades. Loans would be registered on the property title and repaid via special monthly hydro charges. (The City of Toronto uses a similar approach for its High-rise Retrofit Improvement Support program, recouping funds the city has advanced to project proponents through a special charge on the owner's property tax bill.) "This is a good financing solution to spread costs to future owners, who will also be receiving the benefits," observes Andrew Pride, a consultant specializing in energy management and strategic conservation planning. Committee hearings on the proposed Act were completed in late May with third and fourth readings in the Manitoba legislative assembly still to follow.
www.REMInetwork.com | May/June 2017 7
energymanagement government's underpinning strategy document, Getting it Right: A More Energy Efficient Alberta, the product rebates and a related fund to subsidize businesses and homeowners installing small solar photovoltaic systems, have been prioritized for their ability to del iver ea rly results a nd build momentum. "Collectively, these four programs have a relatively quick speed to launch and they are considered cost-effective in both reducing emissions and saving
consumers' money," states the report released in the fall of 2016. "Each program would include significant elements of education and outreach, included as part of the detailed design work prior to launch." However, some real estate industry insiders say they're ready for something a little more sophisticated. "There's a built-in incentive to reduce carbon in our industry because landlords are really the ones paying the cost of heating, electricity and water," asserts
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David McIlveen, Director of Community Development with Boardwalk Rental Communities, which houses about 45,000 tenants in the province. "In the past three years, we have spent more than $3 million on energy reduction, just in Alberta. We've already done most of the things the rebate covers so we're paying a carbon tax to provide an incentive that we can't use." A more comprehensive selection of incentives has been hinted at for the future, which would likely be similar to those offered in other jurisdictions with funding for energy audits, customized retrofit measures and programs to find savings through operational efficiencies. However, in a province where electricity utilities have previously been statutorily prohibited from offering incentives for energy efficiency, it isn't necessarily just the consuming public that's on a learning curve. "To get to the level of programs you see in British Columbia or Ontario, your staffing levels have to go up and you have to have the knowledge base to meet the demand for services," Poirier says. ENVIABLE FEATURES Alternatively, the relative simplicity of Alberta's initial approach comes with some potentially enviable features. Product giveaways may help ease the perennial dilemma of split incentives in the multiresidential sector, as neither landlords nor tenants will have cause to perceive they are making expenditures largely for the other party's benefit. Perhaps even more tantalizing from the perspective of building owners/managers in Ontario, Albertans can purchase products and submit applications for reimbursement later — a marked contrast to Ontario's requirements for approval ahead of action. "That's the difference between most electricity ratepayer programs versus taxpayer focused programs," reflects Andrew Pride, a consultant specializing in energy ma nagement a nd st rategic conservation planning. "Alberta's programs are funded from carbon levies, which operate like taxpayer funding. When utilities deliver ratepayer programs, they typically are required to measure their influence on achieving the savings, which tends to mean more complicated application processes. As carbon programs mature, I would imagine the rigour around influence and attribution of savings will increase." zz For more information, see the Energy Efficiency Alberta website at www.efficiencyalberta.ca.
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SPONSORED CONTENT
race A BOMA Toronto Initiative
BOMA TORONTO AND TORONTO HYDRO PARTNER TO RUN RACE2REDUCE Building on the legacy of the former program, BOMA Toronto showcases commercial real estate excellence
T
he award-winning Race to Reduce, a regional program that challenged commercial buildings to reduce their energy consumption over a four-year period, concluded in 2014. This year, BOMA Toronto has given the program new life with the generous support of Toronto Hydro. Rebranded as race2reduce, the enhanced program will carry on the legacy of the former Race and build on its success. “BOMA Toronto had been a strong supporter of the former Race from its inception. Given the significant overlap between the target audience of the former Race and our membership, there was great interest from our Board of Directors and the general membership to continue this fun yet competitive corporate challenge to promote and drive energy efficiency and enhanced building performance in the Commercial Real Estate (CRE) Industry,” says Susan Allen, President and CEO of BOMA Toronto.
LAUNCHING A NEW AND IMPROVED PROGRAM BOMA Toronto’s race2reduce will target a 10 per cent collective reduction over three years. Buildings will compete to win prestigious, best-in-class awards that are assessed on an annual basis. Categories will include Greatest Electricity Reduction, Innovation and Tenant Engagement. The goal is to build on previous participation, which represented more than 42 per cent of the region’s commercial office sector. At the same time, a new mandate for this race will be increasing participation among the city’s mid-tier buildings, those known as Class B and C. The program officially launched on June 6th, 2017, at Toronto’s TD Centre, with over 60 buildings from more than a dozen key landlords and property managers registered. Bala Gnanam, Director of Sustainable Building Operations and Strategic Partnerships at BOMA Toronto, notes that for this race, BOMA Toronto has the support of the landlords that anchored the previous race.
Collaboration was an integral component of the first Race and BOMA Toronto will continue to focus on that element while exploring creative ways to keep the participants engaged and drive additional value to their assets. A big aspect of that is the program’s visibility. “As a result, we wanted to rebrand in a way that people would understand it was building on what the previous race had accomplished, while being recognizable and having its own unique brand,” says Gnanam. “That’s why we chose to stick with the original name. Our new unique logo was designed to include blue sky imagery which can have multiple meanings in terms of innovative thinking, but also carbon reduction.” While aspects like collaboration and collective targets will remain the same, there are many key differences between the race2reduce and its predecessor. BOMA Toronto plans to make reporting of consumption data easier, with the ability for buildings to have data submitted directly to the race from Toronto Hydro. Other areas of enhancement include the
Register for the race now!
The race is on. Join now. race2reduce.bomatoronto.org
measurement and verification of savings, awards and categories, a streamlined enrollment process, and tracking and reporting systems. EXPANDING OPPORTUNITIES Another key differentiator of this race will be the targeting of Class B and C buildings in the city, ones that may not have been as historically active on the energy management front. “The bigger players have been leaders in energy management and have already put into place robust energy management programs,” says Gnanam. “With them we want to look at some innovative approaches that will move the needle in terms of energy reduction. At the same time, the sheer volume of Class B and C buildings provides tremendous opportunity.” Smaller Class B and C buildings provide great opportunities for ‘low-hanging fruit’ energy savings. Kyle Pinto, Program Manager of race2reduce notes, “Countries like Australia have successfully worked
with their mid-tier class to adopt energy efficiency best practices. It’s been shown that when perceived barriers are addressed, not only do energy savings accrue, but tenant complaints and maintenance costs are reduced and temperature problems are resolved faster.” SOMETHING FOR EVERYONE Constant engagement will be key for the newer buildings that participate, and the race team is ensuring that the appropriate tools are available to get them get ramped up with the race2reduce. On the flip side, the Class A buildings that were leaders in the first race are already running at full tilt. They need very little to participate and are already undertaking best-in-class energy management practices when compared on a global scale. Where the race can benefit these participants is in working to continually move forward collaborative efforts between the landlords and their tenants. “Our various engagement events and awards will specifically recognize tenant
engagement and provide a platform for landlords to get in front of their major tenants in a new light,” says Pinto. When all tenant dialogue focuses on topics like temperature complaints or lease negotiations, there is a different type of conversation that happens. With innovative forums facilitated through race2reduce, synergies can be realized that translate into huge steps forward for landlord and tenant relationships. This in turn provides more opportunities to work together on energy savings and achieve the broader goals of the race2reduce. “We’re very excited to have launched the new and improved race2reduce. It’s a fun challenge but it also addresses the need to continuously improve building performance, reduce environmental impacts, and add value to the CRE Industry,” adds Pinto. For more information on the race2reduce and to register online, visit: race2reduce. bomatoronto.org.
For more information, please visit race2reduce.bomatoronto.org.
ONTARIO AWAITS ELECTRICITY COST ADJUSTMENTS Many Large Commercial Customers Face First-time Decision By Barbara Carss
THE ONTARIO GOVERNMENT’S promised electricity cost adjustments have transformed a projected 3% increase into a 17% reduction for the average residential customer. New rates kicked in May 1, shaving 2.8 cents per kilowatt-hour (kWh) off the price that the Ontario Energy Board would have otherwise pegged for on-peak power consumed between 11 a.m. and 5 p.m., and 1.4 cents/kWh from the lowest priced, off-peak rate between 7 p.m. and 7 a.m.
Potential savings for commercial ele c t r ic it y c u s t o m e r s a r e m o r e diff icult to qua ntify, but May 1 represents something of a watershed for them also. Many owners/managers of larger office buildings and shopping malls are facing a first-time decision about joining the Industrial Conservation Initiative (ICI), while newly expanded eligibility for the program’s perks may be even more punitive for smaller customers on the losing side of cost redistribution.
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Previously, as the name suggests, industrial customers were the majority of pa r ticipants since program r ules essentially disqualified all but very large commercial facilities — typically at least 1 million square feet — and/or buildings that house data centres. Now, with the threshold for eligibility reduced to a monthly peak demand of 1 megawatt (MW), energy management specialists advise most office towers in the range of 350,000 square feet would meet ICI entry requirements.
energymanagement
“It presents a great opportunity,” Bala Gnanam, Director of Sustainable Building Operations and Strategic Pa r t n e r sh ip s w it h t h e Bu i ld i ng Owners and Managers Association (BOMA) of Greater Toronto, told attendees at a recent sem ina r to examine some of the possibilities. “We foresee that many of our members could end up saving hundreds of thousands of dollars, but, at the same time, there is confusion about it in the marketplace.”
That perhaps parallels the confusion surrounding the Global Adjustment — the largely opaque bucket of costs that ICI participants can mitigate through curtailment of electricity consumption during periods of high demand. While Gnanam describes the Global Adjustment (GA) as “one of the most difficult costs to understand”, its impact on electricity bills is easy to see. In the 10 years between 2006 to 2016, it soared from a province-wide monthly average of $54.5 million to more than $1 billion, equating to a 1,786% increase.
SUMMER 2016 SETS AGENDA May 1 marks the beginning of a new benchmark year for the ICI program, although a few other key dates are also in play. This is a time for current and prospective new participants to look back at their electricity loads during the five identified hours between May 1, 2016 and April 30, 2017 when the highest province-wide demand was recorded. Local distribution companies (LDCs) will be required to supply this information no later than May 31 so that eligible customers can meet a June 15 deadline for opting in. Those who choose to do so will be designated as Class A customers. As such, their monthly share of the GA from July 1, 2017 to June 30, 2018 will be calculated with a consistent mathematical factor, derived from their energy demand during the five peak hours in the 2016-17 period. Non-participants remain in the vaster ranks of Class B customers, paying the GA on a volumetric per-kWh basis. Commercial electricity customers won’t necessarily be making their inaugural decision from a position of strength. It’s commonly acknowledged that it is easier to curtail power consumption in industrial operations, where production can be shut down with www.REMInetwork.com | May/June 2017 13
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Newly expanded eligibility for the program’s perks may be even more punitive for smaller customers on the losing side of cost redistribution. relative ease, than in office towers or shopping malls, where energy demand tends to rise in step with the peaks. “Our analysis of dozens of properties suggests that commercial properties with mechanical cooling that operate during normal business hours will not benefit by opting in as Class A customers,” reports Neal Bach, President of the energy data management and consulting fir m, Energy Profiles Limited. Moreover, when the 2016-17 peaks occurred — on July 13, August 10, 11 and 12 and September 7 — commercial customers in the 1 to 5 MW range weren’t aware that they’d be deemed eligible for the program. By the time the
O nt a r io gove r n m e nt m a d e t h e announcement on September 13, 2016, they’d missed the window for knowingly strategizing. Nevertheless, the generally disadvantageous allocation of costs to Class B should prompt all potential Class A customers to consider their options. CLASS A TO B REDISTRIBUTION Customers who don’t qualify for the program are the subsidizers of ICI beneficiaries. After Class A customers’ Global Adjustment is calculated each month, the remainder of the costs is simply apportioned to the Class B base. In 2016, this worked out to an average of 9.75 cents/kWh.
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“Theoretically, if the majority of Class A customers don’t have a good peak demand factor, Class A would actually pay more and Class B would get a break, but I don’t think that’s going to happen,” observes Scott Rouse, Managing Partner of the consulting firm, Energy@Work. Ultimately, energy efficiency is Class B’s best and perhaps only defence. “The more electricity you use, the more Global Adjustment you will pay,” Janet Young, a communications advisor with Ontario’s Independent Electricity System Operator (IESO), reminded seminar attendees. Buildings connected to Toronto’s deep lake water cooling network could be particularly good candidates for Class A. “Deep lake water cooling decreases electricity over traditional cooling by 90 per cent. On peak days, there are no chillers running,” Richard Palu, Director of Partnership Development with the system operator, Enwave Energy Corporation, told the gathering. Beyond this niche of potential winners, Rouse offered some past examples of large customers that have seen rewards or suffered losses based on their choices. Typically, facilities that have relatively consistent energy demand will achieve better results in Class A than buildings in which demand rises and falls throughout the day. Because the peak demand factor used to calculate Class A costs lags real time by about a year — i.e. demand during the peak hours of summer 2016 determines Class A’s share of the GA in 2017-18 — changes in occupancy could also inf luence outcomes. If an energyintensive tenant like a data centre has moved in since September 2016, Class A status should translate into lower electricity costs than Class B. If there has been a significant and sustained loss of occupancy since September 2016, Class B could be more cost-effective. “Some people don’t consider what their future operations profile may look like,” Young said. “In the end, this is a
energymanagement business decision. It’s hard to say that this (Class A) would be good for all offices across Toronto.” Eligible customers are required to annually state their intention to participate by the prescribed date in June so it is possible to switch classes at that time. Ontario’s Minister of Energy also has the discretion to allow a Class A customer to withdraw from the program, but that is likely to occur only in extraordinary circumstances such as an unforeseen calamity. The financial consequences of simply making the wrong decision will have to be borne for the full annual term. RELIEF MEASURES STILL UNCLEAR Currently, it’s still unclear how the Ontario government’s new hydro rate strategy will flow through to non-residential customers. Some previous components of GA costs — the Ontario Electricity Support Program and the Rural or Remote Rate Protection Program — will now be funded via general provincial revenues, which, the Ministry of Energy states will “provide savings” for all electricity ratepayers. Other cuts reflected in the new residential/small business rates may not be shared so universally. In an April 10 letter to the Ontario Energy Board, Energy Minister Glenn Thibeault gave instructions for approximately $2.5 billion in GA relief for the period of May 1, 2017 to April 30, 2018 “to benefit all Ontario customers that are eligible for the RPP (regulated price plan), including those that have opted out of the RPP in favour of market-based pricing or a retail contract as well as non-RPP eligible customers that are eligible for the 8% rebate (of the provincial portion of the HST).” That would encompass residential, multiresidential, small business and farm accounts, but would not include commercial customers that use more than 250,000 kWh annually. Thus, the Class B Global Adjustment allocation for May is expected to be revelatory. “Is the GA relief going to apply to all consumers, or will it all be allocated to the RPP?” Bach muses. “Or will the RPP decrease be added back into the GA, thereby increasing costs for commercial customers?” zz
MAKING THE CHOICE, PLAYING THE GAMe
The preceding article is reprinted from the REMI Network at www.REMInetwork.com.
Scott Rouse is Managing Partner of Energy@Work. For more information, see the website at www.energy-efficiency.com.
By Scott Rouse What's formally known as the Global Adjustment Mechanism (GAM) functions to bridge the gap between the market price of electricity and various other costs in the system — the largest among these being contracted costs for nuclear generation. Province-wide, monthly GA costs have exceeded $1 billion, and it accounts for approximately 65% of a typical commercial electricity bill. For qualifying customers, there are two major decisions involved in choosing to participate in the Industrial Conservation Initiative (ICI). The first decision is tied to the annual June deadline for opting in as a Class A customer. As with all financial decisions, advance study is advised. The value of Class A or B is not obvious. Past examples show a range of differing outcomes, with some ratepayers saving hundreds of thousands of dollars when opting into Class A, and others absorbing greater costs for making the same choice. "Class A GA costs are based on the customer’s portion of the total Ontario Demand (MW) used during the top five provincial demand peak five hours. The five hours must occur on discrete days during a designated 12-month period. The resulting ratio, which is sum of the five peak demand hours divided by Ontario’s demand determines the customers unique peak demand factor (PDF). Their monthly GA contribution is then determined by multiplying the monthly provincial GA cost by their PDF," explains Erika Rose, an energy analyst with the consulting firm, Energy@Work. "Class B is a straightforward rate ($/kWh) that is set each month and applied to the building kWh for that month." After making their choice, commercial customers next need a strategy for moving forward. Class A customers can be proactive to cut consumption during the five peak hours to reduce their peak demand factor for the next 12-month period — reducing future electricity bills. Large industries have been doing this since ICI was introduced and have gained considerable insights on how to play the GAMe. Class B customers will need to focus on energy efficiency, which is central to curbing a cost applied on a per-kilowatt-hour basis. However, large customers should also consider shadowing Class A — i.e. monitoring the peaks and looking for ways to reduce consumption at those times — to keep their options open for switching classes in the future. “If you are Class A, keeping advised on the provincial demand profile is key. It is possible to keep on top of the GA since Ontario is currently in a healthy position with surplus generation available. The five peak hours are occurring in predictable periods, but still require close attention," says Energy@Work's Brad Billingsley, who has experience advising both Class A and B customers. "Preparation makes the GA manageable. Class B’s two-part plan can be as simple or complex as the operating team is prepared to make it.”
www.REMInetwork.com | May/June 2017 15
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May/June 2017
Research challenges current green roof standards
Creating great community facilities
Torrential rain slamming into cities, shutting down roads, bridges, subways and even buildings. Headlines across Canada are awash with this image more and more, especially in older cities like Toronto where aging infrastructure, combined sewage systems and increasing rain events are a perfect storm of conditions for flood damage.
How to create great community facilities was recently discussed during Buildex Vancouver 2017. A panel highlighted a few innovative facilities that have become important gathering places for their respective neighbourhoods.
Infection control downplayed in surface selection Housekeeping staff continue to face many challenges with cleaning and disinfecting healthcare facilities because many environmental surfaces that are purchased don’t meet best practice recommendations under the Provincial Infectious Diseases Advisory Committee.
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The sale of a property in midtown Toronto that closed in January marks Ontario’s first case of unit owners terminating a condo corporation by vote.
Cadillac Fairview ramps up its newest low carbon initiative – a national electric vehicle charging program to add 45 networked chargers at 15 major shopping centres across Canada.
Young investors are looking for a personalized experience in a more relaxed and informal environment than traditional establishments.
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energymanagement
A NUDGE TO ACTION
Engagement Campaigns Set Course for New Behaviour HUMAN BEHAVIOUR is perhaps the most unpredictable variable in energy performance. Building occupants can subvert design intentions or they can proactively find and sustain energy savings. Tenant engagement programs and wider efforts like Toronto's soon to be re-launched Race to Reduce aim to encourage the latter — striving to trigger the right combination of leadership, peer pressure and social acceptance that turns energy-conserving practices into the status quo. Researchers from the Pacific Institute for Climate Solutions recently conducted a historical review to examine how various types of engagement campaigns align with psychological theories of what motivates people to act and/or alter their actions. Drawing from four decades of program evaluations, the researchers conclude that it is possible to nudge consumers in new directions, either through relatively basic mass tactics or strategies targeted to a specific interest group. Both approaches can have intrinsic appeal for participants — imparting a sense of satisfaction, higher purpose or pride — which reinforces new habits. This adds another dimension to conventional carrot-and-stick tactics of offering incentives and/or applying penalties. Program participants who have adjusted their personal perceptions are less likely to revert to earlier behaviour when external influences, which psychologists call extrinsic motivators, cease to be a factor. "Providing tailored infor mation, soliciting commitment (i.e. pledges), recruiting leaders from within social networks, giving feedback and using a variety of other social inf luence strategies can effectively increase climate-friendly behaviour," advise the researchers, Reuven Sussman, Robert Gifford and Wokje Abrahamse. "We recommend that programmers work with environmental psychologists or other social
scientists to design behaviour change programs that target specific behaviours within specific populations."
benefits. That rationale has demonstrably supported energy efficiency in the commercial real estate sector.
WIDE NET TO NARROW FOCUS Looking at programs that cast a wide net, electricity and gas utilities typically have the data and market presence to reach susceptible adherents through unsolicited advice and automatic enrolment in informal benchmarking exercises. The researchers define this as "energy-use feedback and comparison strategies" — generally taking the form of individualized reports on energy use, comparisons to other unidentified customers, energy-saving tips and information about available incentives. Customers who are open to guidance and/or those who are inspired to compete with others in their comparison pool are the target audience. Perhaps because they are often perceived as impersonal institutions, utilities can take an instructional tact that might seem intrusive in other contexts. However, the sheer scale of utilities' client base is a major factor in such programs' success, delivering valuable savings even if only a small percentage of recipients respond to prompting. In contrast, community-based programs are more labour-intensive. The researchers cite examples that entail "goal-setting, feedback, and peer-to-peer interactions as well as outreach strategies such as door-todoor canvassing, attending local events and hanging posters in local businesses". Psychological theories underpin the process, as program developers zero in on a particular behaviour they want to change and devise a strategy to do so. Motivation strategies should account for differences in human nature — from people who prioritize self-interest to those who will sacrifice self-benefits for the greater good. Nor should self-interest be demonized, at least in an energy efficiency context, since it is also equated with weighing costs and
SUCCESSFUL STRATEGIES Buy-in from every member of a diverse group is rare, but the researchers highlight some tactics that have been highly influential. Identifying and leveraging a group's leaders, whether they be formal on informal positions, is key to the larger group's acceptance of new ideas or practices. "By comparing themselves to others, people learn what is possible, normal and approved of," the researchers explain. "Block leaders, energy champions and social networks can be leveraged to encourage climate action. The approach is based on the assumption that information provision will be more effective when it is conveyed by someone from within the same social network than from an external organization." Team events or challenges also create an opportunity for social inf luence. "Gamification combines several effective behaviour-changing elements, including feedback, social comparison, extrinsic motivation (prizes) and intrinsic motivation (fun!)," they report. "Simply competing, even without the prospect of a reward, may motivate participants because the activity is fun and challenging and they do not want to lose." After studying forty years worth of examples, the researchers also urge program implementers to pay more attention to how outcomes will be evaluated. When program designers choose behaviours to be targeted, they should also consider how behaviour change will be measured and verified. zz The complete text of Social Mobilization: How to Encourage Action on Climate Change can be found on the Pacific Institute for Climate Solutions website at www.pics.uvic.ca/research/ publications/white-papers www.REMInetwork.com | May/June 2017 17
GAINING GROUND ON FOSSIL FUELS Emerging Technologies Could be Market Changers Recent research from Lloyd's Register tracks the low-carbon energy sector's progress to economic competitiveness. The survey of 583 global players in renewable and nuclear power gleaned their insight on generation, transmission and distribution technologies to watch. The following is an excerpt – Editor. IT WASN’T SO LONG AGO that the viability of low carbon power was inextricably linked to the oil price: the lower the cost of fossil fuels, the less likely clean energy uptake seemed. In recent times, however, the low carbon sector has broken this link. Despite the drop in the oil price, clean energy attracted $325 billion in investments in 2015 – a new record. Also, for the first time, developing countries attracted a greater share of this capit a l, wh ich suggests t hat environmental goals no longer have to be traded off for economic development. Survey respondents were asked to rate a number of technologies in terms of their potential impact on the low carbon sector, the amount of time it will take for these
technologies to hit the market, and how likely they are to be adopted once they do. RENEWABLES Solar cell advances are viewed as the innovation most likely to be adopted in the short term by the renewables sector. Research teams around the world are competing to improve photovoltaic (PV) design. Extending the durability of perovskites – which can be painted or sprayed on to surfaces of solar cells – is a major focus of this work. This compound is thinner and cheaper to manufacture than the silicon crystals widely used in the PV cells currently on the market. The photothermal process — which enables both the light and heat from the sun to be captured and converted into
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electricity — is also edging closer to commercialization. MIT published a groundbreaking study in 2016 proving that solar thermophotovoltaics (STPVs) could outper for m the traditional maximum efficiency of solar cells, which is now slightly more than 30%. Thus, a given area of panels would theoretically be able to produce twice as much power as the current output. Survey respondents also view advances in wind turbine technology favourably, but were less sure they would get to market quickly and/or be widely adopted. Many of the innovations currently being developed are incremental improvements on current technology. For example: better ways to anchor large offshore turbines; or larger turbines with more generation capacity. This is not expected to cause radical disruption in the field. “With wind turbine innovations, I don’t see ma ny tech nologies in development that would transform the
energymanagement way we connect wind power and transform it into electricity except turbine size increases,” observes Thomas Choisnet, Chief Technology Officer at Ideol. “It took turbine manufacturers a few decades to reach the current level of reliability and quality.” Even though innovators in both offshore and onshore wind have some common development goals — lighter machines and bigger rotors are priorities for both — multiple factors such as NIMBY (not in my backyard) syndrome and a constraint on available land use separates the two sources. Some developed countries have already witnessed a withdrawal of government support for onshore wind, forcing generators to either scrap their projects or look for innovative financing methods — such as co-financing with local communities — to keep them afloat. NUCLEAR Looking at nuclear technology, survey respondents project that small modular reactors (SMRs) will only be seen in the medium term, have a low likelihood of eventual take-up, and will have a low impact when they arrive. Yet, that's not necessarily stopping governments from investigating their potential. “SMR technology could potentially provide flexible low carbon generation, which would complement baseload from larger nuclear plants,” says Tom Greatrex, Chief Executive of the Nuclear Industry Association in the United Kingdom and former shadow energy minister in the UK parliament. “There is a very strong interest in the technology being shown right now and the UK government are running a competition, which might have a quite significant impact in the medium term.” Other forms of the modularization technology that underpins SMRs could hit the market sooner than fully fledged SMRs. "The focus on modular and more efficient construction techniques and building the UK supply chain could make a real difference across the sector,” suggests Daniel Grosvenor, Head of Energy, Advisory Corporate Finance at Deloitte UK. Waste storage innovations and resistant alloys that could extend the lifecycle of nuclear technologies are associated developments deemed to have the greatest potential impact on the sector. The challenges around waste storage are also cited as a major impediment to introducing new nuclear power — ahead of concerns over safety.
BUILDING LOW-CARBON CONSENSUS Buildings, infrastructure and emerging technologies figure prominently in how energy is consumed and conserved, and could present business opportunities as Canada pulls back from its reliance on oil, gas and fossil-fuel-fired electricity. A discussion paper from the Conference Board of Canada, released earlier this year to outline a proposed research program for the new Centre on the Low-Carbon Growth Economy, makes the usual obvious statements about the built environment's role in generating greenhouse gas (GHG) emissions and sets out the typical list of recommended responses. These include codes and standards to shrink the environmental footprint of new construction along with carrots and sticks to push existing buildings to improved performance. Carbon pricing and regulations rank first and second among the policy instruments advocated, but the paper also calls for low-carbon criteria to be integrated into government spending and procurement. It suggests "insufficient consumer, professional, technical, and business knowledge of better practices; financial and risk-capacity constraints; and inadequate price signals" undermine low-carbon options that may, on the surface, appear more costly. It likewise warns that unforeseen policy flaws and the subsequent need for "course corrections" will almost inevitably be an aspect, and a challenge, of any shift in priorities and practices. Across the broader policy spectrum, the new Centre is characterized as both middle ground and largely reflective of Canadians' attitudes. "Societal consensus is building and maturing quickly on the need to reduce Canada’s GHG footprint significantly," the discussion paper states. "However, as is often the case, the debate is at times being polarized by those most at risk of disruption and those with ambitions and high expectations from new opportunities. As a collective, Canadians are still seeking how best to embark on this ambitious journey, with measures to smooth out the transition and promote systemic growth. More consensus-building will be required." Business is seen as an important and influential voice in that effort. The complete text of Shaping the Canadian Low-Carbon Economy can be found at www.conferenceboard.ca/e-library/abstract.aspx?did=8676.
TRANSMISSION AND STORAGE The first ever blockchain energy transaction took place in the United States early in 2016, when a pilot project by US startup LO3 Energy enabled a New York City resident to generate their own solar power and sell it to a neighbour. Over the next decade, blockchain has the potential to tap into the sharing economy and unlock a vast, decentralized energy marketplace. In particular, it opens the way for new market entrants since required expertise is not specifically industry related. “Some of the future innovators or disruptors in transmission and distribution may well be technology companies, rather than utilities or traditional suppliers to the energy sector,” Daniel Grosvenor predicts. High-voltage direct current (HVDC) is another innovation that could improve longdistance transmission and grid infrastructure. For regions struggling with renewable energy overcapacity, such as northwest China, these power superhighways and grids cannot come fast enough. HVDC transmission lines are commercially available and are already supplying power over land and under sea so its foreseen that HVDC grid advances could have a major impact, but they are still a long way from market readiness.
Survey respondents also expect innovations in electrochemical storage to arrive in the short term, but with relatively limited impact. Rather, improved economies of scale with existing batteries could be more promising. For example, Tesla’s ‘Gigafactory’ in Nevada, which is due to start producing in-house-manufactured battery packs, aims to reduce production costs by 30%. This effort alone is projected to boost the North American electric vehicle market by around 60% in 2017. With Tesla also making forays into domestic energy storage through its Powerwall and Powerpack products, there is potential for existing technology to have a huge impact on the energy sector. Supercapacitors to rapidly speed up charging times for large batteries also bears watching. It's estimated the supercapacitor materials market will be worth $5 billion by 2025. Industry experts believe that best energy density within supercapacitors will be achieved before 2030. zz The complete text of Lloyd's Register Technology Radar – Low Carbon can be found at www.lr.org/en/news-and-insight/news/ technology-radar-low-carbon.aspx www.REMInetwork.com | May/June 2017 19
LEADING THE CHARGE Electric Vehicle Drivers Present Market Opportunities By Matthew Bradford STILL WAITING FOR the electric vehicle (EV) fad to fizzle out? It might be time to reassess. The EV market has risen tenfold in the last four years alone, and by 2020, it's projected that one of out every twenty vehicles sold will require a place to plug in. It's not a matter of if the EV movement will pull up to the front door; it's just a matter of when. Drivers are embracing clea ner a nd more cost- ef fect ive alternatives to fossil-fueled vehicles. They're choosing EVs that require less maintenance, leave a smaller ecofootprint, and keep money in their
pockets through tax credits and upwards of $13,000 a year in fuel cost savings. Car manufacturers are responding to this growing market by expanding their EV options. In 2016 alone, big name auto makers introduced more than 27 new EV models ranging from plug-in hybrid electric vehicles (PHEVs), hybrid electric vehicles (HEVs) and battery electric vehicles (BEV). More are expected this year, including fossil fuel options. It's a multi-billion dollar movement that cannot be ignored — as is the fact that more and more EV drivers are leaning on their places of residence and employment to
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accommodate their eco-forward lifestyles. Over and above staying current with evolving regulations and building standards, property owners/managers increasingly perceive that investing in EV-chargers for tenants could be a competitive advantage. “Property managers who take action will enjoy a number of benefits, from increased exposure for EV daily parking, improved amenity infrastructure, greater turnover in their parking lots, the ability to offset costs, and LEED points,” advises Mary Sheridan with Precise ParkLink. According to recent studies, more than 50% of new vehicle buyers are aware of
amenities public charging infrastructure. Among EV drivers, a recent study by CoStar ranked sustainability upgrades as one of t he top consider at ions when choosing a property. Similarly, they ranked LEED certification as the second most important feature renters are willing to pay a premium for, behind location; and that premium is estimated to be as high as 24%. INFRASTRUCTURE OPTIONS Be com i ng E V- r e a d y c a n s e e m intimidating at first. And, for the uninitiated, it can also seem costly. Here's where a little research can go a long way towards dispelling the misconceptions around EV charging investments. First, there are options. Personal chargers, for example, can be leveraged to make individual EV charging stations available to specific tenants, who are then billed independently at the end of the month based on their exclusive usage. Then there are community chargers, which are best suited for spaces like shared parking spots, guest parking and valet areas, where visitors can take turns charging up, and leave the final bill to the property manager. There's also the option of networked stations. These use common power close to parking spaces and cost less to install. As well, since they are connected wirelessly to other EV chargers, they enable advanced usage monitoring and encourage sharing with features like “waitlist”, “overstay pricing”, or "priority charge needs". Networked stations are also more future-proofed, as they are built with the ability to scale to future energy demands and adopt new features with “over-air software” updates. “One issue commercial property management faces is that tenants who drive EVs pay the same monthly amount as other parkers, but receive premium spots that were intended to attract visitor parkers or provide a top-up to tenants. Often, the reality is that EV spaces in commercial properties will see the same tenants parked in the EV spots for the entire day," Sheridan reports. "The networked solution advises the parkers that their charge session is moving from a free or discounted parking rate to a premium rate, and this helps avoid abuse. The notification module ensures monthly parkers are treated equally and property managers achieve their convenience objective.”
Studies show that installing EV chargers during new construction rather than as retrofits can save anywhere from $1,550 to $4,000 per spot. “The installation costs and the dedication of space are often a property manager's pain point when considering going EV,” acknowledges Cara Cairman, president and CEO of Plug'n Drive. “With a variety of charging stations available, however, the infrastructure costs can be offset by the users over time. Dedicated chargers are also available for tenants to absorb the infrastructure cost through their personal incentive program offered by the government.” SUPPORTING SPACE TURNOVER Support from mobile apps can put g reater cont rol i nto EV d r ivers' hands. These apps provide an open network that allows drivers to locate available stations, keep tabs on their charging stats, the cost to park and charge, and notifications related to their bills and usage. On the back-end, property managers can use EV charging web portals that enable them to control access to the stations, set pricing policies, such as demand pricing change and track data such as tenant usage, environmental impact, and revenue. “When EVs came onto the scene in Canada there was a single point growing pain: the cost. Originally, infrastructure cost was borne by the property manager based on a policy that restricted re-selling energy," Sheridan says. "Now, that policy has changed and the cost of EV charging can be passed on to the user in a parkerfriendly manner. The top-up that most EV drivers want and expect can be conveniently provided with a charge for extending their parking session.” For example, the first two hours of charging can be included in the cost of a two-hour parking session. “Once the parker receives notification they can choose to continue to use the amenity and be charged a premium rate for their parking session or for that amount of energy they consumed. Naturally, each property will have its own objectives in providing charging stations,” she notes. With plenty of choices for equipment and support, the ultimate decision for property managers is to ignore EV drivers and risk obsolescence, or plug into the benefits of becoming EV-ready. zz
FAST CHARGERS FOR MALL PARKING By Rebecca Melnyk Cadillac Fairview (CF) is ramping up its newest low carbon initiative – a national electric vehicle (EV) charging program that will add 45 networked chargers at 15 major shopping centres across Ontario, Quebec, Winnipeg and New Brunswick, with some regions welcoming universal fast chargers for the first time. Unavailable charging stations are a barrier for many drivers in provinces like Ontario where there are currently 10,000 EV car owners. That number is ripe for growth. With this trend in mind, CF partnered with Quebec-based FLO, the largest network of charging stations in Canada, to roll out installation over eight months, with more stations slated for 2018. Chargers will be connected to a mobile app on the FLO network, so drivers can instantly locate them and track charging sessions in real time. There’s also a 24/7 bilingual customer support service for drivers seeking immediate assistance. CF currently has 60 chargers at existing sites. Some have converted to FLO; others will in the coming months. “When we started launching this project and putting together a steering committee, people were really excited about it,” recalls John Massey, Vice President, Operations, Ontario portfolio, Cadillac Fairview. “It’s smart to do from a corporate, environmental social governance perspective, but also smart from an employee engagement perspective. People are really keen on being a part of the project, and properties are excited to get these stations at their assets.” Regions seeing fast chargers for the first time will include downtown Toronto (CF Toronto Eaton Centre), Kitchener (CF Fairview Park), Hamilton (CF Lime Ridge), London (CF Masonville) and Winnipeg, Manitoba (CF Polo Park). As it stands, there are 150 fast chargers in Canada, so this project will increase that number and boost the overall EV ecosystem. FLO president and CEO Louis Tremblay says it’s great to work with a company that has several locations across Canada, since most EV charging stations are found in Ontario, Quebec and British Columbia. Those provinces now account for 95% of EV sales in the country. The preceding article is reprinted from the REMI Network at www.REMInetwork.com.
www.REMInetwork.com | May/June 2017 21
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FEDS SCRUTINIZE ENVIRONMENTAL ASSESSMENTS Expert Panel Calls for Consideration of Broader Scope of Impacts By Blakes Environmental Group ON APRIL 5, 2017, the federal environmental assessment (EA) expert panel released its report, Building Common Ground: A New Vision for Impact Assessment in Canada. The report recommends broadening the scope of assessments to include environmental, econom ic, social, cultural and health impacts. Only projects that contribute a net positive benefit to present and future generations would be approved. The report’s recommendations will increase the number of project assessments and the timing and costs associated with each
assessment. The public had until May 5, 2017 to provide comments on the report. BACKGROUND Following the most recent federal election, the Prime Minister directed the Minister of Environment and Climate Change to review the federal EA process with the objectives of r e s t o r i n g p u bl ic t r u s t i n E A s; introducing new, fair processes; and getting resources to market. In August 2016, the Minister announced the establishment of an expert panel to conduct t h is r ev iew. T he Pa nel
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publicly released its official report on April 5, 2017. The federal government will review the Report and all public input received to develop options for legislative, regulatory and policy changes to the federal environmental assessment process. The Report is one component of the fe d e r a l gove r n m ent ’s r ev iew of env i ron ment a l a nd reg u lator y processes i n Ca nad a. T he ot her c om p o n e nt s i n clu d e r ev iews t o mo d er n i z e t he Nat iona l E nerg y Boa rd, t he Fisher ies Act a nd Navigation Protection Act.
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One Authority: A single new federal authority should be mandated to conduct IAs on behalf of the federal government. The Authority should be structured as a quasi-judicial tribunal and empowered to make final decisions and undertake a full range of facilitation and dispute resolution processes, including mediation and informal and formal hearings. The Authority’s decisions should be appea lable to t he G ov e r n o r- i n - C o u n c i l b y a n y participant. Jurisdictional Cooperation: Cooperative
REPORT The Panel found that the current EA process: Imposed unrealistically short timelines for the review of complex documents by interested parties Did not allow for adequate Indigenous participation or jurisdictional cooperation Significantly reduced the number of projects subject to review Placed more accountability for some assessment decisions in the political realm. Altogether, this “sowed seeds of mistrust” in many segments of society. The Panel found that “the pendulum of policy … has swung too far”. The Report outlines a range of recommendations for federal EAs movi ng for wa rd. T he fol lowi ng summarizes some key recommendations: Scope: The scope of EAs should be broadened to consider the five elements of sustainability, namely: environmental, economic, social, cultural and health. EAs should t her efor e b e r ena me d i mpa ct assessments (IAs). IAs should be u nder t a ken e a rl ier i n proje ct development before design elements are finalized.
I A s, i nvolv i ng t he fe der a l, provi ncia l, mun icipa l a nd Indigenous governments should be t he pr i m a r y me cha n ism for conducting I As. “Substit ution” should continue to be available, but only if key federal requirements are maintained. The federal government should be able to request additional i n for m at ion f rom t he ot her jurisdiction if a gap is identified upon completion of the substituted process. “Equivalency” should no longer be available.
Triggers: Federal IAs should relate to
federal government responsibilities. IAs should be required in three circumstances:
1. A project falls within a new project
list, which would include projects that are likely to adversely impact matters of federal interest in a way that is consequential for present and future generations.
2. A project meets certain criteria that
indicates the project has the potential to consequentially impact present and future generations (e.g., the project occurs in a sensitive area).
3. W here a ny p e r s o n o r g r o u p,
including the proponent, requests a n I A for t he project a nd t he Authority accepts this request. The Authority should also have the opportunity to reconsider whether an IA has been triggered based on new i n for mat ion ( Re op ener Scenario).
T imelines: P roject I A timel ines should be established on a projectby-project basis based on input from a l l pa r t icipa nts, i nclud i ng t he proponent and provincial, municipal and Indigenous representatives. Approval Threshold: Projects should only be approved if they provide a net benefit to Canada for present and future generations across the five elements of sustainability. Indigenous Participation and DecisionMak ing: T he I A process should
require the assessment of impacts to asserted or established aboriginal or treaty rights and interests. The Authority should be responsible for the fulfillment of the federal Crown’s duty to consult and accommodate. The principles of “free, prior and informed consent” contained in the United Nations Declaration on the Rights of Indigenous Peoples should be ref lected in the IA process. I n d ig e n o u s P e o p l e s w h o a r e impacted by a proposed project or activity should have the right to provide or withhold consent, but with holding consent should be exercised reasonably. If consent is withheld, any party should be able to refer the matter to a panel to review whether the withholding of consent is reasonable in the circumstances.
Public Participation: Public participation in IAs should be open to all. Meaningful participation should be allowed in all phases of IAs, including mon it or i ng a nd fol low-up. A p a r t ic ip a t io n pl a n sh o u ld b e collaboratively designed for all IAs at the outset, with input from the public, to establish the objectives of public participation and how input will be recorded, responded to and incorporated into decision-making. Quasi-judicial, as well as informal options for public participation should be available, with sessions being held in affected communities and in participants’ language of choice. Use of Best Scientific Evidence: The Authority should have the power to compel exper t ise f rom federa l www.REMInetwork.com | May/June 2017 23
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The expert panel recommends that the scope of EAs should be broadened to consider the five elements of sustainability, namely: environmental, economic, social, cultural and health. scientists and to retain external scientists to provide technical expertise as required. The Authority should be mandated to verify the adequacy of IA studies across all five elements of sustainability. Development of Key IA Documents: The Authority should be responsible for preparing the impact statement using a team of consultants and experts retained by the Authority and funded by the proponent. Monitoring and Enforcement: Indigenous groups should have
the right to be involved in monitoring and follow-up when a project will impact their potential or established aboriginal or treaty rights and interests. Local communities should also be involved in the independent oversight of mon itor i ng a nd fol low-up prog ra m s. Fi nes a nd
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administrative monetary penalties should be available, as well as the ability to suspend or revoke a project approval. Strategic and Regional IAs: The use of strategic and regional IAs should be required. Regional IAs should be required in two cases: where cumulative impacts may occur or already exist on federal lands or marine areas; or outside of federal lands and marine areas where there is a potential for, or existing, cumulative impacts on many federal interests. Strategic IAs would be required when a new or existing federal policy, plan or program would have consequential implications for federal project or regional IAs.
OUTSTANDING QUESTIONS The Report describes a path forward that is dramatically different from the existing EA regime. However, numerous questions remain as to how the recommended changes could be implemented, including: How would a new Authority weigh an economic benefit against an environmental detriment? How might the Reopener Scenario work in practice and what impact will it have on project certainty or uncertainty? What if one Indigenous group says no to a project (reasonably) and others say yes? How would an “affected community” be determined? Does the reliance on “best science” always mean reliance on the most stringent threshold? If any member of the public can participate, how will each person’s level of involvement be determined (e.g., intervenor status, commenter status)? How might the National Energy Board’s approval process, into which EAs were integrated in 2012, be altered or aligned with any sepa rate IA process administered by the new Authority? How do climate change issues fit within individual project IAs? These and many other questions will need to be answered to ensure the IA process provides proponents with certainty and achieves its goal of implementing a fair process to help get resources to market. zz The preceding article from the Environmental Group at Blake, Cassels & Graydon LLP. is reprinted from a Blakes Environmental Bulletin. For more information, see the website at www.blakes.com.
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energymanagement
VENERABLE SASKATOON HOSPITAL ENJOYS UPGRADE PAYBACKS Building Operators Provide Key Project Input By Rebecca Melnyk
ROYAL UNIVERSITY Hospital, located on the University of Saskatchewan campus in Saskatoon, is a seven-wing, seven-storey facility that raised the standard of medical treatment in the province when it was built in 1955. Over the years, aging infrastructure and outdated, energy-wasting fixtures needed to be improved, not only for the health and well-being of patients and staff, but also to help mitigate the building’s environmental footprint. After completing significant hospital upgrades last year through an energy performance contract with Johnson Controls, the 1.6 million-square-foot hospital is now seeing a huge payback,
almost doubling the expected savings from energy, water and operational improvements. RUH invested $13.6 million to ultimately save $1.4 million per year. And in the first two reporting quarters, the total savings is already tallied at $899,192, surpassing the target guarantee by 48.2% or $433,304. Two team members from Johnson Controls, Randy Taylor, account executive of building efficiency, western Canada and Vincent Russell, strategic market accounts manager, Saskatchewan, along with other contractors, engineers and consultants, used energy analysis and on-site survey information to compile a list of measures to improve energy consumption at the facility,
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which is now in a measurement and verification phase. “A lot of measures are not specifically unique for this facility; however the facility operations teams under Brian Berzolla, the facility director (Saskatoon Health Region), are knowledgeable about how the hospital runs and the dynamics of the building. When engaging with them, they have unique perspectives of what equipment could be turned on and off and what upgrades we could do,” Taylor reports. RETROFIT MEASURES Besides more standard measures with lighting, water and the building envelope,
energymanagement the team installed a fan wall. All fans in the wards, operating and general rooms were at the end of their life cycle, costing facilities management ongoing money to repair. This measure is to replace the seven existing coaxial fans with 62 modular fans within three fanwall systems. Each fan module is controlled by its own variable fan drive (VFD). “From an operating point of view, the new fan system allows the maintenance team some redundancy to conduct service work on smaller individual fans, but more importantly, it keeps the facility running no matter what maintenance needs to be done,” adds Taylor, who, when conducting an audit, found several pumps and fans were running on a constant basis. Now, the fans run for significantly reduced hours extending their life, while reducing service costs and down time. “The EPC allowed us to find dollars to do a whole pile of improvements and be paid back by the money we would have spent on utilities,” Berzolla said in a previous inter view with Johnson Controls. “We’re saving more money than was anticipated and making payments on the loan, but we have extra funds to go back into hospital operations.” Other upgrades include replacing steam traps to reduce losses and keep the system working efficiently to meet the required temperature and use less fuel. “I’ve been in some of the steam tunnels and if we didn’t have the cooperation of the staff we probably wouldn’t have found 50% of what we needed to find,” adds Russell. “Some things that really needed to be done were steam trap replacements that are difficult to find and isolate and changing toilets from 1955 that were wasting water, but logistically very difficult to get to.” After more than 16,000 lighting fixtures were reviewed, lamps and ballasts of older lights were retrofitted because adjusting existing fixtures offered greater savings with little occupant impact. Incandescent or compact fluorescent lamps were replaced with LEDs to reduce energy use and provide long service in hard-to-reach spaces. Common areas are no longer dark and dreary, but light now brightens high-traffic areas where staff and visitors move through on the way to patient care or treatment centres. Johnston Controls also switched antiquated, inefficient toilets for low-flow
and efficient faucet, shower and urinal fixtures to decrease water use by 60%. This amounts to an annual savings of about 29 Olympic size swimming pools. Insulated covers were also installed on 325 portions of the steam distribution system to reduce wasted heat energy, making the system work less to meet the required temperature. Since certain areas of the campus are unoccupied at night and weekends, occupancy sensors were connected. Digital controls provide operators with better information to control the environment, such as adding schedules to the HVAC system. ADDRESSING FACILITY CHALLENGES The process to a more efficient facility hasn’t come without challenges, such as shutting down air handling equipment that may be coming from a lab and considering what kind of containment is needed from a safety aspect. “One of the other big challenges was the location of the hospital on a river bank,” says Taylor. “There are also two wings built in different years and the technology was old. Also, next door, they’re building the Saskatchewan Children’s Hospital, so getting material in and out of the facility without hampering hospital operations was a big challenge.” “Hospitals are very challenging environments due to the fact they operate 24/7, are big users of energy, and are a little more complicated than an office or school,”
Russell concurs. “So, it was a key win to take everyone’s ideas, boil them down and put them to action, on time and on budget.” Once all improvements were made, the team worked to attain more savings by looking at fresh air intake, equipment schedules and sequencing and other measures. Going forward, maintenance staff will now have to service variable frequency speed drives, a device connected to an electric fan or motor that reduces frequency so the motor slows down and efficiency is gained. For example, fewer staff in an area means less air. As staff increases, the speed drive provides more air. The process prolongs the life of equipment and saves run time. Along the way, on-site maintenance staff were crucial for planning around a busy healthcare environment, helping to organize work after hours or during downtime so it wouldn’t affect day-to-day operations. “A large part of this project was the scheduling of time for when the contractors could perform their work,” Berzolla said. “The region’s capital planning and project management staff was instrumental in making sure that the right people were in the right place at the right time so that patients and staff were minimally impacted.” zz Rebecca Melnyk is an Online Editor with the REMI Network. The preceding article is reprinted from www.REMInetwork.com www.REMInetwork.com | May/June 2017 27
taxtrends
PROPERTY TAX POLICY SHIFTS IN ONTARIO Municipalities Now View Vacant Unit Rebate as a Subsidy By Barbara Carss
28 Canadian Property Management | Part of the REMI Network
> SOCIAL MEDIA COLUMN Sponsored by MediaEdge
STAKEHOLDER consultation on the future of property tax rebates for vacant commercial and industrial space has been a rote exercise in Toronto given that City Council had already voted to eliminate the program two months prior to a recent public meeting to discuss the issue. Elsewhere, municipal officials in Ottawa have proceeded in a more conventional sequence, but real estate industry advocates are preparing for the same result. This follows the Ontario government’s announcement last fall that municipalities would be given leeway to discontinue the rebate that was first introduced in 1998 in tandem with a province-wide overhaul of property assessment and taxation. Toronto and Ottawa are among what’s likely to be a crush of local governments requesting provincial approval to dismantle the vacant unit rebate program. “I guess we’re not surprised, but we a re disappointed,” ref lects Dea n Karakasis, Executive Director of the Bu i ld i ng Ow ners a nd Ma nagers Association (BOMA) of Ottawa. “This is a change of tax policy, and the way it has been characterized seems to be a bit of an attempt to smokescreen what’s really happening.” Past, present and would-be recipients bristle at suggestions that the rebate is a subsidy or a disincentive to improve the marketability of their properties. Rat her, they point to the program’s historical rationale. It was meant to mitigate the added liability that commercial/ industrial ratepayers assumed when the former business occupancy tax (BOT), which had been charged directly to tenants, was rolled into a single property tax bill levied to landlords. “It’s a tax policy to acknowledge there is a vacant space where the business would otherwise reside,” Karakasis says. Under existing r ules, landlords qualify for partial reimbursement of property tax paid on commercial or industrial space that’s vacant for 90 or m o r e d ays d u r i ng a t a x ye a r.
Appl icat ions wit h suppor t ing documentation are typically submitted in February of the following year, and payouts — equivalent to a 30% refund on vacant commercial space or 35% on industrial space — occur after municipal officials verify the claims. In theory, the revenue underpinning the rebate is collected upfront and then held in trust for the recipients, but many municipalities repor t discordance between their budget estimates for the program and the eventual expenditures. Ontario Ministry of Finance data shows that, province-wide, the value of the rebate jumped from $32 million in 2008 to $60 million in 2014 — suggesting that it could be problematic to base budget allocations on the previous year’s costs. Notably, a report prepared for Ottawa councillors chronicles recent shortfalls of $10 million as “over the years, the budget has not kept pace with the actual use of the program”. “It’s an obligation on the municipality. They have to make up that revenue in the budget and build it into their rate structure, but it’s unpredictable and it can be very hard to estimate these things with accuracy,” says Almos Tassonyi, Executive Fellow and Director with University of Calgary’s School of Public Policy and a research associate wit h I nter nationa l P roper t y Ta x Institute. “For example, how many municipalities actually thought Target was going to go out of business?” DECISIONS PRECEDE CONSULTATION Based on the schedule endorsed in Toronto’s budget vote earlier this winter, the full rebate will still apply for vacancies in the first six months of 2017. It will then be cut to 15% from July to December before it is eliminated entirely beginning in 2018. However, the city still has to formally submit its request to the Ministry of Finance so opponents of the move — including REALPAC, NAIOP and many of the city’s business improvement areas — are pushing for a more gradual phase-out or a mechanism to enable
Make your audience intelligence count By Steven Chester Now that we’ve identified your social media goals, it’s time to figure out which platform is best for you. Start with the big three: Facebook, Twitter, and LinkedIn. Using the search feature, look into each platform and search out industry terms, names of companies you’re interested in, clients, and especially your competitors. Here are some tips to make that audience intelligence count: • Are there lots of active Twitter conversations for your search term? Take a look at those conversations, are you noticing recurring hashtags? Then dig a little deeper, and take note of those hashtags and what they mean – you’ll need them later. • With LinkedIn, search out companies and check out what’s being said via their profile page. But don’t forget Groups – LinkedIn may have discussion groups related to your business interests with tens of thousands of participants already chiming in. Join the groups and look at the participants – see anyone you want to connect with? • If you think Facebook is just a way to connect with friends and see what your teenaged niece ate for lunch, think again. Search terms via Facebook will dig up company pages, news feeds, comments from users, photos, places and events, all related to that search term. Now gauge which platform has the most of the above, then rank which platform(s) deserve the most attention. Next up, we’ll talk about that all-important content strategy. Steven Chester is the Digital Media Director of MediaEdge Communications and helps companies expand their reach through social media and other digital initiatives. To contact him directly, email gosocial@mediaedge.ca or call 416.512.8686 x224.
www.REMInetwork.com | May/June 2017 29
taxtrends
“The business occupancy tax might be gone, but the cost of this tax is still in place on a gross basis.” commercial/industrial ratepayers to self-fund a rebate program. They note that Council had little opportunity to reflect on the industry’s concerns or consider alternatives before making its mid-February decision since the public meeting on the issue was not held until April 20. “The mayor opined fairly early that he thought the rebate was a subsidy for big business and he wanted to kill it,” recalls Brooks Barnett, REALPAC’s Manager of Government Relations and Policy. “The Province also wanted municipalities to consult with the business community, and not all of them have done that to the extent we would like to see.” O ut side Toronto, com mercia l / industrial ratepayers in Mississauga, Brampton and Caledon have also been invited to public meetings to discuss Peel Region’s proposal to reduce the rebate to 20% in 2018, and to 10% in 2019, before eliminating it entirely beginning in 2020. Meanwhile, an early April report to Hamilton councillors promised “engagement will occur during April and into May of this year”, but the Chamber of Commerce, which is prominently listed as a group to be consulted, had not been contacted as of April 27. “ We s u s p e c t a l o t o f t h e s e consultations are just checking a box,” says Terry Bishop, President, P roper ty Ta x, with A lt us Group Limited. “Municipalities know what they want to do.” The city of Ottawa convened its public meeting in early March, and considered submissions from BOMA Ottawa and other stakeholders, but rejected BOMA Ottawa’s proposal that funds be levied specifically from the commercial/industrial property classes to support the rebate’s continuation. This city's finance and economic
development committee endorsed a twoyear phase-out that would see it reduced to 20% of property tax paid on vacant units in 2017 and down to 10% in 2018. City Council will make the final decision later in the month. Property tax consultants foresee a drop in applications as the rebate is phased out. “At a 10% rate, clients will likely not even bother because the cost to obtain it will outweigh the benefit unless it’s a significant amount of space,” predicts David Gibson, a Director with Yeoman & Company Paralegal Professional Cor poration. “T hese vaca ncy applications are incredibly arduous. I have claims from 2015 that are still in play and it will be mid-2017 before they will be settled.” LOSING SIGHT OF ORIGINAL RATIONALE Burdensome administration is one of municipalities’ frequently highlighted complaints with the program, but that’s also true of the forerunner business occupancy tax. A 1999 joint publication from the Ontario government and the Association of Municipalities of Ontario outlining the many details of what was known as local services realignment states: “Outdated and arbitrary, the BOT was the source of a large portion of mu n icipa l it ies’ t a x a r r e a r s, a nd municipalities and businesses have long asked for its elimination.” Proponents of continuing the rebate have offered some suggestions for curbing municipalities’ costs, including: scoping eligibility to at least 120 days of vacancy; placing limitations on the number of consecutive years a property could qualify; and drawing funds for the rebate solely from the commercial/ industrial tax base. “We recognize the administrative costs have become quite significant to administer the program and validate
30 Canadian Property Management | Part of the REMI Network
applicants’ claims,” Barnett affirms. “Changing the application fee structure so there’s more cost recovery there for the city is something we could get on board with.” Other arguments for dismantling the r ebat e a r e se en a s much mor e contentious. The real estate industry typically rejects the theory that the Mu n icipa l P rop er t y A ssessment Corporation (MPAC) accounts for vacancy in evaluations, and highly resents the accusation that landlords aren’t actively trying to lease space because the rebate offers an undue safety net. Ontario’s four-year assessment cycle makes it a clumsy instrument for addressing periodic vacancies in any case, but property tax experts stress that the rebate is an entirely separate me cha n ism f rom t he vaca ncy allowance MPAC applies. It was specifically designed to address the extra tax burden assigned to property owners when the BOT was eliminated. “The business occupancy tax might be gone, but the cost of this tax is still in place on a gross basis. So instead of the tenant paying the business tax portion and the landlord paying the realty portion, now the landlord is subject to both portions,” Gibson explains. Nevertheless, with the passage of time, there are fewer municipal officials who experienced the relief of shedding the administratively cumbersome BOT firsthand. In the intervening 19 years, they’ve become more focused on other financial pressures. “ T here is no quest ion t hat it [eliminating the rebate] is a change in tax policy, but this is now viewed as just a subsidy that is in the system,” Tassonyi observes. In practice, existing tenants will make up for the loss of the rebate as landlords pass through property taxes. Thus, Barnett urges decision-makers to t a ke a n e c onom ic d evelopm ent perspective. “It’s not a subsidy. It’s something that keeps the industry relatively competitive if it sees a lot of vacancies,” he asserts. “Removing this would be removing a major slice of the tax competitiveness pie.” zz The preceding article is reprinted from the REMI Network at www.REMInetwork.com.
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Mark manages nine commercial properties and is considering using ESA’s time saving Continuous Safety Services. To learn more about your legal obligations and the benefits of CSS, visit esasafe.com/propertymanagers
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