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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 R T Y M A N AG E R S

VOL. 28 NO. 1 • APRIL/MAY 2021

A HOIST OF CHANGES NEW AGENDA FOR ELEVATOR OVERSIGHT

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TABLE OF CONTENTS

CONTENTS 11

COVER STORY

IN THIS ISSUE

PRICING RISK

INCENTIVE TO COMPETE 2021-24 conservation and demand management framework shifts course

TRANSACTION LULL LIFTING Investment sales in Q1 2021 surpass Q1 2020

BILLING BAFFLERS

CLEAN EARNINGS

Electricity pricing adjustments abound in early 2021

Canadian suppliers realize profits in low-carbon business activities

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RIPPLE EFFECT Niagara Falls deemed a lucrative landmark imparting spinoff real estate value

Shelved legislation now set to come into force in July 2022

TSSA introduces new outcomebased fee model for elevating devices

ELEVATOR REPAIRS PRIORITIZED

HEIGHTENED CONCERN

UNEVEN FALLOUT

Investment in aging residential stock could reverberate through economy

Gender split of real estate job losses draws special mention in Ontario report

PRICING RISK TSSA introduces new outcome-based fee model for elevating devices BY BARBARA CARSS

GTA & BEYOND ■ APRIL/MAY 2021

OPERATIONS

new billing model for annual elevator licenses could be startling for some Ontario property owners and managers. Beginning May 1, the provincial Technical Standards and Safety Authority (TSSA) introduced fee increases for its oversight services in tandem with bundling some costs that were previously invoiced separately into new upfront flat rates. For example, it may appear that the license fee for elevators that serve four or five floors has tripled from $110 to $330. However, the rate will now include the cost of the periodic inspection and one followup inspection to a maximum of one hour. Beyond that allowable hour, there will be a significant upward spike in charges for necessary additional inspection time. “Theoretically, the cost should be moreor-less similar to what owners were paying before, depending on the complexity of their elevators. The risk is that it initially may be confusing when it’s all billed as one package,” notes Rob Isabelle, Chief Operating Officer with the elevator specialty firm, KJA Consultants, and a member of the TSSA’s elevating devices advisory council. The TSSA promotes the flat rates as “fair, predictable and efficient” since licensees will receive just one invoice and will have a known fixed fee for their budgeting process. The new billing formula is part of the TSSA’s evolution to what it terms an “outcome-based regulator”, which directs more resources and staff time to elevating devices that are shown to pose a higher degree of risk for the public. Accordingly, it aims to derive a greater share of its

self-sustaining revenue from the owners/ operators of those devices, and also to create an assured pot of funds from prepaid fixed fees to underwrite non-income-producing risk reduction programs. “The fee-for-service model currently in use by TSSA dates back to 1997 and is best suited to a prescriptive model with cost recovery focused largely on inspection,” an accompanying explanatory document states. “As TSSA supplements its safety services with improved risk analytics, compliance support, an emphasis on reducing high risks, and a focus on pursuing unlicensed devices and illegal workers, its current business model must change as well.” ANNUAL LICENSE Ironically, the flat license rate will penalize most owners with extra costs if an elevator passes the periodic inspection and does not require a follow-up. Factoring in a follow-up inspection, there will be savings of varying amounts in low-rise, mid-rise and high-rise buildings. In place of the previous basic split of elevators serving fewer than six or 6+ floors, the billing formula now has three categories of license costs: • Elevators serving up to three floor at $250; • Elevators serving four to 20 floors at $330; and • Elevators serving 21+ floors at $400. Based on license fees and an hourly inspection rate of $137 in place until April 30, 2021, annual license costs for elevators that pass first inspection would be $247

for an elevator serving up to 6 floors or $263 for an elevator serving 6+ floors. As of May 1, the hourly rate for periodic inspections rises to $140 — completing a phased three-year 7.7% increase that bumped the rate up from $130/hour prior to August 2019 . The minimum charge for a follow-up inspection that lasts no more than an hour jumps nearly 130% to $315, with additional time billed at $210/hour. Thus, the flat license rate will be a bargain if just one follow-up inspection lasting no more than one hour is required. “The new flat fees are based on a five-year historical average of inspection hours for each category of device, business or facility type,” the TSSA advises. “Additional fees will apply when customers require repeated follow-up inspections due to non-compliance.” Building owners/managers with elevator license renewals due this spring should have already received invoices for the new flat rates since the TSSA has pledged to send them at least 60 days in advance. Information pertaining to the new rate structure is posted on the TSSA’s website, which also reports that customers have received two previous notices of the new billing model — via email on Nov. 20, 2020 and in a letter mailed out on Jan. 29, 2021. “I don’t have an issue with this in principle, as long as we are getting value for the rate alignment that will be implemented,” reflects Randy Daiter, Vice President, Residential Properties, with M&R Property Management. “It may prove beneficial for customers if there is less incentive for the TSSA to inspect sites on a fee-for-service basis, or if rates are

EXTRA FUNDING FOR ACCESSIBILITY UPGRADES A $100-million injection to Canada’s Enabling Accessibility Fund will significantly amplify funding to support universal navigability of the built environment. The 2021 federal budget promises an extra $50 million in each of the next two fiscal years, to be added to an annual expenditure of $20.65 million allocated in the 2017-18 budget. “Organizations want to become more accessible but costs can be prohibitive, especially for smaller organizations,” the budget document states. “The Enabling Accessibility Fund provides funding for renovation, construction, and retrofit projects — from building ramps, to support for the hearing impaired, to automatic door openers — that make communities and workplaces more accessible for persons with disabilities.” Businesses, not-for-profit and Indigenous organizations, municipal and territorial governments are eligible for grants of up to $100,000 for small projects or up to $3 million for mid-sized projects. The application intake period for 2021 is yet to be announced. For more information about the Enabling Accessibility Fund see www.canada.ca/en/ employment-social-development/programs/enabling-accessibility-fund.html. – REMI Network www.REMInetwork.com

OPERATIONS

Balcony Modernization Parking Structure Rehabilitation Roof Assessment & Replacement

Building Envelope Repairs

scaled to apportion fees more equitability to smaller landlords, businesses and/or operators. However, we won’t really know the true impact of the new rate schedule until we look in our rear view mirror and are able to compare actual year-over-year costs.”

Window Upgrades Site Improvements Interior Upgrades New Amenities

Asset Transformation Consulting Engineers Project Managers Materials Testing & Inspection

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OTHER OVERSIGHT SERVICES Flat rates will also be introduced for the various oversight services required when elevating devices are newly installed, extensively retrofitted or altered in more minor ways. As with license fees, these flat rates will bundle in the cost of an initial inspection and one subsequent inspection with the engineering services related to reviewing and approving plans and commissioning. In addition, the hourly rate for engineering services rises from $143/hour to $146/hour on May 1, completing a three-year, phased 6.8% increase from $136/hour prior to August 2019. Of note, the new fee schedule simplifies engineering service rates to just two categories of elevators — elevators serving up to three floors, and elevators serving 4+ floors — in place of the previous five different rates for initial inspections based on the elevator’s propulsion system. As with license inspection fees, the minimum cost of required subsequent inspections jumps from the current $137 to $315 for the first hour, with additional time billed at $210 per hour. The TSSA estimates the new flat rate of $1,400 for elevators serving two to three floors will typically be higher than the total costs previously charged for hydraulic or roped hydraulic elevators, but lower than total charges for traction elevators serving up to 15 floors. The new flat rate of $1,850 for elevators serving 4+ floors is estimated to be about 7% higher than previous total costs for traction elevators serving 16 to 30 floors and about 1.7% lower than total costs for traction elevators serving 31+ floors. Meanwhile, engineering service costs for installing a lift for barrier-free access are projected to drop 29% with new flat rate. Previously, the average total cost for engineering services and an initial inspection was pegged at about $990, while the new flat rate is $700. ■ ___________________________________________ FOR MORE INFORMATION ABOUT THE NEW FEE MODEL, SEE THE TECHNICAL STANDARDS & SAFETY AUTHORITY WEBSITE AT WWW.TSSA.ORG/EN/FEES.ASPX.

ELEVATOR REPAIRS PRIORITIZED Shelved legislation now set to come into force in July 2022 BY REBECCA MELNYK

ntario is kicking the dust off elevator repair legislation that was passed in May 2018 during the previous Liberal government’s tenure, but never proclaimed into law. In a move meant to achieve better elevator availability and stricter maintenance requirements, recently approved regulatory changes allow the Technical Standards and Safety Authority (TSSA) to impose financial penalties for noncompliance with legal requirements. Elevator outage data must also be reported to the TSSA for online publication. In a statement, the Ministry of Government and Consumer Affairs decreed owners of elevators in a long-term care home or residential building will need to report all prolonged outages (i.e., of 48 hours or longer) to the TSSA, along with the cause of the outage and certain characteristics of the building/elevator via an online form. Prospective homebuyers would be able to search an address and gather this data. Both changes are expected to come into force July 1, 2022. They arise from: last summer’s government consultations on the previously shelved legislation; the Auditor General of Ontario’s recommendations in the 2018 Value-for-Money audit of TSSA; and a report by former Superior Court Justice Douglas Cunningham, which assessed elevator availability in Ontario. In particular, Cunningham’s

work was prompted in response to prolonged breakdowns in multistorey residential buildings and long-term care homes. FINE-TUNING THE LEGISLATION Although it’s a viewed as a gain for consumers, industry experts suggest the legislation falls short of addressing some intricacies elevator contractors face on the job. For instance, they maintain elevator contractors can be at an inherent disadvantage trying to comply with the new requirements in problematic older buildings. “If it’s older equipment that hasn’t been modernized and the contractor has been advising the owner to upgrade the equipment for the past five years, does this still become the elevator contractor’s responsibility to maintain the equipment in excellent running condition?” muses Rob Isabelle, Chief Operating Officer with the elevator specialty firm, KJA Consultants, and a member of the TSSA’s elevating devices advisory council. Additionally, contractors sometimes delay repairs if a client is in arrears on its invoices. Currently, it’s unclear if contractors will have to repair an elevator in those circumstances. “There will be some cases where the elevator contractor should be working harder to fix the elevator; there’s other cases where the www.REMInetwork.com

REGULATORY UPDATE contractor is probably not responsible to fix the elevator,” Isabelle maintains. “There are a number of details that will need to be worked out between now and July 1, 2022, and once this gets rolled out, every party will realize this isn’t a simple issue.” There is also uncertainty about what will happen with the data the TSSA collects. “What is the purpose of the information?” Isabelle asks. “Somebody will want to get that data, and that’s why the elevator contractors are concerned.” He argues it’s open to misinterpretation, particularly in the context of the estimated 45,000 elevators in the province. “A large contractor might have reported more than 30 elevators shut down for two days, but on a percentage basis of units maintained this number could be much less than that of a contractor who services only 300 elevators,” Isabelle notes. “That (smaller) contractor might only have 10 down, but on a percentage basis, that contractor could be doing a worse job than the larger ones.” Meanwhile, there is little direction or definition of adequate levels of service in other codes, standards or regulations. For example, the Cunningham report highlighted the absence of requirements for buildings to provide adequate elevator service for the expected number of users. The Ontario Building Code is also silent on the issue. Nor has there been any movement on developing and instigating such standards, despite recommendations. “Where a building should really have four elevators, some developers are installing only three,” Isabelle observes. “Moving day, you’re down to two elevators, and if one is broken, you’re down to one elevator. That’s a problem out there.”

REBALANCING SUPPLY AND DEMAND Even in a highly regulated industry, with a small group of elevator mechanics (roughly 3,500 in Ontario), the majority of repairs are performed quickly except for a smaller percentage of cases where shutdowns are longer-lasting. The Cunningham report found in 2017 that TSSA data and expert analysis placed average availability across residential and institutional buildings at 97%, with 3% non-availability representing the equivalent of 10 days out of service annually. Most buildings with low availability were in the Greater Toronto Area, which also hosts the most elevators. Condos reported the lowest average availability by building type, at 93% of the year. Three years ago, when this legislation was drawn-up, the industry faced what Isabelle calls ‘the perfect storm.’ “There was a ridiculous amount of work and not a lot of qualified technicians to address it,” he recounts. “Work volume has reduced and the union has let more people in; schools have started elevator apprenticeship programs. We’ve been able to rebalance the supply and demand.” Since COVID-19, elevator modernizations have also shut down, creating fewer call orders. “Right now, we have the opposite issue; it’s quite slow because a lot of commercial office repairs are delayed,” Isabelle adds. “Office building owners are not spending money. Residential building owners have put their modernization work on hold pending the pandemic. Post-COVID, there will be a boom in elevator modernizations.” ■ ________________________________________________________________ REBECCA MELNYK IS THE EDITOR OF CONDOBUSINESS.

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MARKET TRENDS

RIPPLE EFFECT Niagara Falls deemed a lucrative landmark imparting spinoff real estate value

iagara Falls makes a list of select global locales where property owners enjoy spinoff real estate value for proximity to celebrated attractions. The consumer credit broker, money.co.uk, includes this sole Canadian entrant in a largely European and American field of rare real estate markets that border on iconic sites, but slots it toward the back of the pack of the 32 named lucrative landmarks. “Our report has found that, globally, landmarks can be a fantastic selling point, but there are so many other things to consider,” says Salman Haqqi, the author and a personal finance expert with money. co.uk, which offers online mortgage rate comparisons among its services. “It does depend on the landmark. Some homeowners will love being next to an iconic tourist attraction. However, others might find the pollution, traffic and footfall overwhelming.” Rankings are based on: average house prices in the surrounding postal code zone; average house prices within a 10- to 20-mile radius; the gap between those two averages; property demand based on the regional population; and traffic and carbon dioxide (CO2) emission levels in the area. Real estate ripple effects are considered strongest in the environs of Arc de Triomphe in Paris, Château de Chillon in Vaud, Switzerland, and Buckingham Palace in London. Threebedroom dwellings in the vicinity of these top-three iconic sites command average

prices of CAD $9.3 million, CAD $5.6 million and CAD $9.4 million respectively. While the first and third ranked landmarks rest in two of Europe’s most populous cities, Château de Chillon’s setting on the shore of Lake Geneva translates into one of the best traffic and CO2 scores among the 32 landmarks. Completing the top 10 are: Palaces of Westminster, London, UK; Eiffel Tower, Paris, France; Times Square, New York, U.S.; Brandenburg Gate, Berlin, Germany; The Louvre, Paris, France; Sydney Opera House, Sydney, Australia; and Prague Castle, Prague, Czech Republic. Meanwhile, in the 11th spot, the U.S. Whitehouse stands out for the whopping 2,395% differential in the average CAD $12-million price-tag for nearby threebedroom dwellings versus the CAD $484,000 average in outlying Washington D.C. neighbourhoods. Niagara Falls is slotted in 21st position, sandwiched between Scotland’s Edinburgh Castle and New York’s Statue of Liberty. Average house prices near the falls are pegged at about CAD $1.38 million or a 101% premium over the CAD $688,000 average elsewhere in the city. Proximity to the falls is something of a bargain in the overall context of the list, earning Niagara Falls 13th spot on the list of

15 landmark locations where average prices fall below 1 million UK pounds — at £799,000. The most affordable real estate surrounds the Pyramids in Cairo, Egypt, where the average three-bedroom home goes for about CAD $62,800 (£36,270), followed by homes near Mont Saint-Michel in Normandy, France, at CAD $300,400 (£173,660) and the Wieliczka Salt Mine in Krakow, Poland, at CAD $320,000 (£185,000). On average, three-bedroom homes in the vicinity of the 32 iconic landmarks command prices that are 246% higher than similar properties at a 10- to 20-mile distance. However, exceptionally wide gaps in a few cases skew that overall ratio. In addition to the chart-topping premium for living near the Whitehouse, proximity to New York’s Times Square exacts a 1,060% toll, with the average three-bedroom dwelling costing nearly CAD $7 million more than threebedroom units elsewhere in the city. Premiums for living near the Acropolis in Athens, the Brandenburg Gate in Berlin or Trevi Fountain in Rome range from 857 to 409%. In contrast, average housing prices bordering Edinburgh Castle, Italy’s Leaning Tower of Pisa and the Roman Baths in Bath, UK, are actually lower than elsewhere in those cities. Notably, the Lucrative Landmarks report fingers traffic and pollution among the factors undermining prices near Edinburgh Castle. ■

_________________________________________________________________________________________ THE LUCRATIVE LANDMARKS REPORT CAN BE FOUND AT WWW.MONEY.CO.UK/ MORTGAGES/LUCRATIVE-LANDMARKS-REPORT. www.REMInetwork.com

ENERGY MANAGEMENT

INCENTIVE TO

COMPETE

2021-24 conservation and demand management framework shifts course

ompetitive procurement underpins the Ontario government’s efforts to trim the price-point of energy efficiency spending. A new slate of conservation and demand management (CDM) programs allocates $456 million for commercial, institutional and industrial consumers over a four-year period with $110 million of that earmarked for still unspecified “customer solutions” to be rolled out in 2023 and 2024. That’s in line with the government’s interest in the outcome of a pending pilot energy efficiency auction to procure 13 megawatts (MW) of permanent demand reduction via a competitive bid process. Notably, the directive from provincial Energy Minister Greg Rickford setting out the parameters for the 2021-24 CDM framework

decrees: “The new CDM framework will leverage competitive procurements and calls for proposals in order to increase competition, improve cost-effectiveness and solicit consumer-based solutions.” It also instructs the Independent Electricity System Operator (IESO) to report on lessons learned from the pilot auction as part of a mid-term review of the framework to be submitted to the Minister by December 31, 2022. Customer solutions are projected to deliver 325.7 gigawatt-hours (GWh) in energy savings and 44.1 megawatts (MW) of peak demand reduction in each of 2023 and 2024, or about 42% of energy savings and 35% of peak demand reduction anticipated from all business programs in those years. In total, the CDM framework anticipates more than 2,509

GWh of energy savings and nearly 410 MW of peak demand reduction from the commercial, institutional and industrial sectors over the four-year period. SAVE ON ENERGY CONTINUITY To begin, many of the commonly obtained Save on Energy incentives from previous iterations of the CDM framework remain on offer. The largest share of funding — $57.6 million in 2021 and $54.5 million in 2022 — will be channelled to prescriptive retrofit measures, providing a per-unit rebate for the installation of a range of lighting and HVAC products, motors, variable frequency drives and select building equipment such as refrigerators, dryers, thermostats and

ENERGY MANAGER FEEDBACK By Rebecca Melnyk After 2022, companies must use their own funds to reimburse embedded energy managers, but will be offered “an enhanced level of technical support and resources.” It’s a move some see as more short-sighted. “People will point to this as creating savings for the ratepayer,” suggests Rob Detta Colli, Manager of Energy and Sustainability with Crossbridge Condominium Services. “However, it effectively ends a program that has been proven to be one of the cheapest ways to reduce energy usage for the province. Peak consumption in Ontario is still an issue, and the generating stations are not getting any younger.” Speaking from personal experience, he says that being able to attack energy consumption and peak demand from within his company’s portfolio has not only generated millions of dollars in savings directly to condo owners and benefited the province, but also increased the capability of the entire company. “Having one energy manager supporting all of the property managers means we’ve got 250 ‘mini’ energy managers out there,” he submits.

GTA & BEYOND ■ APRIL/MAY 2021

The predominant focus on prescriptive retrofits should ease some of the approval delays that came with the option for customized retrofit plans, which was a feature of previous CDM frameworks, but also eliminates the greater saving opportunities from more comprehensive upgrades. Now, three streams are available — lighting; HVAC; and other equipment such as motors and variable frequency drives — and incentive levels are predefined and based on the amount of energy or demand savings of the new equipment. “The custom track allowed the dollar value of the incentive to be proportionate to the savings. If you showed more savings, you got a larger incentive,” Detta Colli recounts. “The only choice now is a prescriptive system. That should make the application and approval process simpler, but prescriptive incentives tend to provide significantly less funds. It looks like the incentives for lighting will be reduced by 20%.” – REMI Network

ENERGY MANAGEMENT controls for beverage vending machines. This will decrease to $39 million in both 2023 and 2024. Whole-building saving incentives through the energy performance program have been enhanced in the new CDM framework. The incentive for commercial and institutional facilities is now offered for a three-year period. A total of $22 million is budgeted for the program, escalating from $4.4 million in 2021 to $7.2 million by 2024. It will provide payments of $0.04 cents per kilowatt-hour (kWh) for metered energy savings relative to baseline energy use at the beginning of the contract period, and a new $50 per kilowatt (kW) payment for metered peak demand reduction relative to the baseline. Additionally, enrollees may be eligible for upfront payments to help underwrite energy efficiency investments that will deliver the savings. Despite escalating allocations for energy management — from $3.5 million in 2021 up to $14 million in each of 2023 and 2024 — funding for embedded energy managers will be diverted to other avenues after 2022. Until then, companies can still cover the salaries of in-house experts tasked with finding and delivering energy savings via the incentive, which provides up to $150,000 annually based on a formula of $300 per kW of peak demand reduction achieved. Although, at that full rate of earning, fewer than 24 would be covered in 2021, with numbers then growing to 55+ in 2022. PROGRAM TRANSITION PENDING As of 2023, companies must use their own resources to remunerate inhouse energy managers, but they will be eligible for what’s described as an “enhanced level of technical support and resources”. The IESO has also promised a stakeholder consultation to get input on companies’ energy management needs. For 2021-24, the range of incentives for small businesses with fewer than 50 employees will expand from the previous focus — which provided up to $2,000 for lighting upgrades — to include HVAC and refrigeration equipment. However, the overall program budget will shrink from $9.1 million in 2021 and $9.2 million in 2022 to $5.1 million in each of 2023 and 2024. Funding continues to be available for local programs, which address specific needs within a community or region. The CDM framework allocates $65.6 million for such initiatives during the four-year period with $15.5 million available this year. In keeping with the Minister’s directive, the IESO states: “Beginning in 2021, the implementation of local programs will leverage competitive mechanisms to provide targeted energy and demand savings for specific areas, while encouraging innovation and energy cost savings.” This year is also a transitionary year, as proponents who had projects approved by Dec. 31, 2020 under the previous CDM framework will have until Dec. 31, 2021 to complete them and claim their incentives. Additionally, due to COVID-19-related business shutdowns and supply chain interruptions earlier in 2020, some proponents will still be completing projects approved under the previous government’s program regime, known as the Conservation First Framework. Those must be complete by June 30 of this year. ■ __________________________________________________________________ MORE INFORMATION ABOUT THE 2021-24 CONSERVATION AND DEMAND MANAGEMENT FRAMEWORK CAN BE FOUND ON THE INDEPENDENT ELECTRICITY SYSTEM OPERATOR’S WEBSITE AT WWW.IESO.CA/EN/SECTOR-PARTICIPANTS/ ENERGY-EFFICIENCY/2021-2024-CONSERVATION-AND-DEMANDMANAGEMENT-FRAMEWORK

NEW VOICES FOR COMMERCIAL ELECTRICITY CUSTOMERS Commercial electricity customers will get more presence among Ontario consumer groups when two new appointees join the Independent Electricity System Operator’s (IESO) stakeholder advisory committee this spring. Bala Gnanam, Vice President, Energy, Environment and Advocacy, with the Building Owners and Managers Association (BOMA) of Greater Toronto, and Agnieszka Wloch, Vice President, Development, with Minto Communities Canada, have been named to the 17-member committee tasked with providing policylevel advice to the IESO board of directors and senior executive. The committee meets a minimum of six times annually to receive briefings and provide feedback on IESO activities related to market development, conservation and electricity planning. It is broadly structured to give voice to five categories of stakeholders including electricity generators, transmission and distribution utilities, energy businesses and services, consumers and Ontario communities. Notably, though, consumers encompass three distinct groups: residential, small business and farm customers on the regulated price plan (RPP); commercial customers; and large industrial users. Gnanam and Wloch will replace the outgoing consumer representatives, Julie Girvan of the Consumers Council of Canada, and Mark Schembri, Vice President, Supermarket Systems and Store Maintenance, with Loblaw Companies Ltd. Wloch is a licensed architect with more than 16 years’ experience in Minto’s development division, where she has become a specialist in mixed-use development projects and is currently a leadership team member overseeing development management in both the company’s Toronto and Ottawa bases. She holds a Master of Business Administration (MBA) from Western University’s Ivey School of Business and is Vice President of the Simcoe Chapter of the land economics society, Lambda Alpha International. Gnanam is an engineer with nearly 20 years’ experience in the energy, commercial real estate and manufacturing sectors. He has keen interest in building performance and climate resilience and has Certified Energy Manager (CEM) and Certified Demand Side Manager (CDSM) designations from the Association of Energy Engineers. He is a member of the board of directors of EcoSchools Canada and the Clean Air Partnership. Stakeholder advisory committee members are appointed from a slate of nominees put forward by “parties having an interest in IESO activities”. They serve two-year terms and are eligible to remain for up to six consecutive terms. Three other new members will begin terms along with Gnanam and Wloch. They are: Ed Gilbert, Corporate Manager, Aamjiwnaang First Nation, and Tonja Leach, Executive Director of the public policy and research group, Quest, representing Ontario communities; and Amanda Klein, Executive Vice President, Public and Regulatory Affairs, and Chief Legal Officer with Toronto Hydro, representing distributors and transmitters. – REMI Network

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ENERGY MANAGEMENT

BILLING BAFFLERS Electricity pricing adjustments abound in early 2021

lectricity consumers may have found their monthly bills more perplexing than usual thus far in 2021. Prices have been in flux due to a new policy direction unveiled in the 2020 Ontario budget last November, which was then coupled with pandemic-related relief measures for residential and small business customers on the provincial regulated price plan (RPP) during the first seven weeks of the year. The major price shift came with the Ontario government’s move to transfer contracted costs for renewable electricity from the electricity rate structure to general provincial expenditures, funded through the tax base. The budget promised commercial ratepayers would realize hydro savings of 14 to 16% with the removal of costs that had previously been embedded in the global adjustment (GA). Meanwhile, in 2021 they began repaying GA costs that were deferred in April, May and June last year. At that time, the Ontario government capped the rate for the envelop of fixed costs — which include expenditures for electricity supply, nuclear facility refurbishment and conservation and demand programs — at 11.5 cents per kilowatt-hour (kWh) to temper the price spike that otherwise would have occurred due to the dynamics of province-wide business shutdowns. A dramatic dip in system-wide electricity demand concentrated inescapable GA costs into a diminished pool of consumption, with particularly harsh consequences for small and midsized commercial buildings (categorized as Class B customers) that are billed for GA on a volumetric per-kWh basis.

GTA & BEYOND ■ APRIL/MAY 2021

“The total deferred GA amount was approximately $333 million — approximately $206 million for non-RPP Class B customers and $127 million for Class A customers,” reports OEB guidance released in late December. Both classes of customers are now repaying those amounts in 12 installments over the course of 2021. As the OEB has outlined, the Independent Electricity System Operator (IESO) calculates the recovery rate to be charged in addition to the monthly GA charge, but it is merged into one line item on hydro bills. “The OEB expects every distributor to communicate information related to the deferred GA recovery to all Class A and non-RPP Class B customers by means of a posting on its website, at a minimum,” it instructs. RPP DYNAMICS For RPP customers, the government’s move to shift some renewable electricity costs out of electricity rates brought another readjustment to the prices that had been newly introduced on November 1. A midDecember announcement gave warning that prices would change again, as of January 1, bringing an electricity rate cut and a corollary reduction in the Ontario Electricity Rebate (OER). The latter had been a 33.2% rebate on pre-tax electricity consumption and transmission/distribution costs in November and December, but dropped to 22.2% in January. “It was a challenge to keep on top of the changes that were rolling through, and it was perhaps even more challenging to reassure our clients that we were on top of the situation

given the pace of change,” recalls Rob Detta Colli, Manager of Energy and Sustainability with Crossbridge Condominium Services. “The December 15th announcement that reduced both the commodity rates and the OER was a complete reversal of what had just come into effect on November 1st when they increased the rates and the OER. So it’s confusing.” He projected the mid-December announcement would result in a 3% saving over the previous pricing scheme. However, on top of that, pandemic-related relief measures froze all RPP rates at the lowest time-of-use (TOU) off-peak rate of 8.5 cents/kWh from January 1 to February 22, before resuming the intended rate schedule on February 23. Ontario’s subsequent COVID-19prompted stay-at-home directives, invoked April 3, did not come with electricity rate relief for RPP customers. However, the OEB has instructed utilities not to disconnect residential customers with account arrears until at least after lockdown measures are slated to be lifted. May 1 ushered in a new six-month RPP rate schedule. The semi-annual adjustment shaves 0.6 cents per kWh off both peak and mid-peak TOU rates and cuts 0.3 kWh from the off-peak TOU and tiered price options, while reducing the rebate on pre-tax electricity use and transmission/distribution charges by 2.3%. “The government’s intention is that, for residential and small business customers, the reduction in the electricity price will be offset by the change in the OER,” an OEB advisory states. ■

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A streamlined approach to P garbage room maintenance

roperty management teams have been stretched thin throughout the pandemic. Between keeping staff and residents safe, meeting heightened demands, and managing building projects, it can be difficult to keep critical maintenance activities from falling off the radar.

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There are options to take this service even further, she adds. In addition to its regular Garbage Room Maintenance Plan, the firm offers a complete parking lot and garage cleaning and maintenance service along with low clearance vac trucks and jetter’s to service all types of drains, catch basins and sump pits. Moreover, Metro Jet Wash’s monthly services include regular reports, which help clients keep track of activities performed, potential garbage room needs, and information they can use to inform future garbage room investments. “Since we’re in there a lot, we can tell our clients what we’re seeing, what we’re doing, and what else can be done to make that environment as effective as possible,” says Andew De Bartolo, Division Lead with Metro Jet Wash. Metro Jet Wash is no stranger to adaptation. Like Offloading the work There are advantages to offloading cleaning and many property management service providers, the maintenance activities. For its part, Metro Jet Wash company has spent a bulk of 2020 implementing has introduced a garbage room maintenance new cleaning and sanitation processes, equipment, program designed to deliver a suite of cleaning, and training to deliver its services safely under updating, and general maintenance services for a increasingly risky conditions. Looking ahead, the team hopes all-in-one service packages like its predictable monthly fee. By signing up for a three-year commitment, clients Garbage Room Maintenance Plans give property receive a wealth of service, including two yearly management teams the solutions, savings, and – compactor/chute cleanings, regular automated more importantly – peace of mind to refocus on odour control system servicing, and one restoration their priorities. painting. As well, the bundled service comes with a welcome kit that includes shovels, brooms, scrapers, Learn more about Metro Jet Wash and its Garbage and cleaner/degreaser; as well as a 10% discount Maintenance Plans at www.mjwcanada.ca or contact the team directly. on items from the Metro Jet Wash online store. “Our philosophy is to make life easier for our clients – to give them peace of mind that we’re taking care of their garbage room,” says Leslie De Carli, Chief Executive Officer with the Toronto-based company. “Offering all these services under one bundled rate lets property management teams focus on their jobs knowing we’re down there keeping things clean, sanitary, and inviting for proper use.” “It’s a lot to deal with,” says Brian De Carli, Vice President of Metro Jet Wash. “So anything a service provider like us can do to take maintenance responsibilities off their shoulders is always welcome.” No doubt, property teams have many responsibilities to juggle on any given day. One of the most important today, however, is keeping their buildings clean and hygienic to mitigate the risks of COVID-19 infection. And when it comes to high-priority spaces, garbage rooms reign supreme. “Keeping a clean and effective garbage room is always important – both for resident safety and comfort. Even still, it’s no small task, especially now when there are so many other priorities for property stakeholders to keep track of,” adds Brian.

CAPITAL INVESTMENT

HEIGHTENED CONCERN

Investment in aging residential stock could reverberate through economy BY ERIN RUDDY

ore than 500,000 Torontonians live in what’s commonly known as “towers-in-the-park” — about 1,200 apartment buildings of the 1960s and ‘70s era, typified by concrete slab construction, repeating balconies and surrounding open space that sets them well back from the city’s sidewalks and roads. These aging residential towers are the backbone of the rental stock, providing dwellings for households with modest and low incomes, including much of the workforce that’s helping to keep society functioning during the COVID-19 pandemic. Long before 2020, concern was brewing over the lack of investment going into this essential affordable housing stock. A recent report from the Urban Land Institute (ULI) points to high greenhouse gas emission footprints, low resilience, susceptibility to catastrophic system failures, poor housing quality, and an increasing concentration of “vertical poverty” as some of the major challenges facing building owners and the city alike.

GTA & BEYOND ■ APRIL/MAY 2021

“There were readily evident life-safety risks created by the current state of many of the buildings. What the pandemic did was put another lens — health risks — on the urgent need for upgrades,” asserts Jim Heid, chair of ULI’s advisory services panel on tower renewal. “As highly dense living environments with substandard ventilation and reliance on small elevators, the towers and many older multifamily properties risk losing property value as people see a new kind of risk that they might not have thought about before.” PANDEMIC CATALYST With lower-income residents making up a significant portion of the city’s frontline workers, the pandemic has underscored the need to drive investment in these flagging rental towers that so many families and vulnerable citizens call home. “Building upgrades have always been mission critical,” asserts Brad Dockser, another ULI panel member and Chief

Executive Officer and co-founder at Green Generation in Bethesda, Maryland. “However, the pandemic has served as a catalyst for accelerating the focus on building upgrades and making buildings greener. Now there is a new bar. What owners should have already been doing is developing long-term energy plans to not only meet resident needs, but to drive strategic value from assets and create a compliance path for existing regulatory requirements.” In addition to original heating systems and inefficient windows, many aging towers have no backup power — meaning key systems like heating, water, elevators, and lighting would not work in the event of a failure. Meanwhile, a whopping 94% do not have central air conditioning, leading to potentially unhealthy indoor air temperatures throughout the summer months. Heid links many of these conditions to short-term priorities on minimizing costs

CAPITAL INVESTMENT and maximizing returns versus looking long term at how an investment creates more value. However, he also acknowledges that the problem cannot be solved by property managers and owners alone. “There needs to be creativity at the regulatory level,” he says. “More assistance at the funding level and more pilot projects using social housing as a subsidized proving ground to test new systems and ideas, which can be adopted and brought to scale economically by the private sector.” Dockser theorizes that, while the vast majority of building owners understand the importance of making upgrades and having a comprehensive energy plan, they often don’t know where to begin. “It’s vital for owners to engage with strategic partners that have the technical expertise needed to turn a vision into an actionable plan in terms of timing, costs, technology, etc.,” he says. “Even though an on-site engineering team may have deep familiarity with the building, they may not have the insight into other aspects, like rebate programs or energy modeling. Comprehensive, end-to-end partners with deep knowledge and experience can help

bring a global perspective to local projects and enable owners to plan for the long term.” QUANTIFYING THE BENEFITS The first step toward revitalizing Canada’s aging residential towers is an understanding of the far-reaching benefits. For building owners, these include reduced regular maintenance, lower rate of tenant turnover, less risk of litigation and code violation, better quality tenants and the potential for premium pricing. In turn, residents benefit from improved comfort, safety and satisfaction, leading to a better quality of life. Communities and cities reap the rewards of superior housing stock that meets today’s bar. Dockser advises residential building owners to engage with their teams and select strategic partners to help critically review their assets. “Trusted partners serve to help owners better understand how to develop the energy plan, including technology selection, energy

modeling, financing and communicating with stakeholders,” he maintains. “With Prime Minister Trudeau’s plans for achieving net-zero emissions in Canada by 2050, it’s critical that owners familiarize themselves with incentives at both national and provincial levels and understand the various capital market innovations and financing schemes available to them.” “Audit, audit, audit,” adds Heid. “It’s hard to effectively evaluate what is needed, the potential return on investment, and the risk of loss in terms of both tenants and property value if you cannot see the entire picture. Evaluate energy systems, life safety matters, livability functions and risks presented to personal health. Rank the severity of the problem and look for creative solutions. Looking holistically can often lead to stacked benefits, where one change can resolve two or three issues at once. But if you don’t know all the issues you might not know how to optimize a specific investment to its highest return.” ■

_________________________________________________________________________________________ ERIN RUDDY IS THE EDITOR OF CANADIAN APARTMENT. THE COMPLETE TEXT OF THE URBAN LAND INSTITUTE REPORT, AFFORDABILITY AND RESILIENCE: THE CHALLENGE OF TOWER RENEWAL IN PRIVATE RENTAL APARTMENT BUILDINGS, CAN BE FOUND AT HTTPS://AMERICAS.ULI.ORG/TORONTO-ONTARIO-ADVISORY-SERVICE-PANEL/

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MARKET TRENDS

TRANSACTION LULL LIFTING Investment sales in Q1 2021 surpass Q1 2020

ndustrial assets and development land accounted for more than 50% of investment sales value in the Greater Toronto Area (GTA) during the first quarter of 2021. Trade activity in both sectors far outpaced dealmaking in the comparable period of 2020, back before the full impact of the COVID-19 pandemic hit. Avison Young’s recently released investment market overview tallies $3.9 billion worth of transactions across all commercial real estate sectors, representing the best Q1 sales performance since 2018. Office was one the sector in which activity did not surpass Q1 2020 levels. Retail enjoyed an upswing coming off a year when investment sales value dropped to an eight-year low. Meanwhile, the continuing compression of multifamily cap rates demonstrates that lower deal volume is due to supply constraints rather than a lack of purchasers. “Flush with cash and supported by favourable borrowing costs, eager investors continue to seek out opportunities in what is shaping up to be another unpredictable year,” Avison Young’s accompanying analysis surmises. “Mass vaccinations offer a ray of hope and the prospect of an

GTA & BEYOND ■ APRIL/MAY 2021

eventual return to pre-pandemic capital flows into what is otherwise a relatively sound property market.” For now, investors are keenly chasing industrial assets. A sales tally of $1.4 billion represents 36% of total Q1 investment deal value, and a 45% increase over industrial sales value in the first three months of 2020. Triovest Realty Advisors inked the priciest deal at $125 million, equating to $239 per square foot, for a 22-acre logistics facilities in the west end of Toronto — acquired from Mantella Corporation. However Amazon’s $40-million purchase of the Pickering Markets at 1400 Squires Beach Road in Pickering comes in at $290 per square foot. “The unrelenting adoption of e-commerce reinforces solid fundamentals for the acquisition of highly coveted lastmile warehouse and distribution space, even if it means demolishing an existing facility and building new,” Avison Young analysis observes. VENDORS REAP UPSIDE RETURNS Industrial demand and the surging housing market are identified as underpinning factors in the 33% quarter-over-quarter

jump in sales values for development land. Deals tallied $807 million, up from $606 million in Q4 and $451 million in Q1 2020. Blackwood Partners’ and Nicola Wealth’s joint $108-million purchase — at more than $1 million per acre — for 2955 King Road in York Region’s King Township represented a 13% chunk of that total. The vendor, King Hill Inc., acquired the 105acre site in 2019 for $55 million. Meanwhile, Q1’s second largest transaction garnered nearly four times more land at less than one-quarter of the cost per acre, as RICE Group paid Infrastructure Ontario $93.5 million for a 420-acre site on Peel Region’s Torbram Road. On the flip side, the York Catholic District School Board shelled out the highest per-acre price of the quarter with its $33.5-million purchase of a WhitchurchStouffville site from Greenpark Homes, which equated to more than $2.2 million per acre. RioCan REIT also enjoyed upside returns on its 50% interest in a 36-storey midtown Toronto multifamily rental building — purchased in 2019 for $114 million and sold for nearly $151 million in Q1. The purchaser, Woodbourne Capital, paid more than

MARKET TRENDS

ENHANCED TAX CREDIT IN TERTIARY MARKETS Investors, landlords and developers could see a refundable tax credit of up to $90,000 if they build, acquire or renovate a commercial or industrial building in southwest, eastern or northern Ontario during the next 20 months. The recently released 2021 Ontario budget announces a temporary doubling of the Regional Opportunities Investment Tax Credit, which came into effect in March 2020, resetting the rebate rate at 20% for up to $450,000 worth of eligible investment. “At a critical time when many businesses are looking to reopen or transition their operations, enhancing the Regional Opportunities Investment Tax Credit would provide opportunities for economic growth and job creation,” the budget document maintains. The tax credit is available for Canadian-controlled private corporations making expenditures within 34 counties or regional districts where employment growth lagged the provincial average during the decade from 2009 to 2019. This covers most of the province outside of Ottawa, the Greater Toronto Area and surrounding regions encompassing Barrie, Hamilton, Niagara, Kitchener-Waterloo and Guelph. For investors interested in secondary and tertiary markets, the tax credit is available in several prominent mid-sized cities including London, Windsor, Kingston, Peterborough, Greater Sudbury and Thunder Bay. To qualify, a building must be purchased, renovated or completed and ready for occupancy between March 24, 2021 and December 31, 2022. The same undertakings are eligible for a 10% refundable tax credit in the period between March 2020 and March 23, 2021. The credit applies on capital investment in excess of $50,000 to a maximum of $500,000. The Ontario government has budgeted about $61 million for the program to the end of the 2022-23 tax year. – REMI Network $647,000 per unit, outdistancing Q1’s other multifamily deals in both transaction value and per-unit price. The quarter saw $642 million in multifamily investment transactions, down from $877 million in trades during Q4, but up from $615 million in Q1 2020. Cap rates continued to trend downward, providing evidence that investors aren’t expecting the current parallel downward rent trend to last, and contrasting with the skittishness Avison Young analysts see in the office market. VARYING INVESTOR CONFIDENCE “An expensive housing market and the eventual return to higher immigration levels post-pandemic have investors squarely focused on the stable but supply-constrained multi-residential sector,” they conclude. “Investors are still seeking greater clarity in the office sector as stakeholders grapple with a multitude of survey results on what the future workplace will look like. Availability and vacancy rates are on the rise and the wait-and-see approach by occupiers has kept investment capital largely at bay.” The quarter’s $349 million in office transactions represented 9% of total investment sales, and is a decline from $531 million in Q4 and $429 million in Q1 2020. “Continuing a trend from 2020, suburban assets attracted most of the capital,” Avison Young reports. Accordingly, the quarter’s largest deal saw Soneil Investments acquire 55 and 105 Commerce Valley West, located in Markham, from Northam Realty Advisors for $115 million, equating to $304 per square foot. However, two smaller downtown transactions yielded considerably higher per-square-foot earnings for the vendors. Sutter Hill Management purchased a 50% interest in 110 Yonge Street from BentallGreenOak, translating to $723 per square foot. Dream Office REIT paid $806 per square foot to acquire 76 Stafford Street and 850 Adelaide Street West from Hullmark. In turn, Hullmark paid the highest per-square-foot rate for a retail property, at $3,351, for a 9,400-square-foot low-rise property at 147 Spadina Avenue in Toronto’s downtown west area. Meanwhile, Ingka Group’s $100-million acquisition of the 132,000-square-foot retail podium at 388 Yonge Street was the largest retail transaction of Q1 and opens the way for a new Ikea store in the downtown core.

“Retail investment increased for the third consecutive quarter with $693 million in first-quarter sales — up 25% quarter-overquarter and 30% year-over-year,” Avison Young advises. “The top five sales reveal a mix of urban and suburban asset types ranging from traditional regional and community shopping centres to street-front and freestanding offerings.” ■ ________________________________________________________________ THE COMPLETE TEXT OF THE GREATER TORONTO AREA COMMERCIAL REAL ESTATE INVESTMENT REVIEW CAN BE FOUND AT WWW.AVISONYOUNG.COM/MARKET-REPORTS.

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Pest Management A Q&A with Paolo Bossio, Advantage Pest Control

pril showers bring May flowers … and pests! Generally, many insects survive the winter months as immature larvae with the protection of heavy debris litter, and when the weather doesn’t fluctuate between thawing and freezing temperatures. With the pandemic shifting food waste to residential buildings, vermin such as rats and mice have also shifted their behaviour from restaurant harborage to residential buildings. Now is an essential time for property owners/managers to protect their residents from these unwanted guests. For insights into pest control challenges and tips on how to swat them, we turned to Paolo Bossio, president and CEO of Advantage Pest Control. Why is spring an important time to consider pest management? This is the time of the year when the weather starts warming up and most pests begin to become active from their dormant state to forage, lay eggs, and expand their colonies. However, mice and rats remain active all year long, even during the colder months. They will eat just about anything to survive, and the gestation period for mice is anywhere from 21 to 28 days. So, it is smart to consider pest management all year round. How has the pandemic compounded the problem? One major problem is that it has forced many restaurants to rely on food delivery services to serve their customers. What that does, though, is it transfers the food waste from commercial properties to residential establishments. Now, all the mice and rats who used to feed on the dumpsters behind restaurants or strip malls are following that food trail to condos, apartments, or singlefamily dwellings. Over the year, we have witnessed thousands of mice and rats behind multi-residential buildings where they’re very well fed. That’s why we proactively send our technicians to all of our property managers to check if that is happening at their property and ensure they were well prepared to manage the issue. This is an example of our dynamic integrated pest management approach.

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What is dynamic integrated pest management? Integrated pest management (IPM) describes an ongoing process of pest control that takes an eco-forward approach to manage pest populations. The first step is an inspection of the pest population or environmental conditions indicating that pest control must be taken, and the second is identifying and monitoring pest activity. Next comes preventative measures and exclusions, and the last step is controlling the problem by using physical trappings and using baits and sprays when appropriate. Dynamic IPM, however, is about seeing things before they happen and adapting to our customer’s needs. Each program is specifically curated to each multi-residential building since each residential home is unique. As Wayne Gretzky said, “it’s about where the puck is going, not where it has been.” For example, when we do a roach service treatment and we are using a combination of a spray and aerosol inside an apartment, what if the person cannot leave? What if they are bedridden or have no place to go because of the pandemic? We must get creative and maybe slightly alter how we complete the service by using the vacuum or use more glue boards. We cannot just say, “Well, this is the IPM program, so we can’t change anything.” Our team is trained to be agile and ready to modify their approach according to the circumstances, even if that means taking more time to do the job more thoroughly and responsibly. One of the questions I ask during technician interviews is, “How many units can you treat in a day?” which is a trick question. Some applicants come from pest control companies where they are expected to handle 30 or 40 units a day, but if they say they’re proud of doing that many, they usually don’t make it past to the next round since it isn’t about the number of treatments they can do, but the quality and outcome from doing the job. I want to ensure our team delivers quality treatments and top-notch customer service, even if it takes more time to get the job done efficiently and effectively.

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Paolo Bossio is the President and CEO of Advantage Pest Control Inc., a family-owned and operated business specializing in Dynamic Integrated Pest Management programs.

Each program is speciﬁcally curated to each multi-residential building since each residential home is unique.

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What pest management tips can you offer property managers to prepare for spring and summer? There are a few things property stakeholders and property managers can do. For instance, always check the exterior of your property to make sure there is no water leaking from the gutters, and the water pump is pushing the water away from the property if you have one. Standing water is a breeding ground for insects! Also, do not store any debris or firewood at the side of the property because that can act as a new point of the harbour for mice or rats. Another tip is to check surrounding trees are not touching the property. If you have a limb touching the roof or a balcony, that can be an open invitation to unwelcome guests like squirrels, which are now looking for places to procreate. Lastly, take a moment to consider how else you can deter pests from making your property their new home. Keep food out of reach and eliminate easy points of entry. Seal up any entry points, especially have a harsh winter, for gaps around pipes, vents, windows, and doors. If you need help or want a partner who will spot and address pest control issues on your behalf, give us a call.

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CLEAN EARNINGS Canadian suppliers realize profits in low-carbon business activities

roduct and service suppliers to the property and facilities management sector are among eight Canadian companies on the recently released list of the 200 publicly traded companies earning the highest global revenues tied to clean economic enterprise in 2019. The annual rankings — jointly undertaken by the Canadian and U.S. research firms, Corporate Knights and As You Sow — also compare the investment performance of this Clean200 against MSCI’s world (ACWI) and world energy indices. “While tech companies like Amazon and Zoom have had a good run through this pandemic period, the broad-based trend of outperformance has been dominated by companies providing sustainable solutions,” reports Toby Heaps, Corporate Knights Chief Executive Officer. From July 1, 2016 to January 31, 2021 the Clean200 have generated a 113.4% total return, surpassing the ACWI’s 78.7% total return. Meanwhile, fossil fuel companies in MSCI’s energy index experienced a 13.8% drop in value during the same period. To illustrate, $10,000 invested in the Clean200 in July 2016 would since have grown to $21,340 whereas $10,000

GTA & BEYOND ■ APRIL/MAY 2021

invested in fossil fuel companies would have diminished to $8,617. “There is now clear financial evidence showing a broad spectrum of companies and market forces making the economic transformation, which is our greatest hope in controlling climate change,” submits Andrew Behar, Chief Executive Officer of As You Sow. The Clean200 is drawn from approximately 8,080 publicly listed entities with annual earnings in excess of USD $1 billion. To qualify, companies must derive at least 10% of their annual revenue from business activities aligned with a low-carbon economy. That includes: energy efficiency; green energy; electric vehicles; financing low-carbon ventures; low-carbon real estate footprints; environmentally responsible forestry, mining and resource management; low-carbon food and apparel production; and information and communications technology that supports such endeavours. Some other types of listed companies are disqualified from consideration, including: oil, gas and other fossil fuel companies; utilities earning less than 50% of revenue from green energy sources; companies with earnings tied to deforestation, climate change denial, weaponry or private prisons;

and/or companies with track records of worker exploitation, racial and/or gender discrimination or criminal activity. Collectively, the Clean200 generated about 39% of revenue from clean economy earnings — placing three Canadian suppliers to the property and infrastructure sectors as above-average standouts: • Cascades Inc., a Quebec-based manufacturer and distributor of paper products and hygiene-related amenities, ranked 86th with CAD $5.2 billion (USD $3.9 billion) in clean earnings, representing more than 93% of company revenue in 2019. • Canadian Solar Inc., a manufacturer and distributor of solar modules, inverters and energy storage systems, headquartered in Guelph, Ontario, derived all CAD $4.2 billion (USD $3.2 billion) of its annual revenue from clean economy activity, placing 105th. It is also one of just 16 companies in the Clean200 with a racially diverse chief executive officer. • Brookfield Renewable Partners LP, headquartered in Toronto, literally generated 100% of CAD $3.95 billion (USD $2.98 billion) in 2019 earnings from clean power. Ranked 194th, it is the only power generation company in the Clean200 list.

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Railway operators, Canadian National and Canadian Pacific, are the highest ranked Canadian companies on the list at 35th and 62nd respectively. Both also surpass the Clean200 average quotient for clean economy revenue with CN’s 85% share translating to CAD $12.88 billion (USD $9.7 billion) and CP’s 77.6% stake equating to CAD $7.39 billion (USD 5.57 billion) in 2019. Bombardier Inc., Telus Corp. and Hydro One Ltd. complete the Canadian contingent in the Clean200. Of these, Hydro One, ranked 175th, has the highest percentage of clean earnings at 30% or CAD $2.16 billion (USD $1.63 billion), while Bombardier’s 26.3% portion translates into the highest dollar amount at CAD $5.5 billion (USD $4.15 billion), earning it 80th position. Telus Corp. is slotted at 167th with about 14.4% or CAD $2.33 billion (USD $1.76 billion) of 2019 income in clean earnings. ■ ___________________________________________ FOR MORE INFORMATION ABOUT THE CLEAN200 SEE WWW.ASYOUSOW.ORG/ REPORT-PAGE/2021-CLEAN200.

BRANDING WORDPLAY Canada Pension Plan Investment Board (CPP Investments) has rolled its holdings in energy, resources, power and renewables into a newly dubbed sustainable energy group (SEG) with approximately $18 billion in assets — including some related to conventional power, upstream oil and gas production, midstream processing, storage and transportation activities and liquefied natural gas. In addition to stretching the definition of sustainable, an accompanying announcement states the new entity will consolidate capital and expertise for a stronger position in the global energy sector. “The energy sector is one of the most important enablers of the global economy and is composed of a wide spectrum of suppliers from conventional to renewable,” says Deborah Orida, Senior Managing Director and head of real assets with CPP Investments. “Along our unique investment horizon, we see a dramatic opportunity to invest in, and support the evolution and innovation occurring across the sector.” Bruce Hogg, Managing Director and previously head of CPP Investments’ power and renewables group, has been named SEG head. Avik Dey, Managing Director and head of the former energy and resources group, will continue to serve as senior advisor to SEG and the office of the chief executive officer for six months before moving on to his own entrepreneurial projects. “The creation of the sustainable energy group with significant, flexible capital, positions us extremely well to pursue the best market opportunities across the entire energy spectrum,” Hogg maintains.

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HUMAN RESOURCES

UNEVEN FALLOUT

Gender split of real estate jobs losses draws special mention in Ontario report

omen suffered more than 89% per cent of job losses recorded in Ontario’s real estate, rental and leasing sector last year. Recently released labour force data from the provincial Financial Accountability Office (FAO) shows that COVID-19 delivered a relatively glancing blow to men in real estate roles, who accounted for less than 0.5% of the 355,300 jobs Ontario shed in 2020. In comparison, women were jettisoned from 14,300 of the roughly 16,000 positions the real estate sector trimmed, making up more than 4% of the province’s newly unemployed. That’s generally in keeping with reported trends across the entire labour force. Women absorbed 57% of the layoffs in Ontario, translating to a 5.8% drop from pre-pandemic employment levels, while men experienced a 3.9% decline in employment. The pace of recovery has also been slower for women. That’s most noticeable in the 15-to-24 age cohort, in which women were still 13.2% below February 2020 employment levels at the end of year, while their male contemporaries were 2.2% shy of the pre-pandemic count. Meanwhile, 49% more women than men in the 25-to-54 age cohort — 104,900 versus 70,200 — simply exited the labour force last year. “In particular, core-age (25-54) working mothers with children under the age of 18 faced greater labour market attachment challenges compared to fathers,” the FAO report states. “Nearly one-fifth of core-age mothers with children under the age of 18 were absent from work, more than twice the share of absence among fathers (9.1%).” Real estate is one of three sectors the FAO report highlights for the disproportionate gender split of layoffs. The others are:

GTA & BEYOND ■ APRIL/MAY 2021

Information, Culture and Recreation, in which 27,800 women lost jobs, while 3,000 men were newly employed; and Services other than Public Administration, in which 16,400 women lost jobs and 2,700 additional men were hired. The report notes “job losses among males and females were largely proportional” for Accommodation and Food Services — the hardest hit sector, which lost 110,700 jobs or nearly 25% of its pre-pandemic workforce — and for Retail Trade, which shed 47,000 jobs, equating to a 5.6% reduction in employment. Beyond permanent job loss, the FAO report tallies more than 410,000 employees who experienced at least a 50% reduction in working hours last year, equating to an estimated 9% decrease across Ontario’s labour force. It also cautions that Ontario’s 9.6% unemployment rate does not capture those who have dropped out of the labour force, and points to the shrinking labour force participation rate, which fell to 63.6% per cent from 64.9% in 2019, for greater context. “Combined, the total number of employees impacted by the pandemic was 765,340 in 2020,” the report states. “Ontario’s labour underutilization rate reached an unprecedented 22.1% in 2020, meaning one in five workers were either unemployed, did not look for a job although they wanted one, or worked fewer hours than they desired.” ASSOCIATED JOB FIELDS Given its multidisciplinary reach, not all employment tied to commercial real estate is classified as directly in the Real Estate, Rental and Leasing sector. Five other overlapping fields offer a wider and more varied picture

of COVID-19’s impact — ranging from the beleaguered Accommodation and Food Services sector to Finance and Insurance, which gained 32,700 jobs over the course of the year. Construction — a sector in which men are the acknowledged vast majority — tallied 25,200 layoffs, representing 4.7% of the prepandemic workforce. However, the FAO places much of that unemployment in the subset of self-employed individuals less likely to be working on major commercial development sites. (Province-wide, self-employed workers accounted for about 14% of job losses versus 81% with private sector employers and just 5% in the public sector.) Building operations personnel would presumably be classified among Business, Building and Other Support Services, which lost 17,700 jobs in 2020. The sector has been slower to recover, with year-end employment levels still more than 15% below the prepandemic benchmark. In contrast, a range of consultants and skilled trades contracted to the commercial real estate industry would fall into the Professional, Scientific and Technical Services sector. It recorded a more modest slip of 3,200 jobs or less than 1% of new unemployment in Ontario. Drilling down to commercial real estate asset types, retail job loss appears in sync with retail properties’ flagging investment returns. There’s perhaps more dissonance between the 38,200 lost jobs in the Transportation and Warehousing sector, representing 9.7% of prepandemic employment, and current vibrant market dynamics for warehouse/distribution and logistics sites. ■

_________________________________________________________________________________________ THE COMPLETE TEXT OF ONTARIO’S L ABOUR MARKET IN 2020 CAN BE FOUND AT W W W.FAO-ON.ORG/EN/BLOG/PUBLICATIONS/L ABOUR-MARKET-2021.

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