Expert Panel on Sustainable Finance Report Supports a Vibrant Retrofit Market
Today the Expert Panel on Sustainable Finance released its Final Report entitled “Mobilizing Finance for Sustainable Growth.” CaGBC supported the Expert Panel by organizing an industry roundtable in February of this year and sharing a summary report with key recommendations from industry stakeholders.
Today’s report validates CaGBC’s commitment to, as the Expert Panel points out, “accelerate the development of a vibrant private building retrofit market” with deep retrofits, standardization, and energy disclosure. In addition, the Final Report lays out opportunities for the federal government to spur the essential market activities, behaviours, and structures needed to bring sustainable finance into the mainstream—including in Canada’s built environment.
The Expert Panel on Sustainable Finance’s report is well worth the read. Here are three key takeaways for the green building industry:
While the panel found that sustainable finance and technologies will become a critical component in terms of Canada’s long-term global competitiveness, we are currently lagging Europe, China and other parts of the world. Canada needs ramp up the pace of change and embrace sustainability as a national economic objective. Establishing long term goals beyond 2030 to the mid-century and clarity of expectations by sector will help accelerate change.
The panel emphasized that it is the government’s role to set the conditions that will allow the private sector to solve and implement solutions to meet Canada’s carbon targets—including in the building sector. This includes access to reliable information and disclosure, legal clarity and supportive professional services, as well as tools to meet the financing needs of critical segments of the economy.
To accelerate the pace of deep retrofits and generate new economic opportunities and employment in the building trades, manufacturing and materials production, will require efforts from the government to establish a policy and regulatory framework that offers owners and investors the visibility to plan for large-scale retrofit projects. At the same time, the panel recommends developing financing structures to alleviate the up-front costs of retrofits at scale—moving from larger institutional owners down to home owners.
CaGBC sees the following as key recommendations from the Final Report:
- Calibrate Canada’s building codes to the proposed PCF 2.0 and develop a capital plan and supports to achieve targets.
- Ensure federal fiscal incentives and building efficiency initiatives promote expedient building code adoption and emissions reductions, rather than simple efficiency gains, with funding tied to performance gains.
- Introduce a mandatory labeling and public disclosure program to enhance the transparency of Canadian building performance.
- Consider energy efficiency and source, water usage and physical risk vulnerability in program scope. The Panel points to the Ontario Energy, Water Reporting and Benchmarking (EWRB) scheme as a potential precedent, as it was negotiated with key industry participants such as REALPAC and the Canada Green Building Council, and is well understood by building owners.
- Commit to publicly disclosing ratings for all federal buildings as soon as practically possible.
- Leverage existing federal building upgrade plans under the federal Greening Government Strategy to create a centralized deep retrofit project pipeline for public-private co-investment.
- Develop a regional green bank network to facilitate an ‘on the ground’ retrofit market.
- Develop financing structures to alleviate the up-front capital cost of home retrofits.
- In the case of municipality-sponsored PACE programs, CMHC could provide guarantees for Local Improvement Charge (LIC) financing programming. In the case of utilities acting as the service provider, CMHC could work with local utilities to create an underwriting framework for on-utility bill financing for targeted retrofit upgrades. Structured facilities would be used to apportion energy savings, which would be paid back through utility payments over time.
We look forward to working together to help Canada meet its carbon commitments.
Learn more about Sustainable Finance: www.canada.ca/sustainable-finance