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Federal Budget – What it Means for Building Owners

What do you need to know as a building owner?

The recent Federal Government’s budget reflects the government’s growing focus on energy efficiency and reducing greenhouse gas emissions.

How does the budget affect building owners?

  1. There is $1,010M budgeted to increasing energy efficiency in buildings, with focus on municipalities, non-profit organizations and social housing.
  2. As of January 1, 2019, Ontario is paying a carbon tax of $20 per tonne of GHG emissions, or about $0.038/m3 natural gas.
  3. The budget outlines targets to reduce GHGs with our transportation, with a 2040 goal of 100% of new vehicles having zero emissions.
    1. To move towards this goal, the budget is setting aside $130M over 5 years to help building owners to install charging stations in workplaces, public parking spots, commercial and multi-residential buildings.
    2. The move to electric vehicles will put a strain on building electrical supply.  You will need to give careful thought to meet the needs of tenants, while still maintaining reasonable loads.

Items 1 and 2 are a carrot and stick approach to moving building owners to improve the efficiency of their buildings.  To cost effectively do this, it is important to step back and look at where your energy is being used, and how best to reduce consumption in a cost-effective manner.  This typically involves an investment grade energy audit.

Items 3.1 and 3.2 are a little different.  As electric and plug-in hybrid vehicles gain traction, building owners can either keep up with the requirement, or risk falling behind.  Early adopters of these types of vehicles are willing to spend a little more upfront to save on fuel costs, and help the environment in the process.  They are forward thinking, and would be a tenant worth attracting and keeping.  They would also likely pay a premium for a parking spot with a charging station.  If you received an extra $200/month for a charging station parking spot, the payback would be less than 5 years, without accounting for the fact that you are keeping a high-quality tenant happy.

Next Steps

Of course, with any change, there are many obstacles and multiple options.  You have to get adequate supply to the area, have to install the right charging station type and have to manage it so that your building load isn’t too high with the added load.  A little upfront effort will go a long way to ensure you have the optimal solution for your building, tenants and future requirements.