COVID-19 Economic Stimulus POLICY RECOMMENDATIONS FOR A DEEP GREEN RECOVERY COVID-19 presents Canadian governments with an unprecedented challenge. Our recovery is a unique opportunity to invest in a better future. Economic stimulus will be essential to get Canada back on its feet. We can better prepare for future crises, and support homeowners and businesses across the country who are suffering the loss of income, by directing investment into structural and long-term changes that will stimulate a new lowcarbon and resilient economy. A Deep Green Recovery will also help Canada meet its commitments to mitigating climate change and protect us from its worst impacts. Integral’s Sustainability Policy and Planning Team present some of their recommendations for projects that can and should be initiated in the next year or less. Their proposals give priority to projects that will build a new green workforce and improve the health and well-being of lower-income individuals and families. Wherever possible, these initiatives should be delivered using existing program and policy infrastructure to streamline implementation and reduce administrative costs, putting money and jobs into the hands and households that need them.
Buildings Low-Carbon New Construction • Partner with municipalities to invest in affordable low-carbon and resilient housing as a means of kickstarting the construction industry. • Provide tax cuts and subsidies to Canadian companies invested in manufacturing low-carbon building products and systems including high energy efficiency electric heat pumps, highefficiency (85%+) heat-recovery ventilation units, solar photovoltaics, battery storage, and highperformance building envelopes. • Subsidize Canadian companies invested in lowcarbon construction materials and the increased carbon sequestration potential of the building sector (e.g. low-carbon concretes, engineered wood products, mass timber, low-carbon insulation materials, natural building materials).
Supporting Low-Carbon Home Purchases • Relax existing mortgage test rules for highefficiency/low-carbon homes. For example, for home buyers with an uninsured residential mortgage (i.e. most mortgages where the borrower’s down payment is 20% of the property value or more) and who intend to purchase a high-efficiency, low-carbon home as measured by the home’s modeled EnerGuide rating, the interest rate that the lender is required to use when qualifying a client could be the greater of the client mortgage or the Bank of Canada’s 5-year conventional mortgage interest rate. For homes that do not qualify as high-efficient and low-carbon, the existing mortgage test would continue to apply (i.e. the greater of the client mortgage plus 2% or the Bank of Canada’s 5-year conventional mortgage interest).
Financing Energy Efficiency & Low-Carbon Home Upgrades • Allow homeowners to use up to $25,000 of their RRSP to put toward deep emissions retrofits without any immediate tax penalty. Similar to the first time Home Buyers Plan, allow the home owner to repay the amount taken out of RRSP over a maximum of 15 years. • Follow through with the commitment to provide up to $40,000 of low or no-cost financing for energy efficiency renovations, expanding the total cap to cover the cost of deeper and more comprehensive retrofits ($80,000-$100,000). • Provide rebates for renovations that count, including low-carbon mechanical systems (e.g. air source heat pumps) and on-site renewable energy generation and storage. • Develop and issue tax credits for energy efficiency upgrades and low-carbon energy system replacement. Consider additional tax credits for upgrades that ensure energy efficiency and low emissions outcomes alongside other eligible home upgrades. • Carry out the plan of providing free or dramatically subsidized energy audits for homeowners and landlords.
Retrofitting Public Buildings • Initiate deep energy and emissions retrofits in public housing to improve the health and comfort of occupants while reducing operational costs and enhancing resilience. • Invest in retrofitting public buildings including schools, hospitals, community centres and others to increase low-carbon resilience and create important community refuge areas during future hazards. • Provide incentives for retro-commissioning existing public buildings, focused on achieving best practices in indoor air quality, as well as the optimization of plumbing and domestic hot water systems to improve efficiency and safety in light of current and future public health events. Pair with incentives for improved air system maintenance, filtration efficiency and filter change frequency.
Energy Improving Building Performance • Stay the course on developing funds to attract private capital to engage in deep energy retrofits in larger buildings. • For small businesses and Class B & C commercial buildings, provide a deep subsidy to engage in a Level 1 Energy Audit and/or Energy Benchmarking. Make the sharing of the results with the funding agency a condition of program participation. Offer a tax credit to companies that: a) participate in the Energy Audit and/or Benchmarking program, and b) make energy efficiency upgrades that lead to a minimum of 10% improved energy performance score. Offer a higher tax credit for buildings in the 20th percentile in terms of their energy performance rating (i.e., the lowest 20% of buildings in each building classification). Offer a higher tax credit for buildings that have a 50% or greater reduction in operational carbon emissions. Consider apportioning a percentage of tax credits to tenants. • Incentivize retro-commissioning and improved maintenance for private sector buildings to improve both occupant health and system efficiency, as above.
Building Industry Readiness • Fund and train cohort of renovation coordinators, building on EnerGuide training to include broader customer support, marketing and knowledge of financing options. • Develop, implement and/or support contractor training programs, beginning with online forums and shifting to in-person as possible, to build the skills and expertise necessary to take advantage of a new green economy. Give priority to trades that lost work during COVID-19.
Investing in Clean Energy Generation • Develop and implement training programs for installation and maintenance of solar PV, wind, and other renewable energy systems at multiple scales, from individual homes to larger projects. • Partner with municipalities to invest in communityscale renewable energy generation and infrastructure projects. • Initiate and fund renewable energy generation projects in remote communities reliant on diesel generators to improve resilience to fluctuations in the supply chain and reduce carbon emissions.
Transportation • Stay the course on the current target of requiring all new light-duty vehicles to be zero emissions by 2040 target, and set new short and long-term targets for medium- and heavy-duty vehicles to stimulate further demand. • Develop and issue tax cuts to Canadian companies invested in manufacturing zero-emission technologies for the transportation sector. • Offer grants and no-interest loans to transit authorities and municipalities to complete backlogged shovel-ready transit-oriented community development projects. • Invest in upgrades to the building-scale electricity infrastructure to support increased EV charging (as well as HVAC electrification).
• Ensure training is provided specifically to minority groups and low-income populations, along the lines of the current Building Up program.
COVID-19 ECONOMIC STIMULUS - POLICY RECOMMENDATIONS FOR A DEEP GREEN RECOVERY
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Integral Group’s Sustainability Policy and Planning Team specializes in the development of strategic plans and policies for all levels of government - to achieve net zero emissions, sustainability, and robust resilience outcomes.
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