Ontario Home Builder - Winter 2018 by Ontario Home Builder

smoke signals: preparing your business for legalized marijuana P.19 the growing flexibility of live-work spaces P.48

WSIB transforming how premium rates are set

pass or fail: Grading the government on legislation P.39

ARE Things looking up? Multi-unit sales across Ontario may nudge the market forward

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Contents

30 The Year Ahead

With interest rate hikes and NAFTA changes looming, and an unpredictable U.S. president in office, what does 33 Canada’s economic Soft Landing Ontario housing sales went future look like? ballistic in 2017 before

falling back to earth. But the rise of multi-unit developments should propel the market forward, if slowly, in 2018

2018

9 One Voice When politics gets in the way of housing, it’s time to act 11 Ontario Report Queen’s Park Day, updates to the Lien Act, OMB replaced by Local Planning Appeal Tribunal, new grants for employers training apprentices, OHBA apprentice pooling and Cote heads up Climate Change Council 17 Frame of Mind Outsourced cafés are replacing the intimate spaces of home ohba.ca

39 Passing Grades Through the years, the provincial government has passed legislation to help improve Ontario’s future. From the Growth Plan to the Greenbelt Act, we grade their performance

19 Inside Storey Is your workplace ready for legalized marijuana? Gowling WLG’s David Law helps clear the air 23 Top Shelf Some of the hottest items for builders, contractors and interior designers include reactive faucets, gifts for your new-home buyers, eye-popping light fixtures, a quick-installing fence, innovative insulation, and a pair of pants that will take more than you can give

48 Flexible Space

In an increasingly entrepreneurial world, not to mention one of ever-worsening traffic gridlock, living where you work is making more financial sense. Who is answering the call?

57 Building Buzz WSIB transforms how premium rates are set, Compass provides a new online health and safety tool and OHBA members shine at Ontario Wood Works! Awards 63 Product Focus From foam and batt insulation to see-thru fireplaces, some of the latest in heating and cooling 70 Words to Build By Bill Malhotra, founder and CEO of Claridge Homes

ON THE COVER

Tridel’s Bianca boutique condo in Toronto’s Annex is emblematic of the increasing popularity of multi-unit developments across Ontario. developments

ontario home builder Winter 2018

The official publication of the Ontario Home Builders’ Association WINTER 2018 | Vol. 34 Issue 1

Quality

editor

Reliability

Ted McIntyre ted@laureloak.ca

Va lue

associate editor

Norma Kimmins, OHBA

FIND OUT MORE

art director

Erik Mohr graphic designer

Ian Sullivan Cant copy editor

Barbara Chambers contributors

Avi Friedman, Tracy Hanes, Christina Hoy, Marc Huminilowycz, Sarah Niedoba, Dan O’Reilly, Joe Vaccaro advertising

Tricia Beaudoin, ext. 223 tricia@laureloak.ca Cindy Kaye, ext. 232 cindy@laureloak.ca publisher

Sheryl Humphreys, ext. 245 sheryl@laureloak.ca PRESIDENT

Wayne Narciso Published by

Laurel Oak Publishing laureloak.ca

ohba.ca Ontario Home Builder is published six times per year (Winter, Spring, Renovation, Summer, Fall, Awards). All rights reserved. No part of this magazine may be reproduced without the written consent of the publisher © 2018. For address corrections please email info@laureloak.ca or phone: (905) 333-9432.

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One Voice

Building ontario’s communities When politics gets in the way of housing, it’s time to act By J o e Vacc a r o

typically, this is the time of year when many reflect upon the pluses and minuses of the past year and anticipate what the year ahead may bring. That is certainly the case for Ontario Home Builder magazine’s winter issue, where we report on what happened and what’s expected to happen with the Canadian economy (p. 30) and Ontario’s housing market (p. 33) in 2018. One thing I think we can all agree upon is that housing was, and still is, a hot topic of discussion for many Canadians. Certainly, I know throughout most of 2017 there was not a family get-together, summer BBQ, soccer practice for my daughter, hockey game with my son or holiday celebration that I attended where somebody didn’t start a conversation about what is going on with the housing market. It was a year of rapid double-digit price increases in some communities, low inventories in many, labour shortages in others and sad tales of buyers left disappointed when they didn’t ohba.ca

“It’s time to show all levels of government that we—members and the public—are home believers.” have the winning bid in multiple-offer situations. For many, it seemed that the scenario appeared virtually overnight. But as our story, “Passing Grades” (p. 39) illustrates, this situation has been brewing for decades, as government after government—both provincial and municipal—have instituted land development and housing policies that have directly impacted housing choices and availability for Ontarians. The chart, “Ontario’s Housing Policy and Economic Indicators” on page 44, maps out key provincial legislation

against the market impact. OHBA and our industry have worked tirelessly over the years, trying to inform, educate and engage politicians about the consequences of their policies—not just in terms of the state of Ontario’s housing sector, but the elevated interest from the public about housing (or the lack thereof) in their communities. Housing is poised to be a leading issue in the upcoming June 7 provincial election. To that end, late last year, OHBA launched a digital campaign intended to engage OHBA’s wider membership, the public and politicians in an informed debate about the current state of housing for Ontarians and where we see it heading. The key message is we need more homes, not politics. Here’s how you can participate. Visit our buildingcommunities.ca microsite, where you can find out more about what happens when we put politics above good planning (and therefore build fewer homes). Review the facts and commentary and then share it on your social media platforms. Then tag the post with the campaign tagline #morehomesnotpolitics. OHBA is actively posting on social media as we respond to local news stories about housing issues, provide facts and present our industry’s position. Posting local stories is a way to effectively inform OHBA members, the public and government that housing is important to all Ontarians. So, when you see OHBA’s campaign activity on social media, share and retweet to your followers to enlarge the impact of our collective advocacy work. Press ‘send’ and spread the word! It’s time to show all levels of government that we—members, and the public—are home believers. OHB

joe vaccaro is the CEO of the ontario home builders’ association

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Ontario Report

Queen’s Park Day OHBA gets its message across to provincial leaders

OHBA President Pierre Dufresne with Minister of Labour, the Hon. Kevin Flynn.

n mid-December, members of the OHBA Executive Committee spent the day at Queen’s Park to advocate for a variety of key industry issues. A breakfast reception was held for MPPs and remarks were delivered by OHBA President Pierre Dufresne; Minister of Municipal Affairs, the Hon. Bill Mauro; PC Housing Critic, MPP Ernie Hardeman; and NDP Housing Critic, MPP Percy Hatfield. OHBA also held separate meetings with members of each party caucus, as well as a meeting on the Development Approvals Roundtable Action Plan with Secretary of Cabinet Steve Orsini and the Deputy Minister of both the Municipal Affairs and Housing Ministries, Laurie Leblanc. OHBA members also attended an Empire Club luncheon in which PC Leader MPP Patrick Brown made a keynote speech with respect to the Progressive Conservative vision for Ontario. OHBA is set to hold another Queen’s Park Day in 2018 that will include local association presidents, EOs and representatives from across the province.

Minister of Municipal Affairs, Hon. Bill Mauro, PC Housing Critic, MPP Ernie Hardeman and Greater Ottawa HBA EO John Herbert.

OHBA 2nd V.P. Bob Schickedanz, NDP Housing Critic/MPP Percy Hatfield, OHBA Secretary Jackie Caille and OHBA 2nd V.P. Louie Zagordo.

UPDATES TO LIEN ACT The Construction Lien Amendment Act unanimously passed in the legislature in December 2017. The new act will make significant changes in the payment process for all construction contracts in

ohba.ca

Ontario. OHBA is opposed to several key changes in the legislation that we believe contradicts existing agreements and practices in residential construction. These changes include mandatory payment

timelines, invoicing practices and an adjudicative process that we believe will add new legal costs for both contractors and owners. There is still a significant amount of work that will need to be done during

the regulatory consultation process to bring into effect the prompt payment and adjudication components of the new Act. OHBA continues to advocate for regulations that are specific to residential construction.

ontario home builder Winter 2018

Ontario Report

OMB replaced with LPAT In December, the provincial government passed Bill 139, Building Better Communities and Conserving Watersheds Act, 2017, with a vote of 86-1, which was supported by all three political parties. The legislation will overhaul the planning appeals system by creating the Local Planning Appeal Tribunal to replace the OMB, as well as making significant amendments to the Conservation Authorities Act. OHBA worked closely with our network of local HBAs and our legal counsel David Bronskill (Goodmans LLP), who has been assisting OHBA and BILD with legal advice throughout an extensive two-year consultation process. OHBA made several submissions to government, appeared before standing committees and had extensive dialogue with the Ministries of the Attorney General and Municipal Affairs throughout the consultation process. At every opportunity with every government and opposition MPP, OHBA repeated the industry belief that the changes will undermine good planning policy and result in council planning decisions falling victim to local politics and NIMBYism. Overall, OHBA is very concerned that the changes to the land-use planning appeals process will result in a more uncertain and politicized planning environment where it will be increasingly difficult to respond to real demand and bring much needed housing supply to Ontario communities.

Training Apprentices:

New Grants For Employers The province has announced new grants for employers that hire apprentices. The Graduated Apprenticeship Grant for Employers (GAGE) replaces the Apprenticeship Training Tax Credit (ATTC). The change was made, in part, in consideration of stakeholder feedback provided during provincial apprenticeship modernization consultations. OHBA and its members were active in the consultation and we are pleased by the direction of the outcomes. GAGE is an improvement from the previous credit because it expands the number of additional trades that qualify, increases financial incentives for businesses that train apprentices and is easier for employers to qualify and receive the funding. Employers that sponsor apprentices will be enrolled automatically in the grant and will not have to apply. Grant payments will be distributed directly to employers as their apprentices complete each level of training and complete their apprenticeship. GAGE is designed to encourage employers to ensure apprentices complete their training programs by providing the following employer grants: •$ 2,500 upon the apprentice’s completion of level one and again at level two • $3,500 upon the apprentice’s completion of level three and again at level four • $4,700 upon the apprentice’s attainment of certification (either through a certificate of apprenticeship or certificate of qualification, if applicable).

GAGE will provide a $500 bonus to each grant level described. Visit tcu.gov.on.ca or call toll-free Employment Ontario hotline: 1-800387-5656 for more information.

Apprenticeship Pooling OHBA is in the early stages of establishing an apprenticeship pool model for members that hire apprentices. This pool would permit an apprentice to move between different employers and 12

allow employers to share administrative expenses related to the apprentice. To that end, OHBA is working with EnerQuality to establish a model for members that would provide more

ontario home builder WInter 2018

apprenticeship opportunities and make it easier for small business to participate in the apprenticeship system. OHBA is pleased that the province has announced it would be providing financial

support to develop the model. OHBA is also working closely with the London HBA and Durham HBA, both of which have expressed interest in starting a local apprenticeship

pool that could be expanded to other local associations. OHBA members passed a resolution in support of apprenticeship during its 2017 Annual Meeting of Members. ohba.ca

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Ontario Report

Cote Heads Climate Change Council OHBA welcomes Michelle Cote as the Chair of the OHBA Climate Change Council. With over a decade of experience in the home building industry, primarily focused around better building practices and market transformation in energy efficiency, Michelle’s leadership and expertise will be of great benefit to the council. The goal of the OHBA Climate Change Council is to inform industry stakeholders on cutting-edge technologies, products, programs, services and the applicable building code changes, and direct members to

educational training and certification programs. “We would love to see this council as a real hub of knowledge sharing and a platform for engagement,” says Cote. “We want to hear from members and local associations about the challenges and interests they have, as we all work together to move towards Net Zero and Climate change plans at the federal provincial and municipal levels.” For further information about the council and how you can participate, contact OHBA’s Senior Technical Advisor, Shawn Good, at sgood@ohba.ca.

2018 Ontario Home Builders’ Association Local Presidents Darren Steedman — (Chair) BILD John Hickey — Bluewater Steve Szasz — Brantford Dave Depencier — Chatham-Kent Alex Markell — Cornwall Trish Bradley — Greater Dufferin Manuel DeSousa — Durham Region Dan Burrows — Grey-Bruce

Building In the [K]now:

Highlighting an Industry EnerQuality is hosting its annual Housing Innovation Forum & Awards, and invites you to be part of Building In the [K]Now. High performance builders are in the know and in the now, and the Housing Innovation Forum is a one-day celebration of both attributes. The event will shine a spotlight on new techniques, new products and new thinking, and feature a one-day conference of sessions

on important topics in high performance building, including a keynote address from a cleantech speaker and frequent CBC guest Tom Rand. The highlight of the day, as always, will be the celebrated Innovation Gauntlet, a Dragons’ Den-type session where five exhibitors vie for the audience-chosen “Most Innovative New Product.” Also returning is the popular Innovation Showcase, an up-tothe-minute look at the

latest green products and services in a traditional exhibition hall setting. The celebratory pitch ends on an even higher note in the evening, where top builders and industry partners from around the province will walk the green carpet into the EQ Awards Gala. Innovators, influencers and market leaders will be recognized for the contributions and advancements in the high performance, green building industry in the last year. Nominations for awards ranging from Builder Achievement to Ontario Green Builder are being accepted until January 19, 2018!

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Nominations for Awards: Open until January 19, 2018 at Enerquality.ca

Kevin Brousseau — Guelph & District Len Herrewynen — Haldimand-Norfolk Keith Thomas — Haliburton County Matt Johnston — Hamilton-Halton Ted Rowell — Kingston-Frontenac Andy Cockburn — Lanark-Leeds Peder Madsen — London Jon Whyte — Niagara Robert Miller — North Bay & District Josh Kardish — Greater Ottawa Scott Deroo — Oxford County Garnet Northey — Peterborough & The Kawarthas Tony Engelsdorfer — Quinte Doug Bain — Sarnia-Lambton Bob Schickedanz — Simcoe County Peter DeBoer — St. Thomas-Elgin Harold Holland — Stratford & Area Louie Zagordo — Sudbury & District John Simperl — Thunder Bay Steven Harris — Waterloo Region Ryan Lane — Windsor Essex ohba.ca

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our outsourced living rooms Modern coffee shops reflect a need for intimate spaces on a recent Saturday afternoon, I was badly in need of a cup of coffee. I’d been indoors all day trying to meet a fast-approaching writing deadline. It was rainy and I decided to head out to our neighbourhood’s main street and get myself a strong one. My regular spot, an unassuming, quiet place, was closed. My craving drew me up the street to an outlet of a coffeehouse chain. I hesitated. I am not a fan of chain eateries and coffee establishments. Patronizing one makes me feel as though I’m wearing a labelled T-shirt. Reflecting on the transformation of coffee shops and restaurants, I recalled that until the middle of the 20th century, in addition to serving food, they were places of information exchange, budding love affairs and political intrigue. Life-changing philosophies and revolutionary artistic ideas were born on the backs of cigarette packages and napkins in smoked-filled Paris bistros. ohba.ca

The rain persisted. I entered and stood in line for my coffee, which I got and carried to a corner table. As I let the coffee cool, I looked around. The place was almost full. The walls’ earth tones and the brown Mexican floor tiles lent the space a warm, cozy feeling. Abstract paintings, a cross between Expressionist and native American, hung on the wall. In front, there was a fireplace made of dark brown stucco and tiles. A natural gas fireplace spread some heat, reflecting light off the shiny tiles. Three large comfy armchairs were set near the fireplace around wooden tables. People sat in the chairs, quietly reading the weekend paper and sipping from mugs. From time to time they put down the paper and talked amongst themselves. Sections of the paper rested on the rug under their seat. A low hanging fixture marked a circle of light around them.

The place looked more like someone’s living room than a coffeehouse. The objects on the fireplace mantel and the framed photos of people I did not recognize gave the setting a domestic touch. Interiors of contemporary coffee places have changed in recent years as they have become more popular. Their transformation has paralleled several social phenomena, among them the fact that the diminished size of the Canadian family has seen the share of singles increase. There are more lonely people out looking for the company of others. The number of seniors has also mushroomed. Having a coffee and reading the paper on a Saturday afternoon has traces of civility and personal comfort sought by some. The popularity of micro-units in urban centres has forced their occupants to kind of source a space away from home. For the price of a cup of coffee you can meet your friend for a long, comfortable chat. And then there are the young crowds who have turned coffee spots into meeting and workplaces. Several tables were occupied by students with tablets and laptops. Taking advantage of the free wifi, they seemed to be working on their papers or preparing for an exam, pausing from time to time for an animated discussion. Above all, people are basically in need of other people. Be it a stroll in a public market, sitting in a movie theatre or in a fake living room in a trendy coffeehouse, we search for the company of others. As marketing experts and interior designers have discovered, patrons of coffeehouses cherish domesticity, and the retailers cleverly use this need as a lure. I wonder what’s next on the menu for the fast-food outlets. Cloth-covered dining tables perhaps? Fries served on china? Will real forks and knives and cloth napkins be on the table? Maybe a slice of civility might be restored one day along with an improved interior. OHB Dr. Avi Friedman is an architect, professor and social observer. He can be reached at avi.friedman@mcgill.ca.

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Inside Storey to prohibit possession of intoxicants in the workplace—except, of course, when there’s a real medical issue involved. how about the parking lot?

If the employer controls the parking area, then it’s their space. If I have a parking lot adjacent to my construction site, I’m responsible for what happens there—just as when someone falls on the ice and makes a workers’ compensation claim. What about the argument that it actually takes stress away and makes a worker more productive?

SEEKING A joint resolution Is your workplace ready for legalized marijuana? By Ted McIntyre with David Law, Partner, Gowling WLG

Expect this year’s Canada Day celebrations to be mellower than most, with a conspicuous run on fast food establishments afterward. July 1, 2018, after all, is the target date for Bill C-45, the Cannabis Act, to take effect. The act will legalize the consumption and sale of recreational marijuana in Canada, with a minimum age of 19 and over for Ontario residents. But is your company prepared for the changing landscape? Few know the subject matter better than David Law. A specialist in employment labour, workers’ compensation and occupational safety, with plenty of experience working with the construction industry, the aptly named Law is a partner at Gowling WLG in Ottawa. That all makes him a font of information as managers and HR offices across Ontario’s home building industry scramble to prevent marijuana-related issues in the workplace from becoming a real drag. ohba.ca

OHB: Should we be worried about the Cannabis act ? david law: The legalization of

recreational marijuana will increase the use of marijuana. It simply will, just as the repeal of Prohibition saw the increase of alcohol use. Since more people will use it, there will be more instances of people being high or stoned. Now some of the anxiety is misplaced. Cannabis-type products have been legal a long time for medical purposes, and they’re like any other medicinal drug that people might take every day. Since the possession of marijuana will generally be legal, though, there will be no legal basis to say, ‘You’ve broken the law on my premises.’ But that doesn’t mean an employer has to tolerate it. The same as you’d have a rule not to bring a bottle of gin to work, for example, you’re still within your rights as an employer

When I was a young steelworker in the early ’80s, I had to go up on the sixth floor inside a steel mill and walk along girders without a tie-off. The guy who did it with me once offered me a joint before we went up. I said, “Are you crazy? I can’t do this and go up there!” And he said, “If I don’t do this, I can’t go up there!” We all take the edge of with something—yoga, alcohol, whatever. The problem with substances is that they can do more than that—they can make the person hazardous to themselves and others. For workplace behaviour, production, performance and safety reasons, it’s really good for people to be sober at work so that they don’t behave stupidly and start flirting with the new receptionist, that they don’t mess up their work and don’t fall down a flight of stairs. And employers can say, “We don’t want any of these substances on our property because their presence creates the opportunity for use.” That’s logical. Employers are also within their rights to say, “If we believe a person is unable to work safely, particularly in a safetysensitive role like construction, we don’t want them at work. So don’t come to work under the influence, don’t have the substances present and don’t use them during the workday.” It there a loophole with respect to addiction?

Addiction to a substance is considered a disability under the law. So any rule that ontario home builder Winter 2018

appears to be targeting someone for substance use can sometimes be interpreted as an attack on them because they have an addiction. If a person were drinking and it was demonstrated that they’re addicted to alcohol, an employer would potentially have trouble saying to them outright. “We’re punishing you for having alcohol in your system.” The law protects people from that kind of punishment. But there is a recent decision of the Supreme Court of Canada (Stewart v. Elk Valley Coal Corp.) where an employee who was addicted to cocaine was fired—but he was fired for breaking a rule (in which he was required to previously notify the employer of his addiction). Can an employer conduct random blood or urine tests for these substances?

In Canada, the position of the courts and human rights tribunals is that almost all forms of testing for drugs and alcohol are offside. Testing that could be considered appropriate is where employers have reason to believe that it is necessary, such as random tests in cases of safety-sensitive positions. But right now that’s only for alcohol. There’s a scientific and legal conclusion that blood-alcohol level testing reflects impairment level. But we don’t have that benefit as yet in testing for other substances. Everything that I have read and heard on the subject suggests that drug testing may show the presence of a drug, but won’t show much more that’s reliable about the effect of the drug on that person. So that makes a drug test a less valid instrument, generally speaking, since it doesn’t tell us what we need to know. An employer’s interest is not in what people are putting into their bodies; it’s how it affects that person—even if it’s for medical reasons. Perhaps that person is unable to safely or productively operate machinery, or their behaviour is altered, or they basically can’t produce because of fatigue or whatever. So how does an employer proceed when you can’t measure for that line that constitutes impairment?

If we have evidence that they appear to be impaired, then we have a basis for 20

ontario home builder WInter 2018

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acting on their employment—in terms of suspending them from active work or reassigning them. The issue is, are they a danger to themselves or others, or are they a lousy performer because they’re intoxicated. So what do you suggest in terms of writing office policy?

The best approach, to be very clear on the rules, is that you cannot tolerate impairment at work that will affect conduct, performance and safety. Putting controls around possession and use at work is perfectly appropriate—asking them not to be in possession in the workplace or while working or operating vehicles or while on the road for you. Employees have to be cognizant of that in terms of their activities. For example, as soon as anyone crosses the border from Canada into the U.S., the legal status of the possession of marijuana changes, and they could be arrested. Just as if I have a revolver in my car—it’s okay on the other side of the border, but you’re probably not going to get it into Canada legally. It’s not just that they might lose their jobs for breaking the law, but worse. so you’d advise companies to speak to a lawyer and draw up a policy prior to July 1.

An employer will probably have to deal with somebody who says, “It’s legal!” And then there’s going to be a grievance about someone’s possession of a legal substance. And the employer needs to be ready. You often have to make rules for the dumbest—or pushiest or loudest—person in the room. What I want is for employers to have rules that make sense and are defensible. And the best ground there is for any rule, especially in construction, is safety. And, with the exception of medical cases or addiction where there’s no safety risk, a rule against possession of, access to or use of intoxicating substances on the premises is a legitimate rule. If companies don’t adopt a wellgrounded rule, they’re going to have arguments, and they’re going to lose those grievances because they had no previous logical rule in place. OHB ohba.ca

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MEETING THE NEW CODE SilveRboard Graphite XS is the most cost-effective and high-performing rigid exterior insulating board in the market today, maintains Amvic Building Systems. The colder the climate, the higher the R-value—a property of EPS insulation not commonly found in other rigid insulation boards. It’s also ideal for builders looking for a sheet with reduced thickness that provides more flexible options, while providing a level rigid surface for exterior finish materials. Amvicsystem.com

GORILLAS IN YOUR MIDST Gorilla Fences can be installed as a “no-dig” fence where 1-7/8” galvanized pipes are driven into the ground and the vinyl “H” post sleeves over it. Fence Rails are screwed to the slot in the “H” post at the desired height. No heavy equipment is required in the yard and there is no need for cleanup and replanting of grass after the job is complete. Almarvinyl.ca

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The Year Ahead 2018

Experts weigh in on Canada’s immediate economic future By S a r a h N i e d o b a

t’s hard to deny that 2017 was a strong year for the Canadian economy. A slight slowdown in the third quarter aside, the first half of the year saw GDP growth skyrocket, thanks to strong consumer spending and a red hot housing market. “We predict that 2017 will (have finished) with a very strong growth of 3.1%, which can largely be attributed to three factors,” says Jean-Francois Perrault, chief economist at Scotiabank. “First, much stronger consumption growth than anticipated—helped by low interest rates, strong job growth and the Canada Child Benefit. Second, much more strength in the housing market than anticipated. And finally, a pick-up in business investment.” Heading into 2018, a slight slowing of national growth seems likely, as both consumer spending and housing prices soften. The Bank of Canada, having raised the overnight rate 50 basis points from a historically low 0.5% since July, is likely to hike it further early this year. But don’t fret too much, suggests Marc Pinsonneault, senior economist at National Bank. “A major factor that could impact national growth would be another interest rate hike. Nevertheless, I believe the economy is strong enough that this kind of monetary policy will have a limited impact,” says Pinsonneault. “In fact, given the strength of the economy in the first half of 2017, it is probably a good thing.” Perrault agrees that a hike could affect the economy, but predicts that the Bank will wait until the spring to make the move. 30

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Several unknowns remain heading into the new year. For one, economists are uncertain about what a terminated NAFTA could mean for the Canadian economy. “When it comes to 2018 growth predictions, you have to take into account the challenges and uncertainties that are looming in the trade sector,” advises Pinsonneault. “Right now, the National Bank’s basic scenario for growth doesn’t account for the termination of NAFTA. We’re predicting a rather optimistic growth rate of 2.8%. But that doesn’t take into account a trade disruption—and we can’t really say what would happen if that were to be the case.” Perrault’s predictions are a bit more conservative. “We’re going to see growth slow significantly,” he says. “We predict a growth of 2.2%. Consumption and housing should slow given the strength we observed in 2017.” Perrault says that NAFTA negotiations will likely impact when—and if—the Bank of Canada will decide to increase rates. Of course, no discussion of NAFTA can occur without a certain name factoring in. “The presidency of Donald Trump and the decision to renegotiate NAFTA introduced some uncertainty into the market, that might have convinced some businesses to delay investment expenses in Canada,” says Pinsonneault. Still, he says that the so-called ‘Trump Effect’ had a relatively mild impact on the Canadian economy in 2017. “Earlier in the year, investors were excited about the prospect of Trump’s pro-business agenda,” says

When do you think the Bank of Canada will hike rates next? CIBC: 0.25% hike in Q2 2018 0.25% in Q4 2018

BMO: 0.25% hike in Q1 2018 0.25% in Q2 2018 0.25% in Q3 2018

TD: 0.25% in Q1 2018 0.25% in Q3 2018

Scotiabank: 0.25% hike in Q2 2018 0.25% in Q3 2018

RBC: 0.25% hike in Q2 2018 0.25% in Q3 2018 0.25% in Q4 2018

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Pinsonneault. “At some point, they lost faith in it, but that had relatively little impact on the market.” How might the Trump presidency affect the economy this year? “Investors seem encouraged by current budget negotiations,” says Pinsonneault. “For sure, they expect the implementation of any package to be delayed and to have less effects than originally expected, but they have hope that it will be a positive outcome for businesses.” One reason for Pisonneault’s optimistic outlook is the two looming provincial elections. “We have major elections this year in Ontario and Quebec that will likely mean increased government spending in those provinces,” he says. “That’s in addition to a coalition

government in B.C. that will also be inclined to spend more.” Perrault predicts that Alberta and B.C. will both see slight declines in growth in 2018 after healthy growth last year. Alberta witnessed a rebound in its energy sector as it recovered from the 2016 Fort McMurray fires and B.C’s booming housing market continued its strength. “For 2018, we’re going to see more balanced growth in both provinces,” adds Perrault, who foresees 2.3% and 2.5% growth for Alberta and B.C., respectively. And what can we expect from our neighbours to the south? Perrault believes that strong consumption growth combined with a rebound in industrial activity will keep the U.S. in excess-demand

Will they stay or will they go? Economists weigh in on a world without NAFTA What would post-NAFTA trade look like? “Complicating predictions of a postNAFTA environment, we don’t know what tariff regime would replace it. There’s been speculation that bilateral trade could revert to something like the earlier Canada-U.S. Free Trade Agreement. But given the Trump administration’s protectionist bent, a bilateral arrangement may not safeguard Canada from ongoing punitive trade actions—consider recent U.S. moves to levy tariffs against Canadian softwood lumber and Bombardier manufactured jets!” — Nathan Janzen, Senior Economist, RBC

No NAFTA? Canada has other options “[Does] Canada have a plan B? Under WTO most-favoured-

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nation status, tariffs are not that onerous. Looking at the weighted average tariff that would be applicable on Canada’s U.S. bond exports, we expect that a mere 5% Canadian dollar depreciation would reduce the costs of the domestic content in our exports enough to offset the tariff. Exports to Mexico are too tiny to matter.” —Avery Shenfeld, Senior Economist, CIBC

Some would be hit harder than others “ Ongoing NAFTA talks point to a heightened risk that the Canadian economy could face a meaningful disruption on the trade front, but the shock wouldn’t be absorbed equally among the provinces. New

Brunswick, Alberta and Ontario each send more than 80% of their exports to the U.S., leaving them with trade sectors most reliant on the U.S.” —Robert Kavcic, Senior Economist, BMO

Significant indirect consequences “ The presence of tariffs could increase some administrative costs for businesses. The uncertainty that would arise if NAFTA were abolished could prompt businesses to be more cautious and slow down their investments considerably. As the Bank of Canada has observed, that could have significant negative consequences on Canada’s economic growth.” —Benoit P. Durocher, Senior Economist,Desjardins

territory into 2018, “even if Washington proves unable to deliver on meaningful changes in taxes and spending.” Perrault forecasts the Federal Reserve will raise rates twice in 2018. He adds that the appointment of Jeremy Powell as Chair of the Board of Governors of the Federal Reserve System, replacing current Chair Janet Yellen, will see little change in the U.S.’s fiscal policy. “This is largely because he seems to have the same policy orientation as Yellen did, and he currently sits on the Board of Governors,” says Perrault. “The other candidates under consideration seemed to have a much more hawkish disposition, so might have raised rates more rapidly.” Perrault forecasts that the U.S. will grow by 2.4% this year, building on strong consumer growth. With respect to Ontario, Perrault forecasted end-of-year 2017 growth rate to be 3.1%, when the numbers were crunched, due to strong consumer spending mixed with a record-breaking housing sales in the first quarter of 2017. For 2018, Perrault predicts Ontario’s growth to slow slightly to 2.3%, as the government’s Fair Housing Plan causes the housing market to balance out further. As for the Ontario home building market, National Bank senior economist Kyle Dahms says we’ll likely see a more balanced year, after a red hot 2017. In 2016, Ontario saw 74,952 housing starts. Dahms estimated a whopping 80,500 for 2017, with a slowing to 69,000 for 2018. Dahms is seeing building permits start to slow in the Greater Golden Horseshoe. The impact of interest rate hikes, combined with a new mortgage stress test now taking effect will likely lead to further declines in 2018 and “a much more normal pace of starts in the region.” Pinsonneault agrees that Ontario will likely see a slowdown. “If you look at the current market in Toronto and the GTA, market conditions went from very tight to what I would call balanced. And it’s not bad to have a balanced market. In fact it’s quite good from an affordability point of view.” The slowing of starts can also be attributed to supply. According to Dahms, given a boost of starts at the beginning of 2017, there should soon be more on the market to meet buyer demand in the new year.” OHB ontario home builder winter 2018

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Soft Landing Strengthening multi-unit sales should buffer Ontario market correction By T r ac y H a n e s

fter 2017’s rollercoaster ride, expect the province’s housing market to be on a steadier track this year. Experts predict a cooling in the market, but it will be a soft landing. Multi-unit residential building (MURB) sales will continue to play a key role in large urban centres due to their affordability, but after a record year, at least one source expects sales and prices to slow there as well. We asked BMO Financial Group Chief Economist Douglas Porter, RBC Senior Economist Robert Hogue,

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CMHC Ontario Regional Economist Ted Tsiakopoulos and Ben Myers, Fortress Real Developments Senior V.P. of Market Research and Analytics, for their views. But first, a recap of 2017—“as crazy a year as you could imagine,” according to Myers. “The average resale home price in the GTA went from $730,000 in December 2016 to more than $916,000 in April 2017. That was unbelievable—26% price growth in just a few months.” That type of increase was simply not justified, notes Hogue, who says buyers and sellers were acting on expectations

that prices would continue to rise 25–30% a year. “The more prices rose, the stronger demand became and the weaker supply became, and that created weird dynamics.” Porter describes the conditions as a “bubble” that spread beyond the GTA to communities within a 90-minute commute, including Guelph, Barrie and Peterborough, where prices also jumped 30–40% from the previous year. “To some extent, that ship has sailed,” he says. The provincial government’s Fair Housing Plan, introduced in April, threw cold water on the fire. While most ontario home builder winter 2018

“By 1985, just one-third of starts were multi-unit. But since then we’ve seen a general uptick, particulary since 2000. Now, 60% of new starts are multi-unit, and that number should continue to increase.” changes were minor and one of its main components, the Foreign Buyers’ Tax, affected a small fraction of buyers, purchasers pulled back. Home resale activity from April to July fell by 44% and resale prices took a tumble too. “The increasing price activity had bled into places such as Wasaga Beach and Orillia, and there have been slowdowns in those areas, but I think it’s temporary,” suggests Myers. On the high-rise side, Myers said there wasn’t much of a drop-off, with many successful launches and values holding. He notes the correction in resale activity in April and July was concentrated in the low-rise market, while the “multi-unit and high-rise market skated through this period.” What that illustrates, says Hogue, is that more affordably priced units are still selling and the market is shifting from higher to lower priced homes, which tend to be mid- to high-rise units. Resales started picking up in August and September, indicating the market had probably hit bottom in terms of reaction to the Fair Housing Plan, “but that doesn’t mean it will bounce back where it was before,” advises Hogue. So what’s ahead for 2018? A gradual slide back to reality. Factors include the recent mortgage stress tests, expected interest rate hikes and a slowing of economic growth. According to the 2017 CMHC Fall Report, interest rates should climb as domestic economic conditions improve and world interest rates rise. CMHC’s baseline scenario predicts a posted five-year mortgage rate in the 4.9% to 5.7% range in 2018 and 5.2% to 6.2% in 2019 (compared to the 4.99% posted rate in December). The expected increase from 20172019 should be, at most, 160 basis points. “We’re looking at further cooling activity. Ontario will be flat this year relative to what we’ve seen the last two years,” says Hogue, who expects the market to stabilize early in 2018 and edge lower in the second half of the year. Tsiakopoulos, however, expects a good start to the year. “I think we’ll see a bounce between the end of 2017 and the spring of 2018,” he says. “Some buyers who moved to the sidelines 34

ontario home builder Winter 2018

and who are willing and able to buy, will enter the market. We should see a decent spring before a cool-off.” The economy as a whole will continue its strong growth, Tsiakopoulos adds. That growth will be felt for the next two to three quarters and there will be some recovery in house prices before a dampening in the latter part of 2018 and through 2019. The economy and immigration numbers have grown faster than expected, he notes, but both will likely slow. Myers, meanwhile, thinks the stress test will push people down the ladder. “Those seeking a larger home will look to a smaller residence or stay where they are,” he says. “But then first-time buyers already had this stress test in 2016 and the opposite of what people thought occurred. Instead of depressing the market, prices shot up 26%!”

THE RISE OF MURBS Although Ontario posted record MURB sales in 2017 (an estimated 34,000, compared to the previous record of 27,000 in 2016), Porter predicts 72,000 housing starts in the province in 2018 and 65,000 in 2019—a notable decline from the inordinately large 79,000 that was estimated for 2017. The CMHC’s 2017 fourth quarter report forecast an inner range of about 65,000 starts in 2018, with increased starts in MURB projects and rental construction, and a decline in single-detached and other home types. Affordability and increased pressure for intensification will erode single-family construction. However, the picture is rosier when focusing on eastern and southwestern Ontario, where there are stronger local economies, fewer imbalances and higher levels of affordability, the report suggests. Tsiakopolous notes a distinct trend, with GTA households occupying apartments (rental and owned) growing five times faster than singledetached occupancy from 2011 to 2016. “The (recent) over-evaluation was more negligible on the multi-family market side, and because of affordability, a lot of demand will continue to ohba.ca

shift in that direction.” There’s also a longer-term trend in play. “In the early ’70s, 70% of all starts were multi-unit,” notes Tsiakopolous. “That number started to drift lower in the following years, with immigration—primarily from Europe—helping drive single-family housing. By 1985, just one-third of starts were multi-unit. But since then, we’ve seen a general uptick, particularly since 2000. And now 60% of new starts are multi-unit, and that number should continue to increase. “It’s not just affordability driving it,” says Tsiakopolous, “but also land-use policy. The other factor is the price of land. In Toronto and Vancouver it now comprises 80% of the value of real estate. So from a builder standpoint, it makes more sense intensifying than building single-family homes. And that trend is proliferating beyond the big city centres into smaller towns.” Numbers from the Building Industry and Land Development Association (BILD) confim the trend. Through October 2017, 91% of the 5,377 new homes sold in the GTA were condos, including high-rise, midrise and stacked townhouse units, according to BILD, setting a new record. Condo sales were 81% above the 10-year average. Low-rise sales, on the other hand, were 64% below the 10-year average of 1,388. Although the numbers aren’t as gaudy, new-project statistics also suggest the rise of MURB projects elsewhere in Ontario. For example, as of November, there were 26 new-home developments within Oakville, 20 of which were multi-unit (11 condos and nine townhouse projects). In Ottawa, of 148 new developments, 82 were multi-unit (67 condominiums, four apartments and 11 townhouse projects). Of Guelph’s 18 projects, 11 are MURBs. And Niagara was seeing six of its nine new projects devoted to condos, apartments and townhouses. However, after a robust year of MURB sales, market research firm Urbanation expects GTA condo sales to moderate in 2018, but still fare well. “As far as the high-rise share of the market goes, I feel developers are going to keep things flowing,” says Urbanation market analyst Pauline Lierman. “There are some launches planned for early in the year and the market won’t quiet over the winter. We might have a busier first quarter than we thought.” Demand will continue in downtown and along new transit lines, but as prices have risen ($1,000 per square foot on average downtown and $700 in Vaughan), that could spur more demand on the outskirts as buyers search for more affordable options, Lierman says. However, the city is going to have to allow for redevelopment of some neighbourhoods to accommodate more density—Lierman cites locations along the coming Eglinton Crosstown line—to meet demand. Even condos in surburban locations such as Milton and Pickering are selling well, she notes. Lierman doesn’t see the mortgage stress test rules ohba.ca

as having much impact on the condo sector, as new condo buyers are already required to have 20 to 25% down. But condo developments do face some headwinds in 2018, she warns. Those include the proposal to replace the Ontario Municipal Board with the Local Planning Appeal Tribunal, which will give greater weight to local community decisions and make it easier for the public to make appeals, and thus likely harder for developers to get approvals. And those longer time lags will add to project costs. That said, the underlying market principles

“In the future, we may have 32,000 or 33,000 completions in 2021, and that could drive down prices.” haven’t eased: “Employment is good, people are moving here, a lot of wealth is coming in and there’s still a lot of immigration,” Lierman notes. According to PwC’s Emerging Trends in Real Estate in 2018 report, the appetite for condos shows no sign of waning in several major Canadian centres. The market is driven not only among young professionals who embrace the live/work/play lifestyle and want to live downtown, but also by retiring baby boomers who want to be in the heart of urban amenities. This has been a trend in Toronto for some time, but the PwC report cites Ottawa as a market that will be strong for new condo projects going forward, as years’ worth of oversupply has at last been absorbed. As for the projected overall easing in starts this year, that’s not necessarily a negative thing, says Tsiakopolous, since fewer new households are being formed. “We need new housing starts to drift to 65,000 to 70,000 a year,” he says. “But keep your eye on this. It’s not a big issue today or for a couple of years, but when units get completed and household growth is lower than it has been, we need to see residential construction cool off a bit.” “We had 28,000 completions in 2015 based on sales made in 2011, which was the largest year ever,” notes Myers. “But we may have 32,000 or 33,000 completions in 2021. That could drive down prices.” Hogue has been impressed “by how multi-family completions have been absorbed and fears of oversupply haven’t transpired.” He cites a continuing desire for property ownership, but because the demand is directed to lower priced units and people don’t want to fight traffic gridlock, the strongest demand for multifamily units will remain in the core. And Myers expects investors to still buy ontario home builder winter 2018

downtown units from builders. And with Sidewalk Labs and possibly Amazon coming to Toronto, and immigration targets increasing, a larger percentage of people will gravitate to the big city.

BEST BETS IN ’18 Looking for a good place to build? Tsiakopoulos is bullish on southern and eastern Ontario. “Windsor and Ottawa are communities that will fare better because they have had fewer imbalances, so are not so overvalued,” he says. “When the GTA sneezes, these areas don’t catch that cold, as they don’t have the Toronto connection like Hamilton or Barrie do.” The Ottawa market hasn’t gone through a boom phase yet and there are public spending programs to be rolled out and the federal government administration sector is growing, says Tsiakopolous. Windsor has benefited from a rise in global manufacturing. He says Sudbury’s market might also prosper, as it remains affordable, the mining sector is doing well and while specifics haven’t been presented yet, there is money set aside for the Ring of Fire, the massive planned chromite mining and smelting development project in the mineral-rich James Bay Lowlands of Northern Ontario. Porter expects the London and Kingston markets to be strong, as they are attracting a lot of retirees. And he too forecasts a surge in Ottawa.

STRONG RENTAL DEMAND People have to live somewhere, says Myers. “Some might live with parents or will stay in their rental, because their rent is not going to go up more than 2.5% a year.” The Fair Housing Plan expanded rental

control to all private rental units in the province. Previously, it applied to buildings constructed pre-1991. Now landlords will be limited to the Rent Increase Guideline amount (1.8% in 2018). That will change based on inflation each year, but cannot exceed 2.5%. “The market is going to grow for rental buildings,” predicts Tsiakopoulos. “We are going to see vacancy rates trend lower and that should encourage slightly stronger rent growth. But there is a cap on rent for new units and that is going to impact new development. We may see investment in new rentals—whether purpose-built or high-rise units that will be rented out—just not as pronounced.” “It may seem like a solution in the near term to put a cap on rent,” says Hogue, “but in the medium to longer term, it’s likely to be counterproductive. I’m already hearing reports about plans to build new purpose-built rentals being abandoned, just when we are starting to see renewed interest in that space.”

CHALLENGES AHEAD Uncertainty about the future of the North American Free Trade Agreement and with exports accounting for 25% of Ontario’s GDP, and with 75% of the province’s exports going to the U.S., changes to the agreement could impact jobs and the economy, cautions Tsiakopoulos. Another economic vulnerability would be hiking interest rates, particularly if people are not able to pay their debts. In the Golden Horseshoe, development land continues to be in short supply and approval times lengthy, resulting in a supply constraint. Affordability will continue to be a

concern. Hogue says many people still want a single detached home with a yard, but “there are compromises to be made.” That means people have to settle for a multi-family unit in major urban centres or move further away and put up with lengthy commutes. “Toronto has reached the big leagues. It’s not the top tier like London and New York, but it’s not that far behind,” says Hogue. “It’s still growing faster than those two cities and is still a maturing urban area. The ownership affordability issues that are inherent to large cities will continue to be part of life in the GTA.” Hogue believes it’s fruitless to impose policies that address ownership affordability in Toronto and that we instead should focus on affordable rental options. What’s hard to predict, though, is buyer psychology, suggests Tsiakopolous. Fuelled by social media, blogs and stories can go viral—even if not factual—and influence people’s buying decisions. For example, while foreign buyers comprise less than 5% of the home-buying market, the introduction of the Foreign Buyers’ Tax inordinately cooled sales as prospective buyers worried about what further policies might affect the market. Hogue, though, expects the Ontario economy to stay robust, unemployment to stay low and, despite increases, interest rates will still be low. The wave of immigration will continue as well. “When you put it all together,” he notes, “the fundamentals are quite supportive (of the housing market).” As interest rates edge up in 2018 along with tighter mortgage rules, the cumulative effect will cool, but certainly not crash the market. OHB

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DISCLAIMER: These grades are not OHBA’s endorsement of policy. This article reflects policy analysis of the intentions versus current outcomes of legislation. The grades do not reflect the individual participants’ assessments.

Passing grades

In the past 25 years, the provincial government has instituted multiple housing policies. We assess five of the most impactful Since 1993, the three biggest political parties in the land have each had their turn at the helm in steering Ontario government policy. The NDP’s Bob Rae, the Progressive Conservatives’ Mike Harris and Ernie Eves and, finally, the Liberal party’s Dalton McGuinty and Kathleen Wynne have all helped define how the province navigates unpredictable waters. Nowhere has that course been more precarious to chart than for Ontario’s housing industry. In the past 25 years, dozens of bills and dozens more amendments to those bills have attempted to do everything from predicting demand and facilitating construction practices to improving the affordability of homes across the province (see “Ontario Housing Policy & Economic Indicators,” p. 44-45). Some of those bills have passed with flying colours, but others have fallen well short of their intended goals. In some cases, plans have been adversely affected by a devastating domino effect of circumstances. Affordability issues, for example, have triggered a significant and unexpected migration away from the GTA, which, in turn, has exacerbated traffic issues in such places as the Niagara-Hamilton corridor. It has also put a tremendous strain on an already dwindling supply of tradespeople, resulting in delays and increased costs for both builders and expectant homebuyers. That has come at a time when new legislation in the form of the College of Trades has seemingly backfired by limiting

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available workers at a time when demand is already exceeding supply, explains Jon Whyte, Niagara HBA President, Ontario Home Builders’ Association Land Committee Chair and planner at Mountainview Homes. “It’s not just the regulation; it’s the lack of enough qualified people to do the jobs right now,” Whyte says. “As affordability got out of reach, almost overnight we saw this influx of development here in Niagara because of people being priced out of the GTA market, which overwhelmed local trades and their ability to keep up. That’s also been the case with building departments and planning at the municipal level.” The demand for trades has also fed the underground economy (see “Engine That Drives Ontario’s Economy,” p. 46). While a recession in 2008-09 slowed the market, recent years have offered a prime opportunity for growth, but it’s a window that may have been missed, suggests OHBA Past President Neil Rodgers. “It’s a glaring disappointment. We are in a time in Ontario’s history where we’ve seen the greatest accumulation of wealth and some of the strongest economic years this province has ever had, and I think all governments missed the boat. They had to get ahead of it— to build some really Big Move transportation kind of stuff. It should have been done hand in hand with the Growth Plan.” What follows is an examination of five pivotal pieces of legislation, including that Growth Plan, with 10 voices weighing in to help us assign a grade for each.

ontario home builder winter 2018

the judges

Doug Tarry

Ron Glenn

John Meinen

Valerie Shuttleworth

David frame

President, Doug Tarry Homes; OHBA Technical Commitee Chair

Principal, bigPplanning; former Chief Planner, Halton Region

President, Pinnacle Quality Homes

Chief Planner, Planning & Economic Development, York Region

Director, Government Relations, Ontario General Contractors Association

Greenbelt Act Instituted in 2005. Updated in 2017. Preserving and protecting the natural environment, the Act fights climate change, limits development and urban sprawl and promotes sustainable growth by designating roughly 1.8 million acres of environmentally sensitive and agricultural land as Greenbelt Area. It built upon roughly 800,000 acres within the Niagara Escarpment Plan and the Oak Ridges Moraine Conservation Plan.

plan for the future

crown’ing achievement

“The Province’s mapping of the agricultural system is not just, ‘Here’s farmland and here’s not farmland.’ They’re mapping where processing plants and feedstores that support farming will go, so there’s a better picture of what’s going on. And new changes will help agri-tourism step up.”

“It’s expropriation without compensation. The government should have bought the land (as is the case in Ottawa). In this case they didn’t do that; they just heavily restricted. And people had unfair restrictions put on their land where they couldn’t even build a second home for their own family.”

— Valerie Shuttleworth

— Matthew Cory

orchestrating development

Growth Plan Instituted in 2006 Targeting the Greater Golden Horseshoe, the plan identifies density and intensification targets, urban growth centres, strategic employment areas and settlement area restrictions. It aims to build compact and complete communities, promote collaboration among all sectors, and reduce traffic by increasing transportation choices, including the creation of the Metrolinx Big Move plan.

ontario home builder Winter 2018

“I think there’s been a lot of effective change happening on the ground. Affordable housing is still an issue, but the issue around form, type and density and seeing intensification in the right areas has been successful from the Growth Plan standpoint. And I think it will continue to evolve over the next 10 years. We neglected transit for almost 25 years and we’re trying to catch up. Whether they have all the policies right, the jury is still out. But if we’re putting all this investment into transit, we have to have the density to support it. We had to curb the forms of development that were demanding a transportation network that wasn’t sustainable in the long term. Some of it now has to occur simultaneously, but you had to have the policies to encourage the development form first.” — Ron Glenn

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Neil Rodgers

Jon whyte

Andrew oding

matthew cory

Dr. John Bacher

President, Dumara Projects Ltd., Past President, OHBA

Planner, Mountainview Homes; OHBA Land Committee Chair

G.M. & Sr. Building Science Associate, Building Knowledge

Principal, Malone Givens Parsons Ltd.

Sierra Club and Ontario Greenbelt campaigner

connecting all the dots

preserving agriculture

where’s the eco-tourism?

“It connects the Niagara Escarpment Plan, which has been around since the mid-’80s, and the Oak Ridges Moraine Act. I think it has been very successful and was probably a good idea— not just from a developmental pressures standpoint, but from pressures on the rural landscape itself.”

“My response is relief, because there were serious attempts to gut the greenbelt. Sometimes urban pressures can create situations where farmers are essentially landlocked and have to lease land, but this has made it affordable for farmers to buy more land; not for people speculating. It’s a sign that the legislation is working as it’s supposed to.”

“I think it’s been successful in that it has forever re-established patterns of growth. It protected what it was designed to do. Correspondingly, we now know where we can’t build. I think the two things that went wrong, though, are the fact that its lack of science in defining what was ecologically important was disturbing. The government has also failed thus far in creating more publicly accessible places—opportunities for agricultural and eco-tourism.”

— Ron Glenn

— Dr. John Bacher

— Neil Rodgers

doesn’t work outside GTA

parking regulation

dictating the market

“I’m glad it exempts heritage districts from intensification and that it rejected proposals for new expressways. But the requirement for businesses and builders to provide as much parking as they need to is controversial and a barrier to proper intensification.”

“A lot of its problem is that it’s not a growth plan, per sé, as in planning for growth with a long-term vision that’s robust and outreaching; it’s more of a growth-control document. And in that regard, it’s dictating a different way of living, of housing ourselves, than the market really wanted.”

“In some areas it’s achieved its vision of creating more complete communities and fostering higher densities; mainly Toronto and areas along the GO Train and where transit exists to support that density. But it’s had the opposite effect outside those areas. Look at how congestion on highways, commuting times and greenhouse gas emissions have increased! It helped put a limitation on the supply of land and housing, particularly single detached housing, causing people to migrate further in search of affordable housing, putting greater pressure on our infrastructure to deal with increased demand. They’ve made some improvements to the most recent revision to reflect some of the differences of the outer ring, but it’s still flawed.”

— Dr. John Bacher

— Matthew Cory

— Jon Whyte

ohba.ca

FINAL GRADE

While some critics question its need, the Greenbelt Act has provided an umbrella in protecting sensitive Southern Ontario lands. Thus far, though, it has failed to deliver the ancillary advantages of eco- and agri-tourism.

FINAL GRADE

C+

The government has failed to recognize the demand for single detached residences, and to what degree buyers will travel to find affordable housing, outstripping existing infrastructure in the process.

ontario home builder winter 2018

omb reform is a good thing

Planning Act Introduced in 1990; updated in 2017 Setting out the ground rules for land use planning, its intent is to require that all decisions be consistent with the Provincial Policy Statement, ensure that planning processes are fair by making them open, timely and efficient, encourage cooperation and coordination among various interests and recognize the decision-making authority of municipal councils in planning.

omb overhaul

“Politics plays a significant role in planning. I think the idea behind Bill 139 (Ontario Municipal Board reform) is a good one in that it honours local municipal and regional official plans. I would hope if a development proposal comes forward, and that proposal conforms to the official plan, that the council of the day would have the fortitude to say to any objectors that this is entirely in line with our official plan, even though you might not be happy.”

“With individual appeals, the appeals body should be looking at, ‘Does it maintain the official vision of the municipality?’ If it doesn’t, it should be up to the municipality to determine. If it does, the appeal tribunal should be able to adjudicate those types of matters, whether it’s a height or transportation matter, etc. I think that’s where they’ve got it (right) in Bill 139. The detail is always in the implementation.”

— Valerie Shuttleworth

— Ron Glenn

the silver tsunami

Ontario Building Code Updated in 2017; further changes in ’18 One of the most continuously revised pieces of Ontario legislation dating to the 1992 Building Code Act, it governs the construction, renovation and change-of-use of a building, establishing detailed technical and administrative requirements as well as minimum standards for building construction, with a continual focus on energyefficient practices.

“When we’re talking about the number of inspections they’ll be looking at requiring within a year, there’s going to have to be a massive uptick in training— both for renovators but also building inspectors, because it’s a LOT more complicated than following the current building code when you’re looking at bringing old houses up to speed. There’s also the concern about ultimately needing double the amount of inspectors at the same time you have the ‘Silver Tsunami,’ with 40% of them retiring over the next few years. That scares the heck out of me.” — Doug Tarry

fix the ratios, develop apprentices

Ontario College of Trades And Apprenticeship Act Introduced in 2009 Replacing two previous pieces of legislation that set out the regulatory framework for the skilled trades in Ontario (the Trades Qualification and Apprenticeship Act and the Apprenticeship and Certification Act, the intent is to put skilled trades on a similar footing with teachers, doctors and nurses, who have their own professional regulatory colleges.

ontario home builder Winter 2018

“I think they’ve lightened up on the scope of practice. But we’ve had not one win on the ratio. Other provinces across Canada are one-to-one, or two- and three-to-one the other way around! One journeyman and three apprentices! I look at the situation across the country and ask, ‘Why would we not open up those doors, and change those ratios?’ Here we are in classrooms trying to entice

kids, while on the other hand there’s hardly any room for them to apprentice with most companies. At the end of the day, the government needs to break down barriers to get more people into the industry and develop more apprentices, because this is an industry that has already been suffering—and it will get worse. The average carpenter is 60 years old.” — John Meinen

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Changes to changes

community building

“For the last 14 years, we’ve had four amendments, which have affected developers, ratepayer groups and municipalities. I think many of those changes were uninformed, perhaps even unwarranted. The industry and municipalities—we’re the ones on the frontlines. I think we’ve struggled, since every time we got settled, there was a new change. It’s been very disruptive to the process. It’s hurt the timing and delivery of projects, and has likely had some impact on affordability and on limiting choices.”

“This is probably the best piece of legislation in this whole set. A lot of its changes over the years are challenging and have caused consternation in the development industry. But in a lot of ways they’ve moved everything to more of a community-building focus in a holistic sense, unlike Houston, for example, where they have no planning regulations, or Tokyo, where people build what they want to build, where they want to build it. For all its flaws, the Planning Act has led to a better outcome, where we have really great communities that are walkable and that use services efficiently, where people from around the world want to come and live.”

— Neil Rodgers

— Matthew Cory

FINAL GRADE

low-hanging fruit

good intentions, unintended consequences

“As much as the industry is always looking to do better, it’s a little unfair for the government to rely so heavily on new-built product to solve all of the climate change and energy efficiency issues that face Ontario. If the government were really interested in reducing greenhouse gas emissions and combatting climate change, the low-hanging fruit is there in the form of existing housing stock and the inefficiencies of those homes.”

“Since the early 2000s, the efficiency of a single detached home has almost cut energy consumption in half. It looks great on paper, but there have been unintended consequences. The Code did not adopt the new standard to do heat-loss and heat-gain calculations, so we were

— Jon Whyte

playing catch up, and unfortunately that was at the cost of homeowner comfort. It took four years to finally sort that out. We’ve also had special interest groups playing a role in some of the energy efficiency adoption—stuff that the jury is still out on. Another thing that’s troublesome is that

Multiple amendments have hampered development. If local councils adhere to provincial plan mandates, the new changes will prove positive. If NIMBYism prevails, intensification and other development will be stifled.

FINAL GRADE

we have changes upon changes happening so quickly. It’s one thing to do an individual cost-benefit analysis of a single Code iteration change, but when you start to have multiple changes, it’s hard to get the big picture on the impact on affordability.”

Unexpected consequences to energy efficiency targets and the regularity of new Code changes has challenged the industry (including manufacturers) to keep up. But energy efficiency has certainly skyrocketed in new homes.

— Andy Oding

FINAL GRADE

underground economy

migration issue

“We have shortages more than an hour away from Toronto. It’s affecting consumer affordability since there aren’t enough trades to go around. How badly is this going to drive the underground economy if we don’t get this sorted out correctly? We’re also doing a terrible job of recruiting— getting in front of school guidance counsellors and parents, saying, ‘This is a great career. Why do you need to go to university and spend tens of thousands of dollars for an English Literature degree you’ll never get a job out of? Also, 50% of the workforce (is being ignored)—women. At our peril we are not addressing these issues. The College of Trades either has to get on board or get out of the way, because they are not helping us to get more people into the trades.”

“The College’s failure to date is that there’s no agreement on the direction it should be going, and therefore there’s been a total lack of direction or achievement. It has largely ignored its mandate to promote the trades and instead has built barriers to entering the trades. They’ve decided that regulation will win out over promotion. And many of us feel they should be going the other way.”

— Doug Tarry

— David Frame

ohba.ca

B-

OCOT didn’t do itself any favours early on when it focused on enforcement and compliance of scopes of practice. There have been improvements recently in its enforcement approach, which is focused on education, not fines.

ontario home builder winter 2018

1990 â&#x20AC;&#x201C; 2018

ONTARIO HOUSING POLICY MULRONEY

PRIME MINISTERS

CAMPBELL

PETERSON

ONTARIO PREMIERS

1990

1991

CHRETIEN

RAE

1992

1993

HARRIS

1994

1995

1996

1998

1997

1999

EVES

2000

2001

2002

2003

(in Thousands) 900

800

Planning Act Update

700

Federal GST introduced

600

New Singles Average Unit Price ($) MLS Average Residential Price ($) Ontario MLS Home Sales New GTA High-Rise Average Price ($)

Oak Ridges Moraine Act

Greenbelt Act

Development Charges Act

500

400

300

200

Single home Av. price

100

High-Rise Av. Price 0

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

(in Thousands) 87.5

ONTARIO HOUSING STARTS

625

Rent Control Act

Total 50

Single 37.5

Multiple 25

GTA Condominium Sales

15 10 5 0

4 4

ontario home builder Winter 2018

ohba.ca

2003

& ECONOMIC INDICATORS MARTIN

HARPER

TRUDEAU

MCGUINTY

2004

2005

2006

2007

2008

Endangered Species Act Provincial Policy Statement

Ontario College of Trades Act

WYNNE

2009

2010

HST on New Housing

2011

2012

2013

2014

Ontario Building Code mandates energy efficiency

2015

2016

2017

2018

Condominium Act

Construction Lien Act

Mandatory WSIB Coverage for Independent Operators

OMB Reform

Ontario Building Code SB-12

Provincial Policy Statement

2004

2005

$349,600

$486,900

$250,000

$390,000

2006

2007

2008

2009

$800,000

Smart Growth for Our Communities Act

2010

2011

2012

2013

2014

2015

2016

2017

$500,000

2018

Promoting Affordability Housing Act Growth Plan for GGH

Coordinated Review of Provincial Plans

Bill 139, Building Better Communities and Conservatizing Watershed Act

SOURCE: Statistics Canada CREA, CMHC, Bank of Canada, Ministry of Finance, Urbanation

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ontario home builder winter 2018

Engine That Drives Ontario’s Economy

Each new home built in Ontario is not only a roof over a family but also supports job creation and economic development. (*2016 data)

74,952 Housing Starts

$56.2 Billion Value

Ontario housing starts in 2016 increased by 6.8% over 2015. Starts were expected to slightly increase in 2017 and ease to below 70,000 in 2018.

Since 2007, the value of new home construction, residential renovations and related impacts of construction increased by 55%, representing growth of $20 billion.

336,907 Jobs

$19.8 Billion In Wages

Residential construction is one of the largest industry employers in the province, employing skilled workers, such as the trades, planning, engineering, architecture, law and economics.

Home purchases are reinvested back into the provincial economy, supporting tens of thousands of individuals and families in communities across Ontario. Over the past 10 years, wages have grown 28%, representing growth of approximately $4 billion.

ECONOMIC IMPACT Combatting the Underground Economy Illegal renovation presents a myriad of problems when the contractor does not follow professional industry standards. Did you know that the underground economy affects more than one-third of the total output of contractor renovations in Ontario?

WHAT’S AT RISK? • Health and safety to construction workers • Liability risks to consumers • Undermining the integrity of the tax system • Creating barriers for the industry’s future development

There is also revenue loss to all levels of government (HST, income tax revenue, CPP contributions, WSIB and EI premiums, municipal permits). The Altus Group estimates that the provincial and federal governments lost $16 billion in potential tax revenues from 2010-2016 due to the activity of illegal renovation contractors. OHBA urges the province to address both climate change and the underground economy through an energy-efficient home renovation tax credit targeting specific renovations and requiring the submission of receipts to the Canada Revenue Agency.

Looking for Professional Renovators? Look for RenoMark OHBA is Ontraio’s home of professional renovators. Certified through RenoMark, professional contractors abide by a renovation-specific Code of Conduct and the Canadian Home Builders’ Association Code of Ethics so that homeowners can renovate with confidence.

Climate Change Leaders Ontario’s renovation industry plays a key role in partnering with the government to mitigate against climate change. The initiatives to improve the energy performance of Ontario’s 4.8 million existing homes can significantly reduce Ontario’s greenhouse gas emissions. *2016 data

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Oxford County Peterborough & the Kawarthas Quinte Sarnia-Lambton Simcoe County

St. Thomas-Elgin Stratford & Area Sudbury & District Thunder Bay Waterloo Region Windsor-Essex ohba.ca

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Atria Developmentâ&#x20AC;&#x2122;s I-Zone lofts have attracted gentrified buyers ranging from a movie director to an opera singer.

ontario home builder winter 2018

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Bringing your work home with you is sometimes a good thing, as buyers of live-work housing are discovering in Ontario

By Marc Huminilowycz

magine living in a building that equally accommodates your requirements for a proper workspace and your need for a place to call home, without ever having to commute to an office again. Renowned Toronto photographer Matthew Wiley is no stranger to this type of live-work arrangement. In the late 1990s, he moved into his Sumach Street home, a former CBC commercial building that was converted into 116 live-work condominiums known as the Brewery Lofts. Featuring 14-foot ceilings and a 200 sq. ft. loft bedroom, the 2,110 sq. ft. space allows Wiley plenty of room for setting up and storing his equipment and lighting, with the added bonus of large building hallways and freight elevators “almost the size of some city condos.” “I love this place,” says Wiley. “It gives me all the room I need to set up my specialty shoots—portraits, group photos and lifestyle images. The building is well-maintained, centrally located and accessible, with a nice mix of occupants

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ontario home builder winter 2018

A Corktown District Lofthouse by Streetcar Developments.

“This type of building is a lot of work, with many quirks and a lot of hassle. Gone are the days of converting an empty commercial shell in Toronto into lofts.”

ranging from artists to photographers to Bay Street executives.” Demand for units is unprecedented, Wiley notes, with condos now selling for over $1.5 million. Live-work spaces are not a new phenomenon. Butcher shops, bakeries and taverns with owners living upstairs have been around for centuries and still exist today in the form of ‘mom and pop’ convenience stores and B&Bs, allowing self-employed people to simply walk down the stairs to work every day. Today, with full-time jobs becoming increasingly scarce and telecommuting gaining in popularity, live-work is an appealing option for self-employed individuals searching for the ultimate work-life balance. The greatest demand for these spaces in the GTA and beyond is from professionals in the creative industries, as well as young entrepreneurs who are unable or unwilling to pay the high costs of buying or leasing office, workshop or studio space as well as additional living space. What began as projects with a limited number of subsidized live-work spaces for artists and artisans, such as the Artscape buildings at Wychwood Barns and Liberty Village, are now being embraced by a broader clientele. Unfortunately this option, at least in Toronto, now comes with a high price tag, and only a few neighbourhoods in the city are zoned “live-work.” But the demand is there. Andrew Harrild, executive vicepresident of property.ca, a real estate brokerage that specializes in Toronto lofts, sees a growing trend in buyers looking for a unique live-work space, especially if it has character and history. “It’s an attractive alternative to commercial space because you can finance a unit like this at residential rates and your taxes will 50

ontario home builder Winter 2018

be lower,” he says. (See sidebar, p. 54.) In Herrild’s experience, however, livework lofts converted from old buildings are very scarce in Toronto. “Developers stopped converting lofts years ago,” he says. “This type of building is a lot of work, with many quirks and a lot of hassle. Because of this, live-work lofts are some of the most expensive real estate in the city. Anything with character that comes on the market sells on the same day.” Accepting the challenges of building converted lofts in order to meet demand, Toronto’s Atria Development Corp. has recently re-launched its I-Zone Live Work Lofts with a limited number of 850 to 2,400 sq. ft. units. Located in a circa-1910 factory in the heart of Toronto’s trendy Leslieville neighbourhood, I-Zone was initally launched in 2002 with 104 retrofit condominiums. “Every one of these (new I-Zone) units will be unique, with different heights and configurations. Some will have rooftop patios, some with multiple levels, some with 26-foot ceilings,” says Atria President Hans Jain, whose firm has previously enjoyed success with its Garment Factory Lofts. “They will offer people the opportunity to live, work and entertain guests and clients in a beautifully renovated space designed to high residential standards—without having to travel to work or even own a car. If they want a rental unit, there are no mortgage payments. If they opt to buy, realty taxes are flexible, assessed at residential/commercial rates according to their live and work spaces.” According to Jain, the challenges of repurposing old commercial buildings into unique lofts are worth the time and effort. “Our ohba.ca

Left and above: 14 of 101 units in CountryWide’s Otto project in Thornhill are live-work designs. Top right: Eldorado Village in Brampton.

I-Zone project consists of five buildings built over time, merged into one,” he says. “It all comes down to careful planning. We’ve had to accommodate for things like varying heights, multiple fire ratings, surveying and planning considerations, as well as unique mechanicals. The end result is one-of-a-kind live-work spaces that feature a tasteful blend of hardwood, steel, glass and concrete, with lots of character.” Concurring with realtor Andrew Harrild, however, Jain admits that traditional live-work loft conversions are difficult to produce in Toronto today, due primarily to the scarcity of commercial buildings. Consequently, some are opting to start from scratch and build new purpose-built “soft lofts” in existing neighbourhoods. Reflecting some of the character of traditional lofts, they are less costly to build and offer greater density. One such builder is Streetcar Developments Inc., which has carved a niche in the Toronto market for the past 15 years, with infill loft condo projects set among established neighbourhoods, primarily along the east end of Queen Street and The Beach. “Our specialty is building homes in vibrant neighbourhoods where people live and local businesses thrive,” says Alie Warren, Streetcar’s V.P. of Sales & Corporate Development, whose residential projects include live-work spaces. Streetcar’s town homes are designed to be flexible enough to

accommodate people wishing to live and work in the same space. “Many of our units offer a very open main-level space that can be set up for live-work, with the kitchen and bedrooms upstairs,” says Warren. “A lot of our buyers operate businesses from their units or have flexible work schedules that allow them to work from home some of the time.” Current Streetcar projects, which have now expanded west along Queen Street, include multiple-building complexes incorporating residential spaces of different configurations and retail spaces fronting the street at grade. “When selecting a site for a new project, we always start by asking. ‘What is the appropriate content for the neighbourhood and what would add value to it?’” says Warren. “We give extra attention to creating a community experience, with everything you need in one place. The City supports this type of development.” While some Ontario developers are having success with live-work space projects in Toronto’s core, others are capitalizing on a steady migration of entrepreneurs beyond the city limits. Dave Hardy, a Toronto planner, is the executive director of the Institute for New Suburbanism (INS), an Ontario not-for-profit think tank that “gathers the ideas of academics and practicing urban planners to promote the health and vitality of suburban areas as essential to the overall health of the urban core and rural areas.” Hardy notes that, as of 2016, office vacancy rates

“It all comes down to careful planning. We’ve had to accommodate for things like varying heights, multiple fire ratings, surveying and planning considerations, as well as unique mechanicals.”

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ontario home builder winter 2018

Clockwise from left: Streetcar Development’s Riverside Square on Queen St. in Toronto, Dawn Victoria Homes’ The Tannery in Waterdown, and CountryWide’s Otto in Thornhill.

Small Businesses Thriving in Ontario

above, which are entered via a quiet residential in Toronto were “almost nil” at 4.4%, compared to street behind the buildings. 15% in the suburbs. “The demand for spaces to live “This project has been well-received by the and work in the city is getting ahead of planners. community,” says FRAM President Frank And the city hasn’t kept up with the amenities Giannone. Award-winning and often copied, its that people are looking for,” says Hardy. “Look According to the latest bold architecture has transformed the character at Liberty Village, for example. The millennials statistics from Innovation, of Port Credit. Taking the live-work concept moved in; but now that they’re having kids, the Science and Economic to another Port Credit location, as well as space, the schools and amenities just aren’t there.” Development Canada Collingwood and Wasaga Beach, Giannone admits According to Hardy, the concept of New (June 2016), small busithat most, but not all, Ontario municipalities are Suburbanism looks to diversify the traditional way nesses (1-99 people) make open-minded about this type of project, with a of living in one place and commuting every day to up 97% of total businesses resolve to define live-work buildings as they do a place of work. He believes that there are limitless in Ontario. Across Canada, commercial and residential properties in their opportunities in the suburbs for attracting Toronto “micro-enterprises” (1-4 zoning regulations. office workers who would like to work from home. employees) constitute 54% With its Port Credit project, FRAM needed “The suburbs need to be different from cities,” he of all private employto negotiate with the City of Mississauga to adds. “When building live-work spaces, developers ers, with 53% of these accommodate the parking needs of its tenants and need to be conscious of proximity to transit, schools businesses classified as their commercial parking requirements. “We had and community parks. Suburban layouts are ideally “service-oriented.” to place parking in other structures. Fortunately, suited for this.” there was room,” says Giannone, noting that Several Ontario developers have successfully live-work parking can be a bigger issue in more merged live-work spaces located outside of intensified locations. the urban core but within close proximity to transit and Another challenge was property taxes. At the beginning of amenities. In Mississauga, FRAM Building Group completed a the project, the municipality wanted to charge the (higher) live-work project on a commercial stretch of Lakeshore Road commercial rate for both the commercial and residential in Port Credit. Live Work Residences is a collection of 18 brick portions of the town homes. After negotiations with FRAM, warehouse-style town house units that offer a true live-work the City decided to levy the commercial rate for only the experience in the heart of a thriving retail area. Architectural commercial square footage of each unit. Utility costs were features clearly delineate separate ground floor commercial another issue. Despite FRAM’s efforts, town home owners are spaces (with main street entranceways) from the living quarters 52

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THANK YOU TO OUR SPONSORS

The Advantages of Live-Work Spaces •C ost Savings: Avoid the high price tag of buying or leasing office, workshop or studio space along with additional living space. • F lexibility: Owners can eventually use their space strictly as a home if they want to, or keep and rent it. • Investment: The equity of the space will ultimately increase in value. • No Commute: Saves huge amounts of time and money and avoids having to go outside in bad weather. •W ork-life Balance: Live, work and play in the same space. • Tax Benefits: Living space is taxed at a residential rate; workspace is taxed at a higher commercial rate. In Waterdown, the residential portion

of The Tannery live-work town home (1,430 sq. ft.) would cost $4,000 in taxes, while the main floor commercial area (1,000 sq. ft.) would be $7,000. In Toronto, you can designate up to 25% of any residence as a workspace, and pay the residential tax rate for that space. • Lower Borrowing Costs: According to Toronto commercial real estate agent Max Casselman, a live-work space may qualify for a

residential mortgage versus a higher-interest business/commercial mortgage at most lending institutions.

required to pay (higher) commercial electricity rates for both the commercial and residential portions of their properties. On a more positive note, Giannone comments that many Live Work Residences owners are offsetting their higher taxes and utility costs by leasing their commercial spaces to retail tenants. Concord-based CountryWide Homes, meanwhile, has created Eldorado Village, an 89-unit development in Brampton, made up of traditional town homes mixed with over 20 live-work town units. Each of Eldorado unit’s ground-floor retail space ranges in size from 500 to 600 square feet, with the town homes above offering 1,900 to 2,200 square feet of space on two levels. “When we opened Eldorado Village, we experienced a huge demand for these live-work spaces, especially from forward-thinking young families and professionals in Brampton and Vaughan,” says CountryWide Manager of Sales and Marketing Richard Mariani. “Eldorado backs onto a large existing plaza, which offers buyers great exposure for their retail or professional spaces on the ground floor.” Mariani gives full credit to the City of Brampton for actively promoting new developments that include a mix of living and live-work options, creating integrated communities that offer a desirable alternative to the typical city commute, connected via Züm Transit and close to Pearson Airport, Highways 410, 427 and 407, as well as GO Transit. “Eldorado Village offers the affordability of a house and a street-level retail/office space in the GTA for about $1 million,” says Mariani. “If an owner doesn’t need the workspace, they can rent it out—currently for about $2,000 per month—to help offset the cost of their town home above. It’s a great concept that is breaking new ground.” Similar to FRAM’s live-work town homes, Hamilton

developer Dawn Victoria Homes’ The Tannery is a collection of urban-inspired buildings housing retail spaces on the main floor and town home condominiums above, reminiscent of traditional Ontario commercial/residential stone and brick buildings. Located in the city’s historic Waterdown community against the backdrop of the Niagara Escarpment, with views of a creek and waterfall, The Tannery offers shopping, restaurants, boutiques, spas and a even a theatre—all in close proximity to a GO station, Highway 403 and the QEW. According to The Tannery’s agent Tom Parsons of Sutton Group Quantum Realty, the ground floor commercial spaces and upper residential townhouse condos are being sold separately, as is the case in another Dawn Victoria Homes project, Village West on Plains Road. “The Tannery’s residential towns are 1,420 square feet, two-bedroom/ two-bath units with kitchen, living and dining rooms on the first floor, bedrooms on the second and a walkout from the third level onto a rooftop mezzanine,” says Parsons, noting that all residential units are now sold. “These sold quickly for $400,000 to $440,000. The 1,000-square-foot commercial spaces are still available, ranging from $420,000 to $440,000. At least one residential purchaser is interested in a commercial unit, which would give them an ideal live-work space arrangement.” With traditional ‘jobs for life’ becoming a thing of the past and prices of residential and commercial spaces in the GTA out of reach for many, some developers are offering attractive and relatively affordable live-work options for entrepreneurs choosing to telecommute or set up a business in the urban core. At the same time, other developers are offering live-work spaces in suburban communities, promising an appealing lifestyle outside of the city to self-employed individuals searching for the ultimate work-life balance. OHB

“If an owner doesn’t need the workspace, they can rent it out to help offset the cost of their town home above.”

ontario home builder Winter 2018

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ontario home builder Winter 2018

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Building Buzz The new model will not affect the overall total amount of premium dollars collected by the WSIB. The rate framework is revenue-neutral and WSIB will continue its risk-sharing arrangement among all employers who collectively pay premiums to maintain the insurance fund.

What’s changing in construction?

The Price of coverage

WSIB Ontario transforming how premium rates are set The Workplace Safety and Insurance Board is transforming how it calculates premium rates for almost 300,000 registered businesses across Ontario. WSIB is introducing a new premium rate-setting model that is simpler, easier to understand and more reflective of individual claims experience. Following a multi-year engagement with businesses all across the province, the new premium rate-setting model is a big step forward in making it easier to understand how businesses are classified and how premium rates are calculated. Another major benefit of the rate framework is the ability to see the direction premium rates are headed in the future. WSIB understands that changing the way they calculate premium rates for businesses across Ontario cannot happen overnight. In advance of implementation on Jan. 1, 2020, the organization wants to make sure that businesses are aware of what to expect under the new model. For example, they are replacing the current classification system based on the Standard Industrial Classification (SIC) coding system with a new system called the North American Industrial Classification System, or ohba.ca

NAICS. By switching to NAICS, WSIB will be using the same system Statistics Canada and the Canada Revenue Agency use to classify businesses all across Canada. It will help to simplify and streamline its classifications, making it easier to understand why businesses are classified the way they are. In the rate framework, your business will be assigned to a Predominant Class. This is generally based on the class that represents an employer’s largest percentage of insurable earnings. The new system will ensure that premium rates are fair and transparent. When calculating premium rates, your business’s individual claims experience will be taken into account so that you’ll be paying a rate based on your actual workplace injury history. WSIB will also provide businesses with something called projected premium rates, which show you the future direction (up or down) of your insurance premium rates. This new rate information will allow businesses time to prepare and adjust for future rate changes. Changes to premium rates will be capped so they are spread over time, thereby allowing businesses to adjust to any changes gradually.

Since the WSIB is adopting a new standardized approach to classifying businesses and will be using the NAICS structure, the construction industry will see a classification change. Employers that engage in business activities in the industry will be assigned one or more NAICS codes that fall under Class G, Construction, and will be assigned a premium rate in Class G. Make sure you check out WSIB’s website for more information (wsibrateframeworkreform.com). Your new premium rates will be more reflective of your individual claims experience. It’s important to remember that any changes to your premium rates will be phased over time to allow for an adjustment period. So what’s next? In September 2017, WSIB launched an extensive engagement campaign about the rate framework. It started with sending a letter to every business registered with the WSIB with information about the rate framework, the new classification system and what your new classification will be in the new model. This was the first step in making sure businesses remain informed and aware of what will be changing. The aim is to continue to engage with businesses as WSIB transitions into the new model. This year, it will begin providing further information to help businesses prepare for implementation in 2020, including what premium rates will look like under the new model. WSIB will also be holding information sessions and webinars for employers all across the province to help them understand what’s changing and what to expect in 2020. For the latest news, visit wsibrateframeworkreform.com.

—Courtesy WSIB ontario home builder Winter 2018

Building Buzz Great Gulf’s Active House, Environmental Building Award winner

Mid-Rise Wood Design winner Branthaven Homes’ Lakehouse Condos

going with the grain Architects, engineers, developers and other construction industry professionals at the forefront of wood design in Ontario came together to celebrate excellence in wood design at the 17th annual Wood Works! Awards night in Toronto in November. The awards program honours people and organizations that, through design excellence, advocacy and innovation are advancing the use of wood in all types of construction. Twelve awards were presented at the event, 10 to specific wood projects and two to professionals for contributions to the building industry that advance the case for wood design and construction. OHBA members walked away with a third of the haul. The Environmental Building Award 58

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went to Great Gulf’s Active House in Centennial Park, Etobicoke. The home employs an innovative structural wood roof and wall system with an integrated air barrier that streamlines the weatherization process and transforms the assembly of exterior walls into a simpler installation process. The Mid-Rise Wood Design Award was captured by Branthaven Homes’ Lake House Condominiums in Grimsby, a project designed by Kirkor Architects + Planners. According to Branthaven, using wood as the primary structural component for Lake House and other mid-rise buildings also provides an opportunity for the developer to support local skilled trades, wood panel manufacturers and lumber suppliers.

Pratt Homes, meanwhile, took home the Designer / Builder Award for its continuing work in its longtime home of Barrie and the surrounding region. The individual honour of the evening went to Great Gulf President and COO Tad Putyra, who was presented with the Wood Champion Award. In its press release, Wood Works! described Putyra as “a respected and recognized member of the home building industry” and “a leader in wood innovation and panelization for over a decade. His commitment to excellence can be seen in his knowledge and passion for the industry. He understands where home construction is heading and has worked tirelessly to bring positive changes to the industry.” ohba.ca

Photo: IGOR YU (left) RENDERING: SAMUEL ZENG (right)

OHBA members shine at Ontario Wood Works! 2017 Wood Design Awards

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WSIB Ontario launches workplace health and safety tool

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With the launch of Compass, a new online health and safety tool, the Workplace Safety & Insurance Board (WSIB) is bringing greater transparency to workplace health and safety. For the first time, Ontarians can find and compare health and safety statistics for businesses across the province. Using Compass, anyone can see the number and types of injuries in any workplace in Ontario. They will also get a sense of how serious those injuries were by looking at how many people were off work past the day of an accident and how many people are still receiving benefits well after an accident. Compass also allows users to compare health and safety stats for up to five different businesses at a time. The program can help businesses make decisions about health and

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safety and return-to-work strategies. The first phase of Compass will let you see how your workplace compares to other businesses in your sector or rate group and to get a sense of where you fall on lost-time injury rates, leading part-of-body-injured statistics and lost-time claims receiving wage loss benefits after one year. You will also be able to see injury claims and benefit payments by registration year. Compass shows data at an employer level. Any business that had ohba.ca

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coverage with the WSIB from 2012 to 2016 will be included. During this time, the majority of businesses had no injury or illness claims. If this is the case for your business, you will still appear on Compass, but without any statistics. The WSIB encourages all businesses to use the tool to help make decisions about health and safety, prevention and return-to-work strategies. Future phases of Compass will provide even more information to facilitate your decision making. Compass can also help identify at a business level what is driving sector statistics. In 2016, for example, the home building rate group accounted for 22% of all allowed lost-time claims in the construction industry, or 1,033 claims. A lost-time claim is created when an employee suffers a workrelated illness or injury that results in them being off work past the day of the accident, loss of wages or a permanent disability or impairment. In the home building rate group, the leading part of body injured is the upper extremities (e.g., injuries to the arms, fingers, wrists, hands) at 28%, followed by the lower extremities (e.g., injuries to the legs, feet, knees) at 25% and the back (including spine, spinal cord and neck injuries) at 18%. Open Data Directive

The WSIB’s efforts are part of a larger government initiative, the Province of Ontario’s Open Data Directive. This initiative is intended to make government more open and transparent to the people of Ontario. One way to do that is to maximize access to government data, unless it is exempt for legal, privacy, security, confidentiality or commercial sensitivity reasons. Compass is one way we are making the WSIB’s workplace data open and accessible. Doing so provides more transparency, enables citizens and community-based organizations to use our data and supports innovation. If you’d like to try Compass, visit

CMY

wsib.on.ca/compass.

—Christina Hoy is the V.P. of Corporate Business Information and Analytics with the Workplace Safety & Insurance Board 60

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Residential Development Charges Exemption

Taking ’Em to School According to the National Association of Realtors, 25% of homebuyers listed school quality and 20% listed proximity to schools as deciding factors in their home purchase. Helping to make that job easier for consumers is REW. ca, a Canadian real estate portal for property listings, new home developments and industry news. The site has released a new “search by school feature” that allows homebuyers to find properties close to their preferred public or private school. You can search properties by school name, view public and private schools in the area, see whether a property is in a catchment and sort properties by distance to a school. Buyers can sort listings by the distance to a school, a feature that helps parents decide if they will need to drive the kids to school, or if they can walk. Property seekers can also view schools on a map, then click on a school symbol to find out its name and what grades it serves.

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Business

Icynene acquires Lapolla Industries Icynene U.S. Holding Corp. and Lapolla Industries Inc. have announced a merger agreement under which Icynene will acquire all the outstanding shares of Lapolla, a transaction valued at approximately $160 million US. The transaction will combine Mississauga-based Icynene, a manufacturer and distributor of high-performance, one-step spray foam polyurethane foam insulation products, with Lapolla, a Houstonheadquartered global supplier and maker of similar products. Together, the combined company’s energy-conserving SPF insulation products will ohba.ca

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serve a wide range of new residential, commercial, remodelling and specialty non-construction insulation project needs in North America and globally. “Together, as one company, Lapolla and Icynene will have more resources to fully serve our respective customers, and positions both companies for long-term, sustained growth,” says Mark Sarvary, Chief Executive Officer of Icynene. safet y

MOL evaluating working at heights training standards

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Ontario is investing $595,000 to assess the effectiveness of its Working at Heights (WAH) training standards to help prevent fall accidents and fatalities at construction sites. Falls from heights are the number one cause of traumatic fatalities of Ontario construction workers. Between Jan. 1 and Oct. 31, 2017, 11 workers died on the job due to falls. “Falls continue to be a leading cause of critical injuries and fatalities of construction workers,” observed Minister of Labour Kevin Flynn in a statement. “By ensuring that these training standards are effective, we will reduce fatal incidents at work by making sure workers receive highquality, consistent training.” Based upon a standard that came into effect on April 1, 2015, Ontario employers must ensure that certain workers complete a training program that has been approved by the chief prevention officer and delivered by an approved training provider before they can work at heights. The standards allow for “high quality and consistent training” for learners, and include a practical component on the appropriate use of fall protective equipment, the Ministry of Labour (MOL) notes. Once the review is complete, the MOL will evaluate the results to determine whether any changes to improve the effectiveness of the WAH training initiative are needed. OHB ohba.ca

Product Focus I de a s for B u i l de r s & R e n ovat or s

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Contractors can make quick work of foam insulating with Icynene’s new ProSeal LE.

Climate Control What’s new in residential heating and cooling? By Da n O ’ R e i l ly

For builders anxious to get their next project underway, the slowdowns brought on by the long, dark cold Canadian winter can be irritating. But the season also provides the opportunity to speak to manufacturers about new and improved heating and cooling products. Certainly, the insulation industry was extremely active in 2017 in bringing new products to market. In July, spray foam manufacturer Icynene announced the Canadian launch of a product its Canadian regional sales director Bruce Young heralds as a “game-changing innovation.” Spray foam contractors will save on labour costs by using the ProSeal LE, which offers the dual benefits of achieving an R-31 value in an extremely short ohba.ca

period, as well as being suitable for cold weather applications, Young says. An initial pass or application of the ProSeal LE can be sprayed in multiple layers up to a depth of five inches, with only a few minutes’ wait before the next layer can be applied, explains Paul Duffy, the company’s V.P. of engineering. The culmination of between two to three years of research, the ProSeal LE is a major advancement over other medium-density spray foams, which are limited by the time necessary before the next layer can be applied. That’s because the application process, combined by the fact that spray foam is fed through heated hoses under high pressure, generates heat. Applying a second layer too soon or too quickly, or applying a very thick

layer can generate even more heat, which could cause the foam to char internally, Duffy observes. Complementing its thermal resistant properties, the product’s features include suitability for cold weather applications as low as -5ºC, Greenguard Gold certification and excellent adhesion to substrates. Also in July, Owens Corning acquired mineral wood insulation manufacturer Thermafiber Inc, which was followed in early autumn with the introduction of two residential product lines into Canada, along with a third one for commercial buildings. The residential offerings include the UltraBatt Thermal Insulation and the Fire & Sound Guard Acoustic Insulation. Applications for the UltraBatt include ontario home builder Winter 2018

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Product Focus exterior ceilings, attics, exterior and basement walls and exposed floors. The Fire & Sound product is a soundabsorptive material designed to provide both enhanced acoustical control and fire resistance. Owens Corning touts its mineral wool insulation as easy to cut and install, that it fits the cavity securely, is mould-resistant and is fire-rated to temperatures above 1,093º C. Extensive research on the products’ adaption to Canadian codes and certifications was conducted before their release, notes Christine Sampson, Building Materials Marketing Leader at Owens Corning Canada. The trend to energy efficiency will only increase, Sampson says. “It started, I believe, with the light bulb, and now the building industry is

constantly showing how energy-efficient homes will not only add comfort but save on heating and cooling costs.” One largely untouched realm of opportunity lies in the estimated seven million under-insulated attics in Canada, says Sampson—a figure based on the 2006 Statistics Canada Census and code analyses by industry expert Keith Wilson. Stressing that Net Zero homes will be mandated by 2030, Sampson says Owens Corning “is poised to offer not only products but solutions to the builder on the path to Net Zero.” Chief operating officer and co-founder of Eco Insulation, Shawn Tang, echoes the sentiment, noting that providing energy-efficient comfortable heating and cooling demands more than simply installing products. Eco is a franchised

warm & Cozy Owens Corning Thermafiber UltraBatt insulation

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operation that provides a range of insulation options, including traditional batts, cellulose and spray foam. “We have one solution that offers a hybrid of spray foam and batt,” Tang explains. “No additional vapour barrier is required because the foam is 1.5 inches thick and is a vapour barrier at that thickness.” The product is installed on the interior of foundation walls, behind the stud wall or before the stud wall is built. This gives builders the freedom and flexibility to connect electrical, plumbing and other services at their own schedule. Later, an Eco Insulation contractor will return to the site and insert the R-12 batts. “This solution is seamless, contiguous and airtight,” says Tang, noting that it’s in line with the movement

From noncombustible insulation to see-thru fireplaces, five products to warm the hearts (and feet) of Ontario residents in 2018

Trane’s Legacy S Series furnace

Napoleon’s Luxuria is available in both single-sided and see-thru models. ontario home builder Winter 2018

Product Focus

Innovation heating up Cost Comparison of Operating Your Furnace Over Five Years $5,300.00

$3,360.00 $1,368.00

97% vs 55%

97% vs 65%

The development of more stringent building codes and the adoption of a Net Zero EnergyReady model by 2030 has major implications not just for builders, but also for heating and cooling product manufacturers and suppliers. For example, primary heating equipment will be required to have a 90% energy efficiency rating by the 2030 target date. Most forced-air furnaces (especially gas models) now being installed in homes are already there. But that’s not necessarily the case with boilers, which are still used in a sizable percentage of Canadian homes, apartments and condominiums, notes Warren Heeley, president of the Heating, Refrigeration and Air Conditioning Institute of Canada (HRAI). A few years ago, the HRAI created an Emerging Technology Committee to keep its members informed on new technologies coming on stream through either regulation or marketplace evolution. “Our members want to deliver those technologies; not be supplanted by them,” Heeley says. Staying ahead of the curve, several heating and cooling product innovations have emerged in the residential sector, notes Natural Resources Canada spokesperson Tania Carreira-Pereira. Some manufacturers of highefficiency natural-gas space heating systems have developed lower heat output systems with high degrees of modulation—the ability to go from a high heat output down to a low heat output—making them suitable for apartments, 66

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97% vs 80%

smaller homes or near-NZE homes. Another innovation is electric heat pumps that work in combination with gas furnaces. A controller integrating the two technologies decides whether the heat pump or the furnace does the space heating based on the outdoor temperature. The introduction of two-stage furnaces have upped the ante on efficiency. Instead of the standard two positions of the valve that leads to the burner section—either fully open or closed—two-stage furnaces have a third position, “partially open.” That allows the furnace to dump less fuel into the heat exchanger when it’s only moderately cold outside. While two-stage furnaces are more expensive, the energy savings for homeowners can be significant. For example, Canadian-made Napoleon claims that its new, whisper-quiet 9700 series (operating at a 97% AFUE) will save homeowners $5,300 over the first five years, when compared to a conventional furnace operating at 55% (see chart above). Some Canadian manufacturers, meanwhile, are investigating the ability of residential space heating equipment to produce electric power, notes Carreira-Pereira, adding that in the very near future, provinces and territories will be able to provide financial incentives for homeowners undertaking energy retrofits through the federal government’s $2 billion Low Carbon Economy Fund.

towards continuous insulation and Ontario Building Code requirements for increased airtightness. The company also functions very much like a consultant. It has created a document that compares the performance rating and costs of the various options and often conducts mini-training sessions for individual builders, as well as presentations for builders, architects and other industry members. Despite the frustrations experienced by builders anxious to get into the ground, this is the best time of the year to conduct those presentations, says Tang. With changing regulations moving toward reduction of fossil fuels for home heating and more efficient cooling systems, builders might also want to check out Daikin’s Aurora series of heat pumps, which were rolled out near the tail end of last winter. Powered though super-efficient electrically driven inverter systems, they are available in multi-zone and single-zone systems. Other developments on the equipment side of the heating and cooling industry include Trane’s new 34” S-Series gas furnace, the production of which is now in full swing after being unveiled in the autumn of 2016. “The Trane Legacy line has been in commission for over 25 years and is revered as one of the most reliable on the market,” says the company’s training and technical manager, Bill Pryhoda. Nevertheless, Trane believed it was time for a redesign to accommodate ease of installation in more home applications. To accomplish that, it assembled a Furnace Dealer Council from 12 dealerships across North America to advise and actively participate in the creation of the S Series. More than two and a half years of research, which included continuous testing and multiple prototypes, was invested into its creation, Pryhoda notes. “It’s been tested and re-tested to meet and exceed the highest standards set well above requirements by the industry.” Last year also marked the debut of Napoleon’s Luxuria Linear Series gas fireplace. Napoleon is also using the ohba.ca

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Product Focus term “game-changer” to describe the unit’s clear glass front, which the manufacturer assures is safe to touch while allowing unobstructed views. A unique Glass Guard System and Dynamic Heat Control System safely redirects heat away from the glass and into the home, eliminating the need for a safety screen. What’s more, the heat redirection still operates in a power outage and doesn’t have the complexity of a noisy circulation fan, says Napoleon’s senior V.P. of sales and marketing, Stephen Schroeter. “We know homeowners associate positive emotions with fireplaces and that they want them in a variety of rooms,” says Schroeter, noting that without the safety screen, the full beauty of the fireplace can be appreciated. Judged among the Best in Show for Hearth Products at the 2017 Hearth, Patio & Barbecue Expo in Nashville, the Luxuria is available in single-sided or see-thru models in four sizes ranging from 38 to 74 inches high.

The patented SureView burner system window in Napoleon’s stylish 9700 Ultimate Series furnace allows a unique view of the flames in operation, a first in the industry.

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Keeping the Home Fires Burning Underfloor heating may be all the rage, but it’s not as new a concept as you might think. Around 3,000 years ago, some Koreans constructed ondols, a system in which a wood fire was burned beneath a masonry floor, which absorbed the heat and transferred it into the home. Around 500 BCE, the Romans began fashioning architecture based on the concept. Their hypocaust system saw buildings built on pillars, with the floors and walls featuring spaces. Fires lit below the buildings allowed the heat to flow through the spaces and out through flues in the roof, thereby preventing smoke from polluting the indoor air while effectively heating the building.

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BEST FEET FORWARD Having been on the market for about 15 years, the EasyMat electric floor system from Vaughan-based Heavenly Heat can’t be considered a new product, but it is gaining wider acceptance by both builders and homeowners due to availability and the fact that clients are aware of its cost-effectiveness, says sales manager Rick Laljie. Composed of high-quality heating cables that are woven into flexible strips, the easy-to-install mat is placed below finished floors and above subfloors. It requires little in the way of equipment and is a low-cost alternative to hydronic heating. The product can be used throughout the house or to provide additional warmth to select areas such as ensuites. While there’s plenty of focus on hydro costs in Ontario, Laljie point out that the EasyMat floor system is equipped with a programmable thermostat. “They’re like furnaces; after a certain point they turn off.” Fortunately for builders and residents, continued innovation in the heating and cooling industry is stuck in the “on” position. OHB ohba.ca

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