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editor’snote ENERGY EFFICIENCY is gaining profile as Canadian provinces devise strategies to reduce greenhouse gases (GHGs) and gain access to federal funding made available through the national framework for addressing climate change. At the same time, conservation is suffering some backlash for the company it keeps — having inadvertently become associated with carbon pricing or, stranger still, rising electricity prices.

The Canada Green Building Council's Roadmap for Retrofits, released in 2017, is both a practical and inspiring example of the first trend. As previously reported in Canadian Property Management and at www.REMInetwork.com, it presents a strategy for achieving significant energy savings in the existing building stock. This encompasses relatively low-cost operational adjustments, costlier replacement of major equipment at the end of its lifecycle (i.e. when capital investment would be required anyway) and prospects for fuel-switching and on-site renewable power generation that the steady pace of innovation is making increasingly economically feasible.

New construction presents an even more straightforward opportunity to design, deliver and maintain ultra-efficient, net zero or even net positive energy buildings. We look at some of the possibilities and pioneers in this issue.

Overall, the built sector is positioned to make a major contribution to Canada's target to reduce GHG emissions to 30% below 2005 levels by 2030. Consultants commissioned to model the economic impact of measures pledged in the PanCanadian framework conclude there will be a multi-billion-dollar annual benefit through energy cost savings alone, as well as a myriad of spinoffs in job creation, growth of the green economy and consumers with more money to spend.

Sponsors of that research, Efficiency Canada and Clean Energy Canada, are enthusiastically waiting for the projections to be translated into action — and there is little time for delay. As we also report, the recently released national progress report on 2016 GHG emission levels reveals less-than-stellar performance in the buildings sector.

That makes emerging obstacles to energy efficiency perhaps even more disconcerting. In Ontario, for example, the incoming provincial government campaigned on a promise to transfer the funding mechanism for conservation programs from electricity rates to the general tax base. Opponents of such a move have argued that it would erode consumers' accountability and make the programs more vulnerable to the whims of those who have many other interests in play.

"In Ontario, conservation is highly politicized — unlike almost anywhere else," Bala Gnanam, Vice President, Energy, Environment & Strategic Partnerships, with the Building Owners and Managers Association (BOMA) of Greater Toronto, observed at a recent seminar to explore options for electricity demand management.

Elsewhere, however, BOMA Calgary's Executive Director, Lloyd Suchet, looks to an approaching provincial election and advises his members that now is probably the best time to secure Alberta's rebates for installing energy-efficient products.

"They are paying the carbon tax; they should take advantage of the incentives," he says. "I think everybody recognizes that these programs are going to be in flux."

Barbara Carss barbc@mediaedge.ca @BarbaraCarss

Canadian Property Management | June 2018 3

11 BOMA Quebec Energy Challenge: New program meant to foster a 10% cut in commercial building energy consumption by 2022.

14 Passive House Momentum: The standard for extremely energy-efficient buildings is gaining profile in the commercial sector.

20 Multi-res Appliances: Split incentives present an ENEGY STAR barrier in rental housing.

24 Tallying Economic Spinoffs: New research projects a significant boost to Canada's GDP through investment in energy efficiency.

27 Quebec's Energy Plan: Conservation given top priority.

28 Commercial GHG Emissions: Canada's latest National Inventory Report reveals there is still a long way to go to meet the target for reductions.

30 Alberta Incentives: Commercial building owners/ managers have been shut out of a new custom upgrade program.

Standards and Benchmarking: 10 BOMA BEST v2 Finale: Numerous recertifications recorded ahead of the transition to BOMA BEST 3.0.

Departments 3 Editor’s note

13 Green Building Adoption Index: Vancouver and Toronto are atop 10 major global cities surveyed.

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17 Seeking Gender Parity: Real estate leaders contemplate the benefits of more diversity.

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6 Paul LaBranche Retires: BOMA B.C. says thanks to outgoing president for 25 years of innovation, advocacy, mentorship and prudent management.

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LABRANCHE

LEGACY ENTRENCHED

IN BOMA BC

Strategic Plan Doubles as Checklist of Accomplishments

By Barbara Carss LOOKING BACK on a 25 year tenure with the Building Owners and Managers Association (BOMA) of British Columbia, recently retired president, Paul LaBranche, characteristically looks through the lens of his organization’s strategic plan to reflect on what he has accomplished. The five underpinning goals and associated performance measurements that steer BOMA BC’s course could also be seen as LaBranche’s job description and the hallmarks of his career.

As the chief staff officer, he has served as both the commercial real estate industry’s voice and an informed conduit for messages coming back from government and the wider community — a role that calls for a delicate two-way player who can defend his members’ interests and advise them what’s in their best interests in ever evolving times.

Along the way, he’s been an able administrator and a champion of professionalism for a membership that has more than tripled to today’s roughly 700 6 June 2018 | Canadian Property Management

individuals representing large, mid-sized and smaller real estate players and key service providers.

“I found that putting some structure in place through the long-range strategic plan was very beneficial for the organization and for me,” LaBranche recalls. “The industry, certainly, is changing, and I think we’ve become a broader, better recognized organization over the years.”

Those accustomed to seeing him in action are a little more effusive.

“Paul has never lost sight of the i mp or t a nc e of a dvo ca cy, f isca l responsibility, education, charitable partnerships and networking to keep BOMA BC relevant to its members and the principal voice of the commercial real estate industry,” says Lesley Heieis, Vice President and managing broker with Colliers International in Vancouver, who served as BOMA BC’s 2006-2007 chair.

“Every level of government knows that BOMA is the go-to for the commercial real

estate industry. Our brand has become really strong under his guidance,” concurs Richard Anderson, President, Hunter McLeod Realty Corp., a past BOMA BC chair who joined the board of directors in sync with LaBranche’s arrival.

SUITE OF SKILLS AND EXPERIENCE Although it was something of a new career direction, LaBranche brought skills and experience that made him a good fit for the association’s needs when he assumed its helm in 1993. A transplanted Ontarian who’d long since made Vancouver his home, he was trained as an engineering technologist at Ottawa’s Eastern Ontario Institute of Technology (since absorbed into Algonquin College) and had worked briefly for the federal public service after graduating. A young man’s curiosity to explore a new locale proved to be a pivotal life decision.

“It was a part of Canada I hadn’t seen so I just made my mind up to go west, and the

industryleadership rest was history,” he says. “The west coast lifestyle was so compelling.”

Soon, he found himself on the job sites of some significant provincial infrastructure projects, including the Revelstoke Dam and the container facility at the Port of Vancouver. Then, after taking time to travel through Europe, Southeast Asia and Australia, he moved onto the project management track and into the burgeoning condominium sector. The exercise of coordinating all aspects of a construction project sparked an interest in organizational development and led to work in the not-forprofit sector, while he also earned a business degree from the University of Seattle.

An understanding of real estate’s structure, its trades and its business pressures arguably positioned him to thrive in his next undertaking, but he didn’t necessarily foresee it was going to sustain him to retirement. “When the opportunity came up with BOMA, I thought it was only going to be for a short while,” he affirms.

However, the match of BOMA’s diverse outreach responsibilities to his own multitasking inclinations simply made other job options less appealing. “Working with an association like BOMA is really something like running a small business, but with the assurance of being part of an industry network. If you’re not in it for the money, but you’re in it for what you can get out of life, it’s a very rewarding career,” he says.

FIRSTS AND LASTING IMPACTS The rewards have flowed both ways as BOMA BC reaps his legacy of innovation, advocacy, mentorship and prudent management. The long-term strategic goals LaBranche pushed to implement now double as a checklist of his leadership accomplishments.

The association is the acknowledged advocate for the commercial real estate industry in the province and enjoys strong public recognition; it supports its members in their business and ESG (environmental, social, governance) obligations, and provides outreach, training and networking for professional development; and it is a province-wide organization, now including a Victoria-based branch.

Early in the 2000s, LaBranche envisioned and drafted Go Green guidelines to help owners/managers assess and improve the environmental outcomes of building operations — a program now commended as the forerunner of BOMA BEST and, equally importantly, as one of the first critical focuses on existing buildings.

“Our brand has become really strong under his guidance.”

“When BOMA BC started it, there were no standards for existing buildings anywhere,” he says. “LEED for existing buildings came later.”

Other evidence of what Heieis terms a “passion for sustainability” is easy to see in e-Energy Training — a BOMA BC initiative since rolled out as a national program — the launch of the charitable Green Building Foundation, and various strategic partnerships with service providers and government funding agencies to help members deploy green technologies and improve building performance. The latter also demonstrates LaBranche’s skill in negotiating cost-sharing and agreements for BOMA to manage government incentive dollars.

“He’s so innovative with sources of revenue. That’s allowed us to keep our dues in check,” Anderson observes.

PRODUCTIVE PARTNERSHIPS Beyond his formative contribution to BOMA BEST, LaBranche has also provided welcome input to BOMA Canada’s council of chief staff officers and other industry associations that share BOMA’s concerns.

“We work together on a regular basis, either through teleconference or in person, to share experiences and flag issues that arise in one region that we expect we’ll see elsewhere,” explains Dean Karakasis, Executive Director of BOMA Ottawa.

“Paul has always been great, especially on the environmental file, in sensing what’s looming and being a guide and a resource.

Another big strength is his ability to find ways to inf luence and work with government. That was always a model that we could all use.”

“LandlordBC and BOMA both represent the built environment — residential rental housing and commercial respectively — and our two organizations have collaborated on the impact of the carbon tax and hope to continue further dialogue,” says David Hutniak, Chief Executive Officer of LandlordBC. “Paul’s knowledge on this

issue was critically important in our discussions, and his leadership for his industry reinforced the professionalism he is known for.”

For his part, LaBranche maintains there’s no great magic to being a governmentwhisperer. His strategy has been “transformation through a voluntary participation method” which typically has the dual benefits of making the case for change to the industry and showing regulators that a heavy hand is not warranted.

“Paul has been a trusted and valued partner of the Province for over a decade through BOMA BC’s voluntary leadership initiatives for improving the energy efficiency of the commercial real estate stock and lowering emissions, thereby paving a path for market transformation in British Columbia and Canada,” says Andrew Pape-Salmon, Executive Director, Office of Housing and Construction Standards, in B.C.’s Ministry of Municipal Affairs and Housing.

“We try to be proactive in everything we do,” LaBranche reiterates. It’s the same open approach he’s used in considering the interests and needs of a diverse membership that he categorizes as one-third large institutional investors/owners, one-third public sector managers of government, health care and education portfolios and one-third mid-sized to smaller private sector companies.

“Pension funds tend to be bigger players in Toronto, Calgary and Montreal whereas Vancouver is very much more a boutique market,” he advises. “You have to really understand the ownership.”

Heieis judges his efforts a success in that regard.

“Paul’s sincerity, candour and sense of humour quickly put me, and all of us, at ease, but he still kept me and the other board members on our toes,” she reports. “He made sure that every opportunity to better serve our industry was explored.”

LaBranche retired from BOMA BC at the end of April. zz Canadian Property Management | June 2018 7

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TAKING ADVANTAGE OF TENANT DATA

There’s a reason “Big Data” is becoming the buzzword of the day. Organizations are becoming wise to the value of consumer metrics, and that includes property managers/owners who are using tenant data to optimize performance, spotlight trends, and inform everyday decisions.

“There’s a lot you can do with clean, relevant tenant data,” says Jarrett Williams, Vice President of Carma Industries Inc., a Canadian company that is among those leading the way in submetering services. “That’s especially true when it comes to leveraging utility usage data to provide a better living experience and, ultimately, save money.”

The first step, he continues, is adopting the technology to monitor water, electricity, and gas consumption on a tenant-by-tenant basis. The second is to collect, clean, and analyze that data to extract several key benefits:

PREVENTING OVERAGES Tenants don’t always report a leaky toilet or a malfunctioning light.

And when you consider the amount of water and electricity waste over dozens of toilets and hundreds of lights, those utility bills can add up. With the ability to monitor that usage in real time, property stakeholders can be notified to abnormal spikes and move quickly to address the issue.

“If you can’t see it, you might not know it’s happening until it’s already shown up on your bill,” offers Williams. “For example, you can have pumps that cycle on and off because of

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a malfunction. Over hundreds of cycles, that can significantly reduce their lifespan. And with no real way to communicate that issue back to the manager or owner, it won’t get noticed.”

provide a daily report which they can review on their own time to track consumption rates, catch any errors in their system, or address other issues,” says Williams.

Similarly, the ability to monitor utility usage in real time allows property stakeholders to embed threshold controls. Carma’s AlarmIt! tool, for one, gives users the ability to control water, electricity, or gas usage when it rises (or drops) beyond a preset level.

MANAGING INVESTMENTS The ability to collect accurate data across every unit enables stakeholders to benchmark their properties’ performances across individual assets or entire portfolios. In so doing, they can identify inefficiencies and make more informed decisions regarding upgrades, retrofits, and other property investments.

STRONGER OVERSIGHT With the right technologies and systems in play, property managers/owners can monitor utility usage at an interval of their choosing (e.g., every 5, 10, or 15 minutes) or receive a regular summary from their submetering provider.

“These people have a lot on their plate already, so many are happy to have their submetering company

“You may discover that one building is using inefficient HVAC equipment or another might benefit from more efficient windows,” explains Williams. “When you can compare data across your portfolio, you can see where your money would be better spent.”

CLEARING THE HAZE Incoming marijuana legalization will allow tenants to grow up to four cannabis plants within their residences (provided their lease or rental agreements allow them). Those that do will be using more than their fair share of electricity and water throughout the growing process, thereby putting their unit at risk for mold damage and dramatically raising utility costs. With the means to zero-in on those individuals, property managers can use submetering to both keep

tabs on such tenants and ensure their non-growing neighbours aren’t sharing the extra costs.

BENEFITS BY THE NUMBERS Submetering is not a new practice; however, the way in which property stakeholders are leveraging sub-metering data continues to evolve. That is, in addition to making sure tenants are billed fairly for their individual habits, “Big Data” can be used to unlock even larger benefits that can give property managers/ owners a digital edge.

Jarrett Williams is Vice President of Carma Industries Inc., a submetering and billing solutions company. To learn more about the latest industry trends and submetering solutions, visit CARMA Industries (www.carmaindustries.com) and CARMA Billing Solutions (www.carmabillingservices.com).

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END OF ERA RESULT RELEASED FOR BOMA BEST v2 Proportion of Silver and Gold Buildings Drop with Recertification Influx THE NEWLY RELEASED BOMA BEST Green Building Report — tracking building performance for the 15-month period from January 1, 2016 to March 31, 2017 — highlights 1,749 certifications to close out the Version 2 era of the assessment and benchmarking program for sustainable building operations. In step with the philosophy of continuous improvement, BOMA BEST 3.0 is now fully in place.

“The past year presented us with some rewarding moments as well as some interesting challenges,” Benjamin Shinewald, President and CEO of the Build i ng Owners a nd Ma nagers Association (BOMA) of Canada, observed in his introduction to the new report. “It was a year of transition, replacing BOMA BEST Version 2 with the much more robust and comprehensive BOMA BEST 3.0, and a year of opportunities which we were thrilled to embrace.”

10 June 2018 | Canadian Property Management

Look ing back to Version 2, he com mends the 108% increase in certifications over the previous reporting period and a jump of eight basis points in the average score. “This was the highest year-over-year change in performance and fantastic culmination of BOMA BEST v2 achievement,” the report reiterates.

Buildings are scored in six categories: energ y; wat er; wa st e re duct ion / enhancement; emissions and effluents; indoor environment; and environmental management systems. More than 72% or 1,268 of the certifications occurring between January 1, 2016 and March 31, 2017 were actually recertifications of buildings already in the program, while 481 were newly enrolled.

Office buildings account for the largest proportion of higher scores, as 597 or nearly three quarters of properties in that sector at t a i ned at least a silver certification. Fifty-six office buildings

received BOMA BEST’s highest rating of Platinum via scores of 90% or higher — collectively reducing their carbon footprint by 69,000 tonnes of greenhouse gas (GHG) equivalent. Another 253 office buildings gained Gold standing with scores between 80 and 89%.

"The average office building achieved a score very close to Gold — 79.5%," the report enthuses.

In general, office buildings matched the best energy use intensity (EUI) yet recorded with an average of 27.1 equivalent kilowatt-hours per square foot (ekWh/ft 2 /yr) for those achieving at least Silver certification. Average water use intensity of 0.69 cubic metres per square metre (m 3 /m 2) was up from a best ever average of 0.65 m 3 /m 2 in 2012, but down slightly from the 2015 tally. The same group of buildings achieved an average waste diversion rate of 63%.

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BOMA QUEBEC LAUNCHES BUILDING ENERGY CHALLENGE

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PROGRESS AND SETBACKS Slightly more than 52% of participating buildings achieved a score of a least 70% for a Silver or higher certification. An average score of 78.9% across these 919 buildings was the best result since 2010.

Nevertheless, there was a notable shift in the weighting of the certification levels compared to the 2015 results, when 740 buildings were certified. In 2016-17, 830 basic certified and bronze certifications made up a significantly larger portion of the whole than in 2015, when 264 basic and Bronze level achievers accounted for about 36% of all c er t i f icat ions. Ac cord i ngly, t he p erc ent age of Si lver a nd G old certifications dropped — a 10% decline in attainment of silver and a more i n c r e m e nt a l 1. 3% d ip i n gold certifications.

There was more progress than setbacks for recertifying buildings, as 346 attained higher standing and 266

BOMA Quebec has announced the launch of a competition aimed at reducing the energy consumption and greenhouse gas (GHG) emissions of commercial, institutional and multiresidential buildings in the province.

The Building Energy Challenge (BEC) is intended for owners, commercial property managers and tenants looking to implement responsible management practices to improve their energy performance in a sustainable manner.

“The Building Energy Challenge is a unique collaboration opportunity between governments, municipalities, building owners and managers, their tenants and their users to reduce the environmental impact of buildings across the province,” says Bruno Turcotte, President, BOMA Quebec. “We’re convinced that it will make a tangible contribution to reducing energy consumption and GHG emissions in the commercial real estate sector and will support the achievement of the targets set in this regard by the governments of Quebec and Canada.”

If 15% of buildings in Quebec’s commercial/institutional sector were to cut energy consumption by 10%, this would represent a decrease of approximately 2.45 million gigajoules (GJ) of energy and 60,000 tonnes of carbon dioxide (CO2) a year, or approximately 12,000 fewer cars on the roads. The BEC is therefore targeting a 10% reduction in energy consumption over four years and aims to include some 100 buildings in the first year.

“In addition to rallying as many property managers as possible, we are creating a platform for sharing current best practices in commercial building energy efficiency.

dropped to a lower level. "Of the buildings that achieved a different level at recertification, almost half either increased from Silver to Gold, or decreased from Gold to Silver," the report notes.

For the 405 buildings for which comparable energy use data was available, 32% of buildings exhibited higher energy use intensity upon recertification versus 14% with a lower energy use intensity. "Not every building

We are delighted to see our members’ enthusiastic response to the launch of this initiative and we are very pleased to be able to count on the support of key partners such as Ville de Montréal, Transition énergétique Quebec, HydroQuebec, Énergir and Natural Resources Canada, who share our vision and our commitment to getting the industry to reduce its environmental footprint,” Turcotte observes.

The BEC builds on other successful challenges under way in other major cities, such as BOMA Toronto’s and Manitoba’s RACE 2 REDUCE. The BOMA Quebec project takes into account the Quebec context and the specific objectives of the Government of Quebec’s 2030 Energy Policy, which aims at improving energy efficiency by 15% and reducing petroleum product consumption by 40%. The Ville de Montréal is also targeting a GHG reduction in its 2016–2020 sustainable development plan.

“More than ever, sustainable development is inextricably linked to responsible consumption. To continue its progress as a city that is both green and prosperous, Montréal must meet its commitments in terms of energy efficiency and reduction of greenhouse gas emissions,” says Robert Beaudry, Ville de Montréal executive committee member. “Our 2018–2022 economic development strategy places strong emphasis on the emergence of innovative sectors. By launching a friendly challenge for owners and tenants of commercial and institutional buildings, the hope is that they will improve their energy efficiency.”

that is a recertification had entered energy data during the time of their original certification," explains Hazel Sutton, BOMA Canada's Manager, Environmental Standards.

Across t he ent i re dat abase, participating buildings scored lowest in the energy and water categories, averaging less than 70% for both these key resources. Participants achieved the highest average score — 96.1% — in the environmental management systems Canadian Property Management | June 2018 11

standards&benchmarking category, which encompasses planning, do cu ment at ion, pu rcha si ng a nd outreach activities.

COMMONALITIES AND DISTINCTIONS An overview of building features and practices reveals some commonalities and some distinctions that set high performers apart. Platinum buildings report higher adoption rates of a wider range of measures.

For example, 92% of Platinum building have building automation systems and high-efficiency hot water equipment versus fewer than 50% of Silver buildings; 83% of Platinum buildings have light sensors and daylight sensors versus fewer than 40% of Silver buildings. Perhaps more surprisingly, fewer than 30% of Silver buildings have low-flow toilets and urinals, while 79% of Platinum buildings have low-flow toilets and 81% have low-flow urinals.

In waste reduction measures, 90% of Platinum buildings offer composting programs versus just 35% of Silver buildings; 87% of Platinum buildings conduct waste audits versus 40% of Silver buildings.

This trend also holds true for some relatively low-cost measures. Less than half (48%) of Silver buildings conduct recommissioning compared to 90% of Platinum buildings. Only 57% of Silver buildings incorporate drought-tolerant plants into landscaping versus 83% of Platinum buildings.

Even where the report laments consistently low adoption of some measures — variable speed drives on heat pumps and domestic water pumps; sub-metering of tenants; sub-metering of water consumption for cooling towers and irrigation — they are more common in Platinum buildings. Just 12% of Silver building have variable speed drives on domestic water pumps compared to 52% of platinum buildings.

More than one third (37%) of Platinum buildings sub-meter water consumption for irrigation versus just 6% of Silver buildings.

MAKING THE AVERAGE Although 49 Platinum office buildings registering average energy use intensity of 16.1 ekWh/ft 2 /yr helped pull the average up, 103 Bronze level office

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buildings with EUI of 31.1 ekWh/ft2 /yr and 295 Silver level buildings with an even higher average of 31.8 ekWh/ft2 /yr pulled it back down. The report includes a breakdown of 559 office buildings (38 fewer than the number reported to have achieved Silver or higher status), revealing that 68 buildings recorded EUI greater than 36 ekWh/ft2 /yr. At the low end of the scale, 16 office buildings had EUI of less than 12 ekWh/ft2 /yr.

As with energy, performance is a major component of the water scores. The report does not cite actual data for Bronze certifications, merely states average scores of 48.5% across 103 office buildings and 33.1% across 94 light industrial facilities.

However, a water use intensity of 0.83 m3/ m2 in Silver office buildings equates to average score of 66.1%. From there, reported water use intensity drops to 0.83 m3/m2 in Gold buildings, then ebbs to 0.43 m3/m2 in Platinum stock, for an average score of 84%.

The report cites data for 527 office buildings (70 fewer than the number reported to have achieved Silver or higher status) showing that 53 recorded a water use intensity greater than 1.2 m3/m2. More optimistically, there was a larger group at the low end of the scale, as 56 buildings boasted water use intensity of less than 0.2 m3/m2.

Data for 535 office buildings (62 fewer than the number reported to have achieved Silver or higher status) shows that nearly 72% boast waste diversion rates of at least 50% — including 31 buildings diverting 90% and upwards. A slightly higher number — 35 — divert less than 30% of waste from landfill.

Light industrial buildings represent the next largest group of BOMA BEST participants with 561 certifications, including 94 Bronze, 123 Silver and 46 Gold. A similar portion (29%) of the 249 open-air retail properties achieved Silver status or higher, whereas 94 enclosed shopping malls collectively boasted the best performance among the sectors with fully half achieving Gold or Platinum certification.

I n cont rast, multi-residentia l participation lagged behind the other sectors. Just 25 buildings were certified and just four achieved scores of 70% or higher, translating into one Silver and three Gold certifications. zz The complete text of the 2018 BOMA BEST National Green Building Report can be found at www.bomabest.ca.

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GREEN OFFICE QUOTIENT GROWS

Vancouver and Toronto Stand Out Among International Markets GREEN CERTIFIED OFFICE space now predominates in the Vancouver and Toronto markets. A new study from CBRE and the Netherlands’ Maastricht University concludes that, on a square footage basis, more than 50% of the commercial inventory in the two cities boasts LEED or BOMA BEST status. This is a higher proportion of green certification than in the eight other European and Australian cities surveyed.

The recently released International Green Building Adoption Index is a companion to the U.S. Green Building Adoption Index, which tracks LEED and ENERGY STAR office buildings in that country’s 30 largest markets. As of the end of 2016, it found 38% of office space was certified in surveyed U.S. cities, with LEED certification applying to roughly 18% of total space and ENERGY STAR at nearly 32% of total space.

Accounting for the greater variety of programs worldwide, the new index tallies the number of buildings and the total square footage enrolled in seven programs, including BREEAM, DGNB, Green Star, HQE and NABERS along with LEED and BOMA BEST. “Although no green building certification program is the same, they all share basic characteristics, such as measuring energy performance, assessing a multitude of other dimensions of sustainability and providing external certification through typically independent providers,” the Index report states.

Researchers found more than 227 million square feet of certified space in the 10 markets — Toronto, Vancouver, Sydney, Melbourne, Amsterdam, Frankfurt, London, Paris, Stockholm and Warsaw — which collectively encompass about 1.2

billion square feet of commercial office space. This represents a significant increase from 2007, when about 6.4% of the space in these markets was certified.

Every city surveyed has stock certified through at least two different programs, while in Toronto and Vancouver, many buildings carry two different designations.

LEED is a presence in all but the Australian markets, translating into nearly 107 million square feet of office space. That includes nearly 54 million square feet in Toronto and about 12 million square feet in Vancouver.

The extensive enrolment in BOMA BEST in Vancouver and Toronto propels it to the second most common certification on a square footage basis — at 81.3 million square feet — even though it is only available in the Canadian markets. In the global context, about 2,300 office buildings carry BOMA BEST certification versus more than 38,000 LEED and nearly 16,000 BREEAM certified buildings.

Similarly, NABERS (21.5 million square feet) and Green Star (23 million square feet) are unique to Australia. BREEAM is seen in five European markets, accounting for 40 million square feet of certified space.

Vancouver tops the list for its percentage of green certified office space — at 51.6%.

It also offers up the smallest office market, pegged at approximately 47 million square feet, among surveyed cities. Toronto’s 51% of certified space translates into considerably greater square footage. Its market, at approximately 160 million square feet, is the third largest, after Paris and London, among the surveyed cities.

The prevalence of certified space in both cities reflects the weight of major owners/ investors who have signed on to the

programs, with larger and newer buildings more likely to carry one or both of the certifications. Notably, only 6.5% of surveyed office buildings in Toronto are LEED certified, but they represent one third of commercial office space. While BOMA BEST is found in a greater number of buildings — 17.8% — its margin over LEED is only about 6.5 million square feet.

Sydney and Melbourne place third and fourth for the highest percentage of green certified office space — at 46.5% and 28.8% respectively. Warsaw, Frankfurt, Stockholm, Amsterdam, Paris and London follow in descending order. However, translated into square footage, both Paris and Sydney have a greater area of green certified space than Vancouver.

The European cities show a steeper climb in new certifications, suggesting that they may simply be later starters that are poised to catch up with Canada and Australia. The percentage of certified green office space in Amsterdam surged from 0.2% to 11% of the market in the five years between 2011 and 2016.

BREEAM certification in Warsaw grew from 1.2 to 12% of market share during the same period.

The pace of adoption is tracked over a longer period in Canada, but is also impressive. In Toronto, about 15% of commercial office space was LEED or BOMA BEST certified at the end of 2006. Less than 7% of Vancouver’s office space was green certified at the end of 2005. zz The International Green Building Adoption Index can be found on the Canada Green Building Council's website at www.cagbc.org.

Canadian Property Management | June 2018 13

energystrategies

PASSIVE HOUSE MOMENTUM BUILDS Rising Cost of Energy Boosts Interest in Standard

By Michelle Ervin PASSIVE HOUSE, a voluntary standard for achieving extremely energy-efficient buildings, appears to be poised for wider uptake in institutional projects in Canada.

After being largely limited to residential applications, small institutional projects are starting to reach completion and a handful of requests for proposals (RFPs) issued within the last year suggest that large institutional projects are soon to follow.

“It really feels like we’re on the cusp of a big explosion of Passive House buildings, and interest in Passive House, as the standard gets rolled out across all 14 June 2018 | Canadian Property Management

of our building stock, and not just residential-scaled projects,” said Jon Loewen, architect, Perkins+Will’s Toronto office.

Loewen was one in a cohort of his colleagues to become a Certified Passive House Designer last summer as the architecture firm anticipates the standard gaining traction. Perkins+Will, which specializes in civic and institutional buildings, is already vying to work on some large projects that could be among the first of their size and type to pursue this certification.

In one recent design competition, the

architecture firm pitched the standard as a pathway to achieving net zero energy.

Passive House is expected to become an increasingly attractive proposition as governments roll out policies aimed at curbing greenhouse gas emissions in an effort to combat climate change. Loewen pointed to the arrival of provincial carbon taxes and cap-andtrade programs as well as tightening municipal energy standards as compelling factors in the case for pursuing the standard.

“Institutions are much more sensitive to the cost of energy than they used to be, and Passive House lines up really well with that

energystrategies

GOING BEYOND NET ZERO

By Rebecca Melnyk

Image courtesy of HCMA Architecture + Design

because it’s all about reducing your energy consumption,” he said. “There are hurdles for clients to overcome in the way you think about building the building, and the way you think about operating the building, but it’s very easy for us to quantify the benefits.”

Achieving the Passive House standard means front-loading spending to realize longterm savings and tilting investments toward the building envelope and away from the mechanical equipment.

“We’re creating this high-quality envelope that can be maintained with smaller equipment, rather than a relatively weak envelope that requires a high level of mechanical equipment and complexity in order to maintain a comfortable interior environment,” said Rob Bernhardt, CEO of Passive House Canada. “For things like the cooling load, for example — that’s the result of solar heat gain — the approach within Passive House is to ensure that the heat doesn’t get into the building — perhaps [using] external shading devices — rather than cooling the building once the sun has been allowed to enter.”

An office building in Markham, Ontario’s technology hub is envisioned as the first net positive energy office building in Canada, generating more energy than needed for annual operation. Though still a work in progress, the new structure would go beyond building industry standards like LEED or even net zero energy — a concept where buildings incorporate renewables and energy efficiency to produce the same amount of energy they consume every year.

The three-storey Howland Green Business Centre, expected to be finished around March 2019, will feature office condos in 59,000 square feet of space, powered by sun and geothermal energy.

Dave De Sylva, President of Howland Green Homes, calls it both a challenging feat and a significant step forward for the sustainable building industry.

“We’re employing brand new insulated concrete forms to our building; we’re instituting energy storage that cuts the curve off of any peak demands there,” he says. “If we’re producing or capturing 25 to 30% more energy than we are using, I don’t know of any building that has accomplished that.”

New concrete forms specifically for Howland Green will provide a combined thermal resistance value of at least R40 — much higher than insulated formwork in standard buildings.

An R80 roof insulation, about four times greater than the building code, will block careless energy transfer, depending on the season.

Windows will be designed with advanced fibreglass technology and low-E argon glass, with resistance values as high as R9. This

surpasses the insulation value of standard triple-glazed windows.

The latest geothermal technology will heat and cool the building with automatic load sharing and individual office controls at a fraction of the cost of other buildings.

The rooftop photovoltaic arrays are expected to capture about 420,000 watts of solar energy and generate about 515,000 kWh of clean energy. This will help offset the carbon footprint, as the operational demand for the entire building will be approximately 430,000 kWh. One of the first electric potential lithiumion and pneumatic energy storage systems in Canada will store the excess energy being generated, allowing for use at a later time.

The system will capture some constant energy uses within the building and use pneumatic energy, through wind or photovoltaic solar production, to compress air, which could drive exhaust fans and garage doors, for example.

“We get energy from the sun every day, every year in the range of 174 megawatts, which is why we only use one-and-a-half of one per cent of the energy that falls on the earth,” De Sylva says. “There is enormous potential to store that energy.”

He argues against free energy that can encourage occupants' wasteful practices.

With a net positive building, the energy coming in gets metered out to users, who would be charged the amount they normally pay. However, the income goes to the office condo, thereby reducing operating costs.

VANCOUVER AND TORONTO AT FOREFRONT The adoption of the Passive House standard has been geographically uneven since it rolled out in Canada in 2010 after being formalized in Germany in the 1990s (although a house in Saskatchewan has been recognized as one of the earliest examples of this approach). Toronto and Vancouver are currently leading the pack as the certification builds momentum across the country following slow uptake dominated by residential applications during its early years.

The Anglicization of Passivhaus to Passive House has contributed to the common misconception that the standard

is strictly for homes, Bernhardt said — the German word “haus” directly translates to “building” in English.

As institutions start to eye the standard for large projects, they may face some temporary challenges. Loewen noted that the Canadian market for highperformance building equipment and products is less mature than the European market, making certain items, such as triple-glazed curtain wall, more difficult to source locally.

However, big buildings have some advantages over small homes in pursuing the Passive House standard. For example, big buildings do not require as much insulation as small homes thanks to a

Rebecca Melnyk is an Online Editor, currently on maternity leave from the REMI Network.

Canadian Property Management | June 2018 15

energystrategies

Photo courtesy of HCMA Architecture + Design

lower surface-to-volume ratio. They also stand to have a greater positive environmental impact on the basis of sheer size.

In Penticton, B.C., the less than 5,000-square-foot Okanagan College Daycare has achieved Passive House certification, and a more than 5,000-square-foot community church, slated for construction in Doig River First Nation, B.C., is targeting certification. So is a more than 9,000-square-foot town hall containing offices, meeting rooms and support spaces under construction in Valleyview, Alberta.

B.C.-based HCMA Architecture + Design, which has completed a handful of residential Passive House projects, is now working on even larger institutional projects.

Vancouver Fire Hall No. 17, a more than 20,000-square-foot facility, is slated to open before the year is out, and Clayton Community Centre, a more than 75,000-square-foot facility featuring arts and recreation programming is slated to open in Surrey next year. Once complete, Clayton Community Centre (pictured on this issue's cover) is expected to become Canada’s largest Passive House facility to date.

“A lot of the institutional buildings are built and operated by municipalities,” said Adam Fawkes, Associate at HCMA Architecture + Design. “That’s where the owner-operators are going to see the benefit of paying a bit more on the capital costs, and then having lower operational costs.”

He projects they will see lower maintenance costs as well, due to the durability of the building envelope produced through the application of Passive House.

PROCUREMENT CRITICAL TO SUCCESS Kearns Mancini Architects, which has more than one million square feet of Passive House projects in the pipeline this year, are

the compliance architect and Passive House designer for project output specifications for a large building planned for University of Toronto’s Scarborough campus. The 280,000-square-foot, mixed-use student residence stands to become the first of its building typology in the world to be completed and certified as Passive House.

Jonathan Kearns, Co-founder and Principal of Kearns Mancini, cautioned that it’s critical to get procurement right if Passive House certification is to be achieved. He identified construction management, design-build and IPD as preferred methods of delivery for projects targeting the standard, and maintains that high-performance buildings require a new procurement process, even for the design team.

“With the front-end design, typical procurement documents and scoring do not permit alternate design paths strategies which offer design success for the rigorous design standard,” said Kearns. “Also, until Passive House becomes more established in the marketplace, and you have lots of builders who know what Passive House is and know how to build it, we’re averse to stip sum (stipulated sum).”

Establishing an integrated team at the outset of such a project prevents the kinds of errors in execution that can occur when designs are handed off to contractors who are unfamiliar with the standard.

“All it needs is one careless tradesperson to put a hole in the air seal,” Kearns noted. “Then, you fail the air pressure test, and it might take days to find where that hole is if it’s a big building.”

He suggests tender documents should prescribe Passive House training for supervisory staff and trades to avoid this risk. Institutions interested in pursuing the energy-efficiency building standard on large projects will soon have further guidance. Kearns Mancini is in the process of writing a white paper on how to procure Passive House projects, which it expects to release this spring. zz Michelle Ervin is the Editor of Canadian Facility Management & Design.

BOMA CANADA LAUNCHES NET ZERO CHALLENGE BOMA Canada has announced the launch of the Net Zero Challenge to recognize and reward buildings that have dug deep and invested in initiatives that lead to ultra-high energy performance, as well as those that can be wholly supplied by renewable energy.

“The Net Zero Challenge is about celebrating action, thoughtleadership and innovation within Canada,” said Benjamin Shinewald, President and CEO at BOMA Canada. “It recognizes the very highest performers – both people and organizations – that are propelling a low-carbon, wholly sustainable commercial real estate industry.”

“Energy efficiency is one way any Canadian can get involved in taking real action to support our move to a cleaner, greener future,” concurs Canada’s Minister of Natural Resources, Jim Carr.

“Canada is proud to recognize BOMA Canada’s role in showcasing 16 June 2018 | Canadian Property Management

leadership and innovation in net-zero energy construction and building management as we continue the transition to a lowcarbon economy.”

“Net zero energy buildings are becoming more attainable and there are a number of exciting initiatives happening right now,” added John Smiciklas, BOMA Canada’s Director, Energy and Environment. “The Net Zero Challenge provides an opportunity to share and encourage a significant shift in the industry.”

BOMA Canada is now accepting its first Net Zero Challenge applications in three award categories: Best in Class, Most Improved and Innovation. Applications will remain open until July 16, 2018. Winners will be announced October 3, 2018 at the BOMA Canada National Awards Gala held during BOMEX 2018 in Calgary, October 1-3, 2018.

industryleadership

PUSHING FOR GENDER PARITY Executives Acknowledge Real Estate Trails Other Sectors

By Michelle Ervin

HARD QUOTAS APPEAR to be an unlikely tool in the growing push to promote gender parity in the real estate industry if commentary at a panel hosted by the Urban Land Institute’s (ULI) Toronto chapter earlier this year is any indication.

A movement to set, measure and track soft targets for diversity and inclusion has only emerged in the last few years. The success to date seen by early adopters of this strategy suggests that looking at how an organization is faring in promoting women at all levels, and then establishing goals, may be enough to realize gender parity.

The Ontario government, for example, announced in 2016 that it would aim to fill at least 40% of appointments at all provincial agencies and boards with women by 2019. At least one provincial agency, Infrastructure Ontario, has already surpassed that target, reaching perfect gender parity in both the boardroom and the C-suite.

Speaking at the ULI Toronto panel, Toni Rossi, President of the real estate division at Infrastructure Ontario, credited the leadership of its board chair in driving action on diversity and inclusion. However,

Rossi said that there is more work to be done, noting that middle management is one part of the organizational chart where the provincial agency has struggled to move toward gender parity.

“We’ve been very deliberate about progressing a measured baseline,” she added.

“I personally have a visceral feeling when I hear the word quota.”

Rossi may not be alone in feeling this way.

Aspiring leaders have expressed to at least one real estate executive that establishing hard quotas may diminish merit-based promotions.

“The feedback that we get from our strongest people is: ‘Please don’t put a quota in there because who wants to be that person who’s looked at as: You have two spots; therefore, I’m one,’” said Blake Hutcheson, then President and CEO of Oxford Properties Group (since moving into the role of President and Chief Pension Officer with OMERS), speaking at the ULI Toronto panel.

ALTERNATIVES TO QUOTAS Also speaking at the ULI Toronto panel, Leslie Woo, Chief Planning and Development Officer with the regional public transit

agency, Metrolinx, added that there are alternatives to quotas in the push for gender parity that have yet to be used. Woo has pressed recruiters to go back to the labour pool after they’ve sought out female candidates and come up short.

She reported Metrolinx has set a goal of reaching gender parity from the manager level up within three years in an effort to reflect the demographic composition of the Greater Toronto and Hamilton region it serves. Its 14-member board of directors has a 50-50 split between men and women and its executive team has a 60-40 split that favours women, but it has some ground to make up from the manager level up, where it currently has 28% female representation.

“Part of what we’re trying to do in our organization is to call it, and enable people to call it when they see it,” said Woo. “When I go into a boardroom or meeting, I take a picture and I show everybody: ‘Did you notice what our boardroom meeting looked like? Let’s mix it up a little bit.’”

Metrolinx is also turning to its women’s network and diversity and inclusion council for ideas. Woo said organizations need to Canadian Property Management | June 2018 17

industryleadership determine what their status quo looks like in order to know where to place their focus.

She had to approach the HR department for demographic data when the women’s network was being formed.

CRUNCHING THE NUMBERS REALPAC, a national trade association representing the largest real estate companies in Canada, started to track diversity and inclusion statistics in 2017, including gender, as part of its annual compensation and benefits survey.

“Collecting data on male-to-female breakdowns within organizations will establish a baseline from which to chart trends,” said Michael Brooks, CEO of REALPAC. REALPAC’s move to track male-tofemale ratios comes as part of a broader initiative, led by an advisory council and a staff committee, launched last year to promote diversity and inclusion in the industry, including gender equality. Brooks said a scan of global best practices showed the Canadian real estate sector is trailing its

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counterparts in the U.S., Europe and Australia.

Male members of the Property Council of Australia, for example, have pledged not to participate in ‘manels’ (all-male panels).

The statistics currently available suggest the real estate sector is also trailing the Canadian economy at large on gender parity. Women in the real estate sector may find the top rungs of the corporate ladder harder to reach compared to some of their peers in other sectors, an a n a lysis of C a n ad i a n P rop er t y Management’s 2017 Who’s Who in Canadian Real Estate Survey revealed.

“It’s been a journey, and I’ll admit that we’re not getting this right — not as a society, not in this industry and not at Oxford,” said Hutcheson, “but I have been a huge champion of both inclusion and diversity, and I’ve just watched the company evolve over nine years.”

“We make better decisions when we have a diverse group in the room,” he said.

DIVERSITY DRIVES RESULTS Oxford's parent, OMERS, provides forums for women’s and LGBTQ groups similar to Metrolinx’s diversity and inclusion efforts. The impetus to promote diversity and inclusion isn’t limited to social responsibility, as Hutcheson cited research coming out of Harvard University that shows it drives shareholder value.

What’s more, a new index from MSCI Canada that tracks a sample of publicly traded entities that meet criteria to be considered leaders in women’s diversity saw higher returns than a broader investable market index over the span of 18 months. Recognizing the research that exists, Rossi said she worries about the ability of the real estate industry to attract top talent in the future, having looked around the room at one of the biggest conferences of the year and not seen a lot of diversity.

In the classroom at Ryerson University where Brooks teaches the capstone real estate course, he sees plenty of women and visible minorities preparing to enter the sector, but he said that the industry needs to change the signals it’s sending.

“Put yourself in their shoes looking for a job at any organization in Canada — ‘I think I’ll check out the C-suite’ — and all you see is white men,” said Brooks. “That doesn’t send a reaffirming message about the future and what your opportunities are.”

There are encouraging signals to be found.

ULI Toronto’s Women’s Leadership Initiative (WLI) recently marked an important milestone as it strives to do its part to promote gender parity in the local real estate and development industry through its She With He campaign.

Having made a concerted effort to increase its female ranks, ULI Toronto now claims the highest level of women members globally — 36% — among ULI’s district councils of comparable size. zz

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EFFICIENT APPLIANCES RARER IN RENTAL DWELLINGS Split Incentives and Consumer Hardship Undermine Investment

ANALYSIS OF NEARLY 133,000 households across the United States reinforces intuitive assumptions about who is most likely to invest in energy-efficient appliances. A study published in the summer 2018 issue of the journal, Energy Policy, found a larger share of ENERGY STAR rated appliances in owner-occupied dwellings and in regions where electricity costs are higher.

The researcher, Mateus Souza, a PhD candidate at the University of Illinois, analyzed data from the 2011 American Housing Survey (AHS), which included a supplementary questionnaire about appliances. Cross-referencing with other AHS data, he developed profiles for four major appliances, two 20 June 2018 | Canadian Property Management

types of air conditioning and three types of furnaces, which depict higher levels of energy consumption in rental units.

For example, the majority of room air conditioners and electric furnaces were installed in rental housing. Yet, in the fewer cases where these devices were found in owner-occupied accommodations, they were more likely to be ENERGY STAR rated. Homeowners also reported a higher percentage of ENERGY STAR central air conditioners and furnaces, as well as refrigerators, dishwashers and clothes washers.

Within rental accommodations, energy-efficient appliances were more prevalent where the landlord paid utility costs. This demonstrates the dilemma of split incentives. Landlords may

energystrategies SASKATCHEWAN REINSTATES ENERGY STAR SALES TAX Saskatchewan landlords and developers face a 6% increase in the price of energy-efficient appliances since the provincial government resumed collecting sales tax on previously exempt ENERGY STAR certified products earlier this spring. The move was announced in the 2018 Saskatchewan budget, which argued that an incentive first introduced in 2003 is no longer needed to influence consumer behaviour.

“ENERGY STAR certified appliances now dominate the household appliance market and constitute the majority of consumer sales in Canada, with the benefit of permanent energy cost savings providing a strong incentive to choose these appliances,” the budget document states. However, less efficient options are still widely available.

“The retraction of the PST exemption will have multi-unit residential owners and developers weighing the cost/benefit when purchasing appliances,” says Jamie McDougald, President of the

be more reluctant to make energy-saving investments when they do not directly realize the benefits.

Souza additionally found “tenant-pay dwellings are, in general, occupied by lower income families than landlord-pay dwellings” — suggesting less leverage to encourage or impel landlords to invest in upgraded energy efficiency. Meanwhile, longer-term tenants were more likely to have energy-efficient appliances, which, he theorizes, may relate to the underlying quality of the accommodations, tenants’ choices and/or good landlord-tenant relations.

“Landlords may have felt more encouraged to invest in efficiency once they learned that tenants were likely to stay in the unit for longer periods,” he reasons. “A long duration rental could be a sign that both the landlord and the tenant abide by contracts, payments or maintenance, all of which may be reflected in the overall quality of the residential unit.”

Some of the same factors may help to explain why the energy efficiency gap between renters and homeowners is less pronounced in areas such as the New England and mid-Atlantic states where energy prices are higher. “This suggests that renters in those areas are more attentive to energy costs, thus demanding dwellings with more energy-efficient appliances,” Souza posits.

In exposing some of the impediments in rental housing, the study also highlights the potential savings to be reaped. Souza suggests appliance labelling, energy audits and disclosure requirements could help tenants become better informed, while targeted incentives could benefit tenants, landlords and broader societal goals.

“Carbon abatement policies for the residential sector should take into account the stark differences in ENERGY STAR appliance adoption rates that exist in rented and owneroccupied homes,” he advises. “It seems that rented units are falling behind in terms of investment in energy efficiency.

Therefore, energy-efficiency subsidies for rental markets may be more cost-effective than those for homeowners.”

Complementing that effort, the American Council for an Energy-Efficient Economy (ACEEE) is offering advice for improving take-up of high-efficiency air conditioners. In two newly released technical briefs, it suggests that more focus on equipment distributors could be an effective way to extend the reach of incentive programs.

“In midstream programs, the distributor receives an incentive and then passes some or all of the savings to the consumer,

Saskatchewan Landlord Association and Chief Operating Officer with Deveraux Developments, a home and condo builder and owner/manager of purpose-built rental housing. “With large developments and bulk purchases, the upfront cost savings experienced by buying appliances that aren’t ENERGY STAR rated might be too enticing for some to pass up.”

Purchasers of ENERGY STAR certified refrigerators, freezers, dishwashers, clothes washers, residential furnaces, boilers and ground- and air-source heat pumps had enjoyed the PST exemption.

“Some 15 years of PST exemption has had a meaningful positive effect for property owners, industry, energy savings and carbon targets,” submits Ted Kantrowitz, Chief Executive Officer of the Canadian GeoExchange Coalition. “Both affordability and capital efficiency matter.”

–REMI Network

instead of giving the consumer a direct rebate,” the ACEEE explains. “Moving to a midstream model can increase program participation significantly by reducing the initial cost and eliminating the need to fill out a form.” zz Mateus Souza's research paper, Why are rented dwellings less energyefficient? Evidence from a representative sample of the U.S. housing stock, can be found in the July 2018 issue of Energy Policy at www. sciencedirect.com/journal/energy-policy/vol/118/suppl/C. Technical briefs from the American Council for an Energy-Efficient Economy can be found at http://aceee.org/fact-sheet/he-air-conditioners.

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Canadian Property Management | June 2018 21

SPONSORED CONTENT

WHAT TENANTS WANT: THE VALUE IN UNDERSTANDING TODAY’S TRENDS

Keeping speed with tenant preferences can be a challenge, if not costly. That’s why, when approaching any apartment project, it pays to recognize the trends and technologies guiding potential owners.

“Building updates and renovations are a big investment,” says Amit Shanghavi, Managing Director of H&S Building Supplies, adding, “Taking time to learn who your target customers are and what they are looking for in a living space will go a long way towards attracting new tenants and keeping occupancy rates high.”

After 25 years in the industry, H&S’s team has seen a number of trends come and go. As for what’s attracting today’s tech-savvy, Millennialheavy market, Shanghavi has a few insights to share.

Social Spaces Today’s tenants are drawn to buildings with well-furnished communal areas that provide

a break from their surroundings, a chance to meet their neighbours, and connect to their community.

that have since made those common areas more appealing and, as a result, an attractive feature for our tenants.”

“Millennials love temporary or flexible spaces that they can make their own,” says Shanghavi. “These include game rooms, fitness areas, outdoor grill areas, or other social venues. Allowing them access to these spaces promotes a buildings’ unique community.”

Smarter Living Smart home technologies (e.g., Internet of Things (IoT), automated systems, and connected devices) are fast becoming a top trend in accommodations. Not only do they provide tenants with enhanced control and connectivity within their living spaces, but they enable property stakeholders to better manage utility usage, monitor building activity, and make data-driven decisions.

Scott Topping, Chief Operating Operator with Homestead Land Holdings, agrees, recalling, “Four years ago, we started the process of renovating our suites and common areas across all of our buildings.

Working with H&S, we identified solutions

“These technologies not only serve to provide property managers with improved sustainability and a better handle on utility

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“ Maintaining an edge in any real estate market takes consumer insights and custom strategies.”

costs, but also as an excellent marketing tool for younger renters,” says Shanghavi. ”That’s why, as a company in this space, we need to be constantly training sales staff on new products and emerging technology relevant to apartment operations.”

Material Choices There is a number of elements that make an attractive space. The use of luxury vinyl tile (LVT) planks, for example, is a popular flooring choice due to its stylish, wood-like appearance and the fact it lasts twice as long as a carpeted surface. Contemporary bathroom spaces with upgraded faucets and rectangular sinks are also popular features, with chrome and satin nickel finishes continuing to lead the way in popular colour choices.

LED lighting is another growing trend within residential buildings. As Shanghavi explains: “With pricing becoming much more affordable, and with total energy costs considered over the entire lifespan, these solutions have become extremely practical.”

A Tailored Approach Maintaining an edge in any real estate market takes consumer insights and custom strategies. That’s why, in addition to offering digital-friendly catalogs and sophisticated ordering and inventory systems, Shanghavi says its equally important for H&S to invest in the research and market insights that help it’s clients make informed decisions.

“When we undertook a complete renovation project for our fully furnished luxury suites

in one of our downtown Toronto buildings, we needed to know what our potential customers were looking for and how we could cater to their preferences,” says Stacy Coolman, Vice President of Operations with Barney River Investments Ltd., recalling, “Key to our success was working with H&S, who helped us determine the right products for the type of clientele we cater to.”

Smarter suites, social spaces, and stylish furnishings are top draws for today’s renters.

That said, the specific products and materials used by building owners / managers will differ depending on a number of factors (e.g., demographics, location, existing materials and infrastructure, etc.) Therefore, before approaching any project, it pays to understand whats been working in the market and what makes tenants tick.

Amit Shanghavi is Managing Director of H&S Building Supplies.

For more, visit www.hsbuild.com.

energystrategies

PARIS

AGREEMENT PAYBACK Gauging the Economic Spinoffs of the Pan-Canadian Framework

By Merran Smith and Corey Diamond

A WIN FOR OUR economy, consumers and the climate? It may sound like an elusive unicorn, but energy efficiency checks all of those boxes.

The federal gover nment’s PanCanadian Framework on Clean Growth and Climate Change has introduced a number of such measures as a way to cut carbon pollution and help Canada meet its Paris Agreement targets. These include improved building codes and energy labelling for buildings so people can better understand the energy per for mance of their homes and businesses.

But what does a more efficient future mean for Canadians? Clean Energy Canada and Efficiency Canada hired Dunsky Energy Consulting to model the net econom ic impacts of energy 24 June 2018 | Canadian Property Management

efficiency measures in the pan-Canadian framework. They also modelled the impacts of going a step fur ther, implementing the most ambitious efficiency goals found in jurisdictions across North America.

This was modelled out to 2045 in order to fully capture consumer savings, which add up over the lifetime of energy efficiency upgrades. Those savings are based solely on measures implemented between 2017 and 2030 — actual savings out to 2045 could be even greater with additional energy efficiency policies introduced after 2030. Here’s what they found.

GROWTH AND JOBS Between 2017 and 2030, Canada’s GDP will see a net increase of $356 billion

thanks to energy efficiency measures in the pan-Canadian framework. This growth comes from spending on upgrades but, mostly, it comes from all the money businesses and households will save on energy bills over time. This improves business productivity and competitiveness and reduces the cost of living for Canadians. These savings are then spent in the local economy, resulting in an even greater economic impact.

Canadian consumers would save $1.4 billion on energy bills per year (net of program costs), on average. Households can expect to save $114 a year on average or about $3,300 over the life of the energy efficiency measures. Meanwhile, Canadian business, industr y and institutions would collectively save, on average, $3.2 billion each year.

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PAN-CANADIAN ENERGY EFFICIENCY MEASURES • Making new buildings more energy efficient: Governments will work to adopt increasingly stringent model building codes starting in 2020. The goal is to have the provinces and territories adopt a net-zero energy ready model building code by 2030 • Retrofitting existing buildings: Governments will work to develop a model code for existing buildings by 2022, with a goal of the provinces and territories adopting the code.

Governments will also work together with the aim of requiring building energy use labelling in 2019.

Governments will also work to sustain and, where possible, expand their building retrofit efforts.

• Improving energy efficiency for appliances and equipment: The federal government will set new standards for heating equipment and other key technologies.

• Supporting building codes and energy efficient housing in Indigenous communities: Governments will collaborate with Indigenous Peoples to work toward improved building efficiency standards and incorporate energy efficiency in their building renovation programs • Improving industrial energy efficiency: Federal, provincial, and territorial governments will work together to help industries save energy and money, including by supporting them in adopting energy management systems.

26 June 2018 | Canadian Property Management

Under the pan-Canadian framework, every $1 spent on energy efficiency programs generates $7 of GDP. That ratio is lower under the Plus scenario because of the higher program costs associated with deeper retrofits, but additional GDP gains more than justify those costs. In both cases, the measures are proven ones, with demonstrated cost-effectiveness in leading provinces and states, such as Massachusetts and Minnesota.

As the economy grows, jobs would follow. Construction workers will gain work improving insulation, builders designing net-zero homes and businesses selling efficiency equipment. Early on, many of these jobs will be in construction, manufacturing and retail/wholesale trade. As savings add up, increased demand for local goods and services will drive economic output and jobs. The model suggests that an average of 118,000 annual jobs would be created between now and 2030.

HITTING THE TARGET There is some heavy lifting to do as Canada aims to hit its 2030 climate target. As a recent report from provincial and federal auditors general revealed, more will need to be done than is currently planned. Based on December 2017 emissions projections, policies in the pan-Canadian framework specifically will need to cut carbon pollution by 205 million tonnes.

Energy efficiency can account for a sizeable chunk of that. Under the panCanadian framework, energy efficiency measures are expected to cut carbon pollution by an impressive 52 million tonnes by 2030, as they help reduce the

FLOW-THROUGH IMPACTS

consumption of electricity, natural gas and refined petroleum products like heating oil. That’s one-quarter of Canada’s Paris climate commitment.

Under the Plus scenario, energy efficiency could cut an estimated 79 million tonnes of carbon pollution by 2030 or nearly 40% of Canada’s Paris climate commitment.

The benefits of energy efficiency are already being realized in provinces across the country. Take Nova Scotia.

T h rough a number of prog ra ms introduced a decade ago, the province has reduced its energy consumption by 10%, helping Nova Scotians save $166 million annually while cutting 840,000 tonnes of carbon pollution every year.

Energy efficiency may not draw as much attention as other policy solutions, but it’s one of the most important — and certainly most cost-effective — ways to upgrade Canada for the future via an approach that Canadians seem to like.

Recent public opinion research from Environics Research found that 88% of Canadians were interested in buying more efficient appliances, 79% in upgrading their homes to save energy and 78% in switching to more efficient heating and cooling systems. zz Merran Smith is Executive Director of Clean Energy Canada and Corey Diamond is Executive Director or Efficiency Canada. The report, The Economic Impact of Improved Energy Efficiency in Canada, Employment and Other Economic Outcomes from the Pan-Canadian Framework's Energy Efficiency Measures, can be found at http://cleanenergycanada. org/wp-content/uploads/2018/04/TechnicalReport_ EnergyEfficiency_20180403_FINAL.pdf.

In modelling the combined net macroeconomic effects of efficiency, this study assessed the three ways in which efficiency generates employment and economic impacts, both positive and negative: • Increased demand for efficiency-related goods and services: Funding energy efficiency programs is a cost to the economy. However, it also stimulates new demand — for example, hiring renovation contractors to weatherize homes generates economic activity and supports employment; • Redistribution of savings: As a result of the energy efficiency improvements, households and businesses save on energy bills. This in turn increases household disposable income, lowers the cost of doing business and/or frees up capital for more productive use in industry, all of which stimulate the Canadian economy; and • Reduced energy sales: Reduced energy sales limit utility revenue, at least domestically. This can negatively impact employment, for example by reducing the need to build new power plants.

–Dunsky Energy Consulting

energystrategies

QUEBEC PRIORITIZES

CONSERVATION New Centralized Agency Planned to Oversee Energy Programs

CO N S E RVAT IO N I S T H E top priority in Quebec’s recently unveiled plan to reduce province-wide energy consumption, increase low-carbon supply and embrace technologies like electricity storage and smart grid applications. A new centralized agency has been proposed to lead the efforts, which would include distributing $4 billion over 15 years to fund energy r et r of it s a nd f uel sw it ch i ng i n residential, commercial and institutional buildings.

“It is time to review our priorities in light of the current global context.

Quebec possesses all of the tools necessa r y to become a leader in r e n ewa ble t e ch nolog ie s , e n e rg y efficiencies and innovation,” Quebec Premier Philippe Couillard states in the introduction to the 2030 Energy Policy, released earlier this month.

“Together, we must be forward-looking and alter energy consumption habits.”

The plan reflects Quebec’s solidarity with the Pan-Canadian Framework on Clean Growth and Climate Change and the national target to reduce greenhouse gas (GHG) emissions to 30% below 2005 levels by 2030. It was one of the first Canadian provinces to implement carbon pricing — through a shared cap and trade system with California and the later, presumably shor t-lived, participation of Ontario — which will partly underwrite the 2030 Energy Policy.

Five targets, beginning with a 15% increase in energy savings, set the framework for the policy. The others i nclud e: a 4 0% r e duct ion i n consumption of petroleum products; boosting renewable energy to nearly

70% of the total supply; a 50% increase in bio-energy production; and the shutdown of coal-fired generation. “ E n e r g y e f f i c i e n c y, e n e r g y substitution and behavioural change are the three linchpins that, taken toget her, wi l l enable Q uebe c to successf u l ly ach ieve t he energ y transition necessary to attain the targets,” the policy document advises.

The new agency is envisioned to provide one-stop administration and oversight of va r ious gover nment, utility and organizational players. The policy outlines a multi-part mandate: prog ra m design, implement ation, per for ma nce mon itor i ng a nd verification; public outreach; financing options such loans and loan guarantees; advising government; and addressing the carbon footprint of publicly owned facilities, including the healthcare and education sectors.

“The new agency draws inspiration from structures established by States t h a t h ave a l r e a d y s u c c e s sf u l ly undertaken the energy transition,” the policy document states. “The future agency will pinpoint regulatory or normative barriers to private or public initiatives that are in keeping with the objectives of this energy policy and propose the appropriate changes to the government departments responsible.

Energy distributors will also be asked to d issem i nat e i n for m at ion a nd promote energy efficiency programs among their clienteles.”

In tandem, a review of Quebec’s Régie de l’énergie is planned to give it an auditing and reporting role similar to the Environmental Commissioner of Ontario’s function in assessing

progress toward environmental and e n e r g y go a l s i n t h a t p r ov i n c e.

C u r r e n t l y, t h e R é g i e i s m o r e straightforwardly an equivalent to the Ontario Energy Board, defined as “a public economic regulator that has a ma nd ate to re conci le t he publ ic interest, consumer protection and the fair treatment of the electric power carrier and energy distributors.”

For now, the priority placed on energy efficiency is more of a macrolevel directive than a detailed agenda of initiatives. Release of the 2030 Energy Policy is the first step, ahead of some required legislative amendments.

Three follow-up action plans for the periods of 2016-2020, 2021-2025 and 2026-2030 are promised.

Nevertheless, some key areas of concern are identified in the residential and commercial sectors. The policy ca l ls for prog ra ms to encou rage homeowners to switch out fuel oil sources for heating and hot water and upgrade to more energy-efficient appliances. It also promises to update building and energy codes for new construction, provide incentives to r e t r of it ex i st i ng b u i ld i ngs , a nd est abl ish a n advisor y council in partnership with the constr uction industry.

“We wish to ensure that consumers benefit from the potential offered by the transition to a green, more ecoefficient economy,” observes Pierre Arcand, Quebec’s Minister of Energy and Natural Resources. zz Quebec's 2030 Energy Policy can be found at https://politiqueenergetique.gouv. qc.ca/home.

Canadian Property Management | June 2018 27

STUCK AT GHG

STATUS QUO

Commercial Building Carbon Footprint Intrinsically Linked to Energy Supply COM M ERCI A L BU I LDI NGS aren’t making much contribution to Canada’s efforts to reduce greenhouse gas (GHG) emissions to 30% below 2005 levels by 2030. The most recent National Inventory Report, filed with the United Nations in April, finds commercial buildings registering the same output of 40 megatonnes (Mt) of carbon dioxide (CO 2) equivalent in 2016 as in 2005. However, that is an improvement from the first half of this d e c a d e wh e n a n nu a l e m i s sio n s wavered from 41 to 42 Mt. Nationally, Canada is making somewhat better progress as total GHG emissions dropped to 704 Mt of CO2e in 2016, representing a 28 Mt reduction from 11 years earlier. Arguably, too, growth cloaks some of the achievement thus far.

Emissions fell from 22.7 tonnes per capita in 2005 to 19.4 tonnes in 2016.

From a GDP perspective, the GHG intensity dropped from 0.49 Mt per $1 billion of GDP to 0.39 Mt per $1 billion of GDP in 2016. Nevertheless, Canada’s reduction commitment is volumetric and GHG levels will have to drop to roughly 510 Mt over the next 14 years to meet the target.

The second warmest winter in 70 years factors into residential GHG emissions for 2016. They dropped to 28 June 2018 | Canadian Property Management

41 Mt CO 2 e — down from 45 Mt in 2015 and 47 Mt in 2014. Even so, heating accounts for the overwhelming share of residential emissions, with fully 39.3 Mt attributed to combustion of fossil fuels.

T he em issions prof i le for t he commercial building sector is more va r ie d . Fo s si l f u el c o m b u s t io n produced 29.3 Mt of emissions with another 0.7 Mt from cogeneration.

P rocesses involving haloca rbons, sulphur hexaf luoride and nitrogen trifluoride added another 5.6 Mt, while non-energy products and solvents produced from fossil fuels contributed 4.5 Mt. Together, commercial and residential buildings are deemed responsible for 12% of the total emissions in 2016. Of the seven economic sectors where GHGs are apportioned, oil and gas was the biggest emitter in 2016 at 183 Mt CO 2 e, followed closely by transportation with 173 Mt of CO 2 e. Those two sectors account for more than half of the year’s emissions. The remainder arose from: electricity (11%); heavy industry (11%); agriculture (10%); and waste and others (6%).

GENERATION INTENSITY A lt h o u g h e m i s s io n s r el a t e d t o

electricity generation are categorized separately, Canada’s report to the UN draws a connection between the two sectors when it outlines how further GHG reductions may be achieved in the buildings sector. “Measures in the Pan-Canadian Framework that are expected to impact future trends in this sector include developing net-zero-energy-ready building codes that can be adopted by 2030 for new buildings; retrofitting existing buildings and providing businesses and consumers with information on energy performance; and improving the energy efficiency of appliances and equipment. The development of a clean fuel standard will also influence future trends in this sector,” it states.

The report’s breakdown of provincial electricity supply and resulting GHG output draws attention to Canadian regions where efforts to save energy will have a proportionally greater impact on em issions. Generation intensity, measuring grams of CO 2 e per kilowatt-hour (kWh) of electricity consumption, varies dramatically in Canada’s four most populous provinces.

In Quebec, where 99.5% of the electr ic supply comes from hydroelectric and renewable generation, the generation intensity is 1.3 grams CO 2 e/kWh. Quebec’s greater reliance on electric heating similarly results in

energystrategies a lower GHG output relative to other provinces — 10.9 Mt in a province with about 8.2 million inhabitants versus 17.7 Mt in Alberta, which has roughly half that population.

I n 2 016 , A lb e r t a’s gene r a t ion intensity was 760 grams CO 2 e/kWh, largely attributable to the coal-fired generating plants producing nearly 62% of the province’s electr icity supply. British Columbia’s energy intensity was 11.1 CO 2 e/kWh and Ontario’s was 36 CO 2 e/kWh. U.S. COMPARISON Looking outside Canada, the U.S. GHG i nve nt o r y r e p o r t d r aws cle a r e r con ne ct ions b et we en ele ct r icit y generation and its end-users. It identifies the electric power sector as the source of 28% of national GHG emissions in 2016, but then apportions that 1,809 Mt of CO2e among the three major sectors — commercial, residential and industrial — consuming power.

Nea rly 66 4 Mt of com mercia l emissions and more than 684 Mt of

residential emissions are attributed to “indirect fossil fuel combustion” related to electricity use. This, in turn, reflects the predominant sources of power generation, as nearly two-thirds of the U.S. power supply is coal or natural-gas fired. In contrast, less than 19% of Canada’s power supply is fossil-fuel fired.

On the flipside, Canadian buildings proportionately emit far more GHGs from direct combustion. U.S. commercial building emitted 231.3 Mt of CO2e and residential buildings emitted 292.5 Mt of CO2e across a population approximately ten times greater than Canada’s. This ref lects the Canadian climate and reliance on fossil-fuel fired heating.

Combi ne d d i re ct a nd i nd i re ct emissions from U.S. commercial and residential buildings appear to have dropped more notably from 2005 levels, with a 16% reduction in the commercial sector and a 22% reduction in the residential sector. However, commercial improvement is solely related to indirect emissions and the changing electricity

supply. Direct emissions have risen by 4.3 Mt. “Recently, a decrease in the carbon intensity of the mix of fuels consumed to generate electricity has occurred due to a decrease in coal consumption, increased natural gas consumption, and increased reliance on non-fossil generation sources,” the U.S. report observes. “While emissions from the electric power sector have decreased by approximately 0.1 per cent since 1990, the carbon intensity of the electric power sector, in terms of CO 2 equivalent per QBtu (quad r illion Br itish ther ma l un its), input has significantly decreased — by 12% — during that same time frame.” zz For more information about Canada's GHG inventory and report, see www.canada.ca/ en/environment-climate-change/services/ climate-change/greenhouse-gase m i s s i o n s / s o u rc e s - s i n k s - e x e c u t i v e summary-2018.html. More information about the U.S. report can be found at www. epa.gov/ghgemissions.

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2017-10-04 Canadian Property Management | June12:36 2018 PM 29

energystrategies

MIXED MESSAGE ON ALBERTA INCENTIVES

Office Buildings Shifted from Eligible to Ineligible for Upgrade Program

By Barbara Carss DESPITE INFORMATION posted on the Energy Efficiency Alberta website for more t ha n a mont h, commercial customers do not qualify for recently announced incentives that promise up to $1 million annually to cover up to 50 per cent of the capital costs of a slate of retrofit investments.

T he $88-m ill ion Custom Energy Solutions program, jointly funded from Alberta’s carbon levy and the federal government’s Low Carbon Economy Leadership Fund, is actually targeted solely to the industrial sector.

“Our website is out of date,” Jessica Shumlich, Program Manager, Industrial, with Energy Efficiency Alberta, confirmed when asked to clarify the online information that listed commercial office buildings among the eligible facilities.

The reference has since been removed and the program is now defined as open to: “a broad scope of industrial operations including manufacturing facilities, industrial plants, natural gas and oil field production sites, mining operations, natural gas and oil processing plants as well as pipelines”.

H oweve r, a M ay 10 A l b e r t a government release states: “Industrial and commercial facilities in a broad ra nge of sectors, including manufacturing, oil and natural gas, wholesale trades, warehousing and waste management, can apply to receive incentive funding for custom energy upgrades.” Advocates for Alberta’s commercial real estate sector are 30 June 2018 | Canadian Property Management

expressing disappointment with the revised rules.

“Commercial buildings in Alberta pay a significant share of the carbon levy that funds these programs so I would encourage Energy Efficiency A lb e r t a t o c o n sid e r i n c r e a si ng commercial building incentives to better match what is already being done with residential and industrial b u i ld i ng s ,” s ays L loyd Su c h e t , Executive Director of the Building Owners and Managers Association (BOMA) of Calgary.

Commercial customers continue to be eligible for more than 60 different product rebates for lighting, lighting controls, load sensing plug strips, variable frequency drives, boilers and water heating equipment. Meanwhile, it’s not clear if commercial customers will be eligible for the incentives for engineering studies, retrocommissioning and re-commissioning and on-site energy managers that are promoted as “coming soon” under the new custom programs, but similar programs have been popular in Ontario.

“Three years ago, we could say Alberta was really one of a few jurisdictions in North America that didn’t have any of these kinds of programs,” Suchet muses. “Our members are absolutely taking advantage of the rebates. It makes the payback a little bit shorter on capital expenditures.”

“The big one we’ve taken advantage of in our light industrial properties is for

conversion to high-bay LEDs,” concurs Keith Major, Executive Vice President, Real Estate Services, with Bentall Kennedy (Canada) LP. That equates to $45 per lamp for replacement of 250-watt or greater HID lamps or $15 per lamp for conversion of HID lamps in the 70 to 249-watt range.

Although earlier expectations that office buildings and/or warehouse/ distribution facilities would qualify for the new retrofit incentives have now prove d u n fou nde d , b ot h i ndust r y i nsiders do of fer some suggestions of how future programs ca n be better ta ilored to the commercial sector’s needs.

“When it’s ‘first come, first served’ and the programs are announced without a lot of notice, that makes it a little bit tricky with budget planning and approval cycles,” Major advises. “ We usu a l ly pla n ba se d on t he assumption the rebates are in place.

We like the Ontario approach where prog ra ms a re in place for a set period.”

“I think we need to look at the opportunities to really push energy management to the B and C class buildings,” Suchet submits. “These are the buildings that could really benefit so much from some type of energy benchmarking. They do have programs for non-profits (to develop energy management plans) that could just as easily be adapted to this segment of the office market.” zz

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