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F O R B U I L D I N G O W N E R S , A S S E T A N D P R O P E R T Y M A N AG E R S

VOL. 29 NO. 2 • JULY 2022

TIME & MONEY

INFLATION POUNCES ON DELAY

PA R T O F T H E

P A R T

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TABLE OF CONTENTS

CONTENTS 13

COVER STORY

SIMPLIFIED PROJECTIONS Real-time consumption now sole determinant of peak demand hours

IN THIS ISSUE

SCORECARD LETDOWN Canada slips into the bottom half of international energy efficiency rankings

PRECARIOUS PRO FORMA Confluence of inflationary pressures pushing construction costs upward

PORTAL TO FRUSTRATION Growth strategies grapple with housing needs

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SIMPLIFIED PROJECTIONS

Real-time consumption now sole determinant of peak demand hours BY BARBARA CARSS

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ENERGY MANAGEMENT

ntario’s large commercial electricity customers have begun a new cycle of peak chasing with somewhat more straightforward parameters for carving out their share of the global adjustment in 2023-24. A provincial regulation filed this spring now ties the five hours of system-wide peak demand, which are central to large customers’ cost calculations, to real-time consumption from the electricity grid. Previously, analysts with the Independent Electricity System Operator (IESO) also factored in the volume of energy storage that hydroelectric generating stations drew to meet system demand. The five peak hours were identified from the resulting tally, which is known as the adjusted allocated quantity of energy withdrawn (AQEW). This presented an added challenge for customers aiming to reduce their energy loads during the five peak hours since the track record of Ontario’s Industrial Conservation Initiative (ICI) shows that the adjusted AQEW can vary by 300 to 900 megawatts (MW) from the real-time reading. “This change will allow peaks to be more confidently predicted,” observes Neal Bach, former president of the energy management and analytics firm, Energy Profiles Limited, which is now a subsidiary of Brightly. “There will no longer be a 20-day wait for the AQEW to be finalized to solidify the peak hour, and it will prevent occurrences like last year where a peak shifted from 5 p.m. to 8 p.m. based on the AQEW.” Speaking during a May webinar sponsored by the Building Owners and Managers Association (BOMA) of Greater Toronto, Tim Christie, Director of electricity policy, economics and system planning with the Ontario Ministry of Energy, advised that the new peak hour baseline and other accompanying tweaks to the regulation governing the ICI program arise largely from a 2019 stakeholder consultation. At the time, Ministry officials directly conferred mainly with industrial electricity users, but commercial customers — both the larger entities that qualify to participate in the ICI program and the greater number of accounts that do not — were also invited to make submissions. Under ICI program rules, all customers with monthly average energy demand of 1 MW

and designated manufacturing sector players with average monthly demand of 500 kilowatts (kW) can opt in as Class A participants. Their share of the global adjustment — which even after the removal of an estimated $3 billion in costs related to renewable generation contracts still averaged about 7.35 cents per kilowatt-hour (kWh) in 2021 — is pegged to their energy usage during the five hours of system-wide highest demand between May 1 and April 30, and then fixed for the following 12 months from July 1 to June 30. After the Class A allocation is subtracted out, non-qualifying or Class B consumers pay the remainder of each month’s GA costs on a volumetric $ per kWh formula.

“For Class A, what it really comes down to is preparing for the five hours. You don’t know when exactly they’re going to occur so you have to use the information available and target maybe 20 days during the peak season, with a four-hour window,” Edward Newton, an energy analyst with the consulting firm Energy@Work, told webinar attendees. “Generally, for each kW you reduce, it amounts to between $100 and $120. So decreasing 100 kW during one of the peaks, that can lead to $12,000 in savings, but the reverse is true if you get caught during a peak and your demand is high.” Christie suggests peak hours based on realtime consumption should make that exercise

TAF OFFSHOOT NOW A RETROFIT AGGREGATOR Efficiency Capital will serve as a retrofit aggregator for Canada Infrastructure Bank’s $2-billion Commercial Building Retrofit Initiative. A newly announced commitment of $50 million in federal funding along with the service provider’s 20% equity capital stake will create a $62.5 million pool to devise and implement projects to reduce greenhouse gas (GHG) emissions. Ehren Corey, Chief Executive Officer of the Canada Infrastructure Bank (CIB) commends Efficiency Capital’s business model, which provides clients in the buildings sector with upfront capital to undertake required work in turn for a share of end-of-project utility cost savings. The company is an offshoot of The Atmospheric Fund (TAF), a non-profit agency funded through endowments with a 30-year track record of testing and advancing programs to underwrite energy and sustainability improvements. Initially launched within the City of Toronto, TAF’s mandate now stretches across the Greater Toronto and Hamilton area (GTHA). Efficiency Capital was incorporated in 2015 as a single-source provider of engineering, finance, installation and monitoring and verification services. Last year, it was ranked 31st in the Report on Business’ list of top growing Canadian companies. “Canadian businesses and building owners are starting to make serious commitments to reduce their GHG emissions, but often struggle with the allocation of sufficient capital to implement their projects at scale or across multiple sites,” observes Chandra Ramadurai, Efficiency Capital’s Chief Executive Officer. “EC brings specialized capital and diverse expert teams to deliver projects that otherwise would fail to meet the internal hurdle rates of our clients.” Under the requirements of the Commercial Building Retrofit Initiative, project proponents will have to achieve a 30% reduction in GHG emissions, with no less than a 25% reduction in any one asset across a portfolio of buildings. Those efforts are projected to be underway later this year once financial arrangements between CIB and Efficiency Capital are finalized. “Retrofitting commercial buildings is and will continue to be an important tool to enable Canada to get to net-zero by 2050,” says Dominic LeBlanc, Canada’s Minister of Intergovernmental Affairs, Infrastructure and Communities. “It is good for our environment, good for our economy and good for workers.” – REMI Network

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ENERGY MANAGEMENT

a little less perilous. He reiterated that the Ministry’s prime objective is to encourage demand response, not create booby traps. “We heard a lot of concern from consumers that hours could fall in or out once they were adjusted. People could make decisions about taking conservation measures using the realtime demand and, after the fact, that could change. It led to a lot of frustration,” he reported. “So we changed the regulations.

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This should make it easier for people to participate with a little bit less volatility and a little more transparency.” ADDITIONAL REGULATORY AMENDMENTS The regulatory amendments also include a couple of streamlining measures that could be of interest to the commercial real estate sector. The regulation now includes a mechanism to recognize that a campus of buildings

registered as a single Class A consumer in the ICI program could split into smaller components if one or more buildings are sold to new owners. The amended rules allow existing and new holders of the properties to remain in Class A until the end of the inprogress ICI cycle (June 30) provided they have a formal agreement of how the billing will be divided and the necessary metering in place. “It’s come up a handful of times over the years,” Christie noted. “The reg didn’t have language to identify how to deal with that situation so we’ve now clarified that.” Property owners would still need to work through the details with their local distribution company (LDC) or the IESO, depending on their grid connection. Additionally, LDCs or the IESO will now handle all administration related to changes in property ownership without having to wait for the Ministry of Energy’s instructions to do so. “Prior to this point, if you wanted to change control of your facility, you would write to the Minister, and the Minister would approve or deny it. In practice, they were all approved so it just became a paperwork exercise,” Christie said. Another new regulation authorizes the Ministry of Energy to collect more information from Class A consumers on an annual basis, including: total electricity consumption; average maximum monthly demand; the peak demand factor (PDF) used to allocate their share of the global adjustment; and their code under the North American industry classification system (NAICS). This will augment the Ministry’s current records of Class A consumers’ addresses. However, much of the additional information, with the exception of the NAICS codes, will be converted to anonymized data. “We will use that information to do program analysis and evaluation,” Christie explained. “The ICI program over the years has — as we’ve reduced eligibility criteria and the wholesale price has gone down and the GA has gone up — become a very material program. A lot of money is allocated for this program and we increasingly didn’t have sufficient data to be able to do appropriate analysis and evaluation. We had decent data for IESO-connected consumers, but for LDC-connected consumers, we always had issues actually determining who was participating.” ■

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SCORECARD LETDOWN

Canada slips into bottom half of international energy efficiency rankings

aw performance metrics sink Canada’s score in a recently released comparison of energy efficiency in 25 of the world’s highest consuming countries. Canada has slipped to 13th, and the bottom half of the field, in the American Council for an Energy-Efficient Economy’s (ACEEE) fifth assessment of policy intent and energy-use outcomes related to buildings, industry and transportation, as well as some broader investment and conservation activities. This year’s results come after a four-year interval in what has traditionally been a biennial benchmarking exercise, and bring some jostling in the standings. France, with a score of 74.5 out of 100, takes the top spot, moving up from third in 2018. Three other countries ranked in the top five — the United Kingdom, Germany and Italy — are likewise carryovers from 2018, but are all now slotted in different positions, with Italy notably falling from a previous first-place tie down to fifth. The Netherlands is a new arrival, jumping from 7th in 2018 to a 3rd place tie with Germany this year. “Top-scoring countries, though far from perfect, offer ideas for what other countries can do to increase their energy security, cut emissions and save money,” suggests Sagarika Subramanian, the report’s lead author and a senior research analyst with ACEEE. “Notably,

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they’re rapidly scaling purchases of electric vehicles by offering incentives, and France and the Netherlands are cutting energy waste by adopting building performance standards.” In citing some exemplary efforts, the ACEEE commends the Netherlands for: its “almost energy neutral” criteria for new construction; prohibition on connecting new homes to the gas grid; and pending requirement (as of 2026) that replacement heating systems for existing homes be either all-electric or hybrid heat pumps. Germany is highlighted for “robust government funding such as tax incentives and loan programs” for building retrofits, lowcarbon heating and cooling options, and electric vehicles; while Japan and the UK earn praise for programs targeting industry.

6-point drop from 2018, down to a failing grade of 49.5, Canada manages to surpass the 2022 mean average of 48.5 — which also marks a decline from the 2018 mean average of 51. Aside from the top five, Canada trails Spain, Japan, China, Taiwan, the United States, South Korea and Poland. It outscores Mexico, Turkey, India, Indonesia, Australia, Brazil, Thailand, Egypt, Russia, Saudi Arabia, South Africa and the United Arab Emirates. Solely from a policy perspective, Canada ranks seventh, having attained 41 of a possible 60 points across 23 measures. Yet, in earning just 8.5 of the possible 40 performance points, Canada ties with the United Arab Emirates in second-last place, besting only Russia, which bottoms out the category with 7 points.

DECLINE IN MEAN AVERAGE France and Netherlands boast improved scores this year, with the Netherlands registering an impressive gain of 6.5 points to reach 71.5. The remainder of the top 5 experienced slight to larger slips, ranging from 0.5 points in the UK’s case to a 7-point slide for Italy, to rest at 68.5. That downward trajectory also plays out across the entire survey base, composed of the 25 countries which account for 82% of worldwide energy consumption and more than 80% of global gross domestic product (GDP). Despite a

OUT IN THE COLD Arguably, the weighting of the scoring in the smaller complement of 13 performance metrics is not advantageous when applied to Canada’s vast geography and cold climate, and compared against more temperate and compact countries. Although Canada earned 1.5 out of a possible 2 points for the penetration of energy services companies (ESCOs) into its market, and 0.5 out of 1 point for its installed combined heat and power capacity, calculations skew negatively for the majority of the metrics.

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BENCHMARKING

CDM COULD SPELL GLOBAL ENERGY-USE AVOIDANCE Conservation and demand management could deliver worldwide annual energy-use avoidance of 95 exajoules (EJ), equivalent to nearly 278 million megawatt-hours, concludes a report released this spring at the 7th Annual Global Conference on Energy Efficiency in Sønderborg, Denmark. Canada is among dozens of national delegations in attendance to endorse urgent action on energy efficiency — recognizing it as one of the most straightforward paths to easing reliance on fossil fuels and curbing greenhouse gas (GHG) emissions. “The cleanest energy is the energy we don’t use,” declares a joint statement from 24 individual countries, the African Union and the European Union. “The current scale of energy efficiency action is not sufficient and there is a need to accelerate implementation on a global level.” The report, from the International Energy Agency (IEA), theorizes that much of the forecast savings could be achieved with existing and readily available technologies, through fuel-switching, replacement of inefficient equipment and building materials, deployment of smart systems and behaviour change. Reaching an annual energy-use avoidance target of 95 EJ by 2030 would require a corresponding 4% annual improvement in energy-use intensity — up from the current 2%. “With each unit of energy delivering more than it does today, final energy demand can be around 5% lower by 2030, but serving an economy 40% larger,” the report submits. “Slower action would lock in higher energy consumption for years to come.” Buildings and transportation are tapped as two key sources of energy savings. Aligned with the IEA’s scenario for achieving net-zero emissions by 2050, the report identifies the potential capacity for a 20% reduction in 2020 levels of building energy consumption by 2030 with fuel-switching playing a major role. That would be achieved on two fronts: electric heat pumps to replace gas-fired boilers; and more sustainable options in place of wood-fired or charcoal-based cooking. “In 2020, energy consumption in buildings totalled around 129 EJ, and contributed around 28% of all global energy related emissions. Early action on energy efficiency including electrification and other fuel-switching helps avoid around 37 EJ by 2030. This results in around 1.2 gigatonnes (Gt) of emissions reductions from the direct combustion of fossil fuels in buildings and also helps lower overall electricity sector emissions,” the IEA report projects. The report also highlights the spinoff benefits of reducing reliance on Russian sources of oil and gas. The targeted 95 EJ in energy-use avoidance equates to about 30 million barrels of oil per day, or roughly triple Russia's 2021 production. It’s equivalent to 650 billion cubic metres of natural gas annually, which is about four times the volume the EU imported from Russia last year. The report, The Value of Urgent Action on Energy Efﬁciency, can be found at www.iea.org/reports/the-value-of-urgent-action-on-energyefficiency.

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BENCHMARKING

2022 ENERGY STAR AWARD WINNERS The 10 recipients of the 2022 ENERGY STAR Canada awards for existing commercial and institutional buildings represent a balance of new and old, with five repeat winners from last year. This year’s honourees are drawn from the pool of 283 ENERGY STAR certified buildings Canada-wide, and include six office buildings, a multifamily condominium complex, a school, a long-term care facility and a hospital. In addition, 28 other ENERGY STAR awards were bestowed for products, programs and sustained contributions to advancing energy efficiency. Private and not-for-profit organizations, including manufacturers, homebuilders, utilities, retailers and advocacy agencies are eligible in a range of categories. “I commend this year’s ENERGY STAR Canada award winners, who have demonstrated innovation in energy efficiency, which is critical to our ambitious climate goals,” says Jonathan Wilkinson, Canada’s Minister of Natural Resources. “Their collective commitment to reach and inspire Canadians to make energy-efficient choices is contributing to Canada’s target of netzero emissions by 2050.” Winners in the existing buildings category include: 2001 Bonnymede Drive, a 215-unit low-rise condominium complex in Mississauga, Ontario. It was built in 1976, and is managed by Crossbridge Condominium Services; Brian Canfield Centre, a 22-storey, 690,000-square-foot office tower located at 3777 Kingsway in Burnaby, B.C. It was built in 1976 and originally served as the headquarters of BC Tel. It is currently owned and managed by H&R REIT; 227 King Street South, Waterloo, Ontario, an 18-storey, 648,000-square-foot office building. It was built in eight phases between 1912 and 1986, and is owned by Concert Realty Services; 351 King Street East, Toronto, a 17-storey 500,000-square-foot office building. It was built in 2016, and is owned and managed by First Gulf; 55 Commerce Valley Drive West, an eight-storey 186,000-square-foot office building in Markham, Ontario. It was built in 2000, and is owned by Soneil CVD 55 Inc.; 6985 Financial Drive, a five-storey, 180,000-square-foot office building in Mississauga, Ontario. It was built in 2006 and is owned and managed by QuadReal Property Group; Commerce South Office Park, Building B, a three-storey, 91,000-square-foot building located on Edmonton’s 51st Avenue. It was built in 1982 and is owned and managed by BentallGreenOak; Saint John Regional Hospital, owned and operated by the Horizon Health Network; Bliss Carman Middle School, Fredericton, New Brunswick. It is part of the Anglophone West School District, and is owned by the Government of New Brunswick; and Sunrise of Windsor, an assisted living and senior care facility in Windsor, Ontario, owned by Ventas Healthcare Realty. Sunrise of Windsor and three of the five office buildings — excluding 351 King Street East and 55 Commerce Valley Drive West — also received ENERGY STAR awards in 2021.

For example, calculations for residential energy-use intensity are derived from tallying the scores assigned to two metrics: total energy use per area of built space; and total energy use per capita. Calculations for commercial energyuse intensity are also based on end energy use per floor area, as well as energy use per dollar of service sector GDP. Scores of 0 to 1.5 are then assigned based on four gradients of energy use. Thus, Canada attains just 0.5 of six possible points for energy-use intensity in the buildings sector, while Mexico scores 6 and Brazil scores 5.5. The United Arab Emirates, Canada’s match near the bottom of the performance measure rankings, also outscores it with 1.5 points.

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However, Canada does outperform Russia, which scored no points for these metrics. “Although we recognize that many variables affect energy use — including wealth, climate, geography, economic structure, and demography — we largely avoided adjusting the data to reflect those impacts. Because our goal was to evaluate energy use across countries, we chose to present the data in the least processed form that allows for meaningful comparison,” the ACEEE report advises. Canada scores 2 out of the 6 possible points for reduction in national energy intensity between 2013 and 2018. That’s the ratio of energy use to economic output, and is calculated based

on the total primary energy consumed per dollar of market-exchange-rate GDP. Canada registered a 6.5% reduction for the period to rank among seven countries earning two points for reductions in the range of 4 to 6.9%. Only China received the full 6 points for a reduction greater than 20%, coming in at 22.7%. Eight countries — the UK, Poland, the Netherlands, Egypt, Taiwan, India, France and Japan — scored 5 points for reductions in the 11 to 19.9% range. The U.S. garnered 3 points for its 8.1% cent reduction, while Russia and Brazil were blanked for their respective energy intensity increases of 2.7 and 3.2%. POLICY STRENGTHS Looking to where Canada scores well, it receives full marks for: spending on energy efficiency, including research, design and development (RD&D); setting energy savings and climate goals; and data availability. Within the buildings sector, it also ranks highly for commercial and residential building codes, building retrofit policies, and appliance and equipment standards, but has more room to improve at building ratings and disclosure. Regardless of countries’ rankings, opportunities for improvement underpin much of the ACEEE’s messaging as it emphasizes the challenges that lie ahead to meet global targets for reducing greenhouse gas (GHG) emissions and the cost-effective path energy efficiency presents for doing so. In moderating the growth of energy demand, energy efficiency also defers required investment in new generation and frees up capital that can be diverted to low-carbon infrastructures and technologies. “Our results indicate that all economies evaluated in this report still lag behind where they need to be,” the 2022 scorecard report states. “Governments that encourage investment in energy efficiency and implement policies to support energy efficiency save citizens money, create jobs, and improve public health by decreasing pollution. These benefits are especially important as the world continues to deal with the impacts of a global health crisis. Yet, energy efficiency remains massively underutilized globally despite its proven multiple benefits and its potential to achieve significant reductions in emissions by 2040.” ■ ______________________________________________

MORE INFORMATION ABOUT THE INTERNATIONAL ENERGY EFFICIENCY SCORECARD CAN BE FOUND AT WWW.ACEEE. ORG/INTERNATIONAL-SCORECARD.

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PRECARIOUS

PRO FORMA

Confluence of inflationary pressures pushing construction costs upward BY BARBARA CARSS

spate of special assessments is anticipated as condominium corporations update their reserve fund studies and adjust for inflation. Coming out of an extended period when the consumer price index (CPI) hovered in the 2 to 2.5% range, many condo boards will confront shortfalls as the CPI now pushes up to around 8%. “That’s going to be a huge adjustment as to what you’ve actually got in the bank and what you are responsible under the [Condominium] Act to have in the bank,” observes Greg Moore, President of the construction management firm, Quantum Project Management Services. “There will be special assessments hitting all of these condo boards and people are going to freak out.” The looming hit for some condo owners reflects a confluence of escalating construction costs for materials, labour and contractual or financing penalties tied to delayed delivery. Industry insiders outlined some of those pressures during a panel discussion in early June at the REMI Show in Toronto. On one side, contractors and project managers are encountering daunting constraints on the supplies and services needed to keep projects moving. On the other, they’re beholden

to developers and institutional clients with budgets and timelines that aren’t sympathetic to supply chain woes. Jeff Murva, a construction management consultant and Chair of the Toronto Construction Association’s board of directors, gave examples of “runaway material and equipment costs” as builders worldwide compete for the scarcity of everything from swimming pool components to the conduit that encases electrical cabling within poured concrete slabs. Turning to labour, he cited soaring wage scales in response to widespread shortages of almost every skilled and unskilled trade. That’s coupled with diminished productivity as employers scramble to fill out their ranks and meet developers’ demands. “Their clients, the developers, are saying: ‘You better take on this additional project. We don’t care where you get the men; just get the men and take it on, or else we’re going to take all of our dozen projects and give them to someone else’,” Murva recounted. “And the problem is, you’re getting the C-team — someone who is not performing,” added Craig Lesurf, President of the construction management company, the Gillam Group. “An A-team crew used to have a majority of As. An

A-team now has one or two As and all the rest are Bs, Cs, Ds and below.” SUPPLY CHAIN COMPLICATIONS The lingering disruptions of the COVID-19 pandemic are melding with more recent repercussions from Russia’s invasion of Ukraine to create new complications and further goad inflation. Lesurf noted that Ukraine is a prominent source for various construction materials and products, including steel, wood and electrical equipment, much of which is shipped from its beleaguered ports. “If you want to get a certain birch for millwork. Ukraine is the principal place it comes from. You may have specified it two years ago, but you can’t get the material now,” he said. “I had some components of a building stuck in a container ship in Kyiv and we had to get it off-loaded from the container ship and shipped to Poland to get it out. We were nervous about having to find a replacement [elsewhere] because we ordered it 12 months ago.” Such supply chain uncertainty is triggering new procurement practices as construction managers order products when the opportunity arises and hold them for the future. That comes www.REMInetwork.com

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with new costs and requirements for storage capacity, while exacerbating overall material and equipment shortages. “Storage was never common in conversations or contracts three years ago. Now there are so many contracts where we’re having to prospect storage,” Murva reported. Meanwhile, for in-progress development, it’s another cost that wasn’t contemplated when the budget was set. “If it’s available, we buy it now and store it. Those storage costs weren’t factored in, and it’s robbing the market of something that used to turn over every three months, but now we’re keeping it for nine months before we need it,” Lesurf confirmed. INVESTORS SEEK ASSURANCE There are also soaring transportation costs regardless of when products and material are obtained. It’s all filtering through to development pro formas — interjecting more caution and squeezing the margins even tighter in what Murva typifies as an already precarious pathway to profits for multi-residential high-rise projects. With institutional investors increasingly holding sway in the development space, contractors and project managers are getting the blowback from pension funds’ and insurance companies’ ingrained risk aversion. “It’s becoming common now to ask for price certainty before the green light is given. What it means is that we are moving towards a stipulated price contract,” Murva said. “Ownership is becoming very nervous about the cost to actually build something, about the cost creeping or escalating on them over the course of the project.” That appears to be a reasonable fear. “People are saying: My price is good for 10 days. It’s no longer 30 or 60; it’s 10 days,” Moore underscored. “The notion of historical data is historical; it’s not relevant anymore. It makes it difficult to actually make a pro forma work. It makes investors nervous. It makes the banks nervous. It makes insurance companies reticent about getting involved.” Condo developments face the added threat of sidelined purchasers. “These condo buildings are 75 to 80% investor-owned. Now they are all getting nervous about where interest rates are going,” Murva said. “It’s putting pressure on the residential high-rise industry in terms of whether or not future projects are going to be financially viable. So there’s this entire ripple effect.” ■

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PORTAL TO FRUSTRATION Delays persist at the Landlord and Tenant Board BY ERIN RUDDY

t’s been a long, weary road to resolution for landlords and tenants caught in the evictions backlog that was exacerbated in 2020 when the pandemic forced the Landlord Tenant Board (LTB) into a five-month hiatus. Though online hearings have since resumed via the Tribunals Ontario Portal, technical difficulties, prolonged waits and complaints of biases abound. “Our paralegals are frustrated with the process so I expect landlords are too,” says Joe Hoffer, a lawyer and partner with Cohen Highley LLP. “I think of the opening of Dickens’ novel Bleak House where the inscription outside the courthouse door reads, ‘Suffer any wrong that can be done you rather than come here!’ because the delays, the cost and the dysfunction result in daily miscarriages of justice for both landlords and tenants.” Hoffer isn’t alone in his exasperation with the LTB, where problems have persisted for years. The sluggish pace of proceedings became

the subject of an investigation by then Ontario Ombudsman Paul Dubé before the State of Emergency was declared. According to his 20192020 annual report, Tribunals Ontario ranked fourth for most prevalent topic of complaint — and, tellingly, 74% of the 1,051 complaints about the Tribunal were specifically related to the LTB. In the two years prior to COVID, the LTB received approximately 80,000 applications per year, 90% of which were filed by landlords seeking to end a tenancy or collect money owed. In 2020, that number dropped to about 48,000 applications due to the five-month LTB shutdown. As many feared, this created a surge in cases once the eviction moratorium lifted, and despite efforts to chip away at that backlog via online hearings and mediation, the board continues to struggle. BURDENSOME BACKLOG Acknowledging this is a real problem, the

Ontario government recently earmarked $19 million over three years to help the Ontario Land Tribunal (OLT) and the Landlord and Tenant Board reduce their respective backlogs. The Province says the funding is intended to help both tribunals appoint new adjudicators, have resources on hand for mediation, improve IT platforms and resolve disputes faster. Though it’s still early on, Hoffer says he has yet to see any evidence of improved efficiencies at the LTB — and, if anything, matters for landlords seem to have gotten worse. “Board members are facing a deluge of applications, and apparently they have no time assigned to writing orders because it can take months to receive them,” he reports. “In many cases following a hearing, we’ve found that the board member’s appointment may have expired, or that the board member resigned prior to issuing orders, and we then receive directions that we have to come back and have www.REMInetwork.com

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REGULATORY UPDATE

another hearing. You can imagine how well that goes over for the parties who thought they finally had their day in court, only to have to go back and start over.” Adding more to the list of grievances, Hoffer says landlord applications for arrears have been held up since December due to a dysfunctional computer system. Meanwhile, tenant applications have been processed in a matter of weeks. “I cannot recall a time over the past 35 years of my practice when the adjudicative system for landlord and tenant matters has been as dysfunctional as it is now,” he observes. QUEUE PLACEMENT The good news is, according to an operational update posted earlier this spring to the Tribunals Ontario website, users who experienced technical issues filing their “Applications to End a Tenancy” and “Evict a Tenant or Collect Money” (L2 applications) through the portal will not be required to start the process over again. “Applicants who filed an L2 application affected by this issue will be receiving a letter from the LTB asking that they complete a new L2 application using our PDF forms and upload it to their Tribunals Ontario Portal file,” the post reads. “This will not have an impact on the affected application’s place in the queue with respect to hearing dates and legislative deadlines, and any supplementary filings such as the Request to Extend or Shorten Time will also be unaffected. The original filing date will be preserved.” ■ _____________________________________________________________________ ERIN RUDDY IS THE EDITOR OF CANADIAN APARTMENT.

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ACCESS TO ADJUDICATION CALLED HUMAN RIGHTS ISSUE The Advocacy Centre for Tenants Ontario (ACTO) has filed human rights complaints against the Landlord and Tenant Board (LTB) and Tribunals Ontario (TO) on behalf of multiple Ontario tenants who contend that the “Digital First” strategy employed during the pandemic has led to systemic discrimination. Since late 2020, the LTB has been holding hearings online — a practice ACTO says leaves behind vulnerable Ontarians and excludes many tenants from meaningful participation in their hearings. Specifically, ACTO posits the system favours landlords and homeowners over certain tenant groups, including social assistance recipients, the elderly and people with disabilities. ACTO affirms it has selected the Human Rights Tribunal of Ontario as the appropriate forum for these cases because, for many tenants, the LTB’s failures during this period have violated their human rights. “Through this litigation we are demanding justice for the tenants who have suffered as a result of the ‘Digital First’ strategy,” says Ryan Hardy, staff lawyer at ACTO. “Beyond ensuring immediate justice for those affected, we are also seeking systemic reform to improve the LTB experience for all tenants and protect people from unnecessary evictions.” Although the LTB provides the option for in-person hearings, the process has been criticized by users for being obscure, confusing and interminably drawn-out. To date, ACTO reports it is not aware of any in-person hearings having been held at the LTB since March 2020, despite hundreds of requests. “Requiring all communication to be digital is like locating a Board office on the second floor of a building that doesn’t have an elevator,” Hardy says. “You are excluding a whole category of people de facto. It should be about actively offering accommodation rather than making it a puzzle the accommodation-seeking individual has to solve. Design the system with vulnerable individuals in mind, not lawyers.” Meanwhile, landlords have been equally dismayed by the Tribunals Ontario Portal, calling it “dysfunctional” and plagued with technical glitches. The Ontario government recently pledged $19 million over three years to help contend with backlogs at both the Ontario Land Tribunal and the LTB, but so far few improvements have been noticed. Acting on behalf of vulnerable tenants, ACTO maintains the LTB’s refusal to grant in-person hearings has been in violation of Ontario’s Human Rights Code. “The LTB is a service provider under s. 1 of the Code,” Hardy notes. “These applications allege that s. 1 was breached on a number of grounds, including but not limited to: age, marital status, family status and disability,” “It is required by law and, through these applications to the HRTO, we intend to achieve justice for those whom the LTB has callously chosen to cast aside,” adds Mairghread Knought, a community legal worker with the Nipissing Community Legal Clinic.

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