Ontario tables 2021 rent freeze legislation

On September 17, 2020, Minister Clark tabled Bill 204 – the Helping Tenants and Small Businesses Act – which includes an unprecedented rent freeze set to begin January 1, 2021.

Many Ontario landlords, who felt blindsided when news of the legislation first dropped last month, are now fretting about the ramifications the new terms will have on their already strained operations. With no end to COVID in sight, and the heightened measures and expenses needed to remain safely operational, the future looks daunting for smaller landlords in particular.

“It is clear from the government’s own figures that inflation is running at 1.5 per cent and without a rent increase to offset the added expenses for cleaning, maintenance and administration relative to COVID, many smaller operators will be feeling the pinch,” says Paul Cappa, paralegal with Cohen Highley LLP. “Landlords were hopeful that there would have been at least a corresponding freeze on property tax and utility increases for 2021. Unfortunately, the rent freeze is untargeted and does little to assist the most vulnerable tenants that have lost their income due to COVID.”

Here, Cappa offers legal advice and clarification for landlords soon to be impacted by the terms of upcoming Bill 204:

Rent freeze terms & exemptions

Beginning January 1, 2021, landlords will not be permitted to increase rents unless they currently have an AGI order, phase in, pending unapproved AGI application, or they fall into one of the exemption categories outlined below.

The rent freeze also applies to rental units that are otherwise exempt under the legislation from guideline increases – i.e. buildings and additions first occupied after November 15, 2018. “Even though these units are not bound by annual guideline increases, they are caught by the rent freeze and no increase may be given to take effect during 2021,” explains Cappa.

For those with N10 agreements to increase rent for more than the guideline, landlords will be entitled to move forward with the increase in 2021 because of capital work completed at the property or unit.

Similarly, where a landlord and a tenant agreed to a rent increase based on the provision of prescribed services (parking spaces, AC units, cablevision, electricity, etc.) the increase is valid even if taken during the rent freeze period.

For all rent increases lost to the rent freeze, these may be taken January 1, 2022 – “unless the Province blindsides the industry again by imposing an extension,” says Cappa, noting that landlords would need to issue a NORI by the end of September 2021 for it to take effect January 1, 2022.

Room for “tweaks”

According to Cappa, the legislature seems to have recognized that there may be implementation issues, and as such, a few legislative tweaks may follow. “For example, there is no guidance for landlords who must file an AGI and corresponding NORI in order to meet timelines imposed by the RTA,” he notes, pointing to the 18-month window for filing.

In addition, Cappa says if a landlord is issued a Notice of Rent Reduction by a municipality, the rent is subject to the rent freeze and must be reduced accordingly— “which amounts to a double loss for landlords who receive such notices.”

Waived rent increases

For those landlords who waived rent increases at the start of the pandemic, Cappa suggests they consider un-waiving them before the rent freeze takes effect.

“In cases where landlords gave rent increases, but waived collection of the increase portion “until further notice”, [they] should consider giving notice to end the waiver effective, at the latest, December 1, 2020,” advises. “While it is arguable that revoking the waiver at some point in 2021 is not a rent increase, many tenants and even some board members, may not see it that way, so to minimize the risk, a December termination of the waiver period is a safer choice.”

For a complete summary on Bill 204, and for ongoing legal advice from Cohen Highley LLP, click here: http://cohenhighley.com/news-and-articles/articles/covid-19/

Virtual World Tax Summit to emanate from Montreal

After previous host venues at the headquarters of the United Nations, the World Bank and Organisation for Economic Cooperation and Development (OECD), the 2020 World Tax Summit will be virtual and broadcast from Montreal. More than 100 speakers will participate in the sixth annual conference, bringing together multi-sectoral perspectives on international tax competition and cooperation.

Three days of online presentations, discussions and debates, set for October 13 – 15, will cover a range of issues including: tax responses to times of crisis; tax justice; green taxation; taxation in African nations; and global corporations’ power to avoid tax or extract concessions by playing jurisdictions off against each other. Canada Revenue Agency (CRA) and Revenu Québec are co-sponsors of sessions devoted to tax administration, which will feature Quebec Finance Minister Éric Girard and discussion of CRA’s role in COVID-19-related initiatives.

Libertarian economists Dan Mitchell and Véronique de Rugy will face off against Erica Payne and Morris Pearl, co-presidents of Patriotic Millionaires, in the feature debate tackling the question: In times of crisis: should we tax the rich more? The conference will close with the premiere of the documentary Fast & Dangerous: A Tax Race to the Bottom.

Carbon pricing bankrolls school energy retrofits

Allocations earmarked for school energy retrofits are now being released from the federal Climate Action Incentive Fund (CAIF). Approximately $60 million has been promised for the MUSH (municipalities, universities/colleges, schools and hospitals) sector this year, drawn from carbon pricing proceeds the Canadian government redistributes to four provinces — Saskatchewan, Manitoba, Ontario and New Brunswick — that have not adopted their own carbon pricing programs as set out in the Pan-Canadian Framework on Clean Growth and Climate Change.

Thus far, 164 projects in Saskatchewan and 127 projects in Manitoba, collectively valued at $17 million, have been confirmed. Since provinces’ share of the CAIF is prorated to the amount their residents pay in carbon pricing, Saskatchewan receives a larger funding allotment due to its heavier reliance on coal-fired electricity generation.

The MUSH stream accounts for a small percentage of collected carbon fees, 90 per cent of which are returned to residents of the four provinces via personal income tax credits. There is also a fund offering grants to business operators for energy-saving and emissions-reducing capital projects, including: building retrofits and/or fuel switching; cogeneration or renewable energy systems for their own use; hook-up to district energy; industrial or agricultural process improvements; heavy-duty or marine vehicle retrofits; and energy efficiency in waste management.

School energy retrofits were specifically targeted for the first round of the MUSH stream. In Saskatchewan, approximately $12 million will go toward building envelope, lighting and HVAC system improvements in 27 school divisions. That includes extensive undertakings like the $571,000 boiler and roof replacement at Evan Hardy Collegiate in Saskatoon, as well as many lower-cost initiatives.

In Manitoba, $5 million will be distributed to 35 school divisions. A sampling of planned projects include $300.000 for window replacement at Daniel McIntyre Collegiate in Winnipeg and $110,000 for door and insulation upgrades at La Verendrye School in Portage la Prairie.

“The average age of school buildings in Manitoba is more than 50 years old,” reports Alan Campbell, president of the Manitoba School Boards Association. “School boards in the province have been able to undertake projects to upgrade this ageing infrastructure, to increase efficiencies, lessen their environmental footprint and improve the environment for teaching and learning.”

New board members elected to the CAO

Four new members have been elected to the Condominium Authority of Ontario’s (CAO) board of directors, filling spots that were vacant since spring.

In April, the CAO’s Chair suggested that one of the board’s elected members step down due to conflict of interest and governance concerns. What followed was four members resigning from their elected terms.

The CAO Board retained quorum and continued to govern and guide the organization under Board Chair Heather Zordel , Board Director Judy Sue as Treasurer and Chair of the Audit and Risk Committee, and Board Director Margaret Samuel as Corporate Secretary.

New members include:

Mary Throop (elected: one-year term to September 2021). She is a condominium owner and founder of Summerhill Capital. She is a former senior partner at Laketon Investment Management and a member of the Global Equities Team;
Larry Banack (elected: two-year term to September 2022). He is a condominium owner and an active member of the Law Society Hearing and Appeal Panels, which decides allegations of lawyers’ and paralegals’ professional misconduct;
Allison Scanlan (elected: two-year term to September 2022). She is a condominium owner, and former condo board director, with a 25-year professional career in purchasing and supply chain for a Fortune-100 global manufacturer; and
Erik Levinson (elected: three-year term to September 2023). He is a condominium owner and chief technology officer with extensive experience building, leading, and advising early and growth–stage software companies, most recently focusing on payments and financial technology.

Public restroom cleanliness: a great source of concern

In order to attract tenants and customers to commercial spaces, property managers relied heavily on the offer of diversified retail and food fairs. Today, it is the cleanliness of public restrooms that will convince people that it is safe to return to public spaces.

A recent British study reveals that more than half of the respondents (51%), are convinced that they can contract coronavirus in public restrooms. This is the main reason that discourages people from returning to public places, restaurants, and pubs. Furthermore, despite repeated and insistent worldwide recommendations on the importance of handwashing to help stop the spread of the coronavirus, this same study tells us that more than one in 10 adults (12%) still do not wash their hands after using the restroom! This is a disturbing statistic that undoubtedly worries 86% of the population, who admit that they are much more demanding than before when it comes to the cleanliness of public restrooms.

For many people, the need to use public restrooms causes anxiety. Although there are multiple intelligent solutions and dispensers on the market, their sole installation is not enough to manage restroom maintenance and cleanliness. Users have their share of responsibility insofar as appropriate arrangements are made to encourage and support hand washing behaviour.

In Japan, the recent appearance of ultra-modern, minimalist, glass-walled public restrooms heralds the potential of the restroom of the future. The transparency of the facilities makes people feel safe because it allows them to see how clean the facility is before entering and prevents malicious people from hiding in them. As soon as the door is locked, the glass becomes opaque, ensuring the occupant’s privacy. In our North American reality, it is unlikely that we will ever see this type of restroom installed in our parks. To make the population feel secure, transparency must therefore be demonstrated through cleaning operations.

The transparency of your cleaning operations

It is important to let your occupants know that you have taken further steps to improve the sanitation of your facilities, especially public restrooms. The status quo is not reassuring! By demonstrating that your facility is committed to hygiene, you encourage users to do their part and remain vigilant.

State your new restroom policy. A checklist, recording the tasks performed, the time of day and the operator’s initials, also helps reassure the most concerned. Even more reassuring is to meet an employee who is involved in restroom maintenance and cleaning during busy hours.

Use posters to remind them of the basic rules, i.e. hand washing, social distancing and face covering. Make sure to keep dispensers clean and functional at all time.

Social distancing

Restrooms do not always allow for social distancing. By keeping your dispensers full you promote good circulation by preventing people from standing in line to wash or wipe their hands, which can sometimes discourage people who are too rushed to stop. Non-contact dispensers are recommended to reduce the risk of cross-contamination. Hand paper towels also dry hands faster and better than hand dryers. Hygiene equipment manufacturers anticipate a craze for hand paper because many people (61%) also use it to avoid touching contact points (faucets, door, handle, etc.).

If possible, designate one direction of circulation in your restroom, one door to enter, another to leave. A space to clean your hands, another space to dry them.
Also install a disinfectant dispenser at the restroom exit. This provides a final opportunity for the user who was unable to wash his or her hands indoors (because it was too busy, because there was no soap left, because he or she forgot, etc.) to fulfill his or her responsibility and disinfect his or her hands.

Intelligent devices

With advances in technology, it is now possible to check in real time, using your smartphone and a QR code, when the last restroom maintenance was performed. Similarly, certain applications allow you to send a comment in the event of messes that require immediate intervention or simply to evaluate and comment on the cleanliness of the premises. Other products are equipped with a device that can send a signal when the dispensers need to be refilled.

Solutions are also available to make a surface antimicrobial or self-disinfecting. Either by applying adhesive film or by chemically treating the surface. To take the example of restrooms in Japan, a UV light can be integrated into the toilet bowls to allow continuous disinfection.

The pandemic period is a good time for innovation. Until we convince the few reluctant people who do not believe in the importance of hand hygiene, there are certainly effective means that can be suitable for all types of facilities and that can contribute to better restroom hygiene in general.

Overall habits improvement

The same British study, however, highlights encouraging improvements in respondents’ hygiene habits. Those who wash their hands now wash for at least 19 seconds, compared to about 12 seconds previously.

By now, 83 percent of people wash their hands after coughing and 40 percent of respondents have made a habit of washing their hands after using a cell phone or touching a computer keyboard. This is twice as high as before the pandemic!

Gestion HB is a Canadian consulting firm who guides, supports and advises their clients on ways to optimize the operational performance of their organizations in terms of building hygiene and sanitation. For more information, please email [email protected], visit https://www.gestionhb.com/ or call 514-316-6723.

Oxford warms to cold storage sector

Oxford Properties Group has moved into the cold storage sector with a CAD $475 million (USD $360 million) investment in Lineage Logistics. The strategic foray aligns the Canadian pension fund with the largest global player in cold storage logistics as momentum builds for digital commerce in grocery retailing.

“The cold storage sector has highly favourable tailwinds via a combination of population growth, a growing consumer preference for fresh food and the continued adoption of e-commerce in the grocery sector, which has accelerated due to the current pandemic,” observes Kevin Egan, Oxford’s head of investments in North America. “Our investment into Lineage is part of our strategy to capitalize on the increasing demand for infrastructure that serves the digital economy.”

Lineage owns and operates more than 320 facilities throughout North and South America, Europe and Asia Pacific, encompassing 1.9 billion cubic feet of temperature-controlled capacity and accounting for approximately 8 per cent of the total global cold storage market. Oxford president Michael Turner will join the board of directors of the company, which began with one facility in Seattle, Washington, 12 years ago.

“The cold storage industry is a sector that is poised for growth and demonstrates great resilience and defensive attributes in this current climate,” Egan says. “Our investment will provide access to the sector’s market leader and supports its management team to execute its growth strategy.”

New regs usher in expansion of CAT disputes

The Ontario government is amending a regulation under the Condo Act, which will allow the Condominium Authority Tribunal (CAT) to exclusively handle more types of disputes that currently go through mediation, arbitration or the courts.

Beginning October 1, 2020, the CAT will accept applications for certain disputes about provisions in a condo corporation’s governing documents that deal with pets or other animals, vehicles, parking and storage, or related indemnification/compensation provisions.

For example, disputes about compliance with provisions can be filed. A condo corporation will be able to file an application against one or more owners because they have not complied with the governing documents. And an owner will be able to file an application directly against one or more owners and/or occupants for failing to comply with the corporation’s governing documents.

Other examples include disputes related to consistency and/or reasonableness of those provisions and disputes about the applicability of provisions.

The Condominium Authority of Ontario (CAO), which manages tribunal operations, will be releasing new information in the coming weeks, including: updates to the CAO’s Guided Steps to Common Issues, with guidance to owners and condo corporations on how they can resolve these issues proactively; revised templates for owners and condo corporations to communicate about these issues; and interactive checklists to help people file applications with the CAT.

Seneca students launch new IFMA chapter

Two Seneca students have launched the International Facility Management Association’s (IFMA) newest student chapter that will help learners pursue careers in the facility management workforce.

The launch of the Seneca College Student Chapter of IFMA is being headed by Klodian Vocaj, a recent graduate of Seneca’s Building Systems Engineering Technician diploma program and Munaf Mansur Awadia, a student in the Mechanical Engineering Technology – Building Sciences advanced diploma program.

“This is most certainly a historic and momentous occasion as we have been involved with the IFMA as members and attending events for many years,” said. Filimon Tsionas of the School of Electronics & Mechanical Engineering Technology. “Dedicated students helped to see this through.”

Students who join the chapter beginning in fall 2020 can look forward to learning outside the classroom as well as scholarship opportunities. The group will enable learners to network and meet industry leaders who could become future mentors and co-workers.

“I am a true believer that a professional organization like IFMA provides a great learning opportunity to help me and other students like myself in further developing our careers in the building industry,” said Vocaj.

He hopes that other post-secondary institutions will join the IFMA community to provide much-needed career support to students in the field.

“This student chapter of IFMA will help build bridges and act as a great networking platform for students and provide them with the right mentorship and guidance, thereby helping them make better career choices,” added Awadia.

The IFMA International Board of Directors approved the new chapter on July 21. The group will be paired with the IFMA Greater Toronto & South Central Ontario Chapter’s Young Professional Program for guidance, oversight and an introduction to the larger facility management community.

“IFMA continues to highlight at both an international and local level the need for young professionals within the facility management industry,” said Shawn Baetz, director, young professionals, IFMA. “With an aging workforce, it is vitally important for succession planning and knowledge among the current workforce and young professionals.”

IFMA’s Young Professional Program will be actively engaged to provide guidance and advice on career and personal development, provide networking and educational opportunities, and increase student’s knowledge of facility management best practices, emerging trends and skills.

Rapid transit crossings proposed for Burrard Inlet

The B.C. government has released the results of a technical feasibility study for a high-capacity rapid transit crossing from Vancouver to the North Shore, identifying five potential crossing methods.

“Our government is committed to creating greener and more liveable cities and boosting access to transit as much as possible,” said Claire Trevena, Minister of Transportation and Infrastructure. “This study shows possibilities that can be considered in future planning. It’s exciting to look towards a future high-speed connection that will make moving around on the North Shore and Greater Vancouver easier and greener.”

The Burrard Inlet Rapid Transit study will help inform the long-term Transport 2050 planning, led by TransLink and the Mayors’ Council. The study led by Mott MacDonald Canada resulted in five possible routes for future planning consideration:

Downtown Vancouver to Lonsdale via First Narrows (tunnel crossing).
Downtown Vancouver to Lonsdale via Brockton Point (tunnel crossing).
Downtown Vancouver to West Vancouver via Lonsdale (tunnel crossing).
Downtown Vancouver to Lonsdale via Second Narrows (new bridge crossing).
Burnaby to Lonsdale via Second Narrows (new bridge crossing).

Connecting Lonsdale City Centre with Vancouver’s metropolitan core and the regional rapid transit network, while considering compatibility with existing and future land use, is one of the recommendations put forward by the Integrated North Shore Transportation Planning Project (INSTPP). That project was led by Bowinn Ma, MLA for North Vancouver, in 2018. Work on the remaining recommendations of INSTPP continues through NXSTPP (Next Step), a working group that includes all levels of government on the North Shore. The group works in partnership to improve mobility both in and around the region.

“People living in North Vancouver are eager to embrace socially, environmentally responsible ways to travel that allow them to beat the traffic,” said Ma. “This exciting technical feasibility study is the first-ever co-ordinated effort by the province in partnership with Indigenous governments, municipalities and TransLink to identify a potential rapid transit solution across the Burrard Inlet for people who live, work and travel throughout Metro Vancouver.”

Research to gauge returns on public transit

COVID-19 has forced Canada’s transit authorities to grapple with the twin challenges of public health logistics and declining revenues. The federal government is now commissioning research to assess public transit’s economic impact and investment returns on public transit infrastructure, along with gaps in spending and service that need to be filled.

Researchers are invited to submit proposals to the Social Sciences and Humanities Research Council (SSHRC) to examine how Canadians’ access to transit affects their economic and social well-being, and related topics such as best practices for transit planning, operational public health standards and the impact of economic downturn. Up to 10 grants of $30,000 will be available for knowledge synthesis projects, which are designed pull together existing research and data from multiple sources in various sectors to produce a comprehensive overview of current status and identify where further action might be needed.

“This project with the Social Sciences and Humanities Research Council will give municipal leaders across Canada new information and tools so they can make smart decisions about public transportation infrastructure that will meet the needs of their communities today and well into the future,” says Catherine McKenna, Minister of Infrastructure and Communities.

Infrastructure Canada’s $33-billion Investing in Canada Infrastructure Program will commit the largest portion of available funds to public transit. A new COVID-19 related stream has also been added to the program, targeting pandemic-resilient infrastructure.

“The knowledge synthesis projects will leverage Canada’s capital in social sciences and humanities research to address changing transit needs and services,” submits Dr. Ted Hewitt, president of the Social Sciences and Humanities Research Council . “The resulting information in areas such as the impacts of COVID-19 and pressing transit, land use, urban planning, and public health and safety questions will help transit users, planning authorities and communities throughout Canada.”

Chartwell provides bleak operational update

Despite positive ratings from residents and families, the pandemic continues to have a negative impact on occupancy levels at Chartwell retirement homes. In a business update issued September 15, Chartwell revealed that several restrictions have lifted since June, allowing for the gradual reopening of services, but the priority continues to be the health and wellness of its residents and staff.

As of September 14, 2020, COVID-19 cases have been confirmed in one Chartwell retirement residence and two long-term care homes. To reduce spread and exposure, precautions in place (in most provinces) include the requirement that new residents self-isolate for fourteen days—which Chartwell says could be an inhibitor to permanent move-in decisions, as well as to short-stay visits.

On the positive side, Chartwell says that the pace of decline in occupancy has slowed since the onset of the pandemic, with August representing approximately 65 per cent of previous-year volumes. Move-out activity continues to be below previous-year levels, and in August was approximately 75 per cent of previous-year volumes primarily due to reduced departures to long-term care, particularly in Ontario.

Ontario’s long-term care funding

On September 10, 2020, the Ontario government issued its previously-announced redesigned capital funding subsidy (“CFS”) program policy for long-term care. The policy includes a $1.75 billion investment to redevelop 12,000 beds and add an additional 8,000 beds over the next five years.

“We have 577 Class B and C beds that are eligible for this redevelopment program,” the Chartwell report revealed. “We are grateful to the Ontario government for taking this important step to improve the aging long-term care infrastructure in the province. We continue to work closely with our industry partners and the government to finalize the details of the new CFS program, to ensure the related approval and licensing process to expedite projects are feasible within this new program, and importantly to ensure the sustainability of long term care homes including adjusting operating funding to sufficient levels to absorb additional costs, particularly enhanced staffing, to prevent and contain the spread of COVID-19.”

On September 9, 2020, the Ontario government announced further funding of $45 million for COVID-related expenses. Chartwell’s share of this funding is $1.7 million. While Chartwell acknowledges that it is welcome support to the sector, it says the funding is not sufficient to fully cover additional costs incurred by long-term care home operators to comply with government orders and directives.

“Our pandemic-related expenses in our Ontario Long-Term Care residences to August 31, 2020, exceeded the aggregate funding, including the funding announced on September 9, 2020, by approximately $3.0 million.”

Budgeting the unknown amid a pandemic

Condo corporations are facing new budgeting challenges in 2020. Planning for unexpected and increasing expenses—rising costs of contractors, ever-increasing insurance premiums, and reserve fund contributions that are nearing half of an annual budget for older condominiums—is difficult to anticipate.

How will COVID-19 impact budgeting?

It’s hard to predict what we do not know, but most corporations are incurring new and ongoing expenses, especially for interior common elements with sanitizer stations, disinfectant sprays or services, masks, and perhaps even plexiglass shields. If a corporation did not have a contingency plan, this will likely interfere with the current budget and should be considered as normal costs for next year’s budget.

The pandemic has also created novel burdens for contractors who must protect their employees, as well as the buildings they service. Imbedded into their pricing are costs related to personal protective equipment, water and sanitization stations, dealing with shortages of staff who may get sick, having to transport employees in separate vehicles, staggering their breaks, and other unknown factors that will undoubtedly add to their fixed costs—paid by the end user. Such measures are unlikely to let up in the near future and should be considered for next year’s budget.

Projecting expenses to the end of this financial year will be trickier as some work may be postponed (window cleaning, for instance), artificially undervaluing the spending on particular or multiple categories. Special care must be taken for these missed expenditures; otherwise, you may miscalculate and reduce the next year’s budget unwittingly, causing a deficit the following year.

Finding Savings

A few factors could impact savings goals and significantly alter a budget this year. Insurance premiums have skyrocketed and continue to do so; managing an insurance policy has never been more important. Corporations still operate without standard unit bylaws defining the components which the corporation is responsible to insure within a unit.

Being specific in the policy—sometimes even going to a “shell unit” definition of the standard unit or simply removing high-value finishes such as flooring and countertops—could impact both the premium and claims should they arise. Condo lawyers have a wealth of knowledge on this topic; sometimes money is well spent exploring options to find long-term savings. While these bylaws are difficult to pass, the recent adoption of virtual owners’ meetings and proxy collection makes it easier to reach people on this important topic.

Another hefty expense is contributing to the reserve fund study which is usually fixed for three-year periods— the maximum amount of time in which the study needs to be revised. Doing so prior to the three-year term is beneficial.

Some corporations may have saved money on projects compared to the allowance in the study or facilitated maintenance work to prolong the life of an asset listed in need of significant repair. Working with a corporation’s reserve fund study engineer to conduct a pro-forma study can help clarify achievable savings in the contribution for the following year.

Planning for the Future

Budgeting is a time to prioritize what is important for the community. This year, boards of directors and managers should consider the unit owners whose lives are irrevocably altered by COVID-19, both financially and the way in which they work. Since many people now work from home, certain issues affect them more drastically, such as noise, HVAC issues, elevator matters and waste services. Understanding this dynamic is integral to planning for next year and finalizing the budget accordingly.

The goal now is to be flexible. By the way, budgets can also be revised mid-year if they no longer serve the community well. While managers try to avoid this daunting task, it certainly is an option. Consider whether you have any surplus in the bank. This can help mitigate the unknown factors previously mentioned and those yet to unfold.

Lastly, decide as a group whether you prefer to keep expenses low and tight and risk possible deficit in the following year if you must go over budget, or whether you are more conservative and prefer to have a looser budget which accounts for contingencies. Neither is right or wrong; it just goes to prove each community has its own personality, which is what makes this industry so exciting.

Andreea Dolnicianu is chief operating officer at Comfort Property Management based in Vaughan, Ontario.

Air ventilation in multi-residential buildings

As more multi-residential buildings are made to be energy efficient, they are also affecting the quality of the air we breathe. Designed to keep heat and cool air in, airtight buildings contribute to lower energy bills, but they also keep the fresh air out.

This is where air ventilation plays an important role. Much like a set of healthy lungs, the goal of ventilation is to keep the clean, fresh air inside while moving the bad air outside. Without that air exchange, moisture can breed mould and mildew, allowing dust mites to flourish, which can lead to a greater risk of health issues in building occupants.

Depending on various factors and rates of exposure, indoor biological pollutants, such as VOCs, CO2, moulds, and other allergens, can cause serious health issues to manifest. Some of these biological pollutants have been linked to the onset of asthma, headaches and concentration problems. Furthermore, healthy indoor air quality will allow occupants to breathe better and sleep sounder.

Presently, there is no recommended response for multi-residential building owners in terms of building ventilation as it relates to COVID-19. However, it is important that building systems are functioning as intended to prevent potential ventilation problems that could worsen airborne transmission.

To better understand how we can create healthier homes for current times and into the future, we first need to understand the three types of ventilation systems that can be used, either separately or together. Each system has its own unique benefits that contribute to achieving healthy indoor air quality.

Natural ventilation

Natural ventilation, as the name implies, is the natural movement of air currents that flow through a home uninfluenced by human technology. Wind ventilation, for instance, is achieved by opening windows and doors to allow unfiltered air to circulate through the rooms of a home. This type of ventilation can also occur through a process called infiltration, where fresh air sneaks in through leaks and cracks in the building itself.

The trend towards airtight construction for newer buildings has all but eliminated this source of ventilation. Furthermore, in multi-residential apartment and condo buildings, natural ventilation may not always be possible due to the unit layout. Buildings today that rely solely on natural ventilation may be limiting air exchange to instances in which windows are open.

Spot ventilation

A spot ventilation system uses technology to provide ventilation to very specific regions of the home. Most often, these systems are located in basements, attics, and other moisture-prone areas. In multi-residential apartment buildings, spot ventilation is most likely to be found in the form of exhaust fans in kitchens and bathrooms, as they quickly remove polluted air from their isolated location.

Individual room fans are another example of spot ventilation commonly found in multi-residential apartment buildings, and they come in a variety of configurations. Portable models can be placed on the floor or on a table, and mountable units can be permanently installed on a wall or ceiling to circulate the air in a particular spot or room. Spot ventilation, while effective, is rarely the sole form of ventilation in a dwelling and is best used as a supplement to additional ventilation systems that will filter the air.

Whole-home ventilation

Whole-home ventilation systems are the most common form of ventilation found in modern housing. These systems use a series of exhaust ducts and vents located throughout the dwelling to provide man-made, deliberate ventilation and circulated air flow. Boasting the ability to be managed, controlled, and modified entirely by the homeowner, building manager, tenant, or a licensed contractor, these whole-home ventilation systems include exhaust, supply, balanced, Heat Recovery Ventilation (HRV) and Energy Recovery Ventilation (ERV).

In recent years, HRVs and ERVs have become more popular, especially in new builds and renovated properties, allowing for proper ventilation without sacrificing efficiency. HRVs recover heat as they ventilate the air. Their primary purpose is to save energy through tempering the air being returned back into the home by using the heat extracted from the air that is exhausted.

Ideal for some dwellings, an HRV system does not recover energy in the cooling season, and also extracts but does not recover moisture, therefore drying the air and requiring a humidifier to replace the lost moisture in addition to a condensate drain, and in some cases, a condensate pump. Because of this, HRV systems are often not the best option for multi-residential buildings, which would benefit more from an ERV solution. ERVs recover both heat and cooling energy, tempering with heat in the winter and cold in the summer while also capturing moisture and helping to maintain comfortable relative humidity in the units. ERVs are a year-round stand-alone solution and comfort enhancer ideal for MURBs. With proper ventilation in and out of the home, you can expect the indoor air quality to improve and residents will be able to breathe and feel better.

ERVs and HRVs can also be uniquely beneficial to the geography of the dwelling. For example, some systems are specially engineered for use in cold climate zones, providing a tempered air supply, humidity control, and a balanced amount of exhaust to help maintain balanced, positive or negative pressure throughout the home.

The importance of indoor air quality on overall wellbeing can’t be underscored enough. The quality of the air inside our homes often gets overlooked – you can’t see the problem so why look into a solution? However, the benefits of ensuring a home has the best indoor air quality can vastly improve the health of the inhabitants and stop potential side-affects associated with poor air quality. With technological advancements in the ventilation space, we’re able to change the standard of indoor air quality for future generations to build healthy home environments regardless of budget or dwelling type.

Kevin Smith is the general manager of Panasonic Canada’s Life & Device Solutions Division. For more information, visit: https://na.panasonic.com/ca/home-building-solutions/ventilation-indoor-air-quality/.

Funding expedites Richmond district energy project

The City of Richmond has received $6.2 million from the provincial and federal governments to accelerate implementation of another phase of the Oval Village District Energy Utility (OVDEU), reducing greenhouse gas emissions in the city.

The grant, provided through the Canada Infrastructure Program – CleanBC Communities Fund, will expedite the implementation timeline for design and construction of a permanent, sewer heat recovery energy centre to provide renewable energy to customers of the OVDEU.

“This project will help move the city closer to its objectives of providing low carbon energy for residents while further reducing greenhouse gas emissions from developments in Richmond’s city centre area,” said Mayor Malcom Brodie. “This funding, through the CleanBC Communities Fund, recognizes the innovation and commitment we have made to improving our environment and making Richmond a sustainable and environmentally conscious city.”

The permanent energy centre will use a sewer heat recovery energy system to service the Oval Village area around River Parkway and Gilbert Road. The $6.2 million, which comprises $2.6 million from the province and $3.6 million from the federal government, will allow the current temporary energy centres on River Parkway to be decommissioned and removed. It will also enable the project, currently planned for 2025, to begin construction in 2022 for a 2024 in-service date.

The OVDEU sewer heat recovery system will replace natural gas boilers as the main source of heating energy and hot water for residents and businesses in the Oval Village area. When complete, around 80 per cent of the area’s energy demand will be met by this system, resulting in an estimated reduction of more than 265,000 tonnes of CO2 emissions over the first 30 years of the project’s life span – roughly equal to taking 95,000 cars off the road for a year.

The investment in this energy system will increase resilient, low carbon, green energy production in the city, while providing customers with a locally produced and reliable energy source.

The OVDEU is a part of the Lulu Island Energy Company, a multi-award-winning municipal corporation wholly-owned by the City of Richmond that implements and operates innovative district energy systems in Richmond.

Chlorine gas release warrants $150,000 fine

Negligent release of chlorine gas at Fort McMurray’s water treatment plant has yielded funds for two health and safety initiatives in the northern Alberta community. After the Regional Municipality of Wood Buffalo, the operator of the plant, pleaded guilty to violating Alberta’s Environmental Protection and Enhancement Act, the Court determined the $150,000 fine should be channelled to efforts to educate plant workers and ensure indoor air quality at a local health care centre.

The violation occurred in the spring of 2017 when workers at the water treatment plant accidentally mixed sodium hypochlorite and polyaluminum chloride, producing chlorine gas. Chlorine is commonly used to killed bacteria in drinking water. However, chlorine gas produces acid when it interacts water, potentially causing human health repercussions when eyes, throat or lungs are exposed.

Through Alberta’s creative sentencing option, some money owing from the penalty will subsidize a workshop to provide plant operators with a refresher on preventing, reporting and appropriately responding to environmental incidents. Another portion of the fine will be allocated to the facility maintenance department at the Northern Lights Health Centre to purchase filters for its air-handling units.

Ontario capital markets set for rule revamp

Proposals to ease some of the rigidly prescriptive oversight of Ontario capital markets, while strengthening punitive mechanisms, have garnered positive response from connected players who issue, underwrite, deal in and advise investors on publicly traded securities. Members of the provincially appointed Capital Markets Modernization Taskforce are now assessing feedback on 47 policy proposals they released for public consideration earlier this summer. That will inform a final report and recommendations to be submitted to Ontario’s Minister of Finance later this year.

Panellists participating in a recent webinar sponsored by the NEO exchange mostly weighed in with praise for the measures outlined in the interim document. Although the hour-long discussion was necessarily scoped to a few key themes, there was general consensus the five-member taskforce has delivered a proposed strategy consistent with its instructions to identify regulatory improvements that can foster innovation, provide more balanced access for large and small players and serve investors’ best interests.

Taskforce member Cindy Tripp — founding partner and co-head, institutional trading, with GMP Securities LP — was also on hand to outline the premise of various proposed measures intended to support issuers, streamline administrative processes, scrutinize the banks’ substantive and expanding position, and give regulators sufficient clout to effectively police miscreants.

“How do we get vibrant capital markets? There are three things that, for me, are critical: competition, innovation and transparency,” asserted Jos Schmitt, NEO chief executive officer and president. “I really like the term ‘investor confidence’ versus ‘investor protection’— that’s less rules, more principle-based organizational transparency.”

The taskforce suggests the Ontario Securities Commission (OSC) should adopt a formal mandate to foster capital formation and competition — an agenda that’s already enshrined for securities regulators in the United Kingdom, Australia and Singapore — in order to pursue those objectives. That would provide an explicit premise to tackle the obstructions market players encounter, whether that be fees or anti-competitive behaviour.

“The aim of this change is to, institutionally and culturally, supplement the policing function of the primary regulator with a public policy imperative of growing the capital markets in Ontario,” the first of the 47 proposals states.

From there, they address a range of issues that are likely to be of interest to listed real estate entities and their investors, as well as start-up ventures and other publicly traded service providers to the commercial real estate industry. That includes: steps to reduce administrative burden and costs; efforts to help start-ups and small companies gain improved access to capital; safeguards for the quality and independence of investment advice: and proactive support for diversity, environmental, social and governance (ESG) information and open data. A new disclosure requirement for some institutional investors is also contemplated.

“We have certainly been watching and reviewing the taskforce proposals,” affirms Michael Brooks, chief executive officer of REALPAC, which counts both public real estate companies and institutional investors among its membership. “We have been discussing many of the same issues with our public company chief financial officers for, in some cases, many years.”

Modifying issuers’ interactions with investors

Looking at issuers’ outreach to potential investors, the taskforce proposes an alternative model that would allow qualifying issuers to offer tradeable securities based on a short offering document and their continuous disclosure record rather than filing a prospectus. That would be subject to an annual limit and other compliance conditions. The taskforce also proposes giving issuers increased flexibility to gauge institutional investors’ interest prior to filing a preliminary prospectus,

Other suggested streamlining measures include: recognition that “access equals delivery” so that materials such a prospectuses could be made available through digital channels; eliminating redundant reporting requirements; and introducing a “well-known seasoned issuer” category, mirroring the designation in the United States, which reduces required compliance steps for issuers that meet certain conditions.

Brooks predicts financial officers with real estate investment trusts (REITs) will be particularly pleased with the proposal to reduce quarterly reporting of financial results and accompanying management discussion and analysis (MD&A) to a semi-annual exercise. He estimates each review accounts for 1 to 1.5 per cent of externally managed REITs’ annual general and administrative costs or 2 to 3 per cent of those costs for internally managed REITs, equating to $160,000 to $460,000 per quarter depending on the complexity of the business.

“We feel that quarterly reporting is inconsistent with the long-term nature of commercial real estate,” Brooks submits. “Given the obligation to report to the market about material changes, we feel that the market is well notified on a real-time basis on what’s happening in each issuer’s business.”

Similarly, he suggests a proposal for enhanced scrutiny of proxy advisory firms could achieve more nuanced readings of how real estate differs from other asset classes. Although the taskforce notes that proxy advisory firms (PAF) serve an important role in analyzing proxy materials and making voting recommendations to investors, it proposes that: issuers be given an opportunity to rebut PAF guidance to voters; and PAFs be prohibited from serving as consultants to both issuers and voters on the same matter.

“We are generally in favour of better oversight of proxy advisory firms. Some of our members have found them inaccessible and, in some cases, uninformed relevant to a specific company or REIT,” Brooks reports. “For example, we have engaged with one proxy advisory firm about their foray into ESG evaluation of firms, where they seem to have little understanding of real estate and are applying a generic business template to real estate operations rather than a industry lens like GRESB.”

The proposal to compel TSX-listed companies to disclose ESG information that is compliant with either the Taskforce on Climate-related Financial Disclosures (TCFD) or the Sustainability Accounting Board Standards (SABS) potentially gives even more weight to those concerns.

The taskforce proposes shareholders be required to disclose their ownership stake once it reaches 5 per cent of the issuer’s voting securities — a lowering of the threshold from the current 10 per cent, which would harmonize with rules in the United States and the United Kingdom. Also in keeping with U.S. practices, it is proposed that institutional investors with holdings surpassing a specified dollar-value threshold in Canadian securities with a specified market cap would have to disclose that information quarterly.

“Because institutional investors are generally not required to disclose their holdings unless they cross the 10 per cent reporting threshold, issuers and other market participants may not have adequate transparency into institutional investors’ ownership positions. The lack of transparency hinders shareholder engagement and the ability for issuers to respond to shareholder concerns,” the taskforce reasons.

Proposals to better support diversity and deter misconduct

Among the dozens of taskforce proposals, Brooks also sees a push for diversity as in accord with REALPAC’s priorities. “This is something that our industry as a whole needs to embrace at every level,” he maintains.

The taskforce notes that little discernible change has occurred since the “comply or explain” model was adopted in 2014 and suggests other levers are needed to increase the presence of women, Black, Indigenous and people of colour in executive ranks and boards of directors. Along with targets and timelines for achieving them, the taskforce proposes TSX-listed companies be required to develop and adopt a written policy outlining how such candidates will be identified and put forward. It also proposes 10-year maximum tenure for directors, albeit with the allowance for up to 10 per cent of the board to serve an additional two years.

“This is aimed to encourage an appropriate level of board renewal,” the taskforce states. “The issue of board entrenchment and board renewal is a concern from a governance perspective as continued refreshment of the board helps to ensure that fresh and diverse perspectives and skills are brought into the boardroom.”

REALPAC’s endorsement contrasts with tenor of the recent panel discussion that the NEO exchange sponsored. Drawing on backgrounds in investment banking, products and advisory, panellists generally expressed support for diversity, but argued against attempts to promote it via regulation.

“I am all for diversity. I don’t think there’s a boardroom in this country that doesn’t think about it, doesn’t talk about it,” said Sheila Murray, a corporate director and former president of CI Financial. “Board renewal takes time. I don’t think we will achieve that objective through a sledgehammer approach.”

“What does this have to do with securities regulation?” queried Rob Wildeboer, executive chairman and co-founder of Martinrea International and counsel to Wildeboer Dellelce LLP, a firm specializing in corporate, securities and tax law. “I don’t think it should be a regulation from the securities commission.”

“I think we are simply asking the question: Is it time to move past ‘comply or explain’?” taskforce member Cindy Tripp observed. “What’s the next step from ‘comply or explain’ if you don’t want hard targets?”

Panellists were highly supportive of the package of proposals related to enforcement — even suggesting that a contemplated fivefold increase in the maximum administrative penalty, taking it to $5 million, is still somewhat modest. The taskforce also proposes the OSC be given authority to freeze or seize offenders’ properties and that they be prohibited from renewing their driver’s licenses or automotive license plates while penalties are still owing.

“I am a big believer in principle-based regulation and it comes with the ability of the regulator to step in, and step in, in a big way,” Schmitt reiterated. “I see a lot of recommendations that align with that. There are quite a few good ideas that will make the regulator stronger.”

Barbara Carss is editor-in-chief of Canadian Property Management.

B.C. amends strata insurance regs

The B.C. Government is amending its Financial Institutions Act to address the rising cost of strata insurance and bring more transparency to the industry.

Changes to strata insurance regulations taking effect November 1, 2020 will require insurers or insurance agents to provide 30-day advanced notice directly to strata corporations of their intention to not renew an insurance policy or of any material changes to the policy.

This change ensures strata corporations have advanced warning of cost increases and has time to seek other insurance options if desired. As well, insurance agents will be required to disclose their commission amount, or a reasonable estimate, to strata corporations. Insurers who fail to meet these disclosure requirements face penalties of up to $25,000 for an individual or $50,000 for a corporation.

Effective immediately, referral fees to strata property managers from strata insurance transactions are prohibited.

These amendments follow an interim report released by the B.C. Financial Services Authority (BCFSA) in June 2020. The report found that strata premiums have risen by about 40 per cent throughout the province on a year-over-year basis, with deductibles experiencing up to triple-digit increases over the same period.

Evidence also showed the industry has been incurring losses over the past three years from mostly minor claims (particularly those resulting from water damage) due to poor building maintenance practices and initial construction quality issues.

The data suggests that insurance has also been used to fill in the gaps left by other forms of protection such as home warranties for new buildings and maintenance programs for older buildings. Further, the exposure insurers have to earthquake risk in B.C. compared to other places has prompted many of them to reduce the amount of insurance that they offer.

The BCFSA will be releasing their final report and recommendations on the rising costs in fall 2020