Ontario Realtors Pitch An Alternative To Mandatory Energy Audits

Written by Posted On Tuesday, 21 June 2022 00:00

Mandatory time-of-sale energy audits – which would require sellers to have their homes tested and rated for energy efficiency before they are listed for sale – are a priority for Canada’s federal government. Prime Minister Justin Trudeau’s ministerial mandate letter to Natural Resources Canada ordered the measure as part of the government’s plan to achieve net-zero emissions from buildings by 2050.

The controversial proposal has been debated for years and has always come under fire from the real estate industry. It says mandatory audits will add another layer of expense and red tape, piling on to the housing affordability and lack of supply issues already facing buyers. It also has concerns about who would conduct the audits. An existing program that provides loans for eligible homeowners wishing to upgrade the energy efficiency in their homes has been slowed by a lack of certified energy advisors. A recent Globe & Mail story says that some people who have applied for the program have been told it will be “months or even years” before an advisor will be available to conduct an audit.

The real estate industry perhaps isn’t the first place you would look to deliver a comprehensive plan to address climate change, but recently the Ontario Real Estate Association (OREA) commissioned the StrategyCorp Institute of Public Policy and Economy to propose ideas to reduce greenhouse gas emissions in residential housing. It resulted in eight policy recommendations, including one related to energy audits.

OREA says the Ontario government should implement a new Home Energy Audit program with a target of completing one million audits by 2035, “or until at least 20 per cent of the existing Ontario housing stock, particularly older homes, have completed home energy audits.” The program would be voluntary and encouraged by a subsidy program. OREA would work with the province’s real estate boards to create a home energy audit field in MLS listings.

Natural Resources Canada (NRCAN) currently administers the existing Energy Efficiency Program, which performs audits on homes and gives them an EnerGuide label that rates the home’s energy efficiency.

OREA’s proposed program would comply with the existing federal rating and certification system to “avoid duplication and unnecessary expenditures on advisor certification and program administration.” But with more advisors urgently needed, OREA says the province could also implement certification for home inspectors and other licensed professionals. “A formal licensing regime will help to professionalize the industry and defer any deviation from standards, which is expected to create consumer confidence and increase uptake,” says OREA.

It says the energy audits would be good for 10 years. “This way, an audit is considered valid for several years rather than requiring a renewed audit at every point of sale, thus limiting any negative impact to a homeowner’s ability to sell their property and mitigating the transactional costs and administrative efforts required prior to selling a home.”

OREA’s report says something must be done to address GHG emissions in the residential sector, which represented 13.5 per cent of total emissions in 2018.

The impact of climate change was felt dramatically last summer when British Columbia had a record heat wave that was blamed for the deaths of more than 500 people. Last year was also the third worst for wildfires in B.C. In Southern Ontario and Quebec, warming is happening at twice the rate of the rest of the world, says the OREA report.

“The Ontario government will need to consider improving the climate resiliency of Ontario homes to safeguard them from drastic temperature changes that are already being felt, and which will likely become more prevalent in the future,” it says. Annual catastrophic insurance payouts in Canada, which averaged $400 million until 2008, are now close to $2 billion each year, says OREA. 

“With rising home insurance premiums and nearly 87 per cent (approximately 4.35 million homes) of Ontario’s housing stock of older vintage that is more susceptible to climate-related events, action is needed to support adaptation of Ontario homes to counter the effects of climate change.”

The association is also calling on the provincial government to create a new Green Home Renovation Tax Credit. “Loans would be available to homeowners and landlords who undertake retrofits identified through an authorized EnerGuide energy assessment. This program will also include a dedicated stream of funding to support low-income homeowners and rental properties serving low-income renters, including co-operatives and not-for-profit owned housing,” it says.

Another suggestion is amending the Ontario Building Code to include energy-efficiency requirements for residential renovations in homes built before 2010. It also recommends introducing on-bill financing, a system in which utility companies provide homeowners with the up-front costs of an energy-efficiency project, which are then paid back through the owners’ utility bills.

OREA is also calling on the government to make installing electric vehicle charging port stations mandatory in new builds, and to remove the HST on charging stations that are being installed in older homes.

Flooding is becoming a bigger problem as a result of climate change. OREA says the government should develop a user-friendly system to record the flood risk in communities across the province, to fill in the gaps in existing flood mapping. This will allow Ontarians to make better-informed decisions when buying or selling a home, says the association.

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Jim Adair

Jim Adair has been writing about Canadian real estate, home building and renovation issues for more than 40 years. He is the former editor of Canada’s leading trade magazine for real estate professionals, as well as several home building, décor and renovation titles. You can contact him at [email protected]

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