Toronto could join the slate of North American jurisdictions that impose thresholds for allowable greenhouse gas (GHG) emissions from buildings sometime later this year. City staff are currently working on a proposed bylaw to set out those requirements, which is expected to be presented for Toronto Council’s consideration before the end of September. In the interim, building owners have been promised advance details and an opportunity for input.

“Our intention is to bring this out more broadly with a proposal of what we’re looking at — timeline, buildings that are in, who will be impacted and when — hopefully as early as May,” Sarah Rodrigues, a senior project manager with the City’s Environment, Climate and Forestry division, reported during a recent webinar hosted by the Toronto chapter of the Urban Land Institute (ULI). “We want political buy-in and engagement with impacted communities to get clear, realistic and achievable targets.”

The anticipated bylaw would be the instrument for implementing what’s known as building emissions performance standards (BEPS), and is part of a larger strategy to achieve citywide net-zero emissions by 2040. Buildings currently account for about 56 per cent of Toronto’s GHG emissions output, with the remainder attributed to transportation (35 per cent) and waste (9 per cent).

Toronto’s inventory of 436,000+ single-family homes contributes about 54 per cent of emissions from buildings or 30.3 per cent of the total, but Council has decided to initially focus on the smaller complement of approximately 40,000 commercial, multi-residential, institutional and industrial buildings. Emissions targets and associated penalties for non-compliance would come into effect for these larger properties first before being rolled out to the single-family sector.

Rodrigues and her colleague, Ana Maria Medina, another senior project manager with the Environment, Climate and Forestry division, sketched out progress since Council conveyed those instructions last year. Thus far, a series of City staff working groups and stakeholder advisory committees have tackled the technical, financial and legal implications and practicalities of implementing BEPS. The six advisory committees are drawn from sectors that will be subject to the standards, including low-rise and high-rise commercial/multifamily buildings and large institutional facilities, and those that will be key to reducing emissions, including retrofit service providers, the finance industry, and utilities and other public agencies.

“It’s a targeted engagement approach, trying to leverage a lot of expertise,” Rodrigues said. “These are folks who will be impacted and who will be influential in the success of this policy, who can help us understand what the policy should look like.”

They’re also weighing in on programs, policies and resources to support compliance, which have been promised as a companion piece to BEPS. That’s expected to include:

• incentives, building on some of the retrofit programs the City already offers;
• utility-level automation and data management efficiencies for collecting and transferring the energy and water-use data that building owners will have to upload to ENERGY STAR Portfolio Manager; and
• more flexibility for properties that may encounter undue structural, technological and/or financial difficulties to stay within designated emission thresholds.

Representatives from some of the advisory groups thus far involved in the process also participated in the webinar discussion, and particularly stressed the importance of this element of the BEPS agenda.

Data collection obstacles delay City’s envisioned reporting timeline

Bryan Purcell, vice president, policy and programs, with The Atmospheric Fund (TAF), noted that obtaining aggregated data from utilities continues to be a “pain point” for many of the landlords and public sector facility managers currently obliged to report energy and water use under Ontario’s longer standing and the City of Toronto’s more recent mandates.

Specific to Toronto, the City now requires monthly consumption totals for electricity, natural gas, district energy (if applicable) and water from buildings larger than 50,000 square feet. Data for the previous calendar year is to be uploaded to ENERGY STAR Portfolio Manager by July 2 each year.

However, Toronto city staff are now recommending a one-year postponement of the reporting requirements for buildings in the range of 10,000 to 50,000 square feet, which would move the first annual deadline for submitting consumption data from July 2, 2025 to July 2, 2026. City Council’s Infrastructure and Environmental Committee will consider that matter this week, before it goes to the full Council at a later date. That’s after owners/managers of larger buildings were also given a short extension for submitting their first round of data last year, with the original July 2 deadline moved to Oct. 31, 2024.

“While progress is being made, automated solutions to providing aggregated whole-building utility data for buildings smaller than 4,645 square metres (50,000 square feet) but as large or larger than 929 square metres (10,000 square feet) are not yet in place,” a report from the executive director of the Environment, Climate and Forestry division acknowledges. “This (deadline extension) will allow additional time for: 1) the Environment, Climate and Forestry division to put in place a reporting help centre which will provide direct support for property owners; and 2) water, electricity and natural gas utilities to streamline access to aggregated whole-building utility consumption data.”

That’s data that has to be retrieved from four different sources: Toronto Hydro, Enbridge Gas, Enwave District Energy and Toronto Water. Purcell stressed that automation at the utilities’ end would greatly reduce both administrative burden for building owners and the potential for erroneous data entry, while Medina advised that work toward those goals is in progress.

“The City is currently working on a project to automate our water data aggregation process to reduce the amount of time that it takes to provide whole-building water consumption data to building owners, and we aim to eventually enable direct uploading of water consumption data into ENERGY STAR Portfolio Manager,” she confirmed. “In the case of Toronto Hydro, we are aware that they are working on enabling automatic upload of monthly aggregated electricity consumption data into our customers’ ENERGY STAR Portfolio Manager account.”

“I’m not sure where Enbridge is, at this point, with data aggregation and automation to ENERGY STAR Portfolio Manager, but I imagine that, as policy pushes forward, this is something that Enbridge will seriously need to consider, and Enwave will as well, as another provider of energy for large buildings downtown,” added Steven Pacifico, executive director of the Zero Carbon Buildings Accelerator Program with Toronto 2030 District, part of a global network of organizations advocating for decarbonization of the built environment.

Alternative compliance paths and financial supports recognized as necessary

Beyond the cost, time and labour for reporting, there is perhaps even greater unease about the potential for financial penalties if emissions from buildings surpass what the City dictates to be the allowable threshold. In New York City, for example, the fine has been set at USD $268 (CAD $380) per tonne for emissions exceeding the established limit.

“What kind of penalties is the City considering for non-compliance, and would there be alternative compliance pathways for complying with the bylaw?” asked Caroline Karvonen, senior director, sustainability and stakeholder relations, with the Building Owners and Managers Association (BOMA) of Greater Toronto.

“Right now, with everything that’s happening in the market, a lot of B and C class assets, especially commercial office, can be distressed and experiencing vacancy. An alternative compliance pathway will be important for them to help comply with the bylaw” Pacifico observed. “We’re getting a lot of questions around the requirements. We’re waiting to see a little bit more meat on the policy.”

More details are promised as part of the upcoming consultation period. In turn, feedback from the consultation will be considered and potentially incorporated into the plan that will be presented to Council sometime this summer. There’s also a recognition that some buildings will face greater costs to get within prescribed emission thresholds, which might be balanced with commensurate leniency, extra financial support or some combination of those two measures.

“We have the benefit of having access to the lessons learned and emerging best practices from jurisdictions that are ahead of us in this process, which we are also leveraging to inform in the consideration of alternative compliance pathways,” Medina said.

That group includes eight large cities in the United States, including New York, Boston, Seattle, Denver and Washington, D.C., that have already adopted emissions standards and dozens more that are on track to do so. Rodrigues highlighted various actions within those cities that provide extra supports for some designated types of buildings.

She reiterated that Toronto policy drafters are well aware of the massive upfront investment in existing buildings that will be required to meet the net-zero target, but they also want to underscore that “beneficial electrification” delivers paybacks in cost savings and improved asset value and resiliency.

“We know that we lean on a lot of other partnerships and levels of government to try to provide some incentives, rebates and really try to cultivate an environment in which it’s a bit more feasible for folks to do this,” Rodrigues said. “We also want to make sure people are planning their retrofits appropriately to realize the benefits.”

As part of the unfolding consultation process, the City has prepared information packages for business and community organizations interested in hosting discussions about the BEPS concept, and will be accepting feedback from those discussions until March 11. Opportunity to respond to an online survey, via the City of Toronto’s website, is also promised to be available soon.