Design Principles for Retrofit Financing Programs and Funding Solutions to Support Building Decarbonization

The Strategy identified nine actions for the City to undertake to achieve net zero emissions from existing buildings and estimates that retrofitting existing building stock to net zero performance levels by 2050 will require more than $145 billion beyond business-as-usual investment by all levels of government and the private sector. Amongst other actions, the Strategy identified the need for mandatory emissions performance standards; integrated retrofit support to make retrofits easier and more affordable; and the expansion and enhancement of retrofit financing. The Strategy also presents the potential impacts on emissions, costs, and the co-benefits of resilience, social equity, health, and local economic development. This report focuses on considerations for future retrofit funding programs and the City's role informed by the following design principles: - Drive Market Transformation - Ensure Long-term, Financial Sustainability for the City - Attract Third-Party Investment to Support Retrofits - Leverage Municipal Tools and Expertise - Deliver a High-Quality Customer Experience This report also provides: - An overview of The City's role in identifying funding solutions and developing programs to enable decarbonization. - The proposed use of a $500,000 budget allocation for a credit enhancement to support scaling up the Home Energy Loan Program (HELP); and - A summary of current retrofit funding solutions and financing programs available for both low-rise residential buildings (detached, semi-detached, row houses, small multi-unit residential) and large buildings (large multi-unit residential buildings (MURBS), commercial and institutional buildings). A companion report (Update on the Net Zero Buildings Strategy and Implementation of Mandatory Emissions Performance Standards) provides progress updates on the other key actions identified in the Strategy, as well preliminary findings from work underway to realign the modelling and proposed pathways in the Strategy with the accelerated net zero by 2040 TransformTO target. The Environment and Climate Division is in the process of developing policy actions and new and enhanced programs including funding solutions to further enable decarbonization of homes and buildings. Informed by the design principles set out in this report, staff will develop program offerings that will maximize the City's available resources and determine where to focus efforts to meet building owner and occupant needs. This approach recognizes the financial challenges the City faces in allocating significant new operating funds or City funded financing to support new programs and initiatives. It will be imperative to identify new and innovative funding solutions and collaborate with other levels of government, the financing community, and community at large to achieve the scale of retrofits necessary to meet our targets. This will be increasingly critical as the City works to introduce mandatory emission performance standards in the coming year.