Commercial Property Assessed Clean Energy (C-PACE) Financing Tools - by Councillor Jennifer McKelvie, seconded by Councillor Shelley Carroll

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The decision

2024-11-13 · Toronto City Council · amended

As filed

City Council on November 13 and 14, 2024, adopted the following: 1. City Council direct the Executive Director, Environment and Climate, with the support of relevant City divisions, to: a. assess the feasibility of developing a voluntary financial tool to enable housing supply, spur construction and economic development and help Toronto meet our sustainability goals outlined in TransformTO without use of public funds ("Commercial Property Assessed Clean Energy financing"); b.

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identify any changes to Ontario Regulation 596/06: Local Improvement Charges - Priority Lien Status to support the establishment of Commercial Property Assessed Clean Energy financing by the City, including, if recommended, any changes that leverage private capital to make investments in energy efficiency, water efficiency, and resilience related qualifying improvements; and c. report back to City Council on the above as a part of the report addressing future amendments to City of Toronto Municipal Code Chapter 367, Building Emissions Performance in the third quarter of 2025. 2. City Council direct the City Manager to request the Government of Ontario to review and analyze the use of Commercial Property Assessed Clean Energy as a voluntary financing tool and identify regulatory changes required to enable its use by municipalities. 3. City Council forward this item to the Ontario Minister of Municipal Affairs and Housing, Ontario Minister of Finance, and Ontario Minister of Energy and Electrification.

On the agenda

As the city filed it

Municipalities in Ontario are considering how to support members of their communities most effectively in actions that will help mitigate climate change, especially regarding Greenhouse Gas emissions from buildings. Many commercial building owners and operators encounter financial barriers to energy and water retrofits and new construction components due to high debt loads, competing needs for other capital improvements, split incentives between building operators who must invest in energy efficiency improvements and their tenants who benefit from the lower energy and water bills, as well as by the longer payback periods that deep energy and emissions retrofits often require to be profitable.

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Many private building owners are looking for ways to improve the resilience of their property to significant weather events, while at the same time there is a growing interest by investors to put their capital to work solving society's challenges, such as climate change. Commercial Property Assessed Clean Energy financing is a voluntary financing tool that enables commercial property owners and developers to access lower-cost capital to invest specifically in sustainability-related qualifying improvements that serve a public benefit. In the United States, in the last decade there has been over $7 billion dollars of third-party private investment through Commercial Property Assessed Clean Energy. The lower cost of capital achieved through Commercial Property Assessed Clean Energy financing can serve as an economic development driver, enabling projects that may not otherwise have access to long-term financial solutions and improving the economic stability of projects and the associated cost of operations

Staff recommended

Councillor Jennifer McKelvie, seconded by Councillor Shelley Carroll, recommends that: 1. City Council request the Executive Director, Environment and Climate, to consider the use of Commercial Property Assessed Clean Energy as a voluntary financing tool to enable housing supply, spur construction and economic development and help Toronto meet our sustainability goals outlined in TransformTO without use of public funds and to provide a report back to City Council on feasibility as part the upcoming report on building emission performance standards in the third quarter of 2025, such report to: a.

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identify any required changes to Ontario Regulation 586/06: Local Improvement Charges to enable Commercial Property Assessed Clean Energy programming, including, if recommended, any changes that leverage private capital to make investments in energy efficiency, water efficiency, and resilience related qualifying improvements.

On the record

The item as the City filed it

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