For several years, climate change has affected our living environments. Floods, droughts, forest fires, rainwater backups from basements, erosion of banks, etc. To combat these effects, public decision-makers are setting decarbonization targets which will soon be followed by new obligations to be met. This is the case for the housing stock.
Posted at 12:00 p.m.
Last year, Montreal adopted the Regulation respecting the disclosure and rating of greenhouse gas (GHG) emissions from large buildings. Other cities have adopted similar policies. Soon, minimum GHG performance thresholds will be imposed. Present at the Montreal announcement in August 2021, Quebec’s Minister of Energy and Natural Resources, Jonatan Julien, “encouraged property managers to build a lower-carbon Quebec”. It is to be expected that the initiatives of Montreal will extend to the rest of Quebec.
The Urban Development Institute (IDU) wanted to reflect on the decarbonization of the building stock by creating a committee on the committed building. We have just published the report of the committee1, which clearly establishes the will of the industry to do its part to combat the effects of the climate crisis. The report concludes on the importance of acting in partnership with the public authorities.
For the real estate industry, the stakes are numerous. First succeed in understanding the objective. Should we aim for a “net zero” or a 50% reduction? In a context where Hydro-Québec must fall back on natural gas, isn’t “net zero” becoming impossible? In addition, commercial buildings are animated by a multitude of tenants whose behavior has an effect on GHG emissions; targets and obligations to owners will need to take this into account. Decarbonization goals must be clear and achievable.
From the outset, it would be relevant for public decision-makers to offer technical assistance or some form of support to owners to determine the actions to be taken.
Second, it must be recognized that the corrective works will have an effect on affordability. Financial support would mitigate this consequence.
Finally, there are great fears for owners of once again suffering the perverse effects of property taxation. Indeed, the financial contribution will add to the value of the building, which will be entered on the property assessment roll and subject to additional tax. Fiscal support should be provided to avoid penalizing the positive action sought.
A helping hand rather than a stick
Regardless of the means chosen, whether it is a property tax credit or an exemption from registration on the assessment roll of the value of the decarbonization investment, the targets will necessarily be easier to achieve if the authorities choose to encourage owners with a helping hand rather than penalizing them with a stick.
A few days ago, the City of Montreal mandated the Commission on Water, the Environment, Sustainable Development and Large Parks to hold a public consultation in November on the decarbonization of the building stock. In announcing these upcoming hearings, Mayor Valérie Plante specified the City’s desire to take into account various aspects, in particular, potential incentive programs and social and economic issues. The IDU is very pleased to see Montreal’s openness to encouraging incentive programs.
Two avenues are available to us. Either convince the cities, one after the other, to create the conditions for this partnership. Or lead Quebec to adopt incentives that will have the advantage of promoting rapid action throughout the territory.
It will be understood that the second option is preferable. It should be added that the current situation offers even more arguments in its favour.
In a context of economic slowdown due to galloping inflation, the meteoric rise in interest rates and the resulting uncertainty, the government could turn this negative factor into an opportunity for growth by adopting a policy of accelerating investments by decarbonization of the building stock.
It is essential that this subject appear on the government’s dashboard in the coming weeks. In this regard, let us note that the stars are aligned as never before.
In fact, the Premier of Quebec recently announced an entirely new kind of interdepartmental committee. This is a committee chaired by the Prime Minister which will bring together, in addition to certain ministers, the CEO of Hydro-Québec, Sophie Brochu. The committee’s objective is to make Quebec the world champion in green economy and GHG reduction. Hydro-Québec obviously has a role to play in proposing the means to ensure the success of the government’s ambition. Beyond electricity production itself, the state-owned company has in-depth knowledge of the market and let us remember that Mme Brochu has already indicated the interest of adopting incentives to support the decarbonization of the building stock.
Moreover, the Minister of Economy, Innovation and Energy, Pierre Fitzgibbon, an influential member of this committee, is well known for favoring energy as an economic springboard. In the current economic downturn, adopting a building decarbonization incentive program is an avenue to serve ecological health and economic prosperity at the same time.
The stars are aligning like never before. We have every interest in choosing each other as partners in decarbonization. This contributes, today, to our slowing economy while accelerating the achievement of greening targets that will allow us to bequeath to future generations a better future.