February 22, 2011


Loans taken out by owners to upgrade rental towers in Toronto can be paid off through energy savings, say organizers of the city’s Tower Renewal program.

Upgrading tower projects in Toronto awaits green loans for building owners

Green construction in the retrofit/renovation industry often comes at a price many building owners are not willing to pay. Could a national green financing program change their minds?

Some observers think so and they build a case for why such a financing model should be taken seriously.

The reno/retrofit market is large and growing as Canada’s building stock ages. By comparison, new construction annually accounts for only a small percentage of all building stock on the market.

The renovation of existing buildings represents a “significant opportunity for sustainability goals,” says Ron Lemaire, vice-president of market development, Canada Green Building Council (CaGBC). However, owners and operators may not make the sustainable choice based on traditional financing models currently on the market.

He says both the public and private markets have recognized the need for a financing product to address green infrastructure and development.

“This is being driven by a push from the mainstream market for green building products and the benefits which we all experience by living, working and playing within a sustainable built environment.”

The CaGBC has been investigating the logistics of a national green loans program with a range of partners from both the private and public sectors, he says.

Green financing is not new. In the U.S., a number of states have given local governments the nod for the Property Assessed Clean Energy (PACE) program, which provides loans to homeowners for energy retrofits.

That model has some hurdles to address related to the lending model and probably doesn’t fit here, says Lemaire, but it offers lessons for Canada.

The CaGBC and other organizations investigating green financing models needn’t look beyond Canada’s borders for ideas, however. The city of Vancouver, for example, is developing two pilot programs with green financing that it hopes to launch this year.

Also, organizers of Toronto’s Tower Renewal program see a credit-enhanced capital pool backed by property tax-based security as the financing model, rather than mortgage security, points out TR’s project director Eleanor McAteer.

TR is an initiative to dramatically improve energy and other efficiencies of more than 1,000 concrete residential highrises built between the 1960s and ’80s in the Greater Toronto Area.

McAteer says the idea is for TR to secure private-sector financing and possibly have the province top off financing with a small amount to keep the interest rate down and improve the credit quality of the pool.

The province has good reason to want to participate, she says, because Tower Renewal could potentially create many jobs – up to $5 billion for the restoration and renovation industry.

She says that building owners wouldn’t have to dip into their equity to pay off the loans of 10 years on average because the energy savings from renovations would pay for the work over the loan period.

To go the traditional loan route through a bank, a building owner would require refinancing and a lien would be put against the building, she points out.

The TR’s proposed financing model has some similarities to PACE but the TR model has small administrative costs by comparison because the bulk of 1,000 or so Toronto towers are owned by only a few owners, says McAteer.

Also cutting the administration tab is the fact that many of the buildings are of similar makeup, which simplifies the design/renovation process, she adds.

In the end, the kind of renos proposed under the Tower Renewal program can easily save building owners 20 percent on energy costs.

To make it happen though, TR needs the provincial government to make regulatory changes that will allow it to collect any default payments as property tax. McAteer says she’s hopeful that the group gets the OK from the province this spring.

Another green model that Lemaire and proponents of national financing program might investigate is the City of Toronto’s Toronto Atmospheric Fund, which leverages investment from foundations, corporations, federal and provincial governments.

Lemaire says there is work currently being done through the United Nations Environment Programme and the major banks in Canada which could support green builders as the market is expanding.

The stakeholder base in the green industry is now being recognized by traditional banks and governments, he adds.

And for good reason — it’s a fast-growing industry. The LEED program is an example. In 2004, 50 LEED projects were underway; today there are close to 3,000.

Print | Comment


These projects have been selected from 371 projects with a total value of $1,936,826,394 that Reed Construction Data Building Reports reported on Thursday.


$134,000,000 Toronto ON Prebid


$128,250,000 North York ON Prebid


$100,000,000 Toronto ON Prebid

Daily Top 10


Experienced Site Superintendent

Project Manager


Site/Field Coordinator

Alberta-Red Deer

Operations Foreman
British Columbia-Vancouver

Earthworks Estimator

Junior Construction Manager
Alberta-Fort McMurray

Estimator/Project Manager


More jobs 


Your gateway to
the top careers
in construction
and design