pmr april 2012

RepoRtProperty Management

A RegionAl RepoRt focusing on the gtA, hAmilton & niAgARA

mARch 2012 Vol.19 no 1

Cost-cutting Considerations

Performance-based Conservation

Fiscal Factors Underpin Density

A proposed measure to capture lost tax revenue in Ontario could deliver lower property taxes for commercial/industrial ratepayers in the cities of Toronto and Hamilton, albeit with counterbalancing increases for some of their contemporaries in other municipalities. One of the nearly 350 recommendations in the recently released report of the Commission on the Reform of Ontario’s Public Services – commonly known as the Drummond report in reference to the Commission’s Chair, Don Drummond – reiterates longstanding calls from the Toronto Office Coalition and the Hamilton Chamber of Commerce for a single, uniform business education tax (BET) rate throughout the province.

“A level tax playing field across the Greater Toronto Area would certainly help reduce the regional disparity experienced in the Office Property class,” observes Jeff Orlans, the Chairman of the Toronto Office Coalition, which represents owners, managers and tenants of approximately 55 million square feet of commercial office space, primarily located in downtown Toronto.

From the Drummond Commission’s perspective, such a move would eliminate an illogical revenue model that ties the education portion of the property tax bill to a patchwork of historical tax rates in Ontario’s municipalities that date back to 1998. A seven-year phased tax reduction program, now in its 5th year, to lower the

ContentsDrummond Commission Recommendations 1Conservation opportunities in the Public sector 9Development Charges and Growth Management 11

Continued on page 4.

Restraint Could Propel Property tax ReformThrust for Thrift

By Barbara Carss

Forest Ad:Layout 1 06/04/10 6:21 PM Page 1

PAVING

forestcontractors.com

Asphalt PavingParking Lot ReconstructionParking Lot ResurfacingPathways/Walkways

Pot HolesRoute and SealPavement MarkingsCatch Basin/ Manhole Repairs

8 Cadetta RoadBrampton, ON L6P 0X4

t 905.913.9291f 905.913.931724hr Emergency [email protected] 416.524.3000

FOREST Paving Our Services

12016_Forest_2012.indd 1 12-03-14 3:44 PM

From the Editor

PROPERTY MANAGEMENT REPORT MARch 2012 3

Upload More Vulnerable than electricity RebatesGo figure that an economist would deem the Ontario Clean Energy Bribe – er, I mean Benefit – an inefficient use of scarce government resources. The call to cancel the 10% discount on eligible customers’ electricity bills, which last year cost the Province $1.1 billion, is among the nearly 350 recommendations in the recently released report of the Commission on the Reform of Ontario’s Public Services.

Like all studies of this kind, the Drummond Report – thus dubbed for the Commission’s Chair, Don Drummond – offers a cornucopia of possibilities. The four Commissioners were directed to find ways to balance Ontario’s budget within the next five years, but were prohibited from recommending tax increases or measures involving privatization of health care or education. The result is a thorough accounting of programs, approaches to service provision and lackadaisical fiscal oversight that the Commissioners contend are unduly siphoning funds.

Regulatory Update summarizes just a few of the findings and recommendations with implications for the real estate and development industries. For many commercial/industrial property taxpayers, it equates to something of a good news/bad news story since the report recommends a single business education tax rate across the province, but also counsels a delay in uploading social service costs from the municipal tax base. Other highlighted recommendations are still vague and less likely to be implemented in time to make an impact on the budget during the next five years.

In establishing an experts’ panel to provide advice, governments are typically looking for a fresh perspective from outside their own sphere of influence – i.e. well-regarded thinkers free from the organizational indoctrination that leads to a “this is the way we’ve always done it” mentality. The Drummond Commissioners have brought that astute outsiders’ sensibility to their task – questioning routines, customs and assumptions about returns on investment. Yet, invariably, political pressures determine the outcome of the recommendations.

In that vein, few observers expect the Ontario government will discontinue its 10% electricity rebate for residential, small business and farm customers. Certainly, the Drummond Commission is not the first critic to suggest that the program actually undermines conservation goals.

Many of the report’s recommendations similarly endorse courses of action that others have previously advocated, which is a good indication that the Commissioners approached their task conscientiously and weighed insight of those affected by a wide range of different and complex policy areas. Meanwhile, it’s at least positive validation for the original proponents of the action even if nothing comes of the recommendation.

Indeed, the historical evidence shows that few governments act quickly on the advice they’ve solicited. Many proposals are outright rejected; others are studied interminably or timidly tested in pilot projects before they’re widely introduced. In this case, however, there is a stated deadline to cut the deficit by the 2017-18 budget year.

That doesn’t necessarily paint an optimistic picture for municipal budgeters. Ultimately, it will be easier for the provincial government to prolong the status quo and delay the delivery of property tax relief than to roll back an entitlement it is already providing.

Barbara [email protected]

PUBLIShER Sean Foley EDITOR Barbara Carss [email protected] Ext. 236 cONTRIBUTING WRITER Marion Fraser

ADVERTISING SALES

Sean Foley [email protected] Ext. 225

Steve McLinden [email protected] Ext. 239

Paul Murphy [email protected] Ext. 264

Melissa Valentini [email protected] Ext. 248

SENIOR DESIGNER Annette Carlucci Wong [email protected] Ext. 231

DESIGNER Jennifer Carter [email protected] Ext. 243

PRODUcTION MANAGER Rachel Selbie [email protected] Ext. 261

cIRcULATION Lina Trunina [email protected] Ext. 232 Property Management Report is produced as a supplement to canadian Property Management magazine, published 8 times a year by:

5255 Yonge St., Suite 1000 Toronto, Ontario M2N 6P4 PRESIDENT Kevin Brown [email protected] TEL: (416) 512-8186 FAx: (416) 512-8344 E-mail: [email protected]

4 MARch 2012 PROPERTY MANAGEMENT REPORT

Continued from page 1.

Regulatory Update

BET rate to no more than 1.6% by 2014 commits the Ontario government to cover an estimated $540-million funding gap over that period – a gap due to the concomitant p l e d g e n o t to a d j u s t r a t e s i n t h e municipalities where the BET rate is less than 1.6%.

The Drummond report’s four authors argue that Ontario can no longer afford this kind of spending. They outline an ambitious strategy to keep public debt in check.

The report calls for an annual 2.4% reduc t ion in sp ending across most provincial programs for the next five years in order to allow modest funding growth in the key areas of health care, elementary, secondary and post-secondary education and social programs. This would be

achieved through a combination of outright cuts, service rationalization and reclaiming potent ia l re venue tha t the Ontar io government now foregoes intentionally, inadvertently or due to illegal activity.

The Drummond Commission’s calculations of Ontario’s fiscal outlook vary significantly from the scenario presented in the provincial budget last year. The report’s executive summary notes:

“The 2011 Budget set out a track to 2017-18 for sp ending on pro g r ams (everything, that is, except interest on the debt) that involved growth of 1% annually from 2010-11 to 2013-15 and 1.7% per year from then until 2017-18. But if we a s s u m e t h a t g ove r n m e n t p ro g r a m s continue as they are now delivered, then spending is actually on course to grow

much faster – 3.5% per year on average over the seven-year period.”

Mo r e t h a n h a l f o f t h e r e p o r t ’s recommendations target health care and education, but the broader prescription also covers costs and services more directly related to real estate operations. This includes property tax, electricity rates, planning and development approvals and steps to control the underground economy in the construction and building trades sector.

UPLOAD DELAYDespite the proposed relief for commercial/industrial ratepayers who have carried a disproportionate share of the business education tax, other recommendations could have a more detrimental impact on property tax bills. First off, promised tax relief would be postponed somewhat with an extended timetable for the upload of social service expenses from the municipal tax base back to the provincial government.

T h i s a d d re s s e s o n e o f t h e m o s t controversial initiatives of the tenure under the leadership of former Premier Mike Harris, when funding responsibility for general welfare assistance, public housing and other income support programs was transferred to municipalities. A nine-year phased upload of the most expensive component of those services – the income assistance program known as Ontario Works – began in 2010, when just 3% of program costs were transferred back to the provincial government. For 2012, that increment is slated to rise to 14%, with an annual step-up each subsequent year until 2018 when the transfer will be complete.

However, the Drummond Commission calculates that prolonging the upload schedule to 2020 could save $165 million. In tandem, the Commission recommends accelerated cuts to transfer payments made through the Ontario Municipal Partnership Fund, which are already slated to drop as the upload of social services occurs.

“We realize that any change in the upload simply shifts the fiscal problem in the province from one jurisdiction to another; it does not solve it. Most of the province’s municipalities are also struggling with their budgets,” the report states. “Nonetheless, we feel that to respect the overall spending restraint required at the provincial level, total transfers to the municipalities should increase by less than 5.2% per year.”

Perhaps predictably, the Association of Municipalities of Ontario (AMO) disagrees. “Premier Dalton McGuinty has made it clear previously that his government would

The Drummond commission’s calculations of Ontario’s fiscal outlook vary

significantly from the scenario presented in the provincial budget last year.

eSight ®Manage Energy Efficiently with the most advanced & intuitive energy suite available

Contact us at 1-877-733-3833

to arrange a demonstration

•A complete solution to manage and reduce energy using targeting techniques

•A hardware independent system implemented and integrated to your existing meters, loggers, building automation, and energy consumption database

•Communicate energy information with dashboards, emails, and advanced browser visualization features

•Optimize the operation of your mechanical and lighting equipment and other energy consumption equipment

from

Utility Energy

Consumption Data (on-line or

off-line)

Building Automation

Excel Spread Sheets

Data Loggers

Smart Meters

Industry Specifc Energy Consumption

Databases

FACILITY MANAGERS

FINANCE STAFFGENERALPUBLIC

Capture Data from Existing or New Sources

Communicate and Report

www.yorkland.net

More than just energy dashboards

Untitled-2 1 12-03-12 11:01 AM


Regulatory Update

honour the commitment to upload $1.5 billion in Provincial costs from the municipal property tax base by 2018,” an AMO response to the Commission’s recommendations counters.

Advocates for commercial / industr ia l ratepayers – particularly in municipalities like Hamilton, which has struggled with social service costs while also burdened with one of province’s higher business education tax rates – also resist any suggestion of delay. “We’re very hopeful to see that date come sooner rather than later,” says David Adames, President and Chief Executive Officer of the Hamilton Chamber of Commerce.

POTENTIAL hITS FOR MULTI-RES RATEPAYERSThe Drummond Commiss ion turns i t s attent ion to the residential and mult i-residential property tax classes as well, and questions the Ontario government’s practice of offsetting assessment related increases with a corresponding decrease in the education tax rate. Thus, the 0.231% residential education tax rate for 2011 falls below the 0.2644% rate in 2008, prior to the most recent province-wide reassessment.

“While this has contributed to nominal stability in the property tax base, in real terms,

this practice has reduced provincial education tax revenues avai lable to support Ontario’s education system,” the Drummond report states. “As property tax revenues decrease as a share of educat ion expendi tures , prov inc ia l transfers to school boards increase to offset this decline.”

The Commissioners advise the Ontario government to at least account for inflation. They point to British Columbia, where an inflationary factor is added to the calculation of the education tax rate to insure a continuing stable level of revenue. Although the Commission’s mandate from the Ontario government prohibited it from recommending measures that would increase taxes, this is arguably a case of taking advantage of existing tax room that the Province currently relinquishes.

Multi-residential landlords have some room of their own to recoup property tax increases of a certain magnitude from their tenants, but much depends on the allowable rent increase guideline in any year. The provision under Ontario’s Residential Tenancies Act allows for what’s known as an “extraordinary increase” when an increase in property taxes

surpasses the annual al lowable rent increase by at least 50%.

For 2012, when the allowable rent increase is 3.1%, property taxes would have to rise by 4.65% before a landlord could apply to the Landlord and Tenant Board for an extraordinary increase. An inflationary factor on the education portion of the bill alone is unlikely to t r i g g er t h o s e con d i t i on s . Even i n combination with other tax escalators, recovering the expense would take some time and effort.

“Landlords must still undertake the a d m i n i s t r a t i ve t a s k a n d d e l ay o f documenting and reporting property tax increases and must obtain an order from the Board allowing the rent increase,” explains Mike Chopowick, Manager of Policy with the Federation of Rental-housing Providers of Ontario.

The Drummond Commission’s call for the immediate cance l la t ion of the Ontario Clean Energy Benefit (OECB) could have an even greater financial impact for rental housing operators. Few o b s e r v e r s e x p e c t t h e p r o v i n c i a l government will withdraw its pledged 10% discount on eligible customers’

1.800.707.9947www.facilityservices.com

Facilities we Service:Commercial

ResidentialIndustrial

RetailHealth Care

Hotels

Services we provide:Housekeeping/JanitorialLandscaping/Snow RemovalFire and Flood RestorationPost Construction CleaningPower WashingTotal Floor and Carpet Services

With our exceptionally trained staff, green-certified products and state-of-the-art technology, we guarantee superior maintenance and quality assurance. Use our integrated solutions to match the needs of your industry, and let us deliver the cost-effective solutions you need.

We are putting the CLEAN back in CLEANING.

11268_FacilityServices_2012.indd 1 12-03-19 2:26 PM


rental equipment that fits...COOLING EQUIPMENTRENTAL & SALES

Air Cooled Chillers

•8–450tonaircooledandupto1,000tonwatercooledchillers

The Right Solution For:•EmergencyChillerServiceDuringOutages

•PlannedMaintenance&Replacement

•TemporarySystems-SeasonalRequirements

Portable Air Conditioners

•1.5–50tonportablepackagedunitsavailable

The Right Solution For:•BackupCooling-PreventativeMaintenance

•SupplementalorEmergencyServices

•Construction&RetrofitCooling

L.M. TEMPERATURE ALSO OFFERS:

•Heaters•AirMovers&Handlers•HumidityControl

•Distribution&Transformers

•Generators

Call us today at 1-855-LM-EQUIP (563-7847) or visit www.lmtemperature.com

7060 Pacific Circle, Mississauga, ON, L5T [email protected]

Por tab le A i r Cond i t i one r s

(those participating in the Regulated Price Plan) electricity bills until the end of 2015, but the Drummond report is emphatic that annual costs in excess of $1 billion are undermining Ontario’s fiscal position.

The Commission also calls for a review of four other energy tax credits/rebates for low-income ratepayers and residential and industrial ratepayers in Northern Ontario. “Each of these initiatives may offer relief to consumers in terms of energ y costs (electricity, gas, oil, diesel etc.), but over t ime could discourage conser vat ion, l eading to h ig her costs , and should periodically be revisited to ensure they are meeting policy goals and represent value for money,” the report states.

ELEcTRIcITY PROPOSALS PREVIOUSLY REJEcTEDMany of the other e lectr icity-related recommendations reinforce notions that electricity market analysts and energy management specialists have consistently promoted – some which the provincial government has heretofore rejected.

For example, conservation proponents concur with the Commission that a wider variance is needed between peak and off-peak pricing, including the introduction of a “critical peak” rate. Yet, many observers question how such critical peak pricing could effectively be implemented through the proposed opt-in approach.

“As it is not elaborated on, I am left to wonder who would choose to opt in?” says Mike McGee, Managing Director of the consulting firm, Energy Profiles Limited. “ T h e re com m en d a t i on i s s om e w h a t simplistic.”

The Commission’s proposal to more accurately weigh transmission costs in wholesale electricity prices is in sync with other d i scuss ions of how locat ional marginal pricing (LMP) could send better price signals and stimulate investment in generation and transmission capacity. Essentially, this approach categorizes the markets into nodes so that transmission congestion can be factored into the spot price in some areas – a pricing formula currently in place in much of northeastern United States.

“The idea has been raised at the IESO (Ontario’s Independent Electricity System Operator) since 2002, but it has always appeared that the government does not support it,” McGee reports. “Arguably, it would be the r ight thing to do, but, unfortunately with the way the market has evolved and with the advent of the huge Global Adjustments, that would add even

conservation proponents concur with the commission that a wider variance is needed between peak and off-peak

pricing, including the introduction of a “critical peak” rate.

Regulatory Update

more complexity and inequity in allocating the Global Adjustment to locational prices.”

WEAK ASSUMPTIONS, INcOMPLETE INFORMATIONElsewhere, the report eschews complexity for w hat many obser vers s ee a s sweep ing generalizations. Notably, proposals to reform a n d r a t i o n a l i z e t h e p l a n n i n g a n d environmental approvals processes provide few details of how cost savings would be realized, particularly within the short-term f ive - ye a r h o r i zo n t h a t u n d e r p i n s t h e Commission’s objectives.

Such a move seems more likely to spark a jurisdictional turf war. Similar measures in Ontario’s Green Energy and Economy Act to allow renewable energy projects to sidestep municipal planning approvals have proven controversial.

“ I t ’ s o n e o f t h e H o l y G r a i l s o f env ironmental assessment and land use planning to somehow integrate those two processes, but the reality is that land use planning is clearly a municipal responsibility,” reflects John Willms, a Partner with Willms & Shier Environmental Lawyers. “Municipalities hold on to their land use planning decision-making power. It’s very important to both local autonomy and being answerable to their constituents. It would be a huge step and extremely difficult to ever take that authority away from municipalities.”

The Commission’s diagnosis of problems with the Ministry of the Environment’s (MOE) financial assurance program diverges from the views of industry insiders working to remediate contaminated sites – although both parties agree that a different approach is needed.

While the Drummond report suggests that the MOE has made inadequate use of financial assurance to ensure that polluters cover the costs of cleaning up land that reverts to Crown ownership, other observers maintain that current requirements can be a disincentive to returning derelict sites to productive, tax generating uses. Brownfield specialists see some merit in the Drummond Commission’s endorsement of a financial assurance tool somewhat like the U.S. Environmental Protection Agency’s Superfund, but not necessarily for the reasons the Commission cites.

“Our system of environmental approvals and enforcement in Ontario is already heavily based on the polluter-pays principle,” observes Luciano Piccioni, President of RCI Consulting, a planning firm specializing in brownfield redevelopment.

For example, MOE’s current financial assurance system requires land owners/developers to provide upfront funds, which are held in a reserve account, to cover possible future costs related to contamination on or migrating from


Regulatory Update

Let Us Restore Them In-Place To a Better Than New ConditionLet Us Restore Them In-Place To a Better Than New Condition

• Ontario Building Code Approved• 20 Year Warranty• Improved Water Quality - Reduced Lead + Metal Content• BPA FREE• Improved Water Flow• Better than a New Pipe• Turn Key Installation• Certified to NSF 61

Toll Free: 1.800.463.0251 • Tel: 905.670.7481 • Fax: 905.670.7483Email: [email protected] • www.bradleymechanical.com

Epoxy Application parameters developed with our PIPE SHIELD™ BELT (blown epoxy lining technology) software program, developed with the assistance of

NRC-IRAP and the University of Toronto

Pipe Shield™ AN500 Epoxy is manufactured with non-toxic base ingredientswww.pipe-shield.com

Division of:

“Experience you can count on since 1985”

PIPEREHABILITATIONPROFESSIONALS

www.pipe-shield.com

No More Rip and Replace

Leaking Pipes?Leaking Pipes?

11080_BradleyMechanical_WilsonBlanchard_2011.indd 1 11-06-10 9:51 AMUntitled-2 1 11-12-14 11:37 AM

a site. A less capital burdensome risk management model would be welcomed.

“If you quantify all the costs that redevelopment of a brownfield site could possibly generate, the dollar amount can be so huge that it will essentially put the project out of business,” Willms says. “Instead of every single operator putting up the full amount of financial assurance, it would be like paying premiums, and the government would have a fund it could use if it needed it.”

Even so, the U.S. Superfund, which draws funding from the chemical and petroleum

industries, is not a straightforward polluter-pay model as the Commission suggests. “Non-polluters within particular industries pay for the polluters in that industry,” Piccioni notes. i

The complete text of Public Services for Ontarians: A Path to Sustainability and Excellence, the report of the Commission on the Reform of Ontario’s Public Services can b e f o u n d a t w w w. f i n . g o v. o n . c a / e n /reformcommission.


We Manage the Quality of Your Lifestyle.

Not Just Your

Building.

C

M

Y

CM

MY

CY

CMY

K

C

M

Y

CM

MY

CY

CMY

K

www.samuelproperties.com

At Samuel Property Management Ltd., we are one of Toronto’s most respected rental, condominium, commercial, office and retail managers, providing a level of service that goes well beyond your expectations. Discover a level of personal attention, commitment and care superior to anything you have yet experienced. After all, your home deserves the best.

For information, please call Gino Sisera or John Wannamaker at (416) 398-5757

1120 Finch Ave. West, Suite 801 Toronto, ON M3J 3H7

Tel: (416) 398-5757 • Fax: (416) 398-4988

10089 Samuel march condo.indd 1 3/31/10 4:51:40 PM

WINDOW CLEANING SERVICES

Town Home & Condo Window Cleaning

Pay 25% LessNew technology = lower costs

Roof Anchor Problems?With our unique SKYPOLE system we work

safely from the ground up, cleaningthoroughly without using roof

anchors, ropes or ladders

Over 30 Years of SuccessThousands of residential& commercial properties

beautified annually

Get a Free Quote1-888-4-SKYPOLE

[email protected]

11006_Skypole_2011.indd 1 11-04-08 9:25 PM

11102_Blackstone_2011.indd 1 11-04-25 11:09 AM

T. 416.286.3500F. 416.286.6891

www.malverncontract.com

The One Source For All Your Flooring Needs

MALVERNContract Interiors Limited

at

11231_Malvern_2011.indd 1 11-11-17 9:52 AM

Call us for complimentary acquisition, due diligence and property consulting services.

We build successful partnerships based on trust, respect and a commitment to excellence.

t. 905.763.8203 e. [email protected]. www.berkleypm.ca

11238_Berkley_2011.indd 1 11-10-19 11:44 AM

Virta EnergyConsultants Inc.

[email protected]

1 866 828 5002

Toronto, Ottawa, Barrie, Niagara Falls

Energy Studies andAudits

ProjectManagement

EnergizedBCA's

48hr Emergency Energy Study Service

Call for a quote!

Energy Studies and AssessmentsProject Management, Energized Building

Condition AssessmentsEnergy Modeling, Net Zero Project

DevelopmentAlternative Energy Studies , High Performance New Construction

CAll for A [email protected]

1 866 828 5002

Toronto, Ottawa, Barrie, Niagara Falls

12034_Virta_2012.indd 1 12-03-16 12:48 PM

Municipal • Commercial • Residential • Industrial

• Stamped Concrete• Bumper Curbs

Installed• Driveway Paving• Jewel Stone• Interlocking Brick• Landscaping

• Parking Lot Resurfacing

• Concrete Curbs and Sidewalk

• Excavating • Disposal Bins

416-771-9887www.ipacpaving.com

12034_IPacPaving_2012.indd 1 12-03-19 10:48 AM

ElEctricalcontrol

automation

416-246-0048www.electricgroup.ca

12034_ElectricGroup_2012.indd 1 12-03-19 10:49 AM


Energy Management commentary

Value for Money a Universally Applicable MessageRoom for Greater Water and Energy Savings in Broader Public Sector

By Marion Fraser

Beyond the headlines about draconian cuts to Ontar io’s publ ic sec tor, the Drummond Report (formally known as the report of the Commission on the Reform of Ontario’s Public Services) may offer billions of dollars of savings with no service cuts. The Repor t ’s mantr a i s s imple and straightforward: Value for money.

These fundamenta l pr inc ip le s for reforming Ontario’s public services closely match the approach to energy and water conservation that the Toronto and Region Conservation Authority (TRCA) has been deploying in growing numbers of schools, hospitals and municipal buildings since 2004. More recently, owners and property managers are adopting the same approach in Class A commercial buildings.

T h e core o f t h i s e v i den ce - b a s e d , systematic approach to conservation is benchmarking, education, resources and

ongoing monitoring to guide continuous improvement in energy and environmental performance.

The principles are good common sense and reflect the best practices of excellent organizations:• constantly benchmark effectiveness and

efficiency• set clear objectives, use proper metrics to

measure progress and provide clear accountability for results

• focus on outcomes, not inputs• bridge organizational silos and reduce

administrative red tape • maximize the value of capital assets • drive relentlessly towards effectiveness

and efficiency

Although the Report does not focus s p e c i f i c a l l y o n e n e r g y a n d w a t e r conservation, it does note that the current

under-pricing of such valuable resources contributes to waste and overuse. If the Commissioners had addressed the full potential for energy and water savings in Ontario’s public sector – the Canada Green Building Council estimates that buildings and homes in Canada can reduce their consumption by at least 50% in the near term – they may have recognized the savings to be found, not just in provincial buildings, but in the broader public service as well.

Others have a l so over looked that opportunity. Traditional conservation programs have focused on high-cost capital retrofits and subsidies for higher efficiency equipment , jus t i f i ed by eng ineer ing estimates of savings – an approach that always seems to leave the broader public sector clamouring for more provincial funding, not less.

Introducing the Vitocrossal 200, CM2: a brand new face with familiar features

Meet the Vitocrossal 200, CM2 gas-fired condensing boiler – featuring the Viessmann technology you know and the performance and value you expect.

Ideal for large residential or commercial applications with inputs of up to 1112 MBHMaximum heat extraction with proven stainless steel Inox-Crossal heat exchanger Extremely low NOx emissions from fully-modulating pre-mix Viessmann cylinder burner Seamless integration of Viessmann control technology and building management systems Multiple venting possibilities with optional air intake kit for direct or chimney venting Gas fuel flexibility (NG/LPG/LNG) with simple electronic conversion Low inlet gas pressure requirement (NG) as low as 4 inches of water column No dedicated boiler pump required due to extremely low water pressure drop

Coming Soon

Pro

duct

may

not

be

exac

tly a

s ill

ustr

ated

.

www.viessmann.ca/cm21-800-387-7373

PMR - Mar - CM2 Cutaway.indd 1 3/14/2012 10:07:31 AM


In contrast, high-cost solutions have not been required for the Hospital for Sick Children (Sick Kids) to achieve savings of more than $2 million per year in energy and water costs . Rather, i t has improved o p e r a t i o n s a n d m a i n t e n a n c e , a n d i m p l e m e n t e d t h o u g h t f u l c o n t r o l improvements, while participating in TRCA’s Greening Health Care program.

This program’s on-line management system contains the largest dynamic database of hospital energy performance in C a n a d a a n d p ro v i d e s m e t r i c s a n d standards that allow each participating hospital to self-assess, set targets and monitor savings over time. Regular forums enable facility managers to share savings results and best practices.

Using these standards and methodology, t h e No r t h S i m co e Mu s ko k a L H I N co l l a b or a t ive ( com pr i s i n g Mu s ko k a Algonquin Healthcare, Georg ian Bay G e n e r a l Ho s p i t a l , O r i l l i a S o l d i e r s ’ Memorial Hospital and Col l ingwood G e n e r a l a n d M a r i n e H o s p i t a l ) i s embarking on a joint project to fully exploit conservat ion potential , share resources and achieve economies of scale. The project is forecast to produce more

than $2 million in annual savings and a net positive cash flow within six years.

Any needed capital investments in higher efficiency equipment or building upgrades will be financed entirely through savings. This appears to be exactly the kind of Value for Money that the Drummond report commends.

Fitt ingly, the report also points to Infrastructure Ontario’s expertise in real asset management. It , too, has been following the basic tenets of performance-based conservation with a number of its properties for the past three years.

G ive n t h e O n t a r i o g ove r n m e n t ’s $14-billion real estate portfolio – much of it older and more expensive to maintain – there is great potential to expand this performance-based approach. The tools to make this happen were introduced in the Energy Conservation Leadership Act in 2006, but only recently have enabling regulations been posted to get action underway.

The Drummond Report makes two other keen observations that apply to conservation.1. “The Ontario Clean Energy Benefit

which provides a taxpayer funded 10

per cent rebate on electricity bills for residential, farm and small business customers distorts the true cost of e l e c t r i c i t y a n d d i s c o u r a g e s conservation.”

Ac h i e v i n g t h e f u l l p o t e n t i a l o f conservation could reduce bills much more at no cost to taxpayers. Any new electricity resources will cost much more than current supplies, whether renewable or not. Only conservation is cheaper than new supply and can reduce bills even if rates go up.

2. “ T h e p r o v i n c i a l a n d f e d e r a l governments should reduce overlap and duplication of services.”

This recommendation also should also be heeded within Ontario where a plethora of public and private sector organizations are delivering publicly funded traditional conservation programs of suspect value, given their focus on estimated savings, large incentives and significant capital investments. i

Marion Fraser is President of Fraser & Company, and has more than 30 years of experience in sustainable energy issues in Ontario.

Energy Management commentary

Housekeeping/Maintenance • Commercial• Industrial• Retail–ShoppingCentres• Hotels• Residential• HealthCareFacilitiesMarble/Granite Restoration

Power Sweeping/WashingPost Construction CleaningWindow CleaningDisaster Restoration Services • Flood,•Fire• Smoke•Crime/Trauma• DesignatedSubstanceSurveys•MoldAssessments•IndoorAirQualityTesting

Total Carpet Care Services • MaintenancePrograms• RestorationCleaning• Upholstery/Modular FabricCleaning• CarpetSales/Installations/ Repairs

Specialists in….


Industry News & Trends

An Unexploited Growth Management toolDevelopment Charges Could Promote Cost-Effective Infrastructure

Development charges have historically been based on the principle that growth should pay for itself. The national public policy think tank, Sustainable Prosperity, argues that more nuanced development charge formulas are now required to encourage intensification and transit-oriented development that makes more e f f i c i e nt us e o f re s ource s and he lp s municipalities to more cost-effectively maintain infrastructure. The following is an excerpt from a recent policy brief – Editor.

Development charges are out of sync with growth management policies in many municipalities. Developers submit the fees to municipalities to cover the upfront costs for sewer systems, roads and other infrastructure that serves new development, but too often the design of the charge incents low-density, automobile-centric development, which in turn necessitates investment in new and more costly infrastructure.

Zoning by-laws, planning policies and market factors affecting supply and demand all influence where development happens, while development charges are a significant cost that can influence location and timing of development and other decisions. If better

UNIVERSAL VS. PROPORTIONATE RATESMany factors shape where development happens, but development charges (DCs) can be significant enough that revising the rate structure or the timing of payments can influence developers’ decisions. Municipalities have some flexibility because DCs can be calculated in different ways.

Using the average-cost pricing formula, municipal officials estimate all infrastructure costs necessitated by all new development

aligned with growth management goals, development charges could provide an incentive for more compact urban development.

Low-density development on the urban fringe may appear cheaper, but it carries many hidden costs, including traffic congestion and d u p l i c a t i o n o f i n f r a s t r u c t u re . Fo r municipalities, this type of development engenders costlier upfront and lifetime infrastructure costs than does more dense development in established urban areas.

As funding from upper levels of government diminishes, development charges are one of the few methods

most municipalities have to pay for growth-related infrastructure. however, as currently designed in

most municipalities, they do not work to encourage more compact and

sustainable development patterns.


throughout the municipality. They then divide that sum by the estimated number of new units to determine a DC rate.

This is a universal rate, which does not reflect the actual cost of infrastructure required in any given area. Alternatively, marginal-cost pricing sets the DC rate based on the actual costs of the development in question.

Meanwhile, an area-specific DC rate is a hybrid approach, which calculates an average DC rate based on the infrastructure necessitated by new development in a given geographical area larger than a single development, but smaller than the entire municipality. Often, municipalities will employ a combination of methods, with a city-wide DC charge, as well as area-specific charges for certain geographic and/or development areas.

As funding from upper levels of government diminishes, development charges are one of the few methods most municipalities have to pay for growth-related infrastructure. However, as currently designed in most municipalities, they do not work to encourage more compact and sustainable development patterns.

Ongoing maintenance and infrastructure renewal costs are rarely considered. Even though DCs do not fund maintenance, policy makers should be aware of the immense lifecycle costs of maintaining the infrastructure and services


RECOMMENDATIONS

1.Promotebetterunderstandingof thecorrelationbetweendevelopmentchargesand growth management. Tailor urban planning policies to ensure landdevelopmentandcommunitygrowthismoreefficient.

2.Provincial governments should amend development charge legislation toexplicitlyrequiremunicipalitiestocollect100%ofthefinancialcostsimposedonthembynewdevelopments.Artificiallylowcostrecoverylimits,suchasOntario’slimitof90%ofcosts,shouldberemoved.

3.Provincialgovernmentscouldamenddevelopmentcharge legislation to includethecostsofproviding transit services related togrowth, and to removeanyrestrictionsondevelopingnew transit-relateddevelopmentcharges.Allowingdevelopmentfeestogotowardgrowth-relatedtransitserviceswillfreeupotherrevenues to support transit for more compact, nodal, transit-orientedcommunities.

4.Provincial leadershipintheformofongoingsupportandguidanceisneededtoensure development charge programs are designed and used effectively.Information and background studies could demonstrate how developmentchargescanproduceadifferentoutcomedependingon thedesiredplanninggoal.Studiesshouldalsoexaminehowdevelopmentchargescouldbeusedtoaddress the non-financial, externalized costs of urban sprawl (e.g. smog,greenhousegasemissions,health,etc.).

Toronto’s Fastest Emergency Response Company24 Hours a Day, 7 Days a Week, Year Round Services

Leading Technology and Specialty Structural Drying EquipmentIICRC Trained and Certifi ed Technicians

Water Damage, Mould, Fire and Smoke Remediation ServicesSpecializing in portable heat drying and desicant dehumidifi cation

Proud members of IAQA, HIP and RIA

“…. We call ourselves DRYIT, because that is our business”

www.dryit.ca 905-738-1759 1-877-473-3657

Gill sans

Healthy IndoorsPartnership

Healthy IndoorsPartnershipHealthy IndoorsPartnership

Canada’s First CSSA Certifi ed Green Sustainable Contractor

Leading the Industry in Certifi ed Green Cleaning

Specialized Carpet Maintenance ProgramsTo fi t all your carpet cleaning requirements

Carpet spot dye and stain removalsCarpet mill approved certifi ed carpet inspections available

Industry certifi cation classes on carpet cleaning, water damage and structural drying available

www.freshandclean.ca Toll Free: 1-877-GREEN57

11268_FreshClean_2012.indd 1 12-03-08 6:32 PM


spawned by inefficient growth patterns. Adjustments – such as lower rates for high-density projects, mixed uses and intensification of built-out areas – could provide an incentive for more compact forms of urban growth.

Average-cost development charges subsidize low-density development that has higher per-unit growth-related capital costs. This ultimately raises costs for higher-density development. In comparison, area-specific pricing has been shown to encourage more efficient land development and equitable distribution of costs related to development.

Under the area-specific DC model, established districts will generally have lower development charges. Thus, redevelopment and intensification within such areas would benefit from lower charges. Development that is farther away from existing infrastructure or requires extensive service or infrastructure provision would bear a cost proportionate to that location.

VARIABLES TIED TO cOST FAcTORSMunicipalities could also vary development charges based on factors such as location, type of development, density or unit size. Infrastructure unit costs depend on linear distances (e.g. for roads, sewers or water) so factors such as lot size, density and development design will have an impact on total costs.

Lot size has a significant influence on infrastructure costs for both commercial and residential developments. Traditional development charges are calculated on a per-unit basis and do not account for unit size or linear distances, which effectively subsidizes the construction of large units and low-density development at the expense of smaller units and dense development. DCs based on unit size would eliminate that subsidy.

Municipalities could pursue revenue enhancement, which would increase overall development charge revenues, or revenue neutrality, by using new revenues from higher development charges to offset reduced or waived development fees for preferred forms of development.

DCs should at least be set at the level required to cover infrastructure costs to prevent future fiscal shortfalls and avoid market distortions. Some provincial governments have also established upper limits to ensure that DCs do not exceed the cost of required infrastructure.

Requirements for upfront payment – usually at the subdivision or building permit stage – may influence developers to opt for low-rise development, which allows them to more quickly recoup their costs from new homebuyers. Delayed or staggered payment schedules could help developers with the financing of denser high-rise projects that take much longer to construct.

• Access Control Management• Live Camera Verifi cation• Emergency & Elevator Phone Monitoring• Fire, Sprinkler & Life Safety Monitoring• Security & Intrusion Monitoring• Concierge Service• Property Mgmt Answering Service

• Access Control Systems• Security Systems• Camera Systems• Building & Automation Systems• Condo Suite Security Systems• Intercom & Communication Systems• Entry Systems

416.445.8274 1.800.445.9949www.247into.com

Cameras

Emergency Phones

Your Property.

24/7

Full Sales and Installation of:

24/724/7 Monitored, Managed and Secure

Entry/Exit Doors

Panic StationsKeypadsCard Readers

24/7

44 Cawthra Ave. • Toronto, ON • 24 Hours • 416.762.9982www.altamiramaintenance.com • [email protected]

Many of your offi ce staff spend more waking time at their offi ce than at their home, so the

quality of the environment you provide is very crucial to their health and productivity.

WE DON’T CUT CORNERS,WE CLEAN THEM.

WE DON’T CUT CORNERS,WE CLEAN THEM.

11231_Altamira_2011.indd 1 11-11-16 11:22 AM




PRESSURES & cONSTRAINTSFiscal, legislative, administrative and institutional challenges can pose some obstacles to DC reforms. Clearly, municipalities would have a difficult time implementing changes that result in lower overall revenues. In fact, municipalities tend to actively look for ways to increase, not decrease, these charges.

A March 2011 report highlighted that fiscal pressures in Ontario municipalities have resulted in more jurisdictions “try[ing] to increase development charges to the greatest extent possible,” often without regard for other policy objectives or the incentives created by the development charges. Municipalities will need to raise some charges if they lower others.

Provincial governments set rules for how development charges are calculated and the types of services for which they can be collected to impose some degree of consistency across municipalities. However, provincial rules can also inhibit the ability of municipal governments to apply development charges more broadly as a growth management tool.

In Ontario, a requirement to discount many services by 10% hampers some municipalities in efforts to collect development charges for improved and expanded transit service levels. Given that transit is an integral component of developing more compact and transit-oriented communities, the ability to fund it adequately is crucial for growth management.

Smaller municipalities, in particular, may struggle with the burden of managing multiple area-specific development charges. For example, the Town of Markham, in the Greater Toronto Area’s York Region, had 31 different area-specific charges until 2008. This has since been reduced to 19 – partly, it is claimed, to streamline administrative demands.

In any case, municipalities must keep meticulous records for DC revenue and spending since developers and others keenly observe how DCs are spent. Within this context, researchers found little evidence that area-specific charges are more complicated to administer.

D ep a r t m en t a l s e g re g a t i on w i t h i n municipalities can shape and/or undermine development charge design. Staff from the planning and financial departments may not have much interaction on a regular basis, but an integrated approach is needed to resolve issues of competing interests. i

Sustainable Prosperity is a national research and policy network focused on market-based approaches to support a competitive green economy. The complete text of Managing Urban Sprawl: Reconsidering Development Cost Charges in Canada can be found at www.sustainableprosperity.ca

Untitled-4 1 12-03-14 3:58 PM

www.servicareinteriors.com

No matter how many

...We are ready to exceedyour expectations!

feet you have...

Untitled-7 1 11-06-08 1:06 PM

C o m p a n y I n c

• Paving&Interlocking stone

• Concrete,curb &sidewalk

• Excavating&grading

• snowploughing, removal&salting

• Catchbasinrepair

• Landscapeconstruction

ATLAS PAVING COMPANY INC.2LeadingRoadToronto,OntarioM9V4B5Telephone416-749-2584IFax416-748-1304IEmailatlas@atlaspaving.ca

OVER 50 SUCCESSFUL YEARS IN BUSINESS

FAMILY OWNED & OPERATED FOR 3 GENERATIONS

OUR REPUTATION SPEAKS FOR ITSELF

WHY GO ANYWHERE ELSE !

24 HOURS EMERGENCY SERVICE

C o m p a n y I n c

Untitled-6 1 12-03-07 2:12 PM

COMMERCIAL | MULTI-UNIT | RESIDENTIAL | INDUSTRIAL | INSTITUTIONAL

The Right Product. The Right Price. The Right People. The Right Choice.Over 14,000 Products – In Stock, Everyday!

The Right Product. The Right Price. The Right People. The Right Choice.Over 14,000 Products – In Stock, Everyday!

APPLIANCEBATHROOMBUILDINGCLEANINGECO-FRIENDLYELECTRICALFIRESAFETYFLOORHARDWAREHVACKITCHSINKSLIGHTBULBSLIGHTFIXTURESPAINTPLUMBINGSEASUPERSPECIALSWALLWHMISANDMOREAPPLIANCEBABUILDINGCLEANINGECO-FRIENDLYELECTRICALFIRESAFETYFLOORHARDWAREHVACKITCHENSINKSLIGHTBULBSLIGPAINTPLUMBINGSEASONALSUPERSPECIALSWALLWHMANDMOREAPPLIANCEBATHROOMBUILDINGCLEANINGELECTRICALFIRESAFETYFLOORHARDWAREHVACKITCHSINKSLIGHTBULBSLIGHTFIXTURESPAINTPLUMBINGSEASUPERSPECIALSWALLWHMISANDMOREAPPLIANCEBABUILDINGCLEANINGECO-FRIENDLYELECTRICALFIRESAFLOORHARDWAREHVACKITCHENSINKSLIGHTBULBSLIGPAINTPLUMBINGSEASONALSUPERSPECIALSWALLWHMANDMOREAPPLIANCEBATHROOMBUILDINGCLEANINGELECTRICALFIRESAFETYFLOORHARDWAREHVACKITCHSINKSLIGHTBULBSLIGHTFIXTURESPAINTPLUMBINGSEA

The one source for it all.The one source for it all.

1 800-207-8325 or 905 738-6003www.hsbuild.comwww.hsbuild.com 1 800-207-8325 or 905 738-6003

PROUD MEMBER OF:

Eco-Friendly | Cleaning | Fire Safety | WHMIS | Paint | Building | Bathroom & Kitchen | Appliance | Wall & Floor

Plumbing | Light Fixtures | Light Bulbs | Electrical | HVAC | Hardware | Seasonal | and More

Choosing H&S as your maintenance materialsupplier means you are putting your confidencein a supplier willing to go the extra mile toprovide you with the best one-on-one service.A knowledgeable sales staff and over 35 yearsof industry experience – no one else offers thatcombination and it’s why people all acrossOntario choose H&S Building Supplies Ltd. astheir One Stop Maintenance Supply Superstore!

Choosing H&S as your maintenance materialsupplier means you are putting your confidencein a supplier willing to go the extra mile toprovide you with the best one-on-one service.A knowledgeable sales staff and over 35 yearsof industry experience – no one else offers thatcombination and it’s why people all acrossOntario choose H&S Building Supplies Ltd. astheir One Stop Maintenance Supply Superstore!

COMMERCIAL | MULTI-UNIT | RESIDENTIAL | INDUSTRIAL | INSTITUTIONAL

H&S AD1 v2:AD Size 8.125 x 10.875 01/09/10 4:34 PM Page 1

pmr april 2012

Documents

drummond report

property tax reformthrust

property tax bill

lost tax revenue

recommending tax increases

toronto office coalition

don drummond

office property class