On February 6, 2017, Ontario Regulation 20/17 (the "Regulation") was filed under the Green Energy Act, 2009 (the "Act"). The Regulation follows the Ministry of Energy's (the "Ministry") Large Building Energy and Water Reporting and Benchmarking proposal (the "Proposal") dated February 25, 2016, in which the Ministry proposed to implement an Energy and Water Reporting and Benchmarking regulatory requirement as a means of monitoring large buildings' energy and water consumption on an ongoing basis to determine how this consumption is changing over time and in comparison to other similar buildings.
The Regulation, which comes into force on July 1, 2017, is of interest to all owners of commercial and multi-unit residential buildings over 50,000 square feet and over 10 units (in the case of multi-residential buildings), including condominium corporations, as well as a limited number of industrial buildings. Owners of qualifying buildings will be required to report to the Ministry, on an annual basis, identifying information in respect of the property, including the gross floor area of the property and information relating to energy and water consumption and performance data, and verify these reports if requested to do so by the Minister of Energy (the "Minister").
The Regulation is also of interest to electricity, natural gas and water distributors, who will be required to provide owners of qualifying buildings with aggregated information as to how much electricity, natural gas or water, as applicable, was used at the building during the reporting period. This includes information for reporting periods during which the current owner did not own the property.
The reporting requirement will be phased-in gradually, over a three-year period, with the first reports due July 1, 2018.
Background
The Province of Ontario, in the 2013 Long Term Energy Plan, committed to putting conservation first, focusing on rate mitigation over major investments in generation or transmission and pursuing lower-cost options to meet energy needs. In its 2013 publication Conservation First: A Renewed Vision for Energy Conservation in Ontario, the Province further noted that rating systems for buildings could allow consumers to benchmark the relative energy efficiency of various properties and inform their investment decisions.
In the Proposal, the Ministry pointed to large building owners as being in a position to play an important role in helping Ontario meet its conservation and greenhouse gas ("GHG") reduction objectives, citing that buildings were responsible for 19% of Ontario's total GHG emissions in 2013. The Proposal stated that measures are needed to improve the efficiency of existing buildings but building owners must first understand energy and water usage levels and track performance to identify what improvements can be made. The Proposal suggested reporting and disclosure as a low-cost market-based tool to help overcome these barriers.
Overview of the Regulation
Who is caught?
The Regulation applies to owners of real property, including condominium corporations governed by the Condominium Act, 1998, where:
- the building has a gross floor area of at least 50,000 square feet;
- electricity consumption information is available from the local distributor for the building as a whole,
- natural gas consumption information (if natural gas is consumed) is available from the local distributor for the building as a whole,
- the property on which the building is situated is included in the list of codes in the Municipal Property Assessment Corporation's Ontario's Large Building Energy and Water Reporting and Benchmarking Requirement: Building Types (the "MPAC Building Types List"), and
- in the case of multi-residential buildings, the building contains more than 10 units (a "Prescribed Property").
A Prescribed Property includes two or more buildings where electricity or natural gas, if applicable, is not separately metered for each of the buildings, the buildings have a combined gross floor area of at least 50,000 square feet, the property on which each building is situated is included in the list of codes in the MPAC Building Types List , and, for multi-unit residential buildings, the buildings contain a combined total of more than 10 units.
Where there are two owners of a Prescribed Property, they are jointly responsible for the reporting requirements for that Prescribed Property.
The Regulation exempts from the reporting requirements corporations that perform public functions1 and owners of property, any part of which is subject to the Ontario Cap and Trade program reporting requirements, as well as the following property owners:
- 50% or more of the property's gross floor area is occupied by a public agency2;
- 10% or more of the property's gross floor area functions as a data centre, television studio or trading floor; and
- 10% or more of the property's gross floor area is used for manufacturing, commercial, agricultural or industrial processing.
An owner of a property to which exemptions 1, 2, or 3 above apply must provide the Ministry with written notice and proof of eligibility to be eligible for the exemption.
What are the requirements?
1. Annual Reporting
The owner of a Prescribed Property must report to the Ministry identifying information in respect of the property, including the gross floor area of the property and information relating to energy and water consumption and performance data, as set out in Ontario's Large Building Energy and Water Reporting and Benchmarking Requirement: Data Elements.
Reporting is to take place through the ENERGY STAR Portfolio Manager electronic reporting system, administered by Natural Resources Canada. For a Prescribed Property containing two or more buildings, information is to be reported on an aggregated basis.
2. Data Verification
The Minister may request an individual who is required to report information in respect of a Prescribed Property with a gross floor area of at least 100,000 square feet to have the information verified by a qualified person before it is reported.
3. Sharing of Information
The Regulation allows the Minister to share information reported under the Regulation with public agencies and certain entities performing a public function.
4. Distributors to Provide Information
Electricity, natural gas and water distributors will be required to provide the owner of a Prescribed Property who is required to report under the Regulation, upon request, with aggregated information as to how much electricity, natural gas or water, as applicable, was used at the Prescribed Property during that year, including for periods during which the owner did not own the Prescribed Property.
When does the reporting requirement commence?
The requirement to report will be phased in over a three-year period.
Owners required to report must do so annually, for each calendar year, by July 1 of the following year. The first year in which the requirement to report applies is:
- 2018 (information for 2017), for property that is at least 250,000 square feet, other than a multi-unit residential property;
- 2019 (information for 2018), for any other property that is at least 100,000 square feet;
- 2020 (information for 2019), for a property that is between 50,000 to 100,000 square feet.
Owners of newly constructed property and property that is less than 50% occupied during a year can apply to the Ministry to be exempted from the reporting requirements for that year.
Please feel free to contact any of the authors listed below for more information.
1 The corporation must meet the following criteria: (i) be established under an Act, (ii) be accountable to the Government of Ontario, (iii) have the majority of its governing body appointed by the Lieutenant Governor in Council, a minister of a ministry of the Government of Ontario or both, (iv) a power, function or duty of a minister of a ministry of the Government of Ontario under an Act has been assigned or delegated to it, and (v) it is authorized or required, under an Act, to perform a public function or to offer a public service.
2 Pursuant to the Act, "public agency" means a ministry of the Government of Ontario or an entity, including a municipality, or class of entities that is prescribed as a public agency.