Climate Change Action Plan and Infrastructure Investment key highlights of Ontario’s Budget: CaGBC and OCS

The Canada Green Building Council (CaGBC) has commended the Ontario Provincial Government on the release of a budget that stayed true to its commitments to the Climate Change Action Plan. The CaGBC views investments in improving building energy efficiency as key to moving toward a low-carbon economy and meeting Ontario’s emission reduction targets of 15 per cent by 2020, and 37 per cent by 2030.

The 2017 Ontario Budget provides greater detail on the Province’s plans to transition to a low-carbon economy. CaGBC is pleased to see the Ontario Budget define its specific investments to improving energy efficiency in 2017-2018, which include:

  • $377 million through the Green Ontario Fund to make it easier for households and businesses to adopt low-carbon technologies;
  • $200 million for schools to improve energy efficiency and install renewable energy technologies;
  • $85 million to support retrofit activities in social housing apartment buildings; and
  • $55 million through a Cleantech Equity Fund to invest in clean tech firms.

Investments in clean technology are of particular importance as a new era of innovation in the building sector is required to achieve zero carbon performance. Green buildings represent innovation hubs for testing new clean technologies, integrating community renewable energy systems, and applying low impact products and materials. Ontario has the opportunity to capitalize on the capacity of its green building industry – the largest one in the country – to drive towards a low-carbon future. 

There are areas where investment is needed in order to affect immediate impact, beyond the investments earmarked for social housing. Building retrofits present a massive opportunity to maximize emission reductions while boosting the economy. Building retrofits have the potential for a solid return on investment due to the significant energy savings they represent. Large-scale upgrades to existing buildings will also create jobs, drive the demand for clean innovative technologies, and could contribute $32.5 billion in total GDP impacts by 2030 and reduce 19.4 million tonnes of GHG emissions.

“These commitments and recent climate leadership policies by the Ontario government show strong intent toward incentivizing innovation and bolstering a low-carbon economy,” says Thomas Mueller, president and CEO of the CaGBC. “The urgency of climate change demands ambitious and accelerated deployment of solutions that can make a tangible impact now, and in the future. We will continue to work with the Ontario government and provincial stakeholders to leverage the potential of commercial, high-rise residential and institutional buildings to contribute to the goal of immediate GHG reductions.”

Other Budget highlights include $30 billion in infrastructure investment over the next 11 years, says the Ontario Construction Secretariat. This brings the government’s total infrastructure investment over 13 years (2014-15 to 2026-27) to $190 billion, up from $160 billion. So far, three years into the 13-year investment, $34 billion has been spent with $156 billion still to come over the next 10 years.1  Included in the remaining $156 billion are previously announced investments of $56 billion for public transit and $26 billion for highways, along with updated commitments of $20 billion for hospitals and $16 billion for schools. Further details on the updates to hospital and school commitments will be discussed below.

In 2017-18 total infrastructure spending in Ontario including third-party and federal contributions is set to surpass $20 billion. This would be an increase of $6 billion compared to 2016-17.

Major Hospital Projects
The most significant announcement for the ICI sector in this budget is the approval of five major hospital projects, says the OCS. These projects account for $9 billion of the total $30 billion in new investment and will be spread out over 10 years. The $9 billion figure is also included in the $20 billion in total hospital capital investment mentioned above.    

Newly Approved Major Hospital Projects:

  • Hamilton Health Sciences – Hamilton Redevelopment Project: The project will address Hamilton Health Sciences’ high-growth needs and update aging infrastructure to meet current hospital standards.
  • Niagara Health System – New South Niagara Hospital Capital Project: The project will include construction of a new hospital in support of service transformation in the Niagara Region.
  • Trillium Health Partners – Broader Redevelopment Project: The project includes investment in the Mississauga Hospital and Queensway Health Centre to add new spaces to address capacity issues, as well as renovate existing space.
  • Weeneebayko Area Health Authority – Replacement Hospital Project: Ontario is committing to the provincial share of the project costs for a new hospital to serve the health care needs of the population along the James Bay coast. Ontario will work with the federal government to advance planning for this project.
  • Windsor Regional Health Centre – New Greenfield Hospital Project:  The project will include construction of a new hospital in support of service transformation in the Windsor Region.

School Repair and Renewal
The Budget does not contain any additional funding for new schools, but does commit an additional $1.2 billion over the next two years for school repair and renewal. This builds upon a repair and renewal investment made by the government last Fall, and is included in the $16 billion total investment in schools over the next 10 years mentioned above.

Installing Sprinklers in Retirement Homes
One smaller item in the budget will catch the attention of Ontario’s sprinkler fitters. In order to help licensed retirement homes comply with new Fire Code requirements, the government committed to providing funding to small and rural retirement homes to install sprinklers. The Budget does not provide details on how much funding or when more details will be forthcoming, but the new Fire Code requirements need to be fulfilled by 2019 so presumably the funding will come before then.

Gas Tax
In order to increase transit infrastructure funding to municipalities and improve municipal funding predictability, the province will be doubling the municipal share of the gas tax. The municipal share will increase from 2 cents per litre to 4 cents per litre by 2021-22.  

Long-Term Infrastructure Plan
The government commits in the Budget to releasing a Long-Term Infrastructure Plan by the end of 2017. The purpose of the plan is to ensure that public infrastructure is aligned with the province’s needs. The plan will describe Ontario’s existing infrastructure portfolio and proposes strategies to meet infrastructure needs.

Ontario’s Economic Outlook
The government’s economic forecast indicates that economic growth will slow over the next few years, but non-residential construction will increase. Ontario’s real GDP growth is forecasted to decrease from 2.7 per cent in 2016 to 1.7 per cent in 2020. Despite this slow economic growth, non-residential construction is expected to increase. Ontario’s data shows that there was a 4 per cent decline in non-residential construction in 2016, and 0 per cent growth is forecasted for 2017. Conditions are forecasted to improve though in 2018 with a 3.5 per cent increase, followed by an even greater increase of 5.3 per cent in 2019. GDP forecast indicates that GDP growth will slow every year until 2020.

Industry Consultations
The Budget includes commitments by the government to engage in industry consultations that would be relevant to the ICI sector. The first consultation relates to infrastructure procurement. The Ontario government is developing a Community Benefits framework to ensure that projects create benefits beyond the actual infrastructure project. One example the government provides is potentially providing construction jobs to disadvantaged community members.

The government is also planning industry consultations on its Ontario’s Highly Skilled Workforce (HSW) Strategy. The goal of the strategy is to ensure that Ontario is developing skills that correspond with future economic and job market needs. The government will be bringing together employers, educators, labour and other stakeholders as part of a Planning Partnership Table.

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