Rising development charges and insufficient incentives are stifling some major municipalities’ efforts to encourage developers to build green.
In Toronto, for example, increases in development charges — including building and planning fees, and parkland dedication — have far outpaced the evolution of green building incentives.
“Between 2016 and 2020, Toronto has upped development charges 120 per cent, while development charge rebates incentivizing builders to adopt geothermal energy to reduce carbon footprints has increased only 16 per cent,” said Matthew Tokarik, president of Subterra Renewables, a Toronto-based green energy supplier. “That’s too modest a change to keep developers incentivized to build green.”
In Toronto, 22 per cent of the cost of new condominiums goes to government charges, up from 18.7 per cent in 2013. In Brampton and Markham, these charges account for up to 30 per cent of the cost of a new home. At 16.3 per cent, Bradford represents the low end in Ontario.
What that means is that government charges constituted $164,500 of the purchase price of a $750,000 Toronto condo in 2019. The same amount is built into new home purchases in Markham, but on a lesser purchase price of $532,000.
While geothermal systems are much cheaper to operate than fossil fuel systems, they’re significantly more capital-intensive to construct. But there’s no doubt about the environmental payoff, as geothermal technology reduces heating and cooling energy consumption by some 60 to 80 percent — so much so that the University of Toronto is currently completing a conversion of its entire downtown campus.
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