BUILDING DURHAM

SUMMARY

OHBA has been closely following the Ontario Minister of Energy’s commitment to reverse an Ontario Energy Board (OEB) decision in late December 2023 that denied Enbridge’s amortization of natural gas connection costs.

The OEB’s decision would have had the effect of front-ending the entire cost of the natural gas servicing connection on the construction of any new homes connected to natural gas utility. This is estimated to add several thousands of dollars in additional costs to the construction costs of a new home.

Minister of Energy Todd Smith committed to introducing legislation to reverse the decision, citing that the decision would lead to increased costs and reduced choice for consumers.

BACKGROUND

On December 21st, the OEB released a decision that Enbridge could no longer amortize natural gas connection costs for new customers over a 40-year period and would have to charge the complete costs upfront (estimated by the OEB at roughly $4,400 per new home).

The OEB’s position is that Enbridge’s long-term plan is unreasonable because it assumes that every new housing development will include gas servicing and that homebuyers will remain on gas for 40 years, with OEB citing an energy transition toward electrification in new home construction.

"The OEB is not satisfied that Enbridge Gas's proposal will not lead to an overbuilt, underutilized gas system in the face of the energy transition," much of the board wrote.

The OEB stated the connection cost should be paid upfront by home developers to address that risk and incentivize developers "to choose the most cost-effective, energy-efficient choice." Per the OEB: “Consumers would benefit if developers chose to forego that up-front cost and opted against gas lines.”

The decision also noted that “connection costs have escalated sharply for Enbridge Gas in recent years due to rising construction costs and additional costs related to municipal permit and restoration requirements.”

The final decision was two to one, with the dissenting commissioner arguing that a 20-year horizon would be appropriate for amortizing gas connection costs for Enbridge’s customers.

MINISTER’S RESPONSE

Minister Todd Smith Released the following statement on December 22nd, 2023.

“Our government was elected with a mandate to rebuild Ontario’s economy as we keep costs down for people and businesses and build the homes our growing province needs.

“I am extremely disappointed in yesterday’s split decision by the Ontario Energy Board to reduce the amortization period for the cost of installing new natural gas connections for homes. This decision, which would mean costs that are normally paid over 40 years would be owed in full upfront, could lead to tens of thousands of dollars added to the cost of building new homes.

“At a time when Ontario, like the rest of Canada, is already dealing with the difficult headwinds of high-interest rates and inflationary pressures, the Ontario Energy Board’s decisions would slow or halt the construction of new homes, including affordable housing. We will not stand for this.

“In response, I will use all of my authorities as Minister to pause the Ontario Energy Board’s decision. At the earliest opportunity, our government will introduce legislation that, if passed, would reverse it, so that we protect future homebuyers and keep shovels in the ground.” [Emphasis added].

The Legislature is in recess till February 20th – so the earliest any legislation can be introduced would be on or after this date.

Some notable points that Minister Smith highlighted during his press conference:

“We’re still doing the math on how many thousands of dollars it could be. More than half of the delegations I’ve had as minister of energy over the last two years are from municipalities that want new natural gas in their communities; they want that expansion program expanded again.”

“We’ve been trying to take a pragmatic approach to the energy transition and not heaping tons of new costs on new homes, making sure that life is affordable for people, particularly for those looking to buy a home for the first time.”

There have been no further statements from the Ministry on the announcement to overturn the decision. Due to the sensitive precedent of overruling an independent regulator’s decision, the Minister has not speculated on precisely what the government will bring forward regarding legislation.

NEXT STEPS FOR OHBA

• OHBA will be sending official correspondence to the Minister of Energy and the Premier communicating OHBA’s support for the government’s move to ensure housing affordability by reversing this decision AND encourage local HBA’s to send letters as well, reinforcing the OHBA position. We will provide a sample form letter to ease of reference.
• OHBA will continue to engage directly with the Ministry of Energy and the Ontario Government to reinforce the sector’s position and seek clarity regarding the legislative vehicle that the government introduces to reverse the decision, as well as the anticipated timeline.
• OHBA will coordinate efforts with our industry partner, Enbridge Gas, on any efforts we may mutually agree are in the best interest of OHBA members to ensure this decision is rescinded.

RESOURCES

OEB Decision Backgrounder December 21, 2023

https://www.oeb.ca/sites/default/files/backgrounder-EGI-EB-2022-0200-20231221-en.pdf

OEB Decision and Order

https://www.rds.oeb.ca/CMWebDrawer/Record/827754/File/document

Minister’s Statement

Ontario Government Standing Up for Families and Businesses | Ontario Newsroom

OHBA has released their Weekly GR Reports for the first two weeks of January, which can be viewed here:

• OHBA Weekly GR Report - January 2 - 4, 2024
• OHBA Weekly GR Report - January 8 - 11, 2024

On December 7, 2023, the OHBA Board of Directors passed a motion to enter into a new operating agreement with BILD.  This agreement aims to highlight each Association's strengths and avoid duplication in efforts to deliver the best possible value to our members.  The agreement will see BILD staff support OHBA in areas of advocacy, jointly supported efforts in research and communication campaigns, and a clearer role sort between the Associations.  BILD released this member update on the agreement.

It is with great sadness that CHBA advises that Kathleen Maynard, Senior Director, Building Innovation, CHBA, passed away from cancer on January 11, 2024. This came as a shock as she only became aware of the cancer less than two months prior. Kathleen was a wonderful colleague, a trailblazing and central contributor to the sector and an all-around amazing person. We will all miss her tremendously. 

CHBA does not have funeral information yet. As it becomes available it will be posted here.

Kathleen’s CHBA colleagues Keith Herring (Director, Modular & Construction Systems, keith.herring@chba.ca) and Frank Lohmann (Director, Building Science, frank.lohmann@chba.ca) will be continuing the important work she was so passionate about.

About Kathleen at CHBA

In her capacity as CHBA’s Senior Director, Building Innovation, Kathleen headed up CHBA’s Modular Construction Council and Technical Research Committee. The sheer volume of building codes-related information she read through and actioned was staggering, and she was a wonder to her colleagues. Kathleen represented CHBA on the Canadian Commission on Building and Fire Codes as well as CSA’s Strategic Steering Committee on Construction and Civil Infrastructure. She also chaired the CSA Technical Committee on Prefabricated Buildings, Modules and Panels and was a very active participant on the Joint Task Group on Impact Analysis under the new Canadian Board for Harmonized Construction Codes – a core concern for CHBA members. Kathleen’s talents were many, and it may come as a surprise to some that she also was heavily engaged in the production of CHBA’s National Conference and its sponsor relations for many years—Kathleen loved the conference. Her creativity and attention to detail helped create a wonderful experience for members time and again.

Kathleen began her career working with the building industry in 1987 as National Director of Communications for Energy Pathways, an Ottawa-based environmental consulting company, until 1997, when she joined Canada Mortgage and Housing Corporation as Marketing Officer for CMHC's Research Division initiatives and collaborations, such as Healthy Housing, FlexHousing, Affordability and Choice Today (ACT), Regulatory Reform, and NRCan's R-2000 Program. As the CEO of the Canadian Manufactured Housing Institute from 2000 to 2016, she managed all facets of the institute’s operation and represented the factory-built housing industry. She then transitioned CMHI to become the CHBA Modular Construction Council in 2017, and officially joined the CHBA staff after having shared office space for many years.

Words cannot express how much everyone in the CHBA family, from staff to members to colleagues in other organizations, will miss Kathleen in so many ways.

The Municipality of Clarington is consulting the public about Clarington's Site Alteration By-law to ensure that the environment is protected and residents remain safe.  The current by-law was enacted in 2008 to regulate grading, filling or dumping on land, and removal of topsoil from land.

A Public Information Centre (PIC) will be held on January 25, 2024 at 6:30 p.m. in council chambers at 40 Temperance Street in Bowmanville.  Following the presentation, there will be an opportunity to ask questions and share feedback on the proposed changes.  Registration is not required.

More information on the PIC can be found here.

The Town of Whitby has announced the their Climate Emergency Response Plan: Phase 2: Mitigation was endorsed by Council at the Regular Council Meeting on Monday, December 18, 2023.

Phase 2: Mitigation focuses on climate mitigation and identifies the sources of greenhouse gas (GHG) emissions in Whitby and provides guidance and recommendations to reach the Town's community GHG emissions reduction target of net-zero by 2045.  The Town of Whitby will work with the community to commence the actions outlined in the Implementation Plan which actively guides the Plan's progress from 2024 to 2030.

The Phase 2: Mitigation Plan documents can be found at the links below:

CERP Phase 2 – Mitigation Plan

CERP Phase 2 – Mitigation - Implementation Plan

CERP Phase 2 – Mitigation - Financial Analysis

CERP Phase 2 – Mitigation - Engagement Summary

CERP Phase 2 – Mitigation - Data, Methods, and Assumptions

As per the Town of Whitby By-Law #7748-21, development charge rates will be indexed on February 1, 2024.  Based on the 2023 (third quarter) Statistics Canada Non-Residential Construction Price Index for Toronto, development charge rates are set to increase by 6.6% on February 1, 2024.

Please note, development charge payments made before February 1, 2024 must have the applicable building permit(s) issued no later than 60 days after the payment has been received; otherwise a top-up payment will be required, equal to the difference between the old and new development charge rates for the Town of Whitby.

The new Town of Whitby development charge rates effective February 1, 2024 to January 31, 2025 are shown here:

Residential Type (per unit)	Development Charge Rate  Feb. 1, 2024 - Jan. 31, 2025
Category A - i.e. Single/Semi-Detached	$49,254.31
Category B - i.e. Large Townhome	$37,538.63
Category C - i.e. Small Townhome/Large Apartment	$20,678.15
Category D - i.e. Small Apartment	$15,801.53
Category E - i.e. Special Care/Special Needs	$14,046.72

The posted development charges may not apply to any calculated development charge rates determined as per section 26.2 of the Development Charges Act, 1997. 

The rates shown above do not include any Region of Durham of DDSB/DCDSB development charges that may also be payable.

Additional information regarding development charges can be found on the Town of Whitby Development Charge Webpage.

Fred Petrich, owner of DFP Surveyors, passed away on November 19, 2023.

There will be a celebration of life on November 29, 2023 from 1 p.m. to 4 p.m. at the Oshawa Golf Club, 160 Alexandra Street in Oshawa.

Please join us to celebrate Fred's life. He will be remembered fondly by friends and family in a setting befitting of someone so gregarious. Whether at the office, the rink or the golf course, Fred was known for capturing a room with a masterfully told joke or story. We hope to honour his memory with our own stories and memories of him.

Read full obituary here.

In the dynamic landscape of Ontario’s home-building industry, effective advocacy and lobbying play pivotal roles in shaping policies and influencing decisions that impact our industry and communities. As we navigate the intricate world of lobbying in Ontario, our upcoming OHBA Member Webinar seeks to shed light on the legal, reputational, and political risks associated with advocacy, empowering you with the knowledge necessary to use your voice and influence effectively.

Navigating Lobbying: Exploring the Legal, Reputational and Political Risks

Tuesday, December 12, 2023

8:30 – 9:30 AM EST

Join OHBA for an enlightening session that explores the nuances of advocacy and lobbying, providing valuable insights to foster a deeper understanding of its role within our industry and beyond. Led by legal experts Guy W. Giorno and Kyle M. Morrow of Fasken LLP, this webinar will:

• Explore the ethical restrictions on lobbying, including the restrictions on political activities, contingency fees, and conflicts of interest;
• Offer tips for complying with legal rules, including the rules on gifts, meals and hospitality;
• Explain lobbyist registration requirements at the municipal, provincial, and federal levels of government, including those that apply to your company; and
• Provide an update on enforcement trends in quasi-criminal and criminal proceedings.

Registration

This FREE webinar is open to OHBA Members and HBA Staff.

Registration is required, and membership status will be verified.

Secure your spot by Friday, December 8

Register Here!

On Wednesday, November 22, Minister of Public and Business Services Delivery (MPBSD), the Hon. Todd McCarthy introduced Bill 153, Building Infrastructure Safely Act, 2023,  which aims to improve the safety and efficiency of the Ontario "One Call" system.

The fact that the government is turning its attention to addressing issues with One Call and the locates system is a step in the right direction. OHBA has been engaged in communicating to the provincial government that the inability of One Call to meet locate timelines poses significant liabilities to construction deadlines, costs, and delivery of their own housing commitment of 1.5 million homes over the next decade.

One Call is mandated under the One Call Act to serve as a single point of contact for all underground infrastructure locate requests. Locates are written information and markings on the ground which identify underground infrastructure (e.g., gas, water and sewer lines). All owners and operators of underground infrastructure must become members of One Call. One Call's members include gas, electrical, telecommunication companies, and all municipalities that own or operate underground infrastructure in Ontario.

Ontario Newsroom: Ontario Helping Contain Costs of Building Roads and New Homes

Read Legislation: Bill 153, The Building Infrastructure Safely Act, 2023

Background On Proposed Changes

The government is proposing substantive changes to the operation of One Call in Bill 153, including:

1. Prohibiting infrastructure owners from charging excavators for locates.

2. Removing the excavator recourse provision that entitles excavators to seek recourse from infrastructure operators for late locates to the Ontario Land Tribunal for failing to provide a locate within the legislated time limit. Fines for late locates are going to be addressed by an administrative penalties system that comes into effect in Spring 2024.

OHBA Position

The OHBA remains encouraged by the announcement that proposes measures to forbid infrastructure operators from charging for locates. The long-standing industry practice of free-of-charge locates is critical for the construction sector to avoid spiralling costs and delays. The OHBA was highly engaged in communicating this to the government and is encouraged that the Ministry has listened to stakeholders about the importance of free-of-charge locates to keep unnecessary additional costs off home buyers.

What remains disappointing in this legislation is that there are no proposed changes to further improve the certainty of timing for locates to be completed. Delays in locate requests can often take unnecessarily long, thus slowing down construction activity across the residential construction sector as well as housing supportive infrastructure (roads, bridges, water and sanitary sewers, transit, etc.) at the time when it is needed the most.

The most important features of the One Call system are that it should be free-of-charge, accurate, and timely. All other proposed changes, legislative or regulatory should be focused on improving the timely service delivery of locates. The OHBA will be strongly advocating for the government to continue to engage the residential construction sector to find new and innovative ways to improve the One Call system.

Read OHBA Submission – RE: Consultation on a draft regulation proposal to specify large project locate requests under the Ontario Underground Infrastructure Notification System Act, 2012

Next Steps

The OHBA will continue to communicate its member's priorities and concerns to the government on the proposed legislative and regulatory changes coming from the Building Infrastructure Safely Act, 2023. OHBA will be preparing written submissions to respond to the Ontario Regulatory Registry postings (due by December 22, 2023) and requesting to appear at the public consultations to speak on the proposed changes from Bill 153.

CLOCA has released its proposed annual increase to its Fee Schedules for Planning Services and Regulation Services.

When the CLOCA Board of Directors considered the comprehensive update to their fee schedules in 2015, the principle of annual inflationary increases was endorsed in order to keep the fee schedules current and to avoid future large year-over-year increases to the fees.

The revised fee schedules provide for a 4% inflationary increase proposed to be effective on January 1, 2024 (the previous increase effective November 2022 was 7%).  No new fees are proposed and the structure of the fee schedules is proposed to remain unaltered.

The 2024 fee schedules and annual updates are also intended to support and build CLOCA's staff capacity to maintain or reduce review time.  For example, this year, CLOCA increased their staff capacity for Whitby and area with a new Development Planner position.

Staff are proposing that the schedules be approved at the November CLOCA Board of Director's meeting scheduled for Tuesday, November 21st.

If you have any comments, concerns or questions, please contact Stacey.