Item - 2022.IE29.9

Speaker Nunziata advised City Council that Confidential Attachment 1 to the report (April 8, 2022) from the Executive Director, Environment and Energy had already been made public on May 5, 2022 and accordingly, the Item should now be received for information.

The Infrastructure and Environment Committee recommends that:

1. City Council authorize the public release of Confidential Attachment 1 to the report (April 8, 2022) from the Executive Director, Environment and Energy, following the expected announcement of funding for the Deep Retrofit Challenge by Canada's Federal Government

On May 2, 2022, the Executive Director, Environment and Energy advised that the Government of Canada has made public the information in Confidential Attachment 1 to the report (April 8, 2022). As a result, Confidential Attachment 1 is now public in its entirety.

This report provides City Council with an update of the City's new Deep Retrofit Challenge and the receipt of federal funding to support this new program.

The City has secured financial support from the federal government to support deep energy retrofits resulting in significant emissions reductions in buildings that undergo a deep retrofit. Almost all buildings within Toronto are required to undergo deep energy retrofits to achieve the City's net zero greenhouse gas emissions climate target. The definition of a deep energy retrofit is a major renovation project in which the building energy usage has been reduced by at least 50 percent - although additional savings may be required to reach Toronto's emissions target. The total amount of funding is currently confidential pending federal announcement – details are provided in Confidential Attachment 1.

A new City program, the Deep Retrofit Challenge, was developed to enable demonstration projects that will accelerate the deployment of high efficiency retrofits of buildings in Toronto. The program is expected to open for applications in the Second Quarter 2022. Almost all buildings within Toronto will need to undergo deep energy retrofits to achieve the City's net zero climate target. It is important to note that many newly constructed buildings, even those that meet the Toronto Green Standard, will need to undergo major retrofits to convert heating systems from fossil fuels to electricity (at least those buildings before Toronto Green Standard Version 4 Tier 3 "Near Zero Emissions" applies in 2028). The Deep Retrofit Challenge is expected to act as a catalyst for early voluntary compliance with actions identified in the City's Net Zero Existing Buildings Strategy and help drive adoption of Toronto's net zero by 2040 goal.

The Deep Retrofit Challenge is a competition style program that will support a number of retrofit projects to significantly reduce greenhouse gas emissions in the multi-unit residential building and mid-tier commercial building sectors and serve as a demonstration of next generation retrofits to accelerate market adoption. Participants will collaborate and compete with the highest performing projects receiving awards based on measured emissions reduction performance. The Deep Retrofit Challenge will award grant funding to selected participants to help offset the cost of performing a deep retrofit of their buildings, with portions allocated for design, construction and confirmed emissions performance. Additional details of eligibility will be released with the program.

The Deep Retrofit Challenge participants will be required to share data on project budget, design and emissions and energy data.  Program data shall be open-sourced, to allow others to benefit from the approach taken and provide clear evidence of benefits achieved by the deep retrofit projects. The Deep Retrofit Challenge participants are expected to participate in the initial cohort of volunteers for actions 1-3 of the City Net Zero Existing Buildings Strategy as these are actualized into City programs. These actions include:

1.    Annual emissions (and energy) performance reporting, public disclosure and labelling

2.    Greenhouse gas emissions performance target

3.    Performing energy and emissions audits and tune-ups (at regular intervals)

Project selection is slated to occur in the Fourth Quarter 2022 with participants completing incremental design activities in 2023. Participants will have until the First Quarter 2025 to complete construction of the deep retrofits. Measurement and verification of project performance will follow with planned program windup in the Second Quarter 2026.

Participants will be encouraged to apply to existing City programs such as Energy Retrofit Loan to assist in funding the projects. The City will provide an in-kind contribution in the form of staff time to administer and promote the program, as well as supporting knowledge transfer and recognition of these transformational projects.