CPM Spring 2026

FOR BUILDING OWNERS, ASSET AND PROPERTY MANAGERS

VOL. 41 NO. 1 • SPRING 2026

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editor’snote

EXPERIENCE IN A CYCLICAL SECTOR doesn’t protect

real estate practitioners from the fallout of a downturn, but it does

perhaps insulate them from paralytic astonishment when shocks

occur. This time last year, many were tentative as they digested

tariff threats and a sudden blast of economic uncertainty. There

was talk of sidelined investment and waiting cautiously, along

with hopes for a relatively quick resolution of trade tensions.

Today, there is arguably even more geopolitical uncertainty, yet

trepidation seems less apparent. In public industry forums, real estate

investors, managers and operators are highlighting opportunities and

sharing strategies for adapting, surviving and thriving.

In this issue, we look at renewed optimism in the office market,

ambitious plans in the tourism sector and the continuing push to

integrate sustainability with investment performance. Industry insiders also express confidence

in industrial and retail assets and suggest a current dip in multifamily rental prospects won’t be

long-lasting. Meanwhile, data centres are drawing steady interest that’s in sync with Canada’s

ambitions for economic growth rooted in clean and smart technologies.

An associated agenda to broaden the base of Canada’s trade partners reminds us, too, that

sustainability, climate risk resilience and disclosure are competitive strengths that will influence

business with and investment from Europe and Asia Pacific. And that comes with the bonus of

operational efficiencies, reduced reliance on non-renewable resources and mechanical

intervention for heating and cooling, and enhanced capacity to keep functioning through power

outages and other disruptive events.

“Quality assets attract more investor interest. They’re viewed as lower risk by most insurers

and they simply are resilient — physically and, increasingly now, financially,” Brent Gilmour,

Chief Commercial Officer with the Canada Green Building Council, asserted during a seminar

earlier this winter probing the symbiosis of sustainability, finance and business. “This is not a

niche. It’s a material economic lane. It’s directly connected to productivity, competitiveness and

how capital will flow in the built environment over the decades ahead.”

We report on some of the insights from that seminar in this issue. The issue also features the

31st edition of the Who’s Who in Canadian Real Estate survey. Thank you to Jason Krulicki

and Gerald Ngan for collecting and coordinating this year’s results.

This spring finds us adjusting to the sad absence of our long-time Art Director, Annette

Carlucci, who died in January 2026. Annette devised the signature look of Canadian Property

Management and a wide array of other MediaEdge print publications, and produced each issue

with discerning flair, professional commitment and good humour toward her coworkers. She

was a talented and respected colleague, and a true friend. We miss her very much.

Barbara Carss

barbc@mediaedge.ca

Authors:

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Canadian Property Management | Spring 2026 3

contents

Focus: Real Estate Trends & Context

6 Office Ascendant: Resurgent market lures back

lenders and investors.

14 Inviting Properties: Tourism promoters pitch

Canada as a destination for investment returns.

18 Capacity for Improvement: Class B assets hold

future promise.

23 Who’s Who in Canadian Real Estate: The 31st

annual survey of the industry’s players and

portfolios in the office, industrial, retail and

multifamily sectors.

30 Vague Value: Green premiums are still more

intuitive than tangible in Canada.

38 Budget Blow: British Columbia’s real estate

sector gets a provincial sales tax surprise.

Articles

34 Enlisting Emitters: Compulsory carbon market

participation could expand.

37 Converging Agendas: Canadian content rules

contemplated for clean technology tax credits.

Departments

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OFFICE

ASCENDANT

Resurgent Market Lures Back Lenders

By Barbara Carss

THE FINANCIAL SERVICES sector provides

dual momentum for Canada’s resurgent

office market. As a tenant, it’s ramping

up demand for space. As a lender, it’s loosening

access to capital and easing uncertainty

that has kept investors on the sidelines.

Recently released findings from CBRE

Canada’s annual survey of lenders’ intentions

for commercial real estate show a

marked turnaround in attitudes from earlier

in the decade. Respondents — representing

47 financial entities that collectively hold

more than $200 billion worth of Canadian

commercial real estate loans — ranked

downtown Class A office as one of their

most favoured asset sub-classes among 22

possible choices, while downtown Class A

and B and suburban Class A office recorded

the most positive gains in perception relative

to their 2025 rankings.

That’s seen in the 45% of survey respondents

who plan to increase their loan books

for office in 2026 — an intention that just

7% of participating lenders indicated in

2025 and none committed to in 2024. While

93% of respondents decreed that office

posed an elevated credit risk on refinancing

in 2024 and 71% offered that opinion

in 2025, just 32% voiced such reservations

this year.

“From zero to hero. Lenders are ready to

support the asset class again,” Joshua Sonshine,

a Senior Vice President with CBRE

Capital, observed in late February, as he

presented an overview of the survey results

in conjunction with the Real Capital conference

in Toronto. “It’s tied directly to improving

market and cashflow fundamentals,

most notably renewed leasing momentum

and a steady reduction in vacancy.”

Lenders, investors and real estate operators

link their optimism to a leasing uptick.

That’s coming through in both hard data for

vacancy rates and anecdotal evidence.

“Looking across our portfolio, tour activ-

6 Spring 2026 | Canadian Property Management

assetperformance

ity is absolutely up. The number of RFPs in

the market are absolutely up. We’re signing

more deals,” Scott Gordon, Head of Asset

Management with Manulife Investment

Management, told attendees on hand earlier

this winter to learn how institutionally

held assets in the MSCI REALPAC Canada

Property Index performed in 2025.

PRIMED FOR CAPITAL GROWTH

Those results confirmed a positive average

total return (2.1%) across the office assets in

the index for the first time since 2021. Office

was the second best performer of the four

core asset sub-classes measured, ahead of

retail and multifamily residential, after consistently

bottoming out the field from 2021

to 2024. Peter Koitsopoulos, Vice President,

Real Estate Client Coverage with the index

producer, MSCI, also attributed Toronto’s

regional outperformance of Montreal to its

“office-heavy” profile.

“One thing I want to stress here is that the

capital values are still negative, but the income

return story has improved for office,”

he said.

Across the broad index, the average value

of office holdings has been in decline for six

consecutive years, with drops in the 10%

range in both 2022 and 2023 and a further

5.5% reduction in 2024. Average value

nudged down an additional 3.4% last year.

Industry insiders participating in a panel

discussion alongside the release of the lenders’

survey results suggest the conditions are

right for a reversal of that trend, although,

for now, that’s most noticeable for Class A

assets in select markets like downtown Toronto

and Vancouver. Kevin Leon, founder

and President of Crestpoint Real Estate Investments,

cited a combination of factors

including the leasing uptick in the third and

CANADIAN REAL ESTATE

UNDERPERFORMS GLOBALLY

Institutional investors garnered anemic returns from their Canadian commercial real estate holdings

in 2025. Results from the MSCI REALPAC Canada Property Index peg the all-asset average

total return at 1.3% across 50 portfolios collectively valued at roughly CAD $160 billion. The average

total return on 2,171 standing investments came in at 2.1%, based on 4.9% income return

against a 2.7% decline in capital value.

Canadian returns in 2024 were middling in the pack of countries represented in MSCI’s global

property index, but were near the bottom for 2025. That’s also in a year when equities and bonds

made significantly better gains.

“Canadian real estate is one of the worst performing markets globally, sorry to say,” Peter

Koitsopoulos, MSCI’s Vice President, Real Estate Client Coverage, told a gathering on hand in

Toronto earlier this winter for the release of the index results.

Underperformance relative to the global benchmark is attributed to geopolitical and interest

rate uncertainty, and the slower readjustment of values compared to countries where write-downs

occurred earlier in the decade and recovery is now underway. This was the fourth consecutive

year of shrinking capital value for the index’s standing assets, following declines of 2.9% in 2022,

4.6% in 2023 and 1.6% in 2024. (Prior to that, the index had registered negative capital growth just

three times in the 21st century, in 2008, 2009 and 2020.)

“In many cases, what we did see when properties would sell, they sold below book value in

our index,” Koitsopoulos reported. “Canada has been in a market where we’ve been taking slower

write-downs over a prolonged period of time.”

“We were expecting a year, maybe two, but we weren’t expecting another year of repricing so

that was kind of surprising,” acknowledged Tamara Lawson, Chief Financial Officer with QuadReal

Property Group, who participated on an industry executive panel tasked with providing on-thespot

feedback on the results. “Canada has lagged in terms of repricing because our market is

typically a more stable market globally. The thinking had generally been that repricing wouldn’t

continue into this last year and we’d see better returns overall.”

Nevertheless, MSCI analysts and industry insiders found some upbeat elements in the results.

Notably, office rebounded into positive territory, largely on the strength of income return.

A 2.1% average total return positioned it as the second best performer among the four main

property types — trailing industrial’s 2.9% total return, but ahead of retail at 1.9% and multifamily

residential at 1.4%.

Among regional markets, Koitsopoulos identified Toronto’s “office-heavy” profile as a differentiator

in surpassing Montreal’s performance, while his colleague, Jim Costello, MSCI’s Chief

Economist, Real Assets, noted the office sector’s contribution to the overall 4% year-over-year

increase in transaction volume.

“That’s not the most fantastic growth, but growth is growth. There has been a little bit every year

since the collapse following the low interest rate environment of 2022,” Costello said. “The office

sector and retail had better growth than industrial and the apartment sector. Those sectors were

quite negative for a time, so I view that as a bit of a positive.”

Koitsopoulos connected that trend to a steady nudging up in income return.

“The yields that someone can get in terms of buying commercial real estate have improved.

That does bring back activity to the market and that’s a very important story,” he submitted.

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assetperformance

FEDERAL HYBRID

WORK MODEL

TIPS TOWARD

OFFICE

The Canadian government’s hybrid work

model is tipping decisively back to the formal

office. Instructions from the Treasury Board of

Canada Secretariat outline expectations that

executive level public servants will spend five

days per week on-site in their departments as

of May 4, while the remainder of direct federal

employees return for a minimum of four days

per week, beginning July 6.

“Separate agencies are strongly encouraged

to take a similar approach,” states a com

munique from senior Treasury Board staff.

“The Government has put forward ambitious

plans to deliver on priorities for Canadians and

to strengthen our country. Working together

on-site is an essential foundation of the strong

teams, collaboration and culture needed during

this pivotal moment and beyond.”

The Building Owners and Managers Association

(BOMA) of Ottawa called for this kind

of action last fall after both the Ontario government

and the City of Ottawa announced returnto-office

mandates for their public servants.

“A thriving downtown supports local businesses,

strengthens transit systems, attracts

private investment and reinforces Ottawa’s

role as a hub for tourism, culture and commerce,”

BOMA Ottawa President, Jen Arbuckle,

maintained in a letter to Ottawa Mayor

Mark Sutcliffe. “We can all agree that a convergence

of municipal, provincial and federal

in-person work standards would enhance

mentorship, inter-agency coordination and

the shared civic identity that resonates most

effectively when public servants can engage

face-to-face with each other and with the business

community.”

Unions representing federal government

workers have not been receptive to that assertion.

They contend the new policy will undermine

productivity and hinder prospects

to realize cost savings from reducing federal

office space inventory. They also accuse the

government of acting in bad faith at a time

when it is simultaneously negotiating collective

agreements that address the issue of

remote work.

“It is insulting for any employer, let alone the

government, to change the conditions of work

while its workers are in bargaining,” maintains

a statement from the Public Service Alliance

of Canada. “PSAC will be fighting this irresponsible

decision every step of the way. We

are prepared to take any legal action against

changes to the in-office mandate.”

fourth quarters of 2025, unsettledness in

equities markets that had previously been

“on fire” and business leaders shaking off a

prolonged period of decision-making inertia

following the COVID 19 pandemic.

“I think the capital markets turned for

office four to six months ago. We see the

fundamentals getting better and now, with a

little bit of volatility in the equities market,

people are saying hard assets are where it’s

at,” Leon mused. “There are more positive

assumptions going into underwriting in the

office market today than there have been in

the last four years, and that’s where you see

buyers step up and say: I’m on the cusp of

something that’s really going to take off.”

In Toronto, where the downtown Class A

vacancy rate eased from 16.7% in December

2024 to 12.1% at year-end 2025, more

buildings now qualify for better financing.

That’s because lenders typically rely on the

most conservative baseline — either the actual

vacancy or the broader market vacancy

— when they calculate a building’s potential

net operating income (NOI).

“Vacancy is not just a market statistic; it

is a central input in every lender’s underwriting

model. During the height of uncertainty,

even a fully leased building could

not escape the drag of high market vacancy.

For an office building that is 100% occupied,

a 460-basis-point decline in [market]

vacancy can swing the underwritten NOI

meaningfully,” Sonshine explained. “As vacancy

continues to fall and leasing activity

continues to strengthen, lenders’ underwriting

assumptions are significantly improved.

With stronger NOI comes better debt service

coverage, more deals pencil, more

capital flows and more confidence returns

to the office sector.”

Few expect the renewed influx of capital

will be channelled to new development, but

corporate egos and a scarcity of Class AAA


assetperformance

space could spur some action if investors

have pre-leasing assurances.

“I do think there will be a value proposition

for a larger tenant that wants its name

on a new building. We’ll see something like

that in Toronto or Vancouver,” Leon hypothesized.

“I don’t think you’ll see buildings

built on spec for four or five years or perhaps

longer.”

ACQUISITIONS AND UPGRADES

In the interim, existing office stock could

harbour some outsized returns on investment.

Institutional investors theorize that

the timing is right to “find alpha” in competitively

priced assets with the potential to

command higher rents, but it will likely take

savvy management and strategic capital expenditures

to extract them.

Gordon acknowledged Manulife is “still

kind of fighting in the trenches” to lease

Class B buildings, but he sees a definable

pocket of demand that can grow in step with

other segments of the market. (See story,

page 18) Meanwhile, older Class A buildings

are already reaping positive spillover

from tighter availability within trophy assets,

and early bird shoppers aren’t likely to

encounter a lot of competition for product.

“There are some great deals to be had, but

those landlords who are still over-allocated

to office, they’re probably going to stay on

the sidelines for awhile until they rebound,”

Gordon said. “For asset managers, it’s a

question of how are you going to get the

economics?”

Leon advised targeting the needs of prospective

tenants.

“You want tenants to come into the building

and feel good about where they are, but

you have to read the value proposition because

that could mean different things,” he

said. “Some of it could be services and amenities.

Some of it could be purely on costs.”

For investors with a deep retrofit in their

value proposition, the news isn’t necessarily

upbeat on the financing front. For 2026,

37% of surveyed lenders said they would

offer tighter credit spreads for loans with

strong sustainability metrics, representing

a 4% decrease in willing lenders from the

previous year. In 2025, 19% of respondents

indicated that they planned to begin offering

spread discounts for sustainability “in the

near future”, but only 5% made that pledge

this year.

This year, about 20% of lenders are prepared

to offer spread discounts of 5 to 9 basis

points (bps) for sustainability and 17%

would tighten credit spreads by less than 5

bps. Last year, roughly 27% indicated they

would offer sustainability-related spread

discounts of up to 9 bps; 12% promised 10

to 14 bps; and about 3% said they would

convey discounts of 15 to 19 bps.

Just 8% of surveyed investors perceive

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assetperformance

“There are more positive

assumptions going into

underwriting in the office market

today than there have been in

the last four years."

that a building’s carbon footprint currently

affects the availability and terms of financing,

even though 17% expressed that opinion

in 2025. Correspondingly, 20% of respondents

do not foresee that a building’s

carbon footprint will ever be a factor in loan

availability or terms — up from the 11% of

respondents who held that view in 2025.

Nevertheless, lenders specializing in sustainable

finance flag office building retrofits

as a potential growth area. Speaking at

a recent seminar sponsored by the Canada

Green Building Council (CAGBC), Melissa

Menzies, Director of Sustainable Finance

with Scotiabank, reported continuing high

demand for green bonds from Canadian in-

The 2026 Canadian Real Estate Lenders’ Report

can be found at www.cbre.ca/insights/reports/

canadian-real-estate-lenders-report-2026.

26_000609_Canadian_Property_Management_Spring_CN Mod: February 18, 2026 8:41 AM Print: 02/19/26 page 1 v2.5

stitutional investors. As well, her bank and

others of Canada’s big six now offer blended

loan rates with Canada Infrastructure

Bank, which extend more preferential rates

based on delivery of greenhouse gas (GHG)

emissions reductions.

“There isn’t as much net new green

buildings being built across a variety of asset

classes. Obviously, office has been a bit

of a challenging asset subclass where we’re

seeing a slower development pipeline, but

still see opportunities to enable emissions

mitigation and reduce energy use within existing

buildings,” Menzies observed. “Once we

have some tangible case studies, and we can

show a lot of these financial metrics across

different geographies and make the business

case by example, I think that’s going to be a

really big topic for the next five years.”

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INVITING

PROPERTIES

Tourism Promoters Pitch to Real Estate Investors

TOURISM PROMOTERS are pitching

Canada as a destination for investment returns.

Several organizations recently joined

forces to highlight potential opportunities in

recreational, leisure and entertainment assets

at MIPIM, the international gathering

of property professionals held annually in

Cannes, France.

“The level of interest in Canada from

investors and media across the real estate,

hospitality and mixed-use sectors at MIPIM

exceeded our expectations,” reports Gracen

Chungath, Senior Vice President, with Destination

Canada, a federal Crown corporation

that provides marketing, research and

facilitation services for the tourism industry.

Last year, Canada’s tourism sector generated

an estimated $134 billion in revenue

— flowing through to roughly 265,000 businesses

in 5,000 regions and communities

nationwide — and those annual earnings are

projected to reach $178 billion by the end of

this decade. International visitors constitute a

Canadian export market, with the added bonus

that the goods and services they consume

while in the country are tariff-free.

Foreign travellers are tapped as a lucrative

customer base toward the target of doubling

Canadian exports outside the United States

over the next 10 years. It’s envisioned that

visitors from countries other than the U.S.

could pump an extra $24 to $30 billion annually

into the Canadian economy by 2035,

but tourism promoters identify a corresponding

need for attractions and related services to

complement and augment existing lures.

The 30-member Team Canada delegation

to MIPIM included representatives from

Vancouver, Kamloops, Winnipeg, Toronto,

Ottawa, the Tahltan Nation in northwest

British Columbia and the Cape Breton region

of Nova Scotia — all seeking to forge

connections with prospective investors in a

range of projects that could serve the sector.

That includes experiential retail, accommodations,

venues for culture, entertainment

and recreation, and sustainable and regenerative

approaches to tourism.

“The collective approach we took at

MIPIM across jurisdictions, levels of government

and the public and private sectors will

continue to guide this work,” Chungath says.

TIMING FOR THE UP CYCLE

The timing could be right to capitalize on

Canada’s growing share of global tourism

spending and perceived bargains in its institutional

grade assets. Canada was one of the

worst performers in MSCI’s global property

index for 2025, posting an average all-asset

total return of 1.3% and the fourth consecutive

year of declining capital value, averaged

across 2,171 assets held in 50 institutional

portfolios in MSCI’s Canada property index.

(See story, page 7)

However, industry insiders suggest that

could deliver an upside here that won’t be

found so readily in markets closer to the

peak of their cycles.

“If you’re an investor, do you want to go

hunting now in Europe?” Ugo Bizzarri, Chief

Executive Officer of Hazelview Investments,

observed earlier this winter when called upon

to assess the 2025 investment results. “I’m

selling Europe and buying Canada.”

Meanwhile, CBRE Canada’s 2026 survey

of 47 financial institutions that collectively

hold more than $200 billion worth of Canadian

commercial real estate loans reveals

38% are planning to increase their loan books

for hotels this year and 55% have expanded

budgets for retail. Lenders ranked hotels (9th)

and entertainment-focused retail (11th) relatively

favourably among 22 asset subclasses.

HOTEL DEMAND

Digging deeper into the survey findings in a

presentation during last month’s Real Capital

conference in Toronto, Joshua Sonshine,

a Senior Vice President with CBRE Capital,

noted that lenders have generally had more

success fulfilling their budget intentions for

hotels than other property types within the


assetperformance

sought-after alternative assets class that are

still at a more nascent scale in the market.

“Hotels have seen fundamentals improve.

Financing is available, accretive and competitive,

and the deal flow is much more

tangible than data centres and life sciences,”

he said.

Colliers Canada’s recently released 2026

Canadian hotel investment report concurs

that there is “robust” availability of capital,

supplied by schedule 1 banks, cooperatives

and credit unions. Hotel investment companies,

real estate owners/investment managers

seeking portfolio diversification and

non-traditional hotel developers that see

promise in current hotel room shortages in

some markets could all potentially be players.

Nevertheless, Colliers analysts caution

that foreign investors have historically preferred

“large portfolio acquisitions” over

one-offs, while the economics of new construction

may not yet be workable.

Last year saw $2.3 billion worth of transactions,

a 16% jump from 2024, while the

average per room price of $219,000 was up

36% year-over-year. In contrast to the years

of pandemic fallout earlier in the decade, just

1% of last year’s sales volume was due to

distressed sales and just 2% of transactions

removed hotel stock to be converted to other

uses. Both domestic and international

travel are identified as drivers of demand.

“A weaker Canadian dollar and the rebound

of long-haul markets, including

China, continue to enhance Canada’s global

value proposition,” the Colliers report states.

“Resort and gateway markets — from Vancouver

Island, Whistler and Alberta’s mountain

regions to Toronto, Vancouver and Montreal

— remain highly sought after, supported

by strong air connectivity.”

CANADA SEES UPTICK IN

INSTITUTIONAL INVESTMENT

Institutional investment in Canadian commercial real estate began to rebound last year and is

projected to keep ticking up in 2026. JLL reports institutional investors — including fund managers,

pension funds, REITs and foreign investors — deployed nearly $15 billion toward Canadian

assets in 2025, representing about one third of investment deal volume for the year and their largest

share of acquisitions since 2021.

“Since these groups generally encompass the largest and most experienced investment funds

in the market, this resurgence underscores a consensus that Canada is entering a new capital

cycle characterized by stronger market fundamentals and improving returns,” observes the real

estate advisory firm’s overview of 2025 performance and expected 2026 trends.

CBRE Canada likewise identifies institutional investors as a driving component of acquisitional

momentum this year. The firm is forecasting an 8% year-over-year increase in deal volume, pushing

it up to about $56 billion worth of activity over the course of 2026.

“Global capital is also increasingly looking to Canada as a market of relative stability amid

rising geopolitical tensions. Meanwhile, a significant rebound in real estate debt markets has supported

greater liquidity across all asset classes, including the office sector,” CBRE analysts state

in the firm’s 2026 outlook report.

On the flipside, Canadian institutional investors pulled back from the United States last year.

Although Canadian investors as a whole continue to hold more assets in the U.S. than any other

foreign market, activity decreased to a record low share of outbound capital.

“Canadians were net sellers of U.S. real estate in 2025. They sold a whole lot more than they

bought,” reported Jim Costello, MSCI’s Chief Economist, Real Assets, while speaking in Toronto

in conjunction with the release of the 2025 results of the MSCI REALPAC Canada Property Index.

Nevertheless, a surge in data centre investment, to the tune of about CAD $2 billion, somewhat

masked that imbalance. Costello identified the emergent alternative sector as one alluring element

of an otherwise less-than-compelling investment landscape.

“The returns have turned positive, but still not so fantastic. You can earn more investing in debt

in the United States today than you can investing in the equity stack,” he said. “That’s a good reason

for Canadian investors to not be thinking about the United States at the moment, and when

you pile all the uncertainty coming from the geopolitics on top of it, it’s not surprising to me that

you see a pullback.”

– REMI Network

TRANSFORMATIVE RETAIL

The upheaval that the Hudson’s Bay Company’s

(HBC) bankruptcy caused for owners of

super-regional malls is apparent in the Canada

Property Index. In 2024, the asset subclass

delivered a 6.1% average total return; in

2025, that plummeted to negative 0.2%.

In 2024, retail was the top performer

among the four asset classes monitored in

the index, with an average total return of

6.5% — breaking down to 0.8% capital

growth and 5.6% income return. In 2025,

retail fell to third place, behind industrial and

office, while recording a 1.9% average total

return and suffering an average 3.6% decline

in capital value. A spate of regional mall


assetperformance

COMPETITION BUREAU POLICES

RETIREMENT HOME SECTOR

Two retirement home operators have been compelled to divest properties as a condition of

regulatory approval to acquire Canadian portfolios. The Competition Bureau of Canada recently

negotiated agreements with Chartwell and U.S.-based Welltower Inc. that will allow two

deals, worth roughly $5 billion, to proceed.

Welltower will sell four of its existing retirement homes located in Vancouver, Victoria, Brampton

and Ottawa so that it can move forward with the $4.6-billion acquisition of the Amica Senior

Lifestyles portfolio from the Ontario Teachers’ Pension Plan. That deal, which was first announced

in March 2025, included 31 luxury retirement homes, seven projects under construction,

nine development sites with secured municipal approvals and a minority interest in Amica’s

management company.

Chartwell will sell off its Clair Hills retirement residence in Waterloo, Ontario, in order

to complete the transaction for the six-building Sifton Properties portfolio. The $432-million

deal, first announced in July 2025, was for a total of 1,024 suites and 29 townhomes under

construction.

In both cases, the Competition Bureau cited concerns about concentrating ownership of

retirement residences in particular markets where the prospective purchasers already had a

presence. The agreed upon divestitures were deemed a satisfactory solution.

“As the Canadian population ages, the retirement home industry becomes even more important,

with demand expected to accelerate rapidly over the next decade. Competition in the

retirement home sector plays a crucial role in keeping prices in check and pushing providers to

maintain high standards of care and modern, well-maintained facilities,” a statement from the

Competition Bureau maintains.

sell-offs also underpins the net divestment of

nearly $1.8 billion worth of retail property from

the index over the course of the year.

Yet, looking to the future, those dynamics

could gel with tourism promoters’ aims. Participating

in the panel discussion in conjunction

with the 2025 investment results release,

Tamara Lawson, Chief Financial Officer with

QuadReal Property Group, cited her company’s

success in fully leasing the ambitious,

high-end redevelopment of the Oakridge Park

retail centre in Vancouver.

That was to have included a space for the

incumbent tenant, Hudson’s Bay Company,

which has now been freed up for other retailers

and uses. She speculated that other mall operators

have likewise moved beyond the initial

shock of the sudden vacancy to adopt an upbeat

outlook on the prospect for more dynamic tenants

with the potential to pull in more customers.

“Our focus is really on transformative retail,”

Lawson said. “It’s no secret that Hudson’s

Bay wasn’t paying a lot of rent. When

it has all worked through the system, people

actually talk about it as a positive.”


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assetperformance

CAPACITY FOR

IMPROVEMENT

Class B Inventory Holds Future Promise

By Barbara Carss

A NEW STREAM of incentives to extract

energy saving potential in Class B and C

buildings dovetails with projections about

their future competitiveness in a recovering

office market. For now, elevated vacancy

rates continue to plague this subset of the inventory,

but some investors are eyeing it as a

good bet for future returns given anticipated

scarcity of Class A and AAA supply.

“Our development cycles are, generally

speaking, at a standstill. Save for a few potential

projects, we’re in a position of limited

new inventory over the next three to five or

potentially seven years. Tenants will be

forced to seek alternative opportunities to a

very tight AAA and A class market,” says

Brendan Sullivan, Senior Vice President, Office

Leasing, with CBRE Canada. “We’re at a

moment in time where it’s very important for

landlords of B class office buildings to understand

the opportunity that exists today, and,

more importantly, will exist in the future.”

Still, there’s no prediction for a quick,

universal or effortless improvement in those

landlords’ fortunes. CBRE Canada’s recently

released data for the first quarter of 2026

reports a 24.3% national vacancy rate for

downtown Class B and C office stock —

a drop of 100 basis points (bps) from 12

months earlier, but just 10 bps lower than at

the end of Q1 2024 and 160 bps higher than

the B/C vacancy rate for the first quarter of

2023. Consistent with Sullivan’s hypothesis,

a steeper year-over-year dip in downtown

Class A (210 bps) and trophy status (160

pbs) office vacancy illustrates where leasing

momentum is currently occurring.

Toronto, which is leading the trend, posted

a third consecutive quarter with more

than 1 million square feet of positive absorption

downtown. A record high tally of

2.1 million square feet of absorption in Q1

2026 includes the completion of the fully

pre-leased, 1.4-million-square-foot CIBC

Square II tower, leaving just 420,000 square

feet of in-progress construction yet to arrive

onto the downtown market. The Class A vacancy

rate fell 160 bps during the course of

the winter to end the quarter at 12.1%, while

the total downtown office vacancy rate declined

by 110 bps, to 15.9%.

Analysts with Savills interpret the yearover-year

0.4% drop in average net asking

rents in Toronto’s central business district

as evidence that “lower-tier” inventory

now accounts for a larger share of available

space. The firm’s newly released stats for

Q1 2026 peg those average asking rents at

$62.67 per square foot (psf) versus $45.73

psf across the broader Greater Toronto

Area. Within the central business district,

average asking rents range from $70.10

psf in the financial core to $49.68 psf in

midtown and $47 psf in the King/Dufferin

node, where more Class B and C office

buildings are typically found.


assetperformance

NICHE FOR OUTSIZED RETURNS

That’s happening as investment property

specialists turn back to asset-specific strategies

after an extended run of reaping easy

gains from tilting their portfolios toward

industrial holdings. Last year, the gaps

in performance narrowed significantly

among the four main asset categories monitored

in the MSCI REALPAC Canada

Property Index, which tracks institutionally

held assets, and office registered the

second best average total return after bottoming

out the field for the previous four

consecutive years.

“It’s becoming more of a stock picker’s

market,” Jim Costello, MSCI’s Chief Economist,

Real Assets, told a Toronto audience

assembled earlier this winter for the release

of the 2025 investment results. “It’s a matter

of finding the right properties, understanding

those properties and making sure you

have the right pieces, at the asset level, to

generate income.”

Searchers for potential outsized returns

on investment — dubbed “alpha” — zero

in on properties valued at a discount relative

to the market, which could credibly

command higher rents and operate more

cost-effectively in the future. Class B buildings,

whether newly acquired or long held

in a portfolio, almost inherently fit that bill,

but typically need intervention to deliver on

their promise.

“You create the alpha by running the

property efficiently, doing something to the

property, really increasing your rents,” Ugo

Bizzarri, Chief Executive Officer of Hazelview

Investments, observed during a panel

discussion occurring alongside the release

of the Canada Property Index 2025 results.

That’s not necessarily accomplished solely

through the addition of deluxe amenities

like the conference centres, fitness facilities

and lounges that have been sprouting up in

Class A and AAA space in recent years.

Joining Bizzarri in the panel discussion,

Scott Gordon, Head of Asset Management

with Manulife Investment Management,

suggested non-trophy office assets and markets

beyond Toronto, Vancouver and Montreal

offer some of the best possibilities.

“If you’re in a primary market, yes,

you’re in a stable economy, but it’s hard to

outperform. The almost-primary and secondary

markets are where, from an investment

perspective, you have to spend a lot of

time looking to try to outperform the index,”

Gordon said. “If you put alt [alternative asset

classes] aside, I think office is actually

where you’re going to find alpha right now,

and amenitzing your building is different if

you’re a C or a B versus an A. I think people

who are looking for Class B office are less

concerned about amenities and more concerned

about economics.”

“There are many things on the margin,

from an investment perspective, that can enhance

the experience that an occupant will

have in an office building,” Sullivan concurs.

“Back-of-house things like energy and

water efficiency complement front-of-house

when we talk about amenitization. It’s not

just about what looks good; it’s also about

what’s operationally good, and they have to

meet together and be symbiotic.”

GAME PLAN FOR GAINS

The Building Owners and Managers Association

(BOMA) of Canada has targeted

that sphere via its Enspire program. Newly

launched Retrofit Ready incentives, drawing

on funds from Natural Resources Canada’s

deep retrofit accelerator initiative, include

rebates of:

• up to 80% of the eligible costs of recommissioning

to assess and, where

necessary, adjust mechanical, electrical

and/or automation systems to ensure

they are operating as intended; and

Engineering

solutions that

protect asset

performance

• Building Envelope and Structural Restoration

• Mechanical and Electrical Engineering

• Condition Assessments and Capital Planning

• Energy and Carbon Reduction Planning

• New Construction Design Consulting and

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• up to 60% of eligible costs for the professional

services required to: set up

and configure tracking and monitoring

systems; develop the business case for

a retrofit involving at least $100,000

worth of upgrades; and/or project manage

a retrofit of similar value.

The program reflects the Canadian government’s

capacity-building agenda for the

deep retrofit accelerator initiative, which is

aimed at developing preparedness, delivery

models and expertise to conduct deep retrofits

on the scale and at the pace necessary

to achieve Canada’s targeted reductions in

greenhouse gas (GHG) emissions. (Those

are a 40 to 45% drop below the 2005 level

by 2030 and net-zero emissions by 2050.)

BOMA Canada’s piece of the larger national

puzzle focuses on Class B and C buildings. Adjacent

programs, such as the Purpose Retrofit

Accelerator offered in collaboration with the

Canada Green Building Council (CAGBC),

cover off other building types and economic

sectors, but also channel federal funds to preproject

planning and preparedness to help owners/managers

reap optimal gains from their retrofit

spending. (See story, page 34)

pretiumengineering.com


assetperformance

ONTARIO TO ELIMINATE REBATE ON BUILDING COSTS

There are just eight months left to make use of Ontario’s regional opportunities investment tax credit, which provides a 10% rebate on up to $450,000

of the costs of acquiring, constructing, expanding or renovating a commercial or industrial building in 34 designated jurisdictions throughout the

northern, eastern, central and southwest zones of the province.

The refundable tax credit for Canadian controlled private corporations was introduced in 2020 as an economic stimulus measure in regions where

the employment growth rate lagged the provincial average during the years from 2009 to 2019. In practice, that covers most areas of the province

outside of Ottawa, the Greater Toronto and Hamilton Area, Barrie, Niagara Region, Kitchener-Waterloo and Guelph.

The 10% rebate applies on qualifying expenditures in excess of $50,000 up to a ceiling of $500,000. For investors interested in secondary and

tertiary markets, it is available in several of Ontario’s more prominent mid-sized cities, including London, Windsor, Kingston, Peterborough, Sudbury

and Thunder Bay.

The recently released 2026 Ontario budget points to an employment uptick in the subject regions and the introduction of other tax relief measures

— including a reduction in the corporate income tax rate for small businesses and accelerated write-offs of capital cost allowance, aligned with new

federal tax measures — as the rationale for eliminating the tax credit as of January 1, 2027. It’s projected the rebate’s termination will result in $17

million in additional provincial revenue in the 2026-2027 fiscal year and $70 million in 2027-28.

Last year, two fully subscribed BOMA

Enspire initiatives — Quick Start Assessment

(QSA) and Building Performance Excellence

(BPE) — provided support for 838

projects in 735 properties collectively encompassing

about 43 million square feet of

space. The new Retrofit Ready initiative has

a $4 million budget, of which slightly more

than two-thirds is earmarked for recommissioning

incentives. Program administrators

began processing applications on April 1.

Eligibility is restricted to Class B and C

commercial and institutional buildings in

the range of 10,000 to 250,000 square feet,

built prior to 2016. Office, retail, light industrial,

restaurants, hotels/lodgings and public

sector facilities, excluding those that the

federal government owns and operates, can

qualify for varying maximum amounts of

funding, depending on their size.

The rebate ceiling is set at $125,000 for

buildings in the range of 100,001 to 250,000

square feet; $100,000 for buildings in the

range of 51,000 to 100,000 square feet;

and $75,000 for buildings from 10,000

to 50,000 square feet. Owners/managers

would have to undertake whole-building

recommissioning and all three of the other

designated activities to obtain those maximum

amounts. As well, they can claim only

to a threshold of $500,000 across their entire

portfolio of buildings, including funds previously

allocated for Enspire’s QSA and

BPE initiatives.

Approved candidates are expected to work

with one of BOMA Canada’s registered

service providers, comply with all program

rules, complete projects by Jan. 29, 2027 and

submit required documentation by Feb. 12,

2027. Beyond that, project proponents will

have to secure and invest the capital to move

forward with their retrofit plans.

Meanwhile, some prospective financiers

welcome awareness-building exercises that

could steer more loan applicants their way.

Speaking at a recent CAGBC seminar,

Carla Heim, Director of Sustainability with

the Business Development Bank of Canada

(BDC) acknowledged that the lending institution’s

certified green building loan is “not

flying off the shelves”.

The preferred-rate loan is available for

Canadian entrepreneurs to acquire, build or

renovate a building that has or will achieve

a sustainability certification, and it comes

with what Heim describes as “very simple”

conditions. However, many applicants in the

small and medium-size enterprise (SME)

sector, in particular, are not highly attuned

to sustainability as they grapple with other

economic and growth-related pressures.

“A lot of times, the building is the last thing

on their list [of concerns]. Entrepreneurs are

coming to us with fully baked projects

and they haven’t made any considerations

about sustainability in their buildings,”

Heim said. “We really want to get into that

conversation a lot earlier. I think they would

pursue it because it has a rate reduction for

achieving a building certification, and we’ve

shied away from complicated reporting

requirements that might intimidate them.

Once the underlying condition is met, the

rate reduction can be done.”

More information about the Building Owners and

Managers Association of Canada’s Enspire program

can be found at https://bomaenspire.ca. More

information about the Business Development Bank

of Canada’s certified green building loan can be

found at www.bdc.ca/en/financing/certified-greenbuilding-loan.


Membership

matters

The Commercial Real Estate landscape is changing. Property managers and

stakeholders look to BOMA Toronto for educational support and resources to help

navigate critical issues, deliver operational excellence, and inspire success.

Build your skills. Build you network. Build your career.

JOIN TODAY!

For membership and sponsorship inquiries contact:

Rahim Datoo

Coordinator, Membership Engagement

rdatoo@bomatoronto.org

416.596.8065 ext. 227

Nadeyah Kailan

Manager, Stakeholder Engagement

nkailan@bomatoronto.org

416.560.0428

www.bomatoronto.org

READY. SET. RETROFIT!

NEW FUNDING INITIATIVE:

APRIL 2026 - MARCH 2027

ACCESS FUNDING FROM 60% TO 80% TO IMPROVE

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Visit bomaenspire.ca/initiatives for more information

PRESENTED BY

WHO’S

WHO 2026

ALIGNING THE RIGHT TECH

WITH YOUR BUSINESS GOALS

By Peter Altobelli, Vice President and General Manager

Canadian commercial real estate is entering a more measured phase, one defined by adjustment, selectivity and

long-term positioning. Office is stabilizing as hybrid work raises the bar on quality and purpose; tenants are making

more deliberate decisions about the spaces they keep. Industrial is finding balance after a period of exceptional

growth, with success now hinging on disciplined execution and rapid response. Retail, meanwhile, has proven more

durable than many expected, with the strongest performance coming from convenience, service and experience.

SPONSORED CONTENT

Against that backdrop, technology decisions should start with the foundation

of the business. Before chasing what is next, organizations need connected

systems, consistent data and clear visibility into the functions that shape dayto-day

performance.

The fundamentals matter more than ever. Month-end close processes that once

took days can be streamlined with a modern ERP system that consolidates tasks,

owners, due dates, dependencies, status updates, reporting and more into a

single dashboard, giving teams a clean, consistent and auditable close process

while leadership gains a real-time view across the portfolio.

Risk oversight and collections are equally critical. When all tenant data lives in

one place, teams can see which leases are expiring, which receivables are overdue

and where risk is building, so they can get ahead of issues before they become

problems. Automated workflows for tenant collections and arrears management

mean issues surface earlier and are resolved faster, protecting cash

flow across the portfolio.

As we all know, AI need to be part of the business strategy, but for many commercial

real estate organizations, the right approach is still a practical one. The

biggest opportunity is not using AI for the sake of innovation, it is applying it in

focused ways that support workflows, improve access to information and help

teams make better decisions.

In practice, this means starting small and being selective. AI-assisted lease

abstraction, for example, can reduce the time it takes to extract and validate

key data from complex documents. Intelligent search and summarization tools

can help teams surface the right information faster, whether that is a historical

maintenance record, a rent escalation clause or a portfolio-level trend. Automated

anomaly detection in financial data can flag discrepancies before they

become reporting problems.

The common thread is focus. AI works best on well-defined problems with clean,

connected data underneath it. That means sequencing matters: organizations

that build a strong operational foundation first are far better positioned to layer

in AI that actually delivers.

The opportunity ahead is not simply to adopt new technology. It is to align

the right technology with the goals of the business. That starts with a strong

operational core, followed by targeted innovation where it can create measurable

value. In a more disciplined market, strategic technology partnership will

matter just as much as the technology itself.

To learn more about aligning technology with your commercial real

estate goals, visit yardi.com.

CANADIAN PROPERTY MANAGEMENT WHO’S WHO 2026

TOTAL

SQ. FT.

(MILLIONS)

FirstService Residential Management Canada 232.817 232.817

CBRE 161.703 41.871 35.94 57.182 26.711

Colliers 93.8 36.9 39.3 9.9 2.6 2.9 2.2

Del Property Management Inc. 91 91

Dream 80.65 4.5 73.6 0.611 1.939

BentallGreenOak (Canada) Limited Partnership 69.6 10.252 7.896 7.111 23.712 5.642 6.082 5.324 3.582

Choice Properties REIT 69.551 0.126 1.017 0.355 21.674 1.175 1.841 42.663 0.7

Rancho Management Services Corporation 65.102 1.277 1.12 2.347 1.581 0.07 58.707

Cogir Real Estate 64.579 0.982 0.063 0.491 4.379 0.912 16.618 4.508 25.655 0.141 10.829

Granite Real Estate Investment Trust 62.6 0.6 53.1 8.9

Jones Lang LaSalle Real Estate Services, Inc. (JLL) 55.37 22.4 15.5 13.7 0.72 3.05

Starlight Investments 54.373 7.401 46.972

Pacific Quorum Properties Inc. 49.187 0.467 0.064 0.228 0.12 2.432 45.876

Wilson Blanchard Management Inc. 47.705 47.705

GWL Realty Advisors 46.177 17.401 16.958 4.421 7.397

Tribe Management Inc. 45.617 0.163 1.366 0.58 14.326 27.791 1.391

Oxford Properties Group 44.389 3.287 10.114 3.809 10.935 3.607 5.603 4.97 2.064

Pure Industrial 42 42

OFFICE INDUSTRIAL RETAIL APARTMENT CONDO OTHER

MANAGE OWN BOTH MANAGE OWN BOTH MANAGE OWN BOTH MANAGE OWN BOTH MANAGE MANAGE OWN BOTH

ICC Property Management Ltd. 41.946 0.01 0.003 0.05 41.87 0.013

CAPREIT 41.315 41.315

Crestpoint Real Estate Investments Ltd. 41.047 6.484 27.307 5.374 1.882

SmartCentres REIT 37.567 0.399 0.229 0.764 2.219 32.738 0.549 0.669

Morguard 37.364 4.554 7.656 4.39 1.015 6.192 5.937 0.063 7.323 0.236

AWM-Alliance Real Estate Group Ltd. 33.739 0.392 0.478 0.937 1.58 30.353

Icon Property Management 32.25 32.25

RioCan 32.179 2.636 28.144 1.399

CT REIT 31.709 4.558 27.152

Boardwalk REIT 30.181 0.163 30.018

Cadillac Fairview 28.244 16.694 0.55 11

SolutionCondo/Rentalys Solution 27.624 0.728 26.896

Kipling Realty Inc. 27.581 4.255 10.29 7.678 5.358

Equium Group 25 0.424 1.043 0.55 3.502 0.092 19.315 0.075

Homestead Land Holdings Limited 24.48 24.48

Hazelview Investments Inc. 22.81 1.436 1.099 0.094 0.169 0.094 19.565 0.352

Canderel/Humford 22.39 15.172 2.935 1.494 0.045 2.696 0.049

Avison Young (Canada) Inc. 22.05 6.4 7.3 4.75 1.4 2.2

EPIC Investment Services 21.877 8.127 5.748 6.88 1.122

First Capital REIT 21.8 21.8

Percel Inc. 21.42 21.42

Sterling Karamar Property Management 20.507 1.07 0.88 1.42 17.137


TOTAL

SQ. FT.

(MILLIONS)

Centurion Asset Management Inc. 19.821 0.171 0.196 2.304 16.655 0.109 0.387

Fiera Properties 19.592 2.841 13.581 1.586 1.584

Brookfield Properties 19.125 15.9 1.1 1 1.125

MetCap Living Management Inc. 19.097 19.097

Realstar Management 19 19

Crombie REIT 18.872 0.814 2.46 14.997 0.601

Skyline Apartment REIT 18.411 18.411

Warrington PCI Management 17.613 6.627 6.153 3.793 1.039

Mainstreet Equity Corp. 17.363 17.253 0.048 0.062

GPM Property Management Inc. 17.305 0.005 17.3

Nadlan-Harris Property Management Inc. 16.926 16.92 0.006

Greenwin Corp. 16.782 0.16 0.123 0.029 0.122 0.413 13.833 2.102

Goldview Property Management Ltd. 16.643 0.076 0.36 0.097 16.11

Apollo Property Management Ltd. 16.335 0.78 0.36 0.392 2.011 12.328 0.464

Killam Apartment REIT 16.134 16.134

Colonnade BridgePort 15.813 3.977 8.548 1.297 1.993

Prologis 15.8 15.8

Hines 15.502 2.923 4.641 2.897 1.661 0.042 0.182 0.593 1.641 0.922

Concert Properties Ltd. 15.327 0.416 1.837 3.202 6.933 0.074 0.2 2.665

Allied Properties REIT 14.5 13.15 1.349

Dorset Realty Group Canada Ltd 14.311 1.318 2.459 2.528 1.257 6.722 0.026

Devon Properties Ltd 13.883 0.112 0.069 0.819 12.884

KDM Management Inc. 13.674 13.674

Realspace Management Group Inc. 13.475 0.474 12.393 0.609

StorageVault Canada 13.237 13.237

Westcliff Ltee 13.046 0.15 0.836 0.752 0.75 1.081 8.163 1.215 0.099

Briarlane Rental Property Management Inc. 13.006 0.152 1.786 0.397 10.671

Northview Residential REIT 12.92 1.233 11.507 0.18

Shelter Canadian Properties Limited 12.687 0.111 0.818 0.127 1.729 0.4 0.011 0.178 4.117 1.222 3.514 0.425 0.035

Nexus Industrial REIT 12.357 0.035 0.056 3.252 8.961 0.053

Downing Street Property Management Inc. 12.124 1.333 5.956 1.254 0.232 3.256 0.093

H&R REIT 12.06 2.816 7.881 1.363

Crown Property Management Inc. 11.7 5 6.7



InterRent REIT 11.655 1.15 10.505

I.G. Investment Management, Ltd. 11.386 2.765 6.449 1.216 0.956

McCor Management (MB) Inc. 11.328 3.366 1.8 4.91 1.019 0.001 0.233

Medallion Corporation 10.954 10.954

Berkley Property Management Inc. 10.864 0.25 0.05 0.04 6.894 0.03 3.6

Drewlo Holdings Inc. 10.584 10.584

Transpacific Realty Advisors 10.5 1.5 5 1 1 2


TOTAL

SQ. FT.

(MILLIONS)

Park Property Management Inc. 10.418 0.069 0.042 0.185 10.121

Compass Commercial Realty LP 10.254 1.372 7.182 1.1 0.6

Property Management Guild 10.25 10.25

Anthem Properties 10.08 1.475 1.59 5.987 0.954 0.075

Skyline Industrial REIT 10.037 10.037

NADG 9.973 0.65 0.598 7.988 0.736

GWL Residential 9.747 0.866 0.129 8.753

Harvard Developments 9.422 0.663 1.941 0.177 4.019 2.622

Menkes Property Management Services Ltd. 9.388 2.872 1.113 0.855 4.378 0.169

Salthill Property Management Inc. 9.343 0.314 0.116 0.153 4.516 4.244

M Group of Companies 9.212 0.334 0.494 1.15 1.632 5.602

Plaza Retail REIT 8.811 8.811

Minto Group 8.58 0.911 0.282 0.033 0.116 0.696 6.543

MenRes Property Managment Inc. 8.473 8.473

Shindico Realty 8.226 0.149 0.034 0.311 0.299 0.545 0.41 0.054 2.313 0.574 2.039 0.934 0.563

A.A Property Management & Associates 8 8

Cominar REIT 7.844 2.433 4.501 0.608 0.302

Globe Capital Management 7.505 0.3 7.205

Comfort Property Management Inc. 7.209 0.005 0.005 7.2

Whitehill Residential 7.1 7.1

PROREIT 6.366 0.105 5.885 0.376

Five Rivers Property Management Group 6.147 6.147

M&R Holdings 6.087 0.176 1.269 0.569 4.073

Lionheart Property Management Inc. 6.039 0.36 5.679

BTB REIT 5.98 2.507 2.059 1.414

Davpart Inc. 5.79 0.133 3.729 1.588 0.34

Prospero International Realty Inc. 5.524 0.278 0.363 1.359 3.525

Canreal Management Corporation 5.37 0.233 3.746 1.392

Taylor Co. Ltd. 5.3 3.5 1.7 0.1

Skyline Retail REIT 5.208 5.208

Shape Property Management Corp. 5.183 0.27 0.058 1.762 2.718 0.375

Osgoode Properties 5.073 0.136 0.058 0.371 4.509

Artis REIT (merged and became RFA Financial - Feb 1, 2026) 4.812 1.138 2.531 1.143

Northam Realty Advisors 4.675 0.079 0.11 2.945 0.762 0.276 0.098 0.405

True North Commercial REIT 4.5 4.5

Canlight Management Inc. 4.483 0.414 0.01 0.474 0.01 0.037 0.353 0.054 2.6 0.532

Old Oak Properties Inc. 4.317 0.155 0.166 0.008 3.988

Aspen Properties 4.3 4.3

Ravelin Properties REIT 4.299 4.299



Dayhu Investments Ltd. 4.087 0.138 0.009 3.746 0.114 0.079


TOTAL

SQ. FT.

(MILLIONS)

Nicola Institutional Realty Advisors 4.062 1.265 2.013 0.733 0.052

Kelson Group 4.059 0.06 3.999

Melcor Developments Ltd. 4.032 1.858 0.247 1.65 0.277

Williams and McDaniel Property Management 3.901 0.092 0.175 3.634

Stoneleigh Management Inc. Real Estate Brokerage 3.899 1.797 0.029 0.068 0.029 1.976

Brilliant Property Management Inc. 3.78 3.78

Lameer Management Inc. 3.741 0.156 0.01 0.3 0.035 2.729 0.511

HighPoint Property Management 3.689 3.689

CPP Investments 3.63 2.854 0.47 0.306

Royal/Kente Property Management 3.609 0.006 0.002 0.451 3.15

Real Estate 360 Property Advisory 3.439 0.506 0.124 0.207 0.434 2.168

Automotive Properties REIT 3.404 3.404

Northwest Healthcare Properties REIT 3.2 3.2

Gulf Pacific Property Management Ltd. 3.159 0.948 0.231 1.641 0.338

Axwood 3.127 1.192 0.445 0.618 0.397 0.137 0.339

Kevric Real Estate Corporation 3.05 2.921 0.129

Dove Square Property Management Inc. 3.039 0.04 0.086 0.095 2.816 0.003

Atlantis Realty Services, Inc. 2.99 0.179 1.469 0.298 1.045

KRP Properties 2.97 2.97

Richmond Property Group Ltd. 2.95 0.4 0.15 0.4 0 2

Canadian Urban Limited 2.932 0.394 2.037 0.418 0.083

Realterm 2.905 2.905



Lawrence Construction/Grant Management 2.651 0.055 0.173 0.091 0.588 0.034 0.125 0.646 0.939

Brown Group of Companies Inc., The 2.512 0.067 0.502 0.017 0.028 0.501 1.398

Armadale Property Management Inc. 2.428 0.103 0.185 0.249 0.011 0.031 0.071 1.439 0.339

BlueStone Properties Inc. 2.342 0.223 0.82 0.018 1.282

NexLiving Communities Inc. 2.2 2.2

O'Shanter Development Company Ltd. 2.151 0.314 1.837

Arnon Corporation 2.137 1.279 0.409 0.052 0.397

Provincial Property Management Limited 2.12 0.5 1.62

State Building Group 2.1 0.1 1 1

CLV Group 2.084 0.055 0.142 1.761 0.126

Narland Management 2.029 0.973 0.018 0.387 0.125 0.168 0.359

Skywater Property Management 1.992 0.007 0.05 0.005 0.032 1.89 0.008

Rathcliffe Properties 1.96 0.235 1.2 0.525

Southwest Properties Ltd. 1.903 1.723 0.18

WJ Properties 1.888 0.015 0.114 1.744 0.015

Equitable Real Estate Investment Corporation Ltd. 1.828 0.29 0.936 0.048 0.554

Westcorp Property Management 1.825 0.316 0.037 0.143 0.59 0.739

Huntington Properties Ltd. 1.81 0.2 0.95 0.11 0.55


TOTAL

SQ. FT.

(MILLIONS)

Guardian Property Management Services Ltd. 1.808 0.002 0.005 0.001 1.8

DBS Developments 1.647 1.647

Canadian Net REIT 1.52 1.52

Madison Group of Companies 1.518 0.716 0.2 0.223 0.379

Antrev & Associates Inc. 1.497 0.542 0.31 0.645

Parkit Enterprise Inc. 1.467 1.467

I.M.P. Group International Inc. 1.413 0.038 1.289 0.086

Niot Investments Holdings Ltd. 1.395 0.05 0.13 1.215

Twin City Management Ltd. 1.382 1.382

Busac Real Estate 1.365 1.171 0.194

The Enfield Group Inc. 1.348 0.054 0.04 1.255

CaraCo Property Management Ltd. 1.312 0.14 0.105 1.067

Tower Building Management 1.275 0.135 0.25 0.415 0.12 0.355

Gillin Engineering & Construction Ltd. 1.24 0.647 0.017 0.576

Bedford Properties & Estates Ltd. 1.219 1.219

Virtus Diversified REIT 1.133 0.035 0.671 0.118 0.31

Imperial Equities Inc. 1.104 1.104

Taft Management Inc. 1.081 0.203 0.21 0.07 0.352 0.246

Concorde Group Corp. 1.01 0.1 0.54 0.37

Sabjoy Inc. 1 0.05 0.95

Marcarko Ltd. 0.986 0.986

Gitalis Group Inc. 0.928 0.24 0.036 0.276 0.1 0.276

York Heritage Properties 0.926 0.12 0.806

Tillyard Management Inc. 0.804 0.411 0.183 0.211



Merkburn Holdings Ltd. 0.757 0.045 0.304 0.084 0.286 0.038


TOTAL

SQ. FT.

(MILLIONS)

Vaultra Asset Management Corp. 0.756 0.001 0.098 0.657

Fana Group of Companies 0.75 0.75

Northland Properties Inc. 0.736 0.24 0.496

Aldgate Group 0.485 0.02 0.43 0.035

Summa Property Management 0.45 0.07 0.102 0.275 0.004

Goodwood Property Investment Ltd. 0.35 0.004 0.021 0.325

Edie & Associates 0.344 0.201 0.143

Glenview Management Limited 0.338 0.024 0.127 0.013 0.01 0.131 0.014 0.019

Folkens-Nägeler Properties Inc. 0.287 0.287

R.W. Commercial Property Management Inc. 0.25 0.25

Leimerk Developments Ltd. 0.245 0.046 0.067 0.132

Lanesborough Real Estate Investment Trust 0.192 0.104 0.088

Regency Group 0.094 0.007 0.01 0.027 0.05

Gistex Inc. 0.081 0.081

Oak Bridge Properties Inc. 0.014 0.014

Edie & Associates 0.344 0.201 0.143

Glenview Management Limited 0.338 0.024 0.127 0.013 0.010 0.131 0.014 0.019

Folkens-Nägeler Properties Inc. 0.287 0.287

R.W. Commercial Property Management Inc. 0.250 0.250

Leimerk Developments Ltd. 0.245 0.046 0.067 0.132

Lanesborough Real Estate Investment Trust 0.192 0.104 0.088

Regency Group 0.094 0.007 0.010 0.027 0.050

Gistex Inc. 0.081 0.081

Oak Bridge Properties Inc. 0.014 0.014



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VAGUE VALUE

Green Premiums Still More Intuitive than Tangible in Canada

By Barbara Carss

A RELATIVELY MODEST construction

premium could yield significant performance

improvements in Canada’s commercial

building stock. Early evidence from

one effort to motivate deep retrofits suggests

a 40% reduction in greenhouse gas

(GHG) emissions, in keeping with the Canadian

government’s 2030 target, could be

achieved for an average incremental cost of

about $10 per square foot.

Those numbers might crunch even more

favourably if capital budgeters could count

on a green premium. Yet, despite general

recognition that sustainability influences net

operating income (NOI), marketability and

the physical condition of assets, there is no

consensus on how it flows through to value

and credit risk. Appraisers and lenders need

credible, standardized metrics to produce

valuations and inform underwriting, and

those key pieces of the financing puzzle are

still emerging.

“It is very case-by-case. We don’t have

granularity yet in the Canadian market on

what the composition of that premium is,”

Colin Guldimann, a Senior Director of Sustainable

Finance at RBC, told attendees at

a recent seminar sponsored by the Canada

Green Building Council (CAGBC).

JLL research, based on the firm’s global

real estate advisory practice, concludes that

green-certified assets do command a premium

over non-certified competitors. That’s


assetperformance

pegged at an average of 8.5% worldwide,

but, speaking at the CAGBC seminar, Julian

Smith, JLL’s Climate and Decarbonization

Practice Leader in North America, acknowledged

there is wide variation from market to

market. In Toronto, where more than 90%

of Class A office buildings carry some form

of green certification, the premium is calculated

to be less than 5%.

Meanwhile, the financial penalties now

attached to exceeding New York City’s

allowable threshold for GHG emissions

from buildings (known as Local Law 97)

appear to be accentuating green premiums

there. JLL analysts found low-carbon assets

significantly outperforming those with

more carbon-intensive profiles, and Smith

speculated there is potential for a more pronounced

divergence in Toronto based on

tenants that have committed to the 2030 target

for a 40% reduction in GHG emissions

relative to 2005 levels.

“There’s an 80% shortfall in supply of

low-carbon stock. Right now there are other

issues in the market that are kind of slowing

things down, but this marker really shows

that there’s going to be a supply and demand

gap at some point,” Smith submitted. “Have

decarbonization measures increased asset

value? The answer is yes. Increased NOIs

and cashflows are happening right now

globally. Is it standardized and somebody

can apply it in the Canadian market? Not

yet, but it is happening.”

FACILITATING PREPAREDNESS

Recently released estimates of the square footage

costs of hitting the 2030 target are based

on identified measures to reduce energy

use and carbon emissions within a selection

of portfolios participating in the Purpose

Retrofit Accelerator. The initiative — part of

a nationwide network of capacity-building

exercises that draw on federal funding to promote

and ease the implementation of deep

retrofits — was launched in April 2024 by the

sustainability consulting firm, Purpose Building,

in collaboration with the CAGBC.

Through the accelerator program, owners/managers

of commercial and multifamily

buildings are eligible for rebates of up to

50% on various elements of deep retrofit

Berkley_CPM_Winter_2023_FINAL.pdf 1 2023-11-17 11:08 AM

30 Mohawk Road Hamilton

(Upper James St) 905.387.0300

2760


assetperformance

GLOBAL CITIES EXERT

CLIMATE ACTION PRESSURE

planning, design and project management.

Thus far, enrollment encompasses roughly

1,700 buildings at some stage of mapping

out how to achieve a minimum 50% reduction

in energy consumption and 70% cut in

GHG emissions. That includes 380 assets

with completed net-zero transition plans

and 26 where design and/or construction are

now underway.

The $10/ft² assumption is derived from a

smaller cohort of 16 properties with finalized

plans that collectively entail 135 retrofit measures.

Accelerator program administrators

also focus on these participants, along with

some broader industry survey data, to assess

the level of emissions reductions that might

be deliverable by 2030 and what’s needed

to make more aggressive gains. Those observations

and related recommendations are

highlighted in a new summary report of the

accelerator program’s first-year activities.

The Canadian government’s stated goal

for the capacity-building initiative is to develop

preparedness, delivery models and

Vancouver, Toronto and Montreal are among 75 world cities seen to be exerting some degree

of climate action pressure on the commercial real estate sector in JLL’s analysis of the interplay

between local regulations, decarbonization and resilience. It finds that local governments in major

global markets are evolving from initially setting largely voluntary targets for the reduction of

greenhouse gas (GHG) emissions to now implementing reporting and building performance

mandates with penalties for non-compliance.

Vancouver is notably grouped with 11 cities deemed to be “global accelerators” with established,

enforceable policies and rules related to emissions reduction, transition away from fossil

fuels and climate change adaptation. Others in the cohort include New York City, Seattle, Amsterdam,

Copenhagen, Helsinki, London, Oslo, Paris, Stockholm and Sydney.

“Regulation is accelerating real estate’s transition toward a low-carbon, climate-resilient future

— and city governments are leading the charge,” JLL analysts observe. “For the CRE sector, local

policy is often the most significant regulatory force impacting operational costs and investment

strategies. As regulation gains enforceability and scope, real estate leaders must anticipate these

shifts to safeguard asset value and manage transition risk.”

That’s evident in the findings that 82% of global investment in commercial real estate over the past

decade — roughly USD $4.1 trillion worth of expenditures — has occurred in markets where there is

a target to achieve net-zero emissions by 2050. More than 40% of the surveyed cities now have some

form of building performance standards that set allowable and increasingly tightening thresholds for

energy intensity and/or GHG emissions, while “dozens more” are on track to introduce them by 2030.

A significant subset of 17 cities, mostly in Europe, already have requirements in place to effectively

prohibit fossil-fuel-fired systems in new construction. As well, Vancouver is flagged as one of

three cities, along with London and Amsterdam, with policies to address embodied carbon, while

all cities in California are captured by the statewide mandate for large, non-residential buildings.

About 60% of the surveyed cities also have policies related to resilience and climate change

adaptation, although mostly still confined to risk disclosure or voluntary planning mechanisms.

Meanwhile, building owners/managers in more than two-thirds of the surveyed cities can tap into

some form of local financial incentives for retrofits and energy efficiency upgrades, building electrification

or on-site renewable energy generation.

“These local tools increasingly sit alongside state, national and supranational programs,” JLL

analysts report. “As these instruments mature, they help to de-risk projects and attract private

capital, and enable owners to undertake more ambitious upgrades at scale.”

Toronto is slotted into a larger group of 22 “market mobilizers” that lags the global accelerators’

pace, but is seen to have “clear regulatory traction” through programs such as mandatory

benchmarking and reporting. The group also includes Boston, Chicago, Denver, Los Angeles,

Portland, San Francisco, San Diego and Washington, D.C. in the United States, seven European

cities and six in Asia Pacific.

Montreal has more company from the Americas in its group of 22 “policy builders” at earlier

stages of policy and regulation implementation and what’s characterized as “still patchy” coverage

and enforcement. This group includes Atlanta, Austin, Miami, Minneapolis, Pheonix and Salt

Lake City in the U.S., along with Medellin, Mexico City and Rio de Janeiro, six European cities and

five cities in Asia Pacific.

Another 20 cities are identified as “emerging implementers” at the early stage of policy development

with few mandatory requirements in place. This cohort is largely located in South America,

Africa and the Asia Pacific, but also includes Houston and Tampa in the United States.

JLL’s City Climate & Resiliency Policy Tracker can be found at www.jll.com/en-us/insights/citypolicy-is-driving-building-transformation.

— REMI Network

expertise for deep retrofits to occur on the

scale and at the pace necessary to achieve

targetted reductions and, ultimately, net-zero

emissions by 2050. Incentives are meant

to facilitate future investment and work —

ideally, in a way that cost-effectively maximizes

emissions reductions using a straightforward,

systematic approach that can be

widely replicated — and help recipients

sharpen the business case for required capital

expenditures.

Authors of the CAGBC report caution

that the initial dataset is comprised of assets

that have been flagged as retrofit candidates

and, thus, “may not represent ‘average’ Canadian

buildings”. However, that still aligns

with the program objectives.

“High-level observations help demonstrate

what’s possible when committed owners

and portfolio managers apply a clear and

proven methodology to energy and carbon

retrofit projects at prioritized assets,” the report

states. “This figure [$10/ft²] is preliminary

and based on a relatively modest pool

of retrofits. We share it here with the hope

that it will spark discussion, innovation and

collaboration across the sector.”

CAGBC industry surveys that bookend

the accelerator program’s first year show

some progress on deep retrofit preparedness.

When questioned in 2024, 30% of

respondents envisioned they would undertake

future retrofit projects; that percentage

jumped to 55% in 2025. In 2024, respondents

collectively envisioned they would finalize

net-zero transition plans for about 6%

of their holdings before the end of 2026; that

climbed to 17% in 2025.

Nevertheless, there are some continuing

financial, technological and policy-related

drags on execution. Notably, 44% of respondents

indicated financing was more

onerous in 2025 than 2024. Although 46%

saw pricing improvements for technology

during that 12-month period, 62% said they

struggled to integrate it into their operations.

Meanwhile, 67% said a fragmented policy

landscape caused them frustration and/

or confusion in 2025, up from 65% who

voiced that sentiment in 2024.

OVERLOOKED COSTS AND PAYBACKS

The report tallies several costs of inaction

that aren’t necessarily acknowledged when

decision-makers consider the upfront costs

of retrofits — including “costs of utilities,

insurance premiums, mitigating risks or repairing

disaster damage, retaining tenants or

attracting new ones” — and contends building

owners/managers are not alone in overlooking

this reality.


assetperformance

“Financial institutions, appraisers and other

market actors need to account for the tangible

advantages of efficient, low-carbon buildings,”

it asserts. “Today, market valuations often lag

performance, underestimating true gains in

efficiency, comfort and resilience that highperforming

buildings achieve.”

Recent findings from CBRE Canada’s 2026

survey of lenders’ sentiment do seem to show

diminishing endorsement of that upside across

a base of 47 financial institutions that collectively

hold more than $200 billion worth of Canadian

commercial real estate loans. This year,

a smaller percentage indicated they would be

willing to offer credit spread discounts for loans

on projects with strong sustainability metrics

(37%) than did so in 2025 (41%) and, when

available, that potential discount is generally

expected to be more modest. As well, just 8%

of surveyed lenders confirmed that a building’s

carbon footprint currently influences loan conditions,

while 20% expressed the opinion that

it never would.

Even so, green building advocates and practitioners

within the sustainable finance field are

striving to adjust that perception. CAGBC is

currently working with the Real Property Association

of Canada (REALPAC) and appraisal

specialists from Canadian real estate advisory

firms to develop standardized approaches

for assessing sustainable attributes. Guldimann

confirmed lenders are grappling with the same

issues.

“We’re engaged in industry groups right now

trying to whittle down the information that we

could be gathering into what’s financially relevant

to the way that we think about lending

to buildings so that we can price risk better,

price loans better, underwrite these buildings

differently,” he advised. “We’re really trying

to understand: What does this do to vacancies?

What does this do to lease-up? What does it do

to all the different parts of NOI? And how does

that translate to valuation?”

Guldimann and Smith concurred that the

connection to value is rooted in how green attributes

sway underlying risk and returns —

drive higher rents, shorten lease-up time, reduce

utility, maintenance and insurance costs,

etc.. That relies on convincing proof, which,

for now, tends to be more piecemeal than comprehensive.

“To ask a valuator to put that to a valuation

is near impossible because they don’t have the

evidence,” Smith said. “That hard data is not

there and it makes it challenging, but those are

the markers that need to be focused on.”

The first-year insight report on the Purpose Retrofit

Accelerator can be found at www.retrofitsnow.ca/

resources.

“Have decarbonization measures

increased asset value? The

answer is yes. Increased NOIs

and cashflows are happening

right now globally."

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ENLISTING EMITTE

Compulsory Carbon Market Participation Could Expand

policylevers

A PROPOSED LOWER THRESHOLD

for mandatory participation in Canada’s industrial

carbon market could bring some

commercial and institutional campuses into

the mix along with a broader range of suppliers

to the buildings sector. A Canadian government

discussion paper, released in December

2025, explores possible adjustments

to the stringency standards that establish key

elements of the federal benchmark and provincial/territorial

carbon pricing systems.

It presents four potential approaches for

determining subject participants, three of

which would target facilities that emit a

minimum of 10,000 tonnes of carbon dioxide

equivalent (CO2e) per year, while one

would set the bar at 25,000 tonnes of CO2e

per year. Either trigger point for compliance

would be a significant drop from the current

50,000-tonne threshold.

The proposals come as part of a regular

review process and as a follow-up on the

promise to strengthen industrial carbon

pricing, which the government made when

it cancelled the consumer surcharge on fossil

fuels in March 2025. The discussion paper

flags “hospitals and other non-industrial

buildings” as examples of non-industrial

sectors that are expected to be exempt from

the proposals, but it also obliquely refers

to commercial and institutional real estate

in arguing why updated parameters for the

regulated carbon pricing system are needed.

“These criteria were designed when the

fuel charge was still in place, and facilities not

subject to industrial pricing systems were instead

subject to the fuel charge,” it states. “The

removal of the fuel charge requires rethinking

how scope of coverage should work.”


policylevers

“The paper states only that sectors

that are ‘generally considered nonindustrial’

would be excluded. It’s

not saying that all commercial and

institutional facilities are

automatically excluded.”

RS

Elsewhere, the list of emission sources that

carbon pricing systems would be required to

cover includes “stationary fuel combustion”

(at the top of the list) and “on-site transportation”

with seven other activities that are more

commonly exclusive to industrial/manufacturing

operations or solid waste management.

“The paper states only that sectors that are

‘generally considered non-industrial’ would

be excluded. It’s not saying that all commercial

and institutional facilities are automatically

excluded,” observes Bala Gnanam,

Vice President of Sustainability, Advocacy

and Stakeholder Relations with the Building

Owners and Managers Association (BOMA)

of Canada. “I suspect large campuses, around

5 million square feet or more, could come

under this.”

“I could definitely see large cogeneration

systems being covered,” adds Eric Chisholm,

a Principal with the engineering and sustainability

consulting firm, Purpose Building Inc.

COMPETITIVE CONCERNS

The discussion paper more explicitly acknowledges

the risk of creating a competitive

advantage within various industry sectors for

CO2e emitters that fall under the threshold for

required participation in the carbon market.

That concern underpins the proposed option

to set the mandated entry level at 25,000

tonnes, which would capture “fewer industrial

activities where there is a significant

split between emissions above and below

the threshold” but also reduce the number of

participants, potentially undermining optimal

market functioning.

Alternatively, a proposed “activity-based”

approach would be scoped to specific subsectors

where it’s calculated that facilities

outputting upwards of 10,000 tonnes of

CO2e annually account for at least 75% of

emissions. (Various supporting assets for the

oil and gas sector, dubbed “petrinex” facilities,

that individually emit less than 10,000

tonnes annually would also be included.)

This option would appear to definitively

exempt commercial and institutional

buildings, but the discussion paper does

specify the producers of many common

building materials, including: iron; steel;

aluminum; cement; gypsum; polystyrene

foam products; brick; and glass.

Finally, there is a combo option that would

encompass all facilities within specified industry

sectors that emit a minimum of 10,000

tonnes of CO2e annually, and smaller oil and

gas petrinex facilities. This approach is projected

to address facilities that collectively

generate about 284 megatonnes (284 million

tonnes) of CO2e per year, or 41% of total Canadian

emissions, while the loosest approach

of setting the threshold for market participation

at 25,000 tonnes would target 264 megatonnes

(264 million tonnes) or about 38% of

total Canadian emissions.

“All options would cover the majority of

Canada’s industrial emissions (75 to 80%)

and a large number of facilities,” the discussion

paper states. “The options vary by the

extent to which they balance GHG reduction

potential with competitiveness and carbon

leakage risks, the number and diversity of

market participants that would be covered

(which influences market function and liquidity),

and in regulatory complexity.”

PRICE SIGNAL IMPEDIMENTS

The discussion paper also addresses some

identified challenges related to the quantity

and price of carbon credits and the effectiveness

of current price signals for influencing

investment in decarbonization. Although

the benchmark carbon price — $110/tonne

as of April 1, 2026 — is consistent nationwide,

there are some considerable discounts

within the various output based pricing systems

(OBPS) that are in place in every province/territory

except Quebec and Northwest

Territories.

Each carbon credit represents one tonne of

carbon that is reduced, avoided or removed

from the atmosphere, but few regulated


policylevers

market participants are paying full price to

counterbalance emissions that exceed their

allowable benchmark. In turn, it’s less lucrative

for market participants to sell carbon

credits earned from coming in below their

mandated emissions intensity level, and

there is less incentive for potential developers

of emissions reduction projects to embark

on credit creation.

“It’s a very fragmented system, and provinces

have different rules and different supply

and demand for credits,” Adi Dunkelman,

Director of Policy and Strategy with the carbon

market advisory firm, Clear Blue Markets,

told attendees at The Buildings Show in

Toronto last December. “If you’re in Ontario

and you’re generating a credit, you can sell

it for $72, but if you’re in Alberta, the value

of your credit is $18. This is something that

the federal government is trying to change up

and harmonize because this is not a system or

a market that can support decarbonization.”

The discussion paper attributes the discrepancies

to a credit glut, which is particularly

pronounced in some provinces,

and outlines proposed mechanisms to help

rebalance supply and demand. This would

require carbon pricing systems to put a buffer

in place to ensure that demand for compliance

credits exceeds supply, taking into

consideration the volume of banked, unused

credits in the market.

“The annual net demand test would be

adjusted to require that forecast demand

for credits exceed forecast supply by a

given amount each year, scaled to reflect

the size of the system,” the discussion

paper proposes. “This could increase certainty

for regulators and stakeholders that

market prices are likely to stay close to

the headline price, and therefore incentivize

decarbonization investments up to that

price level. However, the additional level

of compliance obligations required to create

the buffer could increase overall compliance

costs for facilities.”

The discussion paper can be found at www.canada.

ca/content/dam/eccc/documents/pdf/climatechange/carbon-pricing-benchmark-consultation/

Discussion-Paper-Driving-Effective-Carbon-

Markets-Canada.pdf

FINES REAPPRAISED FOR

ENERGY EFFICIENCY VIOLATIONS

Proposed amendments to Canada’s Energy Efficiency Act would instigate a five- to 100-fold increase

to existing maximum fines, depending on the circumstances, and introduce a new slate

of administrative monetary penalties (AMPs) characterized as primarily for instructive rather

than retributive purposes. Enabling legislation has now completed the second reading stage

in the Canadian Senate with several steps still to go before it might be adopted in the House

of Commons.

As proposed, equipment/appliance dealers or other commercial entities that “use an energyusing

product for commercial purposes” could be in line for a significant financial hit if they are

found to be importing or shipping items between provinces that do not comply with applicable

energy-efficiency standards or carry accurate labels. Currently, they would face a maximum fine

of $50,000 if convicted of a summary (i.e. less serious) offence or a fine of up $250,000 for a serious

indictable offence.

The proposed amendments would lift maximum fines to $250,000 for a first summary offence

and $2 million for a first indictable offence. Subsequent convictions could yield fines of up to

$500,000 for a summary offence or up to $5 million for an indictable offence.

A range of other transgressions — such as tampering with energy-rating labels, false statements/documentation

or inadequate record-keeping — that can currently result in fines of up to

$10,000 could become steeply more odious. Maximum fines of $500,000 for a first offence and

$1 million for a subsequent offence are proposed.

Elsewhere, the amendments would establish the authority for administrative monetary penalties

(AMPs). As proposed, the Minister of Energy and Natural Resources would designate officials

with the authority to issue notices of violation to individuals or other entities for contravening

provisions of the Energy Efficiency Act or its regulations. In turn, recipients would have the right to

request a review of the alleged violation and/or to enter into a compliance agreement for a lesser

penalty. The framework for the penalties would be set out in future regulations.

“The purpose of a penalty is to promote compliance with this Act and not to punish,” the

amendment states. “The maximum penalty for a violation is $5,000, in the case of an individual,

and $25,000, in any other case.”

The proposed legislation also includes the framework for regulatory sandboxes that would

allow new products to be tested in the marketplace in tandem with the development of rules to

govern them, and other new provisions related to digital procedures and mechanisms that have

emerged since the Act was last updated.

– REMI Network


policylevers

CONVERGING

AGENDAS

Canadian Content Rules Could Apply to Decarbonization

THE CANADIAN GOVERNMENT is

considering how its agenda to support domestic

manufacturers and technology providers

could meld with goals to decarbonize

the buildings and energy sectors. Early this

winter, it called for public input on the viability

of introducing Canadian content requirements

for federal investment tax credits tied

to clean technology and clean electricity.

Under existing rules, commercial building

owners are among the proponents eligible

to claim credits for up to 30% of qualifying

costs associated with the purchase and installation

of various designated clean technologies,

including air-source heat pumps, wind

and solar energy systems and stationary

electricity storage systems. Entities in the

electricity generation and transmission sectors

can claim tax credits for up to 15% of the

eligible costs of low-carbon generating systems,

stationary electricity storage systems

and inter-provincial transmission equipment.

SUPPORTING STRATEGIC SECTORS

Contemplated Canadian content rules could

complement recently introduced protocol to

guide federal government procurement in

“strategic” economic sectors. For now, that

prioritizes Canadian suppliers and products/

materials when contracts with a minimum

value of $25 million are awarded, but the

rules are slated to apply to contracts with a

minimum value of $5 million by springtime

this year. Canadian suppliers are promised

additional points in the tendering process

and all bids are to be assessed for “inclusion

of Canadian goods, services and value-added

content” in contract delivery.

There are also new rules for procurement

for federal buildings, infrastructure

and defence spending that mandate the use

of domestically produced steel, aluminum

and wood products. Those are in effect for

contracts valued at a least $25 million that

require at least $250,000 worth of any one

type of material/product for which there are

Canadian suppliers in the marketplace.

The recent consultation delved into the

potential pros and cons of integrating domestic

content requirements with clean tech

and clean electricity investment tax credits.

Respondents were asked:

• whether such rules could support or

undermine their business activities and

supply chains;

• what products should be covered or

exempted;

• what processes and documentation should

be used to verify product origin; and

• what the consequences should be for

failing to comply with Canadian content

requirements.

“Other countries, including the U.S., have

incorporated domestic content requirements in

their clean electricity tax credits to encourage

the use of domestic materials and equipment.

In Canada, stakeholders have called for similar

measures to strengthen domestic supply

chains and support Canadian manufacturers,”

the prelude to the consultation questions states.

DOMESTIC SUPPLIER ABSENCE

Energy management and decarbonization specialists

caution that Canadian manufacturers

still have a long way to go before they’ll be in a

position to forge competitive market share for

some of the equipment and systems fundamental

to switching away from fossil fuel heating

sources. However, the consultation did present

an opening for the buildings sector to make a

case for broadening the range of technologies

that qualify for the investment tax credit.

“Most of the commercial cold climate heat

pumps available in Canada are manufactured

in the USA, Mexico, Japan, Italy or elsewhere

outside the country,” says Eric Chisholm, cofounder

and principal with the engineering

and sustainability consulting firm, Purpose

Building. “Bluntly introducing Canadian content

restrictions for investment tax credits will

undermine program participation. To meet

emissions reduction targets, participation will

need to increase, not decrease, and there are

already barriers in the existing program.”

“Today, key technologies like heat pumps

are not yet manufactured in Canada at the

scale needed. Targeted collaboration with

manufacturers is essential to avoid increasing

construction costs or slowing the green

building economy,” concurs Thomas Mueller,

President and Chief Executive Officer

of the Canada Green Building Council

(CAGBC). “Energy efficient and low carbon

technologies are increasingly important

to investors, and Canadian asset owners and

developers need reliable access and competitive

pricing to meet project financial goals.”

Chisholm underscores the risk of skewing

the market toward monopoly providers and

argues content restrictions would be best applied

in product categories where there are a

number of different Canadian competitors.

Enabling more choice for prospective investors

could also have flow-through benefits

for those feeding the supply chain.

“Heat recovery heat pumps, or heat recovery

chillers, are a foundational decarbonization

technology that doesn’t qualify for an

investment tax credit currently. Including

them as eligible technology could quickly

accelerate market participation,” he urges.


taxtrends

BUDGET

BLOW

B.C. Real Estate Sector Gets PST Surprise

COMMERCIAL AND RESIDENTIAL

landlords and strata corporations in British

Columbia face a 7% increase on some key

operational costs later this fall when provincial

sales tax (PST) will be added to the purchase

price of property management, security

and accounting services and non-residential

brokerage fees. These new levies, along with

the introduction of 2.1% PST on architectural,

engineering and geoscience services, were

announced in the 2026 provincial budget earlier

this winter, and are projected to generate

roughly $534 million in revenue once they’re

in place for the full 2027-28 fiscal year.

The new tax is scheduled to kick in Oct. 1,

2026. In justifying the move, the B.C. government

notes that most other Canadian provinces

already tax professional services, albeit

with the obvious exception of Alberta,

which does not collect provincial sales tax.

“B.C.’s economy has shifted significantly

towards services, which have largely

remained untaxed under the PST. B.C. currently

has the narrowest sales tax base of all

Canadian provinces that have a sales tax,”

the budget document states.

The consumers in line for new costs don’t

necessarily see it that way. While acknowledging

the B.C. government is looking for

new sources of revenue in response to daunting

constraints elsewhere in the economy,

industry advocates suggest targeting the

housing and buildings sector will have repercussions

for affordability and business competitiveness.

“With office occupancy and vacancy rates

still not returned to normal, added costs will

not help, but will only hinder our progress,”

maintains Zach Segal, Director of Government

Relations with the Building Owners

and Managers Association (BOMA) of

British Columbia. “Adding costs to property

management and several other building

services, such as architecture, engineering

and security, will make it more expensive

for small businesses to lease space and run

their business.”

“If you want affordable housing, it seems

misdirected,” concurs David Hutniak, Chief

Executive Officer of the rental housing industry

association, LandlordBC. “Licensed

property managers deliver an important ser-

vice to our sector. They’re the ones managing

the tenant relationships and we really

don’t need an extra cost for that.”

The new tax fallout might have been

more muted for many business operators,

including commercial landlords, if British

Columbia had not withdrawn from the harmonized

sales tax (HST) arrangement with

the federal government in 2013.

“There is no ability for the purchaser

(in B.C.) to recover the PST paid on those

services,” advises Laura Gheorghiu, a tax

lawyer and partner with Gowling WLG.

“If this were an HST environment, an input

tax credit (ITC) could be available provided

the expenses were incurred in the course

of commercial activities, the recipient was

validly GST/HST registered and the other

criteria for claiming the ITC were met.”

However, those other criteria exclude

rental housing providers in any case. LandlordBC

is now grappling with the implications

of a raft of new unexpected costs.

“We saw it for the first time when the budget

was tabled. It just came out of the blue,

and basically everything that’s on that list

[for application of PST], our industry uses,”

Hutniak says. “I’m confident the Housing

Minister, in particular, is acutely aware of

how difficult it is to deliver rental housing so

it’s just really odd they targeted us.”

The 2026 budget also includes a tax

boost for many holders of undeveloped

residential land. As of Jan. 1, 2027, the

provincial school tax surcharge on residential

property valued in excess of $3

million will increase from 0.2% to 0.3%

on the portion of assessed value up to $4

million, and climb from 0.4 to 0.6% on

the remainder of assessed value above $4

million. The B.C. government projects it

will generate an additional $139 million

in revenue through this mechanism in the

2027-28 fiscal year.

The government is additionally revising

its formula for calculating school property

tax. Increases will now be based on the

three-year average annual change in nominal

provincial gross domestic product (GDP) —

replacing the practice of pegging increases

to the inflation rate plus the tax on new

construction. That’s projected to yield $31

million in new revenue from non-residential

ratepayers and $124 million from residential

ratepayers in the 2027-28 fiscal year.

“The share of tax revenue from provincial

property taxes has decreased from 14%

in 2003/04 to 8% in 2025/26,” the budget

document states. “This policy change

maintains the property tax base relative to

economic growth, in line with other provincial

taxes.”


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