Accelerating energy retrofits – building the policy and business case for local improvement charges in the City of Vaughan and York Region

In 2012, changes to provincial legislation in Ontario provided municipalities with a new market-based tool to improve the energy and water efficiency of the existing building stock; the ‘local improvement charge’ (LIC) mechanism. The City of Toronto was the first and remains the only Ontario municipality to use LICs to finance residential energy retrofits, starting in 2014 with the Home Energy Loan Program. Many other municipalities are interested. Indeed, one of the key priorities articulated in each of Vaughan, Newmarket and Markham’s Municipal Energy Plan (MEP) is the development of an energy efficiency retrofit program for residential buildings, supported through implementation of a Local Improvement Charge mechanism. However, a lack of clarity regarding the risks to the municipality in developing an LIC program for energy retrofits, particularly in a two-tier municipal government context, is seen as a barrier to program implementation. This project aims to determine the best approach to implement a coordinated LIC-based residential energy retrofit program in the context of a tiered governance framework such as exists with these York Region municipalities. The methodology to conduct this study will include 1) a synthesis of existing research on LIC experience, 2) a municipal design thinking workshop to understand risk profiles and mitigation options, associated with various program designs, and 3) developing a municipal LIC toolkit for energy retrofits.