The Chair (Mr. David Orazietti): Our next presentation is Chris Chopik. Good afternoon, sir. Welcome to the Standing Committee on General Government. You have 10 minutes for your presentation, five minutes for questions from members of the committee. Please state your name for the purposes of Hansard and you can begin.
There’s a small bio here for those who are interested in reading it. I’m a realtor, vice-chair of the Toronto Real Estate Board’s green task force and an instructor at real estate boards across Ontario.
As an informed Ontarian and supporter of the Green Energy Act Alliance who has lived here in Toronto for my entire life and plans to live here for the foreseeable future, I’m in complete support of the Green Energy Act from all perspectives.
As an instructor of realtors across Ontario, I can say with absolute confidence that Ontarians who are doing the right thing for themselves and the environment have not seen the real estate industry being effective at putting a value on home energy efficiency. In the last year I have spoken to roughly 3,000 realtors in training contexts. Every time I teach a course, I ask people to put their hands up: “Who has sold a house with a geothermal heating system?” I ask those same folks to tell me, “Who has received a premium from the marketplace?” I then ask what was the reason that they did not, because the consistent answer was they did not. The reason that they did not was because the buyer market does not understand energy performance.
The reason a mandatory energy label is so critically important is that there is no market mechanism to ensure that energy enters into the conversation within the purchase and selling process. There are no court cases where realtors have been sued for nondisclosure of energy performance. Banks do not account for the true cost of operating when assessing the debt service ratio for qualifying mortgage borrowers.
The consuming public deserves to be protected from unknown energy costs today. In future, it’s generally accepted that energy prices will continue to climb. This means that there is going to be more exposure of individuals to the effects of energy inflation. The Ontario housing market will be more resilient in the face of energy inflation while the mandate affects the acceleration of energy retrofits in existing buildings. This will help protect the future value of housing stock in the Ontario marketplace and the quality of life of Ontarians.
The Ontario Real Estate Association’s position on the issue is impotent, in my opinion. It is not well informed, it does not show desire to protect the long-term real estate interests of Ontarians, and many of the objections are empty. I have had the opportunity to speak with hundreds of realtors who share this opinion.
There are a few points that OREA raises that warrant further discussion. I strongly recommend that the government enter into a consultative process with organized real estate to ensure that a process for implementing this label is created that will work within the real estate business and each transaction. I met with the finance ministry last August to discuss the possibility of incorporating a database field for energy labelling in MPAC. It seems as though that’s a possibility, and I suggest that you pursue that.
Finally, in addition to pure energy measurements, there are many other issues that are facing property owners, municipal governments, and, increasingly, environmental issues that relate to insurance. I think that it’s appropriate to look at incorporating water conservation issues, issues such as the presence of trees, into this label.
Mr. John Yakabuski: On the issue of energy audits, while it may be—and I would suggest it would be—helpful to any homeowner to know what the energy efficiency or lack thereof of their home is, the issue in this bill is not finding that out about homes, it’s that it only injects that into the mix at the time that someone is trying to dispose of their home. They’re not in the business of trying to upgrade their home at that point. They’ve made a decision; they want to move on. Some can afford it, some can’t. In fact, some people today who have lost their jobs would probably be in the least—I was listening to people on the radio today saying, “I’m a month away from losing my home. I hope I can sell it before then.” That’s the kind of situation some people are in today.
The other side of it is that there is no requirement, with respect to this energy audit, for anyone to invest a single nickel if, for example, they were to have the price reduced because of the fact that the home scored lower than the buyer had hoped. There’s no requirement to invest any of that into energy efficiencies in the home. I’d like you to comment on those two if you could.
Mr. Chris Chopik: Okay, so requirement on energy efficiency investment first: You’re absolutely right. Right now, there is no conversation about energy. When I take you to purchase houses, we may see objectively similar properties. One may cost $600 a month to operate, and the other may cost $200 a month to operate. It’s the same as when you go to purchase a car. By law, consumers are disclosed the miles per gallon or litres per 100 kilometres. I believe that it’s appropriate to disclose energy performance—
Mr. Chris Chopik: Okay, sure. Then we can get into a debate with NRCan about whether HOT-2000 is as good as HERS in the US. Those issues aside, because we’re dealing with the law of the land in Canada, which is EnerGuide, there are some imperfections within that system. But disclosure and having the conversation with the customer will elevate the demand and create a marketplace where people who invest their hard-earned dollars in home energy efficiency, which benefits us as a society and benefits them individually, then are in a position to enable my industry, the real estate industry, to put a value with greater ease on somebody’s investment of $35,000 in a geothermal heating system, as an example.
Mr. Peter Tabuns: Chris, thanks very much for the presentation and the background information. I’ve been puzzled by the Ontario Real Estate Association’s approach on this. I assume you’ve been involved in discussions with other realtors. What’s driving them on this?
Mr. Chris Chopik: I don’t get it either, frankly. I’ll cite a specific example. This is a document that came from OREA, and some of you have this. Item number 2 is that one of their objections to mandatory labelling is that “those sellers who can afford expensive retrofits will want a premium sale price.” Well, that’s the reason I have a job. My job is to put a value on these things. I am very puzzled by OREA’s position. I think that it’s also ineffective at getting a job done. We could be consulting in a positive way on how to make this work, rather than putting up relatively empty objections. I think that’s the problem I have with OREA’s position.
Mr. Peter Tabuns: One of the statements that was made in Ottawa by the OREA speaker was that buyers can now tell how much energy is being consumed by looking at the bills that a homeowner can present for their gas, electricity and so on. Do you find that a reliable guide?
Mr. Chris Chopik: Well, my human experience is that some sellers are very organized, and I can ask them for their property file, which includes all sorts of very organized data, and others are disorganized. So 25% of my clients will have that information readily available and easily accessible, others will have to go find it, and some won’t be able to find it at all. In my industry, those who don’t want to participate in helping sellers put a higher value on energy performance aren’t doing that every day today. They’ve had a chance to do it in a compliant manner, and they’ve failed. We have failed as an industry in Ontario.
Ms. Laurel C. Broten: Thank you, Chris, for your comments and your paper. I want to focus on two things: One is, with respect to section 112 of the Condominium Act and the challenges that that’s creating, just see if you can expand a little bit on how you would propose that that would be remedied. The second question is, as a realtor, can you think of any circumstance where a purchaser would not care about the energy rating of a home?
Ms. Chris Chopik: A purchaser who’s planning to tear a house down or tear it apart would not care, although, if the grants continue into the future, then there would be a reason to have a pre-audit if you’re going to do a gut reno on a property. I think that through that dialogue that I’m recommending with real estate, there are things that we’ll discover and properties that may be exempt. In fact, there may be legal work to the whole process.
With respect to section 112 of the Condominium Act, I’ve been part of some community groups that have been cultivating interest in solar in Toronto, particularly, and there is a lot of interest for multi-unit residential buildings, including co-ops and condominiums. The act currently does not allow for conditions that would enable a condo board to make a decision to invest in solar PV, for example, or geothermal heating, and to create a circumstance that a lender is going to be comfortable lending against, despite the fact that the mechanisms in the act to provide a profitable and sensible allocation of resources exist.