Quebec’s newly announced RénoVert refundable tax credit is aligned with the provincial government’s stated goals to reduce residential greenhouse gas (GHG) emissions, stimulate economic growth through household spending, and spur the burgeoning green products and green renovation industries. Accordingly, Quebec’s largest rental housing association argues the program could be even more effective — with flow-through benefits for tenants — if apartment building owners were also eligible.
“Currently, landlords have practically no return on investment if they make major repairs or renovations because of the lowest rate ever imposed by the rent control policy in Quebec,” says Hans Brouillette, director of public affairs with CORPIQ (Corporation des propriétaires immobiliers du Québec) which represents the owners of approximately 500,000 units of housing. “Nearly three-quarters of tenants pay their heating bills directly to the utility and they pay more for their heating because, generally speaking, these buildings are less efficient than others in the residential real estate sector. CORPIQ is asking the government of Quebec to extend RénoVert to rental apartments.”
As Minister of Finance Carlos Leitão outlined in the 2016-2017 provincial budget, released last week, $174 million has been earmarked to subsidize energy efficiency improvements and/or upgrades to private septic systems contracted between March 18, 2016 and March 31, 2017. To qualify for the green retrofit incentive, homeowners must invest at least $2,500 and can then receive a 20 per cent rebate of eligible expenditures above that amount to a maximum $10,000 credit on an investment of at least $52,500.
About 100,000 Quebecers are expected to tap into the program, underpinning nearly $1.2 billion of direct consumer spending. Government analysts also project positive spinoffs for Quebec-based manufacturers of high-performance HVAC equipment and systems, doors, windows, cladding and insulation.
“We are going to help individuals improve the environmental performance of their residence, and this assistance will at the same time benefit the entire renovation sector,” Leitão said in his March 17 budget speech.
Meanwhile, for 2016, Quebec’s Régie du logement has provided leeway for 0.4 per cent rent increases in units where tenants pay their heating costs directly to the electricity or gas supplier, and a 2.5 per cent ceiling to pass through required capital expenditures. Under this formula, CORPIQ calculates it would typically take 40 years to realize a payback on upgrades to enhance energy efficiency.
“If RénoVert was extended to include rental units, investment would increase to support the economy, while providing better housing for tenants,” Brouillette asserts.