Mr. Chair, thank you for inviting me to address the committee today.
I want to start off by talking to you about how green buildings can help achieve the Government of Canada's low-carbon economy and climate change targets, particularly through its own building portfolio.
You as the government are obviously one of the largest building owners in the country, and as such, you have tremendous procurement power in how you procure new buildings, how you lease your buildings and also how you manage and retrofit your existing buildings. There's a little opportunity not only for leadership on the part of the Government of Canada but also, of course, for a return on your investment, because the building sector, when it comes to climate change, is one of the few sectors, if not the only sector, in which investment actually has a payback over time while reducing carbon emissions and other environmental impacts.
In terms of the key objectives, I want to talk to you about the federal government's building portfolio to reduce emissions to meet 2030 targets.
I also want to talk to you about new buildings. The government ought to target high performance, focusing on zero carbon buildings and highly energy efficient buildings. Another area on which an interest was expressed was the whole concept of zero waste coming out of those buildings, be they office buildings or other building types.
Finally, there is the existing building sector and investment in the energy efficiency of existing buildings, carbon reduction and zero waste.
I want to point out that in terms of climate change, it has become very clear that existing building retrofits and enhanced operational practices are key to achieving any carbon reduction targets in the building sector. Without those, it's going to be very hard to achieve those targets by 2030.
I also want to point out that carbon is a very important metric. Increasingly, in moving towards a low-carbon economy, we need to focus not only on energy efficiency but also on carbon. You can have a very energy efficient building that still produces a significant amount of carbon, depending on the energy that building uses. I think that carbon as a metric is very important. Energy efficiency and carbon are not the same thing, as I will point out throughout my presentation.
In terms of meeting the greenhouse gas emissions target, that requires leadership of the federal government with regard to its own buildings. We did some research. I wouldn't say it's highly accurate, but it's the information that we were able to access, and it shows that federal government buildings account for 3% of building sector emissions. I want to point out that there's already a lot being done in government-owned buildings, particularly through the real property branch, with significant advancements both in LEED and zero carbon buildings.
In addition to what you're already doing, and in terms of enhancing your leadership roles in government-owned buildings, one thing is to adopt a portfolio-wide retrofit strategy and operational practices for existing buildings to achieve high performance, whether zero carbon and/or the LEED building standard. The LEED building standard is already being used by the government for new buildings, so this could be extended to existing buildings. A second part is to ensure innovation in building design and construction by adopting a zero carbon building standard for new buildings.
In terms of the financial benefits of greening the federal government building portfolio—and I'm talking particularly about existing buildings here—there are four major initiatives targeted at buildings of over 25,000 square feet. The four strategies are building recommissioning, deep retrofit, renewal energy procurement, and fuel switching, so switching from a fossil fuel to a clean, renewable source of energy.
Our studies have shown that if these buildings are built to LEED standards for existing buildings, there are savings in operational costs and a return on investment over the life cycle of a building. In our survey, we found that owners expect to recoup the full cost of the renovation through energy savings over the next three to five years and see a decrease in operating costs of 3% to 10% within the first year and up to a 32% decrease within five years. This is obviously a significant opportunity in terms of both carbon reduction and cost savings, but why LEED?
Just to emphasize this, LEED is a globally recognized standard and is now being used in 160 countries. It provides a credible framework and guideline, as well as credible certification, which is key. It's well supported very effectively by the Canada Green Building Council here, the U.S. Green Building Council south of the border and other organizations across the world. It allows you to improve energy efficiency and reduce carbon, but also to make advancements in other areas, such as water efficiency, waste and occupants' health and well-being.
We'll go to the next slide on reducing federal government GHG emissions. The Canada Green Building Council really assists the government in getting there. We are a recognized, national, non-profit organization that's industry led. Our board and our membership are made up of a cross-section of people from the industry, from investors and owners to developers, designers and product manufacturers, as well as builders.
We have an existing MOU with the Government of Canada, with the real property branch at PSPC. It was updated in 2015. We've already worked on the implementation. We recommend that the government should formally implement a LEED gold or platinum policy, not only for new buildings, but also for existing buildings, and upgrade its 2005 policy. You were one of the first entities in the country to adopt the green building policy in 2005 under the Liberal government. You should move it up to LEED platinum and possibly to zero carbon for select projects. There's a real opportunity here.
On the zero carbon standard, this is really the area of innovation. The zero carbon building standard is a made-in-Canada solution to reduce carbon emissions and provide a path for buildings to achieve our climate change commitments. Without getting into the technical details, what it really does is combine high levels of energy efficiency with taking advantage of renewable energy sources and, particularly in Canada, taking advantage of our clean energy sources in provinces such as British Columbia, Manitoba, Quebec and other areas.
Going to zero carbon also increases the resiliency of buildings, in that the building envelopes are better, so the buildings are cool longer in the summertime and warm longer in the wintertime. In the case of disasters, renewable energy onsite, which supplies at least some energy, will allow the buildings to operate during periods of outages and natural disasters.
Last month, we released a study on the business case for zero carbon building, which we did with the Government of Canada, with support from various government departments, along with support from REALPAC, comprising the largest real estate organizations and the largest owners in the country, and a couple of foundations. That study is now available, but it's highly technical.
What I wanted to point out is that we studied the cost of zero carbon buildings in six cities. We studied seven building types. We found that over four million tonnes of carbon could be avoided in those buildings. The strongest outcomes are in Halifax, due to the high carbon intensity of the Nova Scotia electricity grid. The outcomes for Montreal, Ottawa, Toronto and Calgary are economically strong, with upfront capital cost premiums that are mitigated over the life cycle by higher operating and emissions savings.
We included both energy pricing and carbon pricing in predicting how these buildings would do over their life cycle, with the life cycle being defined as 25 years. The good news is that these buildings can be done right now with existing technologies and existing know-how. The council is a supporter of this standard—and we developed this standard with the industry—for buildings that have already been certified.
One of those is a private sector building in Kitchener-Waterloo. The other one is a Bentall Kennedy commercial office building and two institutional buildings.
Overall, the results show that there's a life-cycle return of 1%. In the private sector, a 1% return is not a lot, but in this context it means that zero carbon buildings don't cost you more over their life cycles. There are only modest incremental capital costs of about 8%, on average, depending on the building type. That signals that these buildings can be done right now. In fact, the Government of Canada has one building in the program, the Arthur Meighen building in Toronto, which is a major retrofit. The additional life-cycle cost of that building will be about 6% over 25 years.
The Government of Canada has a very important role to play to de-risk zero carbon standards for the private sector. You played a similar role when the LEED standard first came into Canada, de-risking it for the private sector; now 45% of our LEED-certified buildings are commercial private sector buildings. Thanks to the leadership by the government, there was significant growth in the sector. It would also accelerate the adoption.
I want to finish off by showing you the opportunities in terms of zero waste. The council now has a new system, TRUE, which stands for “total resource utilization and efficiency”. It's a zero waste standard that's being used south of the border. A number of projects have already been certified in Canada. This is an additional way to achieve exceptional performance in waste, in addition to what a LEED building would bring to the table. LEED projects already divert 75% to 90% of construction and demolition waste, and have requirements to reduce waste from building operations during the life of the building. The zero waste standard brings additional...zero waste stands for 90% diversion of waste.
We include here a case study by HP in California. It's a computer company. They are diverting, through recycling and composting, 96% of their waste from landfill. They are also implementing sustainable practices. They are changing their purchasing and procurement practices around plastics and food. They are also donating food. They have reuse programs for office supplies, furnishings and computer equipment. They also host employee events for existing and new employees on how to do that. The zero waste standard is again a profitable standard in that it will help an owner reduce waste disposal and waste management costs. As well, importantly—
