Mr. Speaker, with regard to the investment of the Canada Infrastructure Bank, or CIB, in the Avenue Living residential retrofits, with regard to (a), the CIB’s investment is structured as two corporate loans, together the “CIB credit facility”, to two Avenue Living entities, together, “Avenue Living”, that wholly own the properties being considered for decarbonization retrofits, each a “project”. Drawdowns under the CIB credit facility are made available to Avenue Living pursuant to a four-year availability period up to a maximum amount of 80% of total eligible project costs net of grants, not to exceed $130 million in aggregate. The aggregate amount drawn will convert to a fully amortizing term loan which at the earliest of the completion of the final project; or one year following the end of the availability period. The CIB’s investment must be fully repaid within 24 years of financial close.
With regard to (b), Avenue Living has not used the CIB credit facility to finance retrofits of any properties as of May 3, 2024. Avenue Living has identified a preliminary list of approximately 95 properties that it intends to retrofit with CIB financing. The proposed portfolio consists of approximately 240 buildings, all of which are bound by specific eligibility criteria, including a required minimum decarbonization threshold. In accordance with the provisions of the CIB credit facility, Avenue Living can add, remove or replace properties in the preliminary list throughout the availability period, subject to meeting the defined eligibility criteria and satisfying the minimum decarbonization threshold, always subject to the term of the availability period and the maximum aggregate CIB investment amount.
With regard to (c), the CIB is not privy to any information related to specific properties and rent increases. Furthermore, Avenue Living has not used the CIB credit facility to finance retrofits of any properties as of May 3, 2024.
With regard to (d), no disbursements under the CIB credit facility have been made to Avenue Living as of May 3, 2024.
With regard to (e), all projects are at various stages of early development as of May 3, 2024, with certain properties further along and nearing eligibility criteria and conditions for disbursements under the CIB credit facility.
With regard to (f), the core mandate of the CIB’s Building Retrofits Initiative, or BRI, is to reduce investment barriers to modernize and improve the energy efficiency of existing buildings to drive significant reduction in carbon emissions, which additionally will improve the living conditions for tenants through co-benefits. In the case of Avenue Living, each project is subject to meeting specific minimum decarbonization targets and the potential CIB investment was assessed on that basis. The CIB credit facility was agreed on terms that made those reductions economically feasible. Also, Avenue Living is bound under the CIB credit facility by requirements to comply with applicable law, including any applicable landlord-tenant laws, regulations and policies in effect at the time in the relevant jurisdictions. The goal for Avenue Living is to achieve a greenhouse gas, or GHG, remissions reduction of over 49% across the portfolio of retrofitted projects, while maintaining a required minimum annual GHG reduction threshold of at least 30% for each building.
With regard to (g), while an indirect benefit of the CIB credit facility is to lower the economic burden on Avenue Living and its tenants that benefit from retrofits, the core mandate of the CIB’s BRI is to support existing property owners in reducing investment barriers to modernize and improve the energy efficiency of existing buildings, which dictates the specific provisions included in any given credit agreement.
With regard to (h), CIB understands that affordability is a critical issue for Canadians, which is why going forward we are ensuring residential building upgrades financed by CIB will not be used as a rationale to increase rent. Avenue Living and the CIB continue to discuss this matter.
With regard to (i), for all subsequent CIB investments under the BRI that finance retrofitting of multi-unit residential buildings, the loan agreements will include provisions that limit a borrower’s ability to increase rents or impose additional utility burdens on existing tenants as a result of the CIB’s investment in the decarbonization retrofits.