Attention affordable housing providers! The Canadian government has introduced the Canada Greener Affordable Housing (CGAH) program. The program will provide funding to make deep energy retrofits in aging residential rental buildings and make them energy efficient. These retrofits may include high-efficiency heating and cooling systems, energy-efficient appliances, insulation, air sealing, windows, and doors.
As part of Canada’s Green Buildings Strategy, the program aims to reduce the approved housing project’s energy consumption by 70% and GHG emissions by 80%.
The Canada Greener Affordable Housing (CGAH) program has something for everyone.
- Affordable housing providers can improve the energy efficiency and the lifespan of their aging buildings.
- Housing residents can enjoy improved indoor air quality.
- The government can reduce its GHG emissions and come closer to achieving net-zero emissions by 2050.
If you are an affordable housing provider, here is a guide to the Canada Greener Affordable Housing (CGAH) program and how to avail of it.
Do You Qualify for The Canada Greener Affordable Housing (CGAH) Program?
The target of the CGAH program is residential buildings that provide housing to low- and mid–income earners. Community housing providers, indigenous governments and organizations, and provincial, territorial, and municipal governments can apply for the CGAH program. If you are among such providers, see if your property qualifies for the program.
Your housing should check three levels: property type, housing type and affordability.
Property type: Community housing, affordable rental housing, indigenous community housing, shelter, transitional, supportive housing, single-room occupancy, or mixed-use with affordable rental housing qualify for the program. These properties should meet some specific housing requirements.
Affordability: Your project should meet the affordability criteria of municipal, provincial or Canada Mortgage and Housing Corporation (CMHC) program or other CMHC criteria like rent-geared-to-income, low-income, moderate-income, established income or rent limits/thresholds.
- The residential use of the above property types should be at least 70%.
- The affordable housing project must have at least five units or beds and serve low to moderate-income households.
- If it is a single detached dwelling, duplex, or townhouse, it should be at least 10 years old.
- If it is a mid to high-rise building, low-rise, or multi-plex, it should be at least 20 years old.
You are more likely to qualify for the program if you have not done any major work on the project since it was built and are facing at least two of the following issues:
- high energy bills (electricity, gas, oil),
- near future envelope replacement (walls, roof)
- condensation in windows, mould or water damage on windowsills
- frequent occupant complaints around heating and poor air quality.
How Does the Canada Greener Affordable Housing (CGAH) Program Work?
If you are eligible under the CGAH program, you can apply for two types of funding: pre-retrofit funding to study the retrofit requirement and retrofit funding to install the devices. Here’s how to go about with the application.
First, you apply for pre-retrofit funding, the window for which will open from November 1, 2023, to January 31, 2024.
You must specify the pre-retrofit activities, such as an energy audit, energy modelling study, and a recent building condition assessment report you are interested in. You also have to provide the quotation and the estimated start and end date to carry out the activity.
If the quoted activities are approved, the CMHC will review them and give an advance of up to 25% of the approved funding amount. It will release the balance funding when you submit the invoices for eligible expenses in the same fiscal year it was approved.
You can get a maximum pre-retrofit funding of $130,000 per project for over three years starting in 2023/24.
Once you have the reports and documents from pre-retrofit activities, you can apply for retrofit funding, the window for which will open from September 15 to December 15, 2023.
The CMHC will give retrofit funding of up to $170,000 per unit in the combination of repayable and forgivable loans over four years starting in 2023/24. The forgivable loans portion would be $85,000 or 80% of the retrofit cost, whichever is lower. You must claim this loan in the same fiscal year it was approved. The CMHC will provide the remaining funds through a low-interest repayable loan, which you can amortize for the remaining economic life of the building or a maximum of 40 years.
You will only pay interest while the energy retrofits are being installed. However, you must complete the retrofit work within two years of approval. Once the work is completed, the interest and principal payment will start. For the repayable loan, the interest rate will be locked for a 10-year term, during which no pre-payment will be allowed. After the 10-year term, you can repay, prepay, or renew the loan. The interest rate will be reset according to the applicable rate at the time of renewal.
Housing providers can recover the cost of repayable loans from the energy savings the retrofit will bring.
The CMHC will review the applications submitted based on,
- the project’s depth to reduce energy consumption and GHG emissions,
- and the number of units and population the project will serve.
The government has allocated $19.5 million for pre-retrofit and $1.1 billion for retrofit funding. The CHMC will review the application and allot funds on a first come, first serve basis till the budget lasts. The first call-out window is over. The second call-out window will begin soon. Try to apply early to improve your chances of securing funding.
You can seek the help of a professional accountant to expedite your application for the CGAH Program.
How to Apply, Who to Contact & Where to Find More Information
Contact Ford Keast LLP in London to Help You Access Canada Greener Affordable Housing (CGAH) Funding
A professional accountant can guide you on the various government programs that come from time-to-time and help you through the application process. At Ford Keast LLP, our accountants can provide services such as preparing accounts and availing government funding. To learn more about how Ford Keast LLP can provide you with the best accounting and consultation, contact us online or by telephone at (519) 679-9330.