EV charging Stations in Condos and Government Funding
The troubling statistic that transportation accounts for 25% of the total greenhouse gas emissions in Canada has influenced the Government of Canada to believe that electrification is crucial to decarbonizing the transportation industry and transitioning to a low-carbon future. In an attempt to tackle this initiative, Natural Resources Canada (“NRCan”) has implemented the Zero-Emission Vehicle Infrastructure Program (the “ZEVIP”) which is a federally funded programme aimed at making electronic vehicle charging more accessible across Canada. The programme is expected to run until 2024 with an objective to address the lack of charging and refuelling stations across Canada; one of the key barriers to Zero Emission Vehicle (“ZEV”) adoption. The program will fund up 50% of the total eligible project costs and incentive amounts are capped at a certain amount per charger type.
Since 2015, Canada has invested almost $1 billion to make electronic vehicles more affordable and chargers more accessible for Canadians. Budget 2022, A Plan to Grow Our Economy and Make Life More Affordable, proposes to invest an additional $1.7 billion to extend the government's purchase incentive program until March 2025 and to expand the types of vehicle models eligible under the program, which would include more vans, trucks and SUVs.
Further, in support of the ZEVIP, Budget 2022 also proposes an additional $400 million to NRCan to continue deploying zero-emission vehicle infrastructure by extending the ZEVIP to March 2027, complemented by $500 million that Canada's Infrastructure Bank will invest in large-scale EV charging and refueling infrastructure that is believed to be revenue-generating and in the public interest.
These investments are yet another step in reaching Canada's target of ensuring all new passenger vehicles sold in Canada are zero-emission by 2035.
For many, the hesitation with going electric stems from technological limitations in more affordable EV’s, including battery longevity and vehicle range from a single charge. These limitations have, in the past, been further exacerbated by the lack of a national and provincial network of electric vehicle charging stations that mirrors the accessibility of gasoline stations. In recent years, there have been more availability on the market for affordable vehicles that are able to travel much further distances than before.
The ZEVIP is designed to increase a network of EV charging and refuelling stations in more localized areas where Canadians live, work, and play and in multi-unit residential buildings, workplaces, or light-duty vehicle fleets. As such, the location of the charging station must be in one of the following categories:
- Public Places. Public places are defined as parking areas intended for public use that can be privately or publicly owned and operated.
- On-Street. On Street parking is considered charging infrastructure for public use and is managed by local governments.
- Workplaces. A workplace is defined as a location where employees perform duties related to employment. The charging infrastructure must be primarily used by the employees of the business.
- Light-Duty Vehicle Fleets. A light-duty vehicle is considered as having a gross vehicle weight rating of less than or equal to 3,856 kg. Light-duty fleet vehicles are owned or leased by an organization and used in support of organizational or business operations and activities.
- Multi-Unit Residential Building (“MURB”). MURB charging is defined as infrastructure in parking spaces where people reside. For the purpose of ZEVIP, to be designated as a MURB, the building must have a minimum of three (3) dwelling units. Condominiums would fall within this category.
NRCan is now accepting proposals for the latest round of ZEVIP funding. This round of Requests for Proposals (the “RFP”) focuses on public places, on-street, multi-unit residential buildings, workplaces and vehicle fleets and will be open until August 11th 2022. The funding is applicable to all expenditures directly related to the installation of charging stations in public places, on-street, in multi-unit residential buildings, at workplaces, or academic institutions. The ZEVIP program will pay up to 50% of total Eligible Costs, up to the maximum amounts shown in the following table:
How to Apply?
Applicants must address all of the criteria in their project proposals and provide all supporting documentation and information requested by the ZEVIP. Applicant’s must complete the Application Package Request Form, after which each applicant will automatically receive the Applicant's Guide and the Application Form for the RFP it intends to apply.
Each project proposal will be reviewed for completeness and assessed against the mandatory criteria. NRCan will then issue final funding decisions based on this rating and regional distribution; unsuccessful project proposals will receive letters of regret and successful project proposals will receive a Letter of Conditional Approval.
Project proposals that have been conditionally recommended for funding will thereafter undergo a due diligence assessment. This assessment will analyze the financial strength of the applicant as well as their ability to complete the project. An independent firm will be contracted to support the programme with this process. If in-depth financial analysis is required, NRCan will inform the applicant and provide details on next steps. The findings from the due diligence process will be considered in NRCan’s ability to enter into a contribution agreement with an applicant for the proposed project.
Once a project proposal has been approved and the due diligence assessment results are acceptable, the applicant will then be invited to negotiate a contribution agreement. The findings from the aforementioned due diligence assessment may determine risk mitigation strategies that will be included as part of the Contribution Agreement.
EV Charging in Condominium Buildings
The Ministry of Government and Consumer Services introduced amendments to the regulations under the Condominium Act, 1998, S.O. 1998, c.19, (the “Act”), which established a process to facilitate the installation of EV charging systems in condominium buildings. Sections 24.3 to 24.6 of Ontario Regulation 48/01 (“O.Reg. 48/01”), under the Act, governs the process of installing EV charging stations, specifically, the provisions set out the following:
- the process for condominium corporations to obtain approval to install EVCSs; and
- the process for an owner to request and obtain approval to install an EVCS.
Installation by the Condominium Corporation
Generally, when making a change to the common elements or a change in a service that the condominium corporation provides to unit owners, this must be done in accordance with section 97 of the Act. However, O. Reg 48/01 exempts a condominium corporation from complying with section 97 of the Act as long as the installation of the EV charging station is carried out in accordance with the provisions therein.
If a condominium corporation decides to install the EVCSs, all costs associated with same will be considered common expenses. Accordingly, all owners will be responsible for paying for the costs associated with the installation, based on the statement of proportion set out in a condominium corporation’s Declaration.
O. Reg 48/01 provides for two (2) scenarios:
1. On notice, but without a vote of the unit owners
Under this scenario, the condominium corporation may unilaterally install the EV charging station, on notice to unit owners, if certain prescribed conditions are met. Generally, if: (i) the estimated cost of the installation is not more than 10% of the annual budgeted common expenses for the current fiscal year; (ii) and the installation of the EVCE would not, in the eyes of unit owners, cause a material reduction or elimination of their use or enjoyment of their units or the common elements, then the condominium corporation may proceed with the installation.
2. Enhanced notice to unit owner’s and possible vote required
If the estimated cost of the proposed installation is in excess of 10% of the budgeted annual common expenses for the current fiscal year or the installation would cause a material reduction in the use or enjoyment by owners of their units or the common elements, then the condominium corporation will have to provide notice of the proposed change to unit owners, which notice must include, a statement that the unit owners have the right, in accordance with section 46 of the Act, and within sixty (60) days of receiving the notice, to requisition a meeting of owners. The proposed installation will be approved only if:
- The owners of at least 15% of the units have not requisitioned a meeting within sixty (60) days of receiving the notice;
- If a meeting has been requisitioned, but a quorum is not present at the first attempt to hold the meeting; or
- If a quorum is present at the first attempt to hold the meeting, but the owners have not voted against the proposed installation.
Installation by a Unit Owner
Generally, a unit owner who wishes to make a change to the common elements may do so under section 98 of the Act by a obtaining approval from the corporation’s board and entering into Section 98 Agreement. Section 24.4 of O. Reg 48/01 provides an exemption to section 98 of Act for the installation of an EV charging station by a unit owner, where the following process is to be followed.
Step 1: Written application
An owner must create an application and deliver it to the condominium corporation. The application must:
- Identify the owner and the owner’s address for service;
- Be signed by the owner; and
- Include drawings, specifications, and/or information relating to the proposed installation.
The condominium corporation then has an obligation to respond, in writing, to provide any information, permission, or authorization that the owner requests that will assist the owner in meeting the requirements for providing drawings, specifications, and/or other information.
Step 2: The Decision
Once the application has been submitted to the condominium corporation, the condominium corporation will have sixty (60) days to respond to the written application (this can be extended upon agreement of both parties). The condominium corporation can only reject the request for installation if, based on the opinion or the report of a qualified professional:
- The installation would be in violation of the Act or any other legislation;
- The installation would adversely affect the structural integrity of the property; and/or
- The installation poses a health and safety risk to the property and its occupants.
If the condominium corporation is rejecting an application for one of the aforementioned reasons, it is required to provide a copy of the report or opinion of the qualified professional to the owner.
Step 3: The Agreement
If the application is not rejected, the condominium corporation and the unit owner have ninety (90) days to enter into an Agreement. The Agreement must contain terms and conditions that speak to, inter alia: the manner of installation of the EV charging system; how costs will be allocated between the parties for the installation; each party’s duties and responsibilities with respect to the EV charging system, including the responsibilities relating to the cost of the use, operation, repair after damage, maintenance and insurance; and who will have ownership of the EV charging system or any part thereof. There is no obligation on the Corporation to pay for the installation and the costs may be passed on to the unit owner. However, we suggest that consideration as to the lifespan of infrastructure cost be a basis for amortization and recoupment for the investment. With that said, it is important to remember that where parking units are unitized, the value of an EV charging system in the market is solely a gain to the unit owner. The Agreement is registered on title and the rights and obligations thereunder pass to a new unit owner, so you can structure the Agreement with that in mind as well.
The condominium corporation must, as soon as reasonably possible, register the Agreement on title to the owner’s unit in order for it to take effect.
Mediation and Arbitration
Any disagreement between a unit owner and a condominium corporation with regards to the EV charging system must be submitted to mediation and arbitration. An application by an owner for the installation will be deemed abandoned if the unit owner or condominium corporation do not submit a disagreement to mediation and/or arbitration for resolution within six (6) months of the condominium corporation rejecting the owner’s application or within six (6) months of the time provided for the two parties to enter into the written Agreement.
Although new condominiums will be required to come equipped with electric vehicle charging infrastructure, existing condominiums need to prepare for EV charging stations. Whether the Corporation decides to be proactive and gain some funding from the Corporation or anticipates responding to unit owner requests as technological advances and more affordable models become more readily available, a condominium board should be prepared by knowing the condominium. Is your condominium able to support EV charging stations in each parking space or in a few parking spaces only? Do people have to share? How will you bill for the electricity component? Do you have a qualified service provider? Condominium buildings with the proper infrastructure in place to support EV charging will be able to present themselves as “EV friendly”, making them more marketable to potential buyers. Considering this, it may be prudent for board’s to be proactive in ensuring that their buildings are equipped with the requisite capabilities to support an electric future.
Most importantly, each condominium community is different, and it is crucial for boards to understand the needs of their residents before over-committing on investing in what may be the future of other condominium communities, but not their own. However, now is the time for boards to take action. Boards should consider applying for the appropriate funding to limit the financial exposure that may be implemented on unit owners.
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All of the information contained in this article is of a general nature for informational purposes only, and is not intended to represent the definitive opinion of the firm of Elia Associates on any particular matter. Although every effort is made to ensure that the information contained in this article is accurate and up-to-date, the reader should not act upon it without obtaining appropriate professional advice and assistance.