Inflation and the effect on Condo

Most, if not all of us have noticed that items are becoming more and more expensive from groceries to gas to the real estate market and unfortunately this looks like our new reality. Condominium corporations will have to prepare their yearly condominium budgets based on the current inflation rates. The same goes for reserve fund contributions – reserve fund studies may need to be revisited to consider the current inflation rates. What may have been reasonable contribution last year may not be the case today. Condominium engineers may have to update the reserve fund study in order to reflect the new reality of costs and a large number of special assessments are anticipated as condominium corporations update their reserve fund studies and adjust for inflation.

The pandemic has heightened the cost and shortage of labour which in turn has impacted delivery, the cost of materials as well as wages and salaries. With the shortage of labour comes an increase in the cost of labour and the lingering disruptions of COVID-19 combined with the repercussions from Russia’s invasion of Ukraine are creating new complications and further inflation.

This new reality might affect almost every aspect of the operating expense and board members and management companies should explore all possibilities of reducing and controlling these costs on the common element fees. One option is the possibility of installing LED lights and energy efficient equipment. In doing so, there may be government incentives available that may be worth while and beneficial to the condo.

Zero-Emission Vehicle Infrastructure Program

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 has implemented the Zero-Emission Vehicle Infrastructure Program which is a federally funded program aimed at making electronic vehicle charging more accessible across Canada. Natural Resources Canada is now accepting proposals for the latest round of the funding. This round of Requests for Proposals focuses on public places, on-street, multi-unit residential buildings, workplaces and vehicle fleets and will be open until August 11^th 2022. For more information on the program, including eligibility, please read our firm’s most recent article.

Disconnect Policy

On April 11, 2022, Ontario’s new Working for Workers Act, 2021 received royal assent, which introduced many employee friendly changes to the Employment Standards Act, 2000. The Minister of Labour declared that the changes would “require most workplaces to have a right to disconnect policy.”

The government’s statements could understandably make an employer—and condo directors, owners and residents—worry that their employees or service providers, including property management, were about to become completely unreachable outside their scheduled work hours. However, the new rules do not actually give employees the right to disconnect. In fact, they do not give employees any new rights to refuse work or ignore work communications. Instead, the new rules require some employers to simply have “a written policy in place for all employees with respect to disconnecting from work.” The new rule does not apply to small businesses; an employer is only required to have a disconnection policy if it has 25 or more employees as of the first day of each calendar year.

COVID-19 Update

Unfortunately, Ontario’s top doctor has now confirmed that the province has officially entered its seventh wave of COVID-19, driven this time by the Omicron BA.5 subvariant. For the first time since May 2022, test positivity is above 10 per cent, with wastewater signals rising across the province. Ontario is also seeing its first increase in COVID-19 hospitalizations since May, with the number of people admitted for the virus higher than at any time last summer.

The BA.5 subvariant has been rising slowly since early June but really started to rise mid-month, becoming a dominant strain. Ontario can likely expect another 4 to 5 weeks in this wave, which is now in about its third week and infections are expected to increase over the next 10 days before beginning to slow down. The new wave comes amid the summer months when many are spending more time outdoors — something that would have otherwise been expected to help curb the spread of transmission, raising questions about what will happen as more people head indoors later in the year.

The government has advised that it is preparing for an influx of cases and is now opening up eligibility for fourth COVID-19 vaccine dose to all adults aged 18 and older; however, the province’s chief medical officer of health is advising that healthy adults wait until the fall to receive the fourth shot.  At this time there have been no changes to any mask restrictions however, individuals can continue wearing a mask should they wish to do so. Condominium corporations can still continue to pass and enforce their own rules that would require individuals to wear a mask and/or face covering while on the indoor common elements.

If you have any questions, please do not hesitate to contact anyone on our team:

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.