Court battle with City of Toronto could undermine building standards meant to make homes more resilient to climate change & sustainable 

The ongoing California wildfires are the latest devastating reminder of the need for resilient, sustainable infrastructure and homes in the face of climate change. 

Yet instead of constructing houses to withstand future challenges and mitigate a range of climate-related problems, some builders are pushing to sideline sustainability due to rising costs and the impacts of regulatory requirements.

In November, the Residential Construction Council of Ontario (RESCON), representing new home builders, filed a legal application to Ontario's highest court targeting the City of Toronto over its escalating Toronto Green Standard (TGS) performance measures, which aim to enforce stricter environmental building standards.

(The Atmospheric Fund)

The association representing more than 100 unions is seeking a mandatory order to enforce the Building Code Act, aiming to prevent the city from applying building regulations to planning applications, arguing that such actions are “beyond the legal authority of the city.”

“With a critical need for new housing, it is imperative that all levels of government take immediate action to boost construction by lowering the taxes, fees and levies and reducing the red tape and bureaucracy which slows the industry and adds to the cost of housing. To spur the market, we need conditions that allow builders to build houses that people can afford. Otherwise, we may be in dire straits as new home construction stalls and unemployment in the industry rises,” RESCON president Richard Lyall said in a statement.

The move is backed by a report titled Housing Market Outlooks in Ontario, commissioned by RESCON and prepared by a Toronto-based economic research firm, warning housing starts are expected to decline in the coming years, exacerbating the already critical housing supply shortage in the city.

A report by The Atmospheric Fund (ATF) challenges this narrative, arguing that green standards have not contributed to housing slowdowns.

“The statistics and the facts don't support their claim…So, the fact that they're challenging Toronto specifically, and not another municipality that has green standards, they have picked the worst example to make that argument with, because it holds absolutely no water. It's just not true in the world we occupy,” ATF senior manager of climate policy Evan Wiseman told The Pointer in an interview.

The provincial government has used aggressive policies to expedite housing construction projects; critics worry it’s doing the opposite.

(Doug Ford/X)

In 2023, Toronto exceeded its housing targets by 51 percent, with nearly 96 percent of housing starts meeting the Toronto Green Standard. “Overall, Toronto’s housing starts have grown or stayed consistent nearly every year since the TGS was implemented,” the report notes.

The legal application states the TGS includes six categories of standards for development projects including air quality, building energy, emissions and resilience, water quality and efficiency, ecology and biodiversity, and waste and the circular economy.

Wiseman explained “green standards are effectively just a collection of all the municipal development standards” to ensure that new developments create thriving, sustainable communities. 

These standards don’t just focus on “energy efficiency and carbon reduction, which are incredibly important to lowering costs for people, but also include things like bike paths, managing stormwater runoff, and preserving green spaces…things that make our streets and communities livable.”

As previously reported by The Pointer, the Toronto Green Standard (TGS) has become a gold standard for sustainable development, inspiring other municipalities such as Mississauga to adopt similar models.

Introduced in 2006, the TGS is now in its fourth iteration as of May 2022 and is designed to guide Toronto toward achieving net-zero emissions by 2040, a target set by the city in 2021.

Over the past years, the city has extensively consulted with developers and construction stakeholders on TGS updates including EllisDon, BILD, and Minto who have supported the standards while suggesting minor amendments.

In 2022, RESCON itself supported certain TGS updates, such as the removal of minimum parking requirements, which not only reduces embodied carbon in construction but also encourages alternative modes of transportation and lowers construction costs for developers.

“We realized we wanted to respond to what the pressures or the environmental concerns were for the City of Toronto,” Jane Welsh, project manager for Environmental Planning in the Strategic Initiatives, Policy and Analysis unit of Toronto City Planning, had told The Pointer previously. “So it was starting to think and being forward-thinking and proactive thinking about what we needed to do to ensure that new development was built in a more sustainable fashion.”

(Clean Air Partnership)

Toronto has pioneered a tiered approach to sustainable building standards. While baseline standards are mandatory, the TGS also includes optional higher-tier standards that are set to become mandatory over time, ensuring continuous improvement and progress toward sustainability goals.

Since 2010, the TGS has required new developments to meet stricter energy and emissions performance measures, reducing greenhouse gas emissions by over 5.4 megatons, according to the city of Toronto.

The city even offers incentives to developers through its Development Charge Refund Program to encourage the adoption of higher-tier standards. Since 2010, developers who exceed the mandatory standards have been eligible to apply for a rebate on development charges. In 2022, the City boosted the program, increasing the refund by 25 percent for Tier 2 projects and by 50 percent for Tier 3 and Tier 4 projects.

In Mississauga, Mandatory Tier 1 metrics took effect last year, while Tier 2 and Tier 3 metrics remain voluntary. 

“All new residential and non-residential site plan approval applications submitted on or after March 1, 2025, have to comply with Tier 1 green development standards,” the city states on its official website.

The city plans to implement Tier 2 as mandatory by 2028, followed by Tier 3 in 2030, aligning with the goals of Mississauga’s Climate Change Action Plan to guide the municipality toward achieving near-net-zero emissions by reducing greenhouse gas (GHG) emissions by 40 percent by 2030 and 80 percent by 2050.

For Toronto, the Net Zero Strategy aims for community-wide net-zero greenhouse gas emissions by 2040, with an interim target of a 65 percent reduction by 2030, based on 1990 levels.

In Toronto, the Net Zero Strategy targets community-wide net-zero greenhouse gas emissions by 2040, with an interim goal of a 65 percent reduction by 2030, based on 1990 levels.

Green development standards play a vital role in moving toward these goals, supporting broader national targets. In December, Canada raised its emissions reduction target to 40 percent below 2005 levels by 2030, with a long-term goal of reaching net-zero emissions by 2050—a target that some experts suggest is insufficient.

The GTHA creates close to 50 percent of Ontario’s emissions.

(The Atmospheric Fund) 

The 2023 Carbon Emissions Inventory by TAF shows carbon emissions in the Greater Toronto and Hamilton Area (GTHA) increased 2 percent in 2023, from 53.5 million tonnes in 2022 to 54.5 million tonnes, surpassing pre-pandemic levels.

Buildings remain the largest contributors, making up 45 percent of all GTHA emissions.

(The Atmospheric Fund)

Given these figures, can Ontarians afford to roll back on green development standards? The answer seems clear.

Wiseman said he “understands RESCON's point of view,” seeing green standards “as unnecessary costs,” but argues that the real concern is long-term operating costs for homeowners, arguing green standards not only improve resilience to extreme weather with better insulation, windows, and design but also reduce energy costs and increase durability.

“Green standards don't dictate exactly what developers must do; rather, they set goals and objectives to ensure when someone buys a home, they know it's safe, efficient, and won't cost as much as a similar home built elsewhere without those standards. So there's a lot of value back to the consumer,” he added, noting green homes are better equipped for extreme weather events like wildfires, keeping smoke and particulate matter out of living spaces. “For instance, heat pumps have HEPA filters attached to them, and they clean the air inside your home.”

(City of Toronto)

Green standards offer a prevention approach, primarily benefitting people by improving affordability and long-term sustainability, making it easier to maintain a home. “Retrofitting a home years later can be far more expensive like buying a home for $850,000 or $900,000 and then needing to spend another $60,000 to $70,000 on retrofitting just a few years later is a major concern,” he said.

“RESCON really plays to the lowest denominator of developers that just want to build a building get out as fast as possible and move on to the next thing, and they do not care about the people inhabiting their products.”

This trend is not isolated to local builders. 

Across Canada and North America, companies are scaling back sustainability pledges. Major corporations like Mercedes-Benz Group AG, Equinor ASA, and ArcelorMittal SA have all removed ESG (Environmental, Social, Governance) labels from their revolving credit facilities this year.

In November 2023, the federal government introduced Bill C-59, aimed at strengthening greenwashing regulations through the Competition Act. While many welcomed the bill, there are concerns that it doesn’t go far enough to effectively combat greenwashing and protect Canadian consumers.

Bill C-59 passed without amendments on June 19, 2024, and received Royal Assent on June 20, 2024. 

Since its passage, several oil and gas companies—including MEG Energy, Suncor, Cenovus, and Canadian Natural—have “temporarily” removed references to sustainability and climate from their websites.

“There is uncertainty on how the new law will be interpreted and applied. Until the Competition Bureau provides clarity and specific guidance on what is required to comply with these new laws, given the associated risk of non-compliance, we have temporarily removed some environmental and climate content from our website, social media and other public communications,” a statement released by Suncor mentioned. 

Greenhushing is the practice of companies withholding information about their sustainability initiatives.

(The Sustainable Agency)

Canadian Climate Law Initiative notes: “While companies must be careful with their statements to avoid greenwashing risks and the other risks arising therefrom, they should not fear or refuse to publicly disclose climate-related information. This practice is called greenhushing. Instead, companies should engage in real climate actions, avoid boilerplate disclosures, get third-party verification, and be transparent in their communications.”

These moves are just the tip of the iceberg, poised to melt as right-wing governments rise globally.

At a more local level, Wiseman said if RESCON prevails, it could have broader implications for municipalities in the Peel region.

“This isn't just a challenge to Toronto's authorities. This is a challenge to municipal authorities across the whole province, and that's something that municipalities really need to understand is that what will happen to Toronto will have knock-on effects for them and their development industry,” he warned while criticizing the national codes as well as the recent updates to the Ontario Building Code, which came into effect on January 1, 2025, for failing to adequately address the realities of a changing climate.

“It just provided a bare minimum standard that developers have to build to ensure safety. It doesn't have anything to do with taking into account our changing climate.”

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