A new white paper says British Columbia needs a new financing tool to accelerate building retrofits and meet climate goals.

The report argues that existing financing options are not enough to support large-scale upgrades to commercial and multi-unit residential buildings. High interest rates, limited owner cash flow, and constrained public budgets continue to delay projects, it says.

Published by the Zero Emissions Innovation Centre, the paper recommends a made-in-B.C. Property Secured Improvement Financing (PSIF) program based on the Commercial Property Assessed Clean Energy (C-PACE) model already used in parts of Canada and the United States.

Under the model, building owners finance energy efficiency upgrades through loans secured against the property. The financing is repaid over two or three decades through a property-based charge and stays with the building if it is sold.

According to the report, the approach lowers annual debt payments by about 10-20 per cent compared with conventional commercial mortgages. While total interest costs may be higher over the life of the loan, lower annual payments improve cash flow and make more retrofit projects financially viable.

The paper says the need is significant. Buildings remain a major source of greenhouse gas emissions in B.C. Many commercial and multi-unit residential properties are more than 50 years old and are approaching major equipment replacement cycles.

Financing a major barrier

The report notes that technical support programs, including the BC Retrofit Accelerator, have helped build industry capacity. However, access to financing remains a major barrier.

The proposed PSIF program would rely primarily on private capital, reducing pressure on government balance sheets. A centralized, non-profit administrator would oversee the program, while municipalities could opt in and retain responsibility for registering property liens.

The paper also recommends broad eligibility for retrofit measures, prudent loan-to-value limits, standardized documentation, and strong consumer protections. It argues that concerns about municipal liability and loan defaults can be addressed through program design and notes that experiences in other jurisdictions have shown municipalities are not financially responsible for defaulted commercial PACE loans.

The report concludes that a province-wide PSIF program could attract private investment, reduce financial barriers, and help modernize B.C.’s aging building stock.