Building performance standards

On this page

• What is a building performance standard?
• Understanding the value of building performance standards
• Key considerations for building performance standards policy design
• Decision points for designing a building performance standards policy
• Determining which buildings are included
• Supporting building owners with compliance
  • Education and support
  • Establishing reporting mechanisms

What is a building performance standard?

A BPS (building performance standards) is a policy that defines specific energy and/or GHG emission performance levels that buildings/building owners must achieve by actively benchmarking and making improvements to their existing buildings over time. The energy and/or GHG emissions performance levels often have a progressive performance tier that building owners must meet over time. These performance improvement cycles drive continuous energy savings and GHG emission reductions. A BPS policy may be created or adopted by a provincial, territorial, or municipal government and applied to a defined list of building types and sizes, including existing commercial, institutional, and multi-unit residential buildings within a jurisdiction. While BPS and benchmarking are distinct policies, enabling access to energy consumption data for compliance with benchmarking programs or mandates helps inform BPS policies. Data gathered through benchmarking can provide a basis for the energy and/or GHG emissions performance levels a jurisdiction defines in its BPS policy.

Requiring reductions from existing buildings through a BPS policy can go a long way toward achieving decarbonization goals, considering that a majority of the commercial, institutional, and multi-unit residential building stock that will be standing in 2050 is already built.^{Footnote 1} Additionally, a BPS may influence new construction, given that buildings will be subject to the increasingly stringent standards once in place. A BPS can encourage developers to construct higher energy-efficient buildings, recognizing that there could be an impact in future years once the building is operating.

BPS policies are designed to improve performance for a variety of building aspects – including energy use, water use, and GHG emissions – and encourage investments in energy efficiency and other clean energy technologies and strategies. This can include increased use of renewable energy, energy storage, and electrification. Provincial, territorial, and municipal governments can collaborate with stakeholders – including the private sector, utilities, and others – to help building owners achieve the BPS over one or more performance improvement cycles. Additionally, provincial, territorial, and municipal governments can provide support, funding, and technical assistance to building owners in need of additional resources.

Understanding the value of building performance standards

Jurisdictions can adopt and/or implement a BPS as a key strategy to achieve decarbonization goals.^{Footnote 2} By requiring buildings to meet a specified level of energy and/or carbon performance, a BPS policy can drive change towards progressively reducing energy use and GHG emissions, by helping building owners plan for upgrades that improve building performance while stimulating the local economy and creating jobs.

While benchmarking and BPS activity typically start at the jurisdictional level, opportunities to coordinate across multiple jurisdictions exist on a variety of policy design and implementation processes. Coordination can lead to improved policies and reduced compliance burdens for building owners, helping provincial, territorial, and municipal governments achieve policy goals. This coordination can also result in shared information, efficient use of resources, and increased transparency.

Key considerations for building performance standards policy design

Provincial, territorial, and municipal governments have key decision points to consider when designing a BPS. While the design of a BPS policy will vary between jurisdictions, there are key elements that provincial, territorial, and municipal governments should consider when developing a policy so that it aligns with jurisdictional goals and accounts for the needs of stakeholders.

Aligning and establishing goals

Aligning a BPS with a jurisdiction’s decarbonization objectives can help ensure that the energy and/or carbon performance standards produce the necessary reductions to meet the jurisdiction’s decarbonization goals. Typically, BPS policies should rely on existing benchmarking data to help set BPS as the best-in-class resource for understanding the actual performance of a building within a jurisdiction. Provincial, territorial, and municipal governments can couple benchmarking data with other data and analysis to identify achievable decarbonization pathways by building type, to ensure that BPS goals are realistic for building owners to achieve or if policies need to be revised.

One of the most critical elements of a successful BPS is to select the appropriate performance metrics that will later be used to assess compliance. Generally, metrics fall into two broad categories – energy metrics and GHG metrics^{Footnote 3} — but variations exist within those categories. For example, metrics could be based on intensity values (for example, energy use per square meter or GHG emissions per square meter) or absolute values (for example, total energy use or total GHG emissions). Other variations for energy metrics include site or source energy metrics or greenhouse gas intensity (GHGI) metrics. ENERGY STAR Portfolio Manager provides options for different metrics that can be used by a jurisdiction to establish a BPS. A jurisdiction should choose the metric(s) that best align with key strategies to achieve their decarbonization goals. Coordinating across jurisdictions can also align objectives and allow for information sharing that can result in improved policies and streamlined compliance for building owners.

Choosing specific metrics for a BPS involves balancing several considerations, such as:

• Normalizing for operational parameters
  • Jurisdictions may want to adopt metrics that account for significant differences in building operations or activity
• Recognizing differences in property type when setting standards
  • Certain property types tend to operate at a higher site Energy Use Intensity (EUI) than others (for example, a supermarket is expected to consume more energy per square meter than a warehouse)
  • Jurisdictions should consider how their BPS will differentiate performance levels by property type, depending on which metrics or compliance paths they adopt
• Setting a timeframe for compliance and interim milestones
  • Establish timelines and performance cycles for building owners to become compliant with new energy and/or GHG emissions performance levels (for example, every 5 years) until the long-term performance standard is achieved
  • Interim standards can drive predictable improvements in building performance and corresponding GHG emission reductions while allowing for flexibility by enabling building owners to defer improvements so that upgrades can be aligned with capital planning within a longer timeframe
  • Establishing long-term standards using set metrics can provide building owners with a clear sense of the reductions they must achieve over time
• Ensuring performance is measured, and standards are established based on high-quality data
  • An important consideration in BPS design is including measures to ensure that compliance data are high quality, such as requiring building owners to verify the data they submit
  • Such measures may increase confidence in the standards and the assessment of a building’s performance relative to them
• Changing standards based on jurisdictional considerations
  • If a BPS has more than a single standard and compliance period, consider changing how standards are set over time
  • This would depend on several factors, such as changes in building performance, the carbon intensity of the electricity grid, technology developments, stakeholder needs, and shifting priorities
  • One way to accomplish this would be to create flexibility in the policy itself, where policymakers would have an opportunity to change targets at defined points in time

Decision points for designing a building performance standards policy

Provincial, territorial, and municipal governments have several key decisions to make when designing a BPS policy. These key decisions are described in the table.

Key decision points for designing a BPS policy

Decision point: Determine the appropriate department within your jurisdiction that will be responsible for administering the policy, and determine whether funding is available

• Description: First, determine if your level of government has the legislative authority to implement a jurisdiction-wide mandatory policy. Then, determine which department in your organization can prioritize the design, implementation, and enforcement of the policy. Determine the funding and resources needed to design, implement, and enforce the policy. Funding may come from a grant or other source, or through a fee placed on properties that building owners pay when reporting. Jurisdictions may consider hiring a third party to manage aspects of their programs, including the provision of support services and a customer relationship management database.

Decision point: Identify the sectors and building types that are included or exempted

• Description: Provincial, territorial, and municipal governments must understand their building stock before defining which buildings will be subject to BPS compliance. The type and size of buildings that need to comply are key factors in determining the amount of energy, water, and GHG emission savings that can be achieved, and will inform the degree of program outreach and support needed for building owners.

BPS policies often initially focus on larger buildings to target high energy savings or carbon reduction potential and keep program administration manageable. Exemptions can relate to occupancy rates, financial hardship, building size, or specialty-use buildings, among others. Data collected through existing benchmarking programs can help provincial, territorial, and municipal governments set and measure compliance performance levels of BPS policies.

Decision point: Determine the reporting mechanism, schedule, and process

• Description: Jurisdictions need to define the reporting tool, what information is required to be reported, and how building owners report information. Reporting schedules can vary depending on jurisdiction considerations. There has been phased-in reporting, where larger buildings with more resources are required to report first. Jurisdictions should consider reporting public buildings early on, allowing for the government to lead by example and enact any necessary changes before requiring other sectors to comply.

Decision point: Identify an approach to ensure data quality

• Description: Creating a process to ensure data quality is a key element of a BPS policy. Minimizing errors in the data will make performance information more meaningful and actionable for transparency and other efforts targeted at improvement. Portfolio Manager has a built-in data quality checker and is adding fields for data verification.

Decision point: Decide on an approach and timeframe for transparency

• Description: If transparency is part of the policy, provincial, territorial, and municipal governments should consider which method of public disclosure will best suit their needs. There are a variety of ways to make BPS data accessible to the public, including through public websites, online maps or spreadsheets, direct disclosure to prospective lessees or purchasers, or requiring on-building labelling. Each of these will have widely varying costs and levels of complexity, so it is important to consider those concerns and the likelihood of various approaches to achieve the goals of the policy.

Decision point: Determine how to encourage building owners to comply

• Description: The goal of BPS is to reduce energy use and/or carbon by establishing performance levels that building owners must achieve, and over time, progressively increase performance levels until the jurisdiction's decarbonization goals have been reached. It is important to consider how a jurisdiction will encourage building owners to comply with performance levels, and what penalties should be in place when a building owner is non-compliant.

Determining which buildings are included

Provincial, territorial, and municipal governments can apply a BPS metric to a variety of building types, although most BPS policies to date have been aimed at existing commercial, institutional, and multi-unit residential buildings.^{Footnote 4} See Benchmarking and Building Performance Standards in Canada for examples of building types and sizes required to comply. The process for determining which building types will be included in a BPS policy can be guided by several factors, including the amount of energy savings and GHG emissions reduction potential, the degree of program outreach and support that building owners need, and the input received from stakeholder engagement.

Jurisdictions can apply a BPS policy to the same building types required to benchmark under existing benchmarking programs or policies, relying on pre-established data collection.

Large commercial, institutional, and multi-unit residential buildings have the potential for significant energy savings and emission reductions. Since building owners and managers of large commercial and institutional buildings tend to have resources and technical expertise in-house, they may need less support than owners of smaller buildings. When considering which buildings should be included, decision-makers may want to plan for additional support for building owners to meet the requirements of a new BPS policy. Provinces, territories, and municipalities should consider creating information packages and how-to guides to support building owners so that they understand the importance of the BPS policy and compliance requirements.

It is important for provincial, territorial, and municipal governments, in consultation with stakeholders, to consider and identify exemptions and accommodations for certain building types. BPS policies should take into consideration factors such as financial hardship, capacity constraints, building usage, occupancy rates, major renovations, the condition of a property, and change of ownership for determining exemptions and accommodations. Jurisdictions with a benchmarking policy in place can also consider aligning building-type exemptions with exemptions in their BPS policies.

Supporting building owners with compliance

Provincial, territorial, and municipal governments achieving energy use and GHG emission reductions is the main objective of a successful BPS policy. It is important to consider measures to ensure that building owners comply with the energy and/or carbon performance targets without overburdening or over-penalizing if compliance is not met. Provincial, territorial, and municipal governments should build flexibility while aligning stakeholder needs with BPS objectives. While provincial, territorial, and municipal governments should focus on educating building owners and providing support to boost compliance through performance improvements, enforcement can help ensure compliance is achieved.

Compliance can be based on achieving the defined energy and/or GHG emissions performance levels or implementing a set of prescriptive measures to achieve the levels later, and when necessary, applying non-compliance penalties for building owners who fail to comply. Provincial, territorial, and municipal governments may want to primarily direct building owners to a performance pathway because it ensures a set level of savings; however, considering additional pathways can allow for compliance flexibility. For example, developing a set of cost-effective prescriptive measures may help building owners with resource constraints meet the standard and provide certainty concerning compliance. In addition, incorporating flexibility by extending compliance timeframes can enable building owners to align building upgrades with their capital planning, granted the building owner will meet the long-term standard.^{Footnote 5}

Provincial, territorial, and municipal governments can consider various compliance pathways when selecting performance metrics for a BPS. Provincial, territorial, and municipal governments and utilities can encourage investment in building performance improvements by providing financial incentives via early adoption programs or offering benefits or exceptions for buildings with ENERGY STAR certification.^{Footnote 6} Regardless of the compliance approach taken, a BPS will likely require some mechanism to allow for alternative compliance pathways for some building types.

When determining fines for noncompliance, provinces, territories, and municipalities should consider a level that would encourage compliance by setting a fine amount higher than the estimated cost of compliance. Fines can relate to building size (for example, dollars per square meter), or can be on an absolute energy or GHG basis or can decrease depending on the level of improvement a building achieves by the end of a performance period. Fines could also be triggered if the owner does not meet reporting requirements, takes measures that harm occupant health or safety, or falsifies data. Provinces, territories, and municipalities may want to consider providing additional support and considerations for building owners of certain buildings or building types, including affordable housing or other under-resourced buildings.

Provinces, territories, and municipalities may consider distributing fines collected to support building owners in need of financial support. As BPS policy implementation makes progress over time, there will be opportunities to assess the effectiveness of different enforcement approaches to inform future policy development.

Education and support

Provincial, territorial, and municipal governments are well-positioned to offer technical support and education to building owners on their BPS policy. Provincial, territorial, and municipal governments need to allocate the appropriate funding towards education and support. This can include providing educational material on planning, developing, and implementing cost-effective performance improvements, answering questions on reporting or compliance requirements, and establishing a support mechanism to assist underserviced owners, tenants, and under-resourced buildings. Utility providers can also play an important role in providing education and support to comply with BPS reporting requirements.

Technical support needs will vary by building type and size. Large commercial buildings tend to have more resources and technical expertise in-house, whereas owners of other building types such as small commercial and residential buildings may need more support. Provincial, territorial, and municipal governments (and utility providers in some jurisdictions) should consider convening building owners and technical experts to offer coordinated technical assistance, oversight, and outreach to help building owners with compliance. Provincial, territorial, and municipal governments may explore partnering with colleges and universities to provide technical support with students serving as the support staff. In some jurisdictions, utility providers have the authority and responsibility to provide such support.

NRCan is available to support provincial, territorial, and municipal governments throughout their BPS development, including through ENERGY STAR Portfolio Manager, access to helpful resources, training, and related topics, as well as technical assistance.

Decision-makers can also develop new or feature existing sources of funding to assist building owners with compliance. For many building owners, compliance with a BPS could require significant investment and financial assistance. Provinces, territories, and municipalities may have existing funding sources and programs in their jurisdictions that can be leveraged to offer support and incentives to building owners.

Establishing reporting mechanisms

Regardless of the specific design and implementation of a provincial, territorial, or municipal BPS, it is important to consider how building owners will report their energy and/or carbon use. The recommended approach for reporting under existing benchmarking policies is for provincial, territorial, and municipal governments to use ENERGY STAR Portfolio Manager. Portfolio Manager offers two reporting mechanisms: data requests and property sharing. Both are designed to make reporting easy and can work in tandem, helping to resolve data quality issues with respondents more easily.

Reporting method	Characteristics	Pros and cons
Data Request	Creates a “snapshot of performance” based on requested metrics and period.	Requires action from the building owners each reporting cycle that may improve data quality and completeness Defined metrics and periods ensure greater data privacy Offers fewer insights into historical data and into building owner inputs that could have errors
Property Sharing	Provides “real-time” and full view into all building owner inputs and corresponding metrics	Allows jurisdictions to see a rolling view of current and historical inputs and metrics as building owners make changes and when NRCan refreshes metrics, such as 1-100 ENERGY STAR scores Could create issues by not prompting the building owners to review data quality and completeness, and may raise data privacy concerns among building owners, requiring transparent communication around was data points will be retrieved, when, and for what purpose(s)

To learn more about Data Requests, Property Sharing, and other features of the ENERGY STAR Portfolio Manager benchmarking tool, visit NRCan’s Training documents page.

Coordination among federal, provincial, territorial, and municipal governments is critical when working with utilities to ensure the availability of whole-building energy consumption data. This is particularly important if a province, territory, or municipality is looking to establish a requirement for utilities to provide data or provide clear guidance on what kinds of energy data are subject to customer data privacy protections.

See Guidance for Utilities on Providing Whole-Building Energy Data to Enable Benchmarking in ENERGY STAR Portfolio Manager for more information on data access and privacy protections.