Loan deal proof green power works

Canada Trust

Sometimes we forget the collective power we have as people. It came home to me with a wallop as I was sitting in a corner office on the 34th floor of the Canada Trust tower, at the architecturally spectacular

BCE Place

in Toronto, early on a raw February morning when the fog was so thick outside I could barely see the next building.

I was listening to Gary Kawaguchi, vice president of personal lending services, explain why Canada Trust offers preferential loans to people who will build to a higher environmental standard when they construct or renovate a home.

We do it, Kawaguchi was saying, because we know people are concerned about the environment. « All our research shows that even though the environment sometimes takes a back seat to the economy, nevertheless there is a prevailing, long-term, deep concern.

« This concern moves around in the consciousness of Canadians, depending on what’s happening that day or that week.’’ But, he said, it’s always there and it’s always major.

Canada Trust is not a bank; it does not engage in commercial lending. It concentrates exclusively on individuals, and that means it’s focus is on the grassroots. So when the grassroots speak, it responds. Canada Trust is nothing if not astute.

Consequently, it has offered to take a 20 per cent lower return on mortgages if homeowners use the money to make their existing homes more energy and resource efficient. It does that, says Kawaguchi, by charging a lower interest rate and amortizing the loan over a longer period.

It shows that consumers can change things. And it reminds me of what John Kenneth Galbraith, the prominent U.S. economist, has been saying for generations, namely that orthodox economists have got it all backwards. They speak of the economy and market forces with the reverence reserved for unalterable rules of nature.

However, says Galbraith, the economy is only a tool. We should first decide what kind of society we want; then we should fashion an economy that will deliver it. Not vice versa. What’s going on with Canada Trust strikes me as a beginning step in the direction Galbraith is pointing.

Canada Trust isn’t offering as great an incentive in mortgages for new houses, but the thrust is the same. There are two types. One is called an « R-2000 mortgage’’ for houses built to a higher standard energy efficiency; the second is for an « EnviroHome’’ — a house built to even higher standards developed by the Canadian Home Builders’ Association and Canada Trust and co-sponsored with Canada Mortgage and Housing Corporation and Natural Resources Canada.

According to Kawaguchi, both houses will cost 3 to 5 per cent more to build, but the extra cost can be recovered in five years from savings in utility charges. As an enticement to build to a higher standard, Canada Trust gives homeowners up to $1,000 in a cash rebate for use in paying energy bills.

« I don’t like to focus only on the five-year payback,’’ says Kawaguchi. « We’re also talking about a higher quality of life, better air, fewer emissions from materials.’’

The EnviroHome uses solar energy, low-flow water fixtures, composite wood materials made from waste wood and scrub trees (instead of full-dimension lumber cut from mature trees), state-of-the-art windows that are more efficient at retaining heat than heavily insulated walls, energy-efficient lighting, a number of recycled materials, and paints, glues, carpets and other products chosen for their low emission of gases that can touch off allergies.

It also captures rainwater for later use in gardens, thereby reducing demand on municipal water supplies and, at the same time, reducing storm water effluent that carries all sorts of pollutants to waterways.

I expect that renovations will have the most immediate, and possibly the largest, impact on the environment. So far, says Kawaguchi, the loan policy has generated « fair activity.’’

But there’s a fly in the ointment. Canada Trust has relied on Green Community organizations in cities and towns to do independent audits of homes. It’s only after they’ve confirmed that proposed renovations would improve energy efficiency that Canada Trust has granted its preferential loans.

However, the Ontario Government has cancelled funding to Green Communities across the province.

« We’re trying to find ways to keep (the loan program) going,’’ says Kawaguchi, « but I haven’t an answer yet.’’ He sounds determined to find one.

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