Government Concerns Response

DRC Response

While DRC is a first-mover in the Alberta CEIP space, our founding team brings directly transferable expertise:

• Chris Weinhaupl — 20+ years in regulated-industry technology solutions, including MetroNet (sold to AT&T for $6B+). Expert in building enterprise systems for complex, multi-stakeholder environments.
• Kevin D Brown — 40+ years in high-performance building construction, Passive House building energy modelling, and energy audit methodology. Instructor with Passive House Canada.
• Robert Homersham — Senior counsel at Field Law specializing in commercial real estate, municipal finance, land use planning, and the Municipal Government Act. Past president of NAIOP Calgary.

Additionally, DRC has conducted extensive analysis of the existing CEIP administrator (AMSC) and has adopted and adapted their contractor frameworks, code of conduct, and marketing guidelines — with appropriate attribution and commercial-specific modifications.

DRC Response

DRC addresses this through its fully digital platform — the artifacts in this document suite demonstrate DRC's approach to program administration through technology-driven efficiency:

• Comprehensive 5-Phase Workflow — Detailed process frameworks for every stage of CEIP administration, from bylaw development through decades of monitoring (see Sequence Diagrams)
• Policy Framework — 9 governance policies covering all regulatory requirements, developed with legal counsel specializing in municipal finance law
• Clause-by-Clause Regulatory Alignment — Every section of Alberta Regulation 212/2018 mapped to specific DRC operational procedures (Business Plan Appendix 6, pp. 42-56)
• Platform Architecture — Modular system designed for transferability, ensuring business continuity even if DRC were to cease operations (see Engineering Strategy)
• Financial Modelling — Pro forma projections across 11 years with detailed cost structures and revenue models (Business Plan Appendix 1)

DRC Response

DRC acknowledges that formal municipal partnerships require the ministerial designation as a prerequisite. Now that the designation has been granted (MO 16/2025), DRC is positioned to formalize these relationships:

• Designation as leverage — The ministerial order provides the formal standing municipalities require to engage in program administrator agreements under Section 6 of the Regulation
• Calgary focus — Calgary's existing CEIP Bylaw 53M2021 provides a ready framework; DRC plans to collaborate on amendments to include DRC as a designated program administrator
• Edmonton engagement — Edmonton requires a new CEIP bylaw; DRC will provide model bylaw language and eligible improvements lists
• Industry endorsements — BOMA Calgary, NAIOP Calgary, BILD Alberta, and BILD Calgary Region have endorsed DRC's application
• Platform approach — DRC's digital platform is designed to be municipality-configurable, reducing onboarding friction for any Alberta municipality

DRC Response

DRC has expanded its scope to serve all four property types recognized under the Municipal Government Act:

• Residential — Max $50,000 | Application fee: $100 | Simplified energy assessments available | Dower Act and mortgagor confirmation requirements integrated into application workflow
• Commercial (Non-Residential) — Max $1,000,000 | Application fee: $500 | Full ASHRAE Level 3 audit required | Professional engineer/architect oversight
• Farm — Max $300,000 | Application fee: $200 | Agricultural-specific eligible improvements | Seasonal energy baseline adjustments for monitoring
• Non-Designated Industrial — Max $1,000,000 | Application fee: $500 | Industrial-specific eligible improvements | Same professional oversight as commercial

The platform includes a property type selector that adapts the entire workflow — application forms, fee structures, audit requirements, funding thresholds, and reporting granularity — based on property classification. See Sequence Diagrams and Stakeholder Journey for demonstrations.

DRC Response

• Unified Digital Platform — Single platform serving all municipalities with configurable, municipality-specific program parameters while maintaining consistent DRC branding and processes
• Branding: "Deep Retrofit Capital" — Professional, province-wide brand identity (not municipality-specific "C-CEIP") that scales across all jurisdictions
• Contractor Training Program — 3-hour video training with certification, online guides, and if needed, in-class sessions for all stakeholders (property owners, financiers, real estate professionals, trade associations, educational institutions, government, skilled trades)
• Code of Conduct and Marketing Guidelines — Adopted and adapted from existing AMSC frameworks with DRC-specific modifications (Regulation Section 4.2)
• Public Portal — Open-access information including eligible improvements catalog, qualified contractor registry, program guides, and annual performance reports

DRC Response

• No public funding requested — DRC is entirely self-funded by its founders during ramp-up, with costs later recouped from operational profits
• Volume strategy — Target $100M in qualified projects within first 2 years in Calgary alone; administration fees shared with municipalities on a per-agreement basis
• Technology-driven efficiency — Platform automation minimizes per-project administrative cost; as volume grows, marginal cost per project decreases
• Pro forma validated — 11-year financial projections show EBITDA positive by Year 3 with cumulative positive cash flow by Year 4 (Appendix 1)
• Administration fee structure — 5% of total capital cost (DRC assumes this includes the formula result of Reg 10.1.c, not as a separate charge on professional services or incidental costs)
• Municipal admin fee sharing — Negotiated on a per-municipality basis with DRC absorbing maximum administrative workload

DRC Response

DRC acknowledges and accepts that no regulatory oversight body exists for CEIP program administration. In its absence, DRC has built robust self-governance mechanisms:

• Board of Directors — 5-11 members with mandatory industry seats (clean energy, finance, real estate), government observer seat, majority independent directors, staggered 3-year terms (Policy DRCP-BOD-0001)
• Advisory Board — External experts providing strategic guidance, risk assessment, and policy recommendations (Policy DRCP-AVBRD-0001)
• 4-Tier Escalation Process — Structured issue resolution from DRC Program Liaison through to Minister's Office for matters of significant public concern (Policy DRCP-IRE-0001)
• Annual Reporting Transparency — Public annual reports published by September 1 each year, with municipality-specific reports shared directly
• Performance Bonds — ~$100K per $100M aggregation to ensure long-term monitoring capability even if DRC ceases operations
• Audit-Ready Platform — Complete audit trail of all decisions, transactions, and communications maintained in the digital platform

DRC Response

DRC acknowledges and accepts this position. The Board governance policy has been updated accordingly:

• Government Observer (non-voting) — DRC's policy now provides for a non-voting Board Observer seat reserved for the Minister of Environment and Protected Areas (or delegate), rather than a formal board seat. Attendance is at the government's discretion.
• Communication channel maintained — DRC's designated government contact is Heather Dent, Director of Strategic Climate Policy (heather.dent@gov.ab.ca, 780-644-3022)
• Independent governance — Board maintains majority independent directors with mandatory industry expertise seats, ensuring professional oversight without government dependency

DRC Response

DRC addresses contractor variability through rigorous qualification requirements and continuous performance monitoring:

• Qualification thresholds — APEGA or AAA license, $5M liability insurance, $2M E&O insurance, current WCB, mandatory 3-hour DRC training program
• Performance KPIs — On-Time In-Full (OTIF) must exceed 98%; Energy Improvement Achievement (EIA) must reach 95% of projected improvements; Customer Satisfaction must sustain 90%+ rating
• Non-compliance sanctions — Escalating penalties from warning to suspension to removal from the qualified contractors registry, with 30-day appeal process (Policy DRCP-QCTRS-001)
• Professional oversight mandate — Every project requires continuous oversight by a licensed engineer or architect, who certifies completion against the ASHRAE Level 3 audit scope
• Post-completion audit — Mandatory ASHRAE Level 2 audit one year after installation to verify actual vs. projected energy improvements
• Monitoring built into contracts — Qualified contractors are contractually required to provide monitoring interfaces and training as part of their warranted work, with costs included in the project budget

DRC Response

• Self-funded training — Training development is included in DRC's operational budget during the ramp-up phase, funded by founders' investment
• 3-hour video training — Primary training is delivered via online video, minimizing production and distribution costs while enabling unlimited scaling
• Cost recovery — Training costs are factored into the overall administration fee structure; no separate training fees are charged to contractors
• Leveraging existing standards — DRC does not intend to create proprietary certification. Training focuses on CEIP-specific processes using established industry certifications (APEGA, AAA, ASHRAE) as prerequisites
• Platform-integrated training — The digital platform includes guided workflows, contextual help, and process documentation that serves as continuous on-the-job training
• Partnership approach — DRC will collaborate with educational institutions (Northern Alberta Institute of Technology, Southern Alberta Institute of Technology) and trade associations for specialized training content