April 21, 2021: The federal government hoped a budget provision for C$40,000 interest-free loans would be sufficient incentive to encourage 200,000 Canadian households to undertake deep retrofits on their homes.

The 2020 Economic Statement promised to provide $5,000 grants to 700,000 homeowners who completed less-ambitious energy efficient improvements. The budget proposes an additional $4.4 billion over five years to assist homeowners and landlords who undertake deeper, more costly retrofits, such as replacing oil furnaces or low-efficiency heating systems with a high-efficiency furnace or air- or ground-source heat pump, boosting insulation of the house, replacing windows and doors, or installing a high-efficiency water heater or onsite renewable energy system like solar panels.

“Climate action starts at home, and deep home energy retrofits can have a big effect on emissions reduction,” the budget states. The energy used to heat and cool homes and other buildings is responsible for 13% of Canada’s carbon emissions, and increasing those structures’ energy efficiency will cut emissions and lower energy bills for occupants.

Loans will be administered through Canada Mortgage & Housing Corporation after eligibility is determined by an EnerGuide assessment. Ottawa says details will be available by this summer and will be “easily accessible through straightforward online tools”. 

The budget papers say nothing about the greenhouse gas emissions the retrofits are meant to achieve. They frame the home energy retrofit program as a measure to improve the climate resiliency of homes, and directly benefit low-income Canadians by combating energy poverty and reducing vulnerability to GHG emissions. Funding will include a dedicated stream for low-income homeowners and rental properties which serve low-income renters, including cooperatives and not-for-profit housing.

“The federal investments announced in the past number of months are a significant scale-up,” Efficiency Canada Policy Director Brendan Haley told The Energy Mix. “A quick estimate suggests the federal government will be making average annual investments of about $3.3 billion a year on energy efficiency.”

“Of course, more is needed to reach climate goals, but we should acknowledge this is a fairly big increase in efficiency efforts from the status quo,” he added. “An acceleration of deep retrofits likely requires turnkey models, such as having a retrofit specialist takes on the responsibility of financing and project management and selling zero-carbon comfort services. We need to welcome experiments with new business models and projects that aim to find economies of scale, instead of working building by building to retrofit at the scales required.”

Home energy retrofits “make our homes more comfortable, reduce our energy bills, and create good, middle class jobs, especially for skilled workers and tradespeople,” the budget states. The program is also intended to spur clean growth by developing an industry for energy-efficient retrofits, including a domestic supply chain for high-efficiency home renovation products. The measure is meant to benefit workers in the energy efficiency sector, where women hold only 13% of construction jobs and younger workers (34 and under) account for 42%.

“While significant, this investment unfortunately is unlikely to get us to our destination,” said Tom-Pierre Frappé-Sénéclauze, buildings and urban solutions director at the Calgary-based Pembina Institute. “Canadians will need to spend $13 billion per year every year between now and 2040 to eliminate carbon pollution from our residential buildings while creating 127,000 lasting jobs.” 

He estimated the $4.4-billion investment will create 10,000 jobs in the retrofit sector over the next five years.

Deep building retrofits have been identified by many groups as a key element in Canada’s climate change strategy. In a pre-budget submission in September, the Task Force for a Resilient Recovery called for a $27-billion energy retrofit program, as part of a $55.4-billion program that included more investment in green electricity and zero-emission vehicles.

Natural Resources Canada’s Comprehensive Energy Use Database estimates that Canada’s 14.8 million residential buildings released 65.6 megatonnes of GHG emissions in 2018 (latest data available), up from 60.7 Mt in 2016 and 63.2 Mt in 2017, but down about 15% from 77.1 Mt in 2000. In the latest data, 43.3 Mt came from heating all homes, 1.2 Mt from cooling, and 12.6 Mt from heating domestic water. The remaining 8.5 Mt came from appliances and lighting.