Alberta’s energy retrofit industry could generate C$5.8 billion in GDP growth annually and sustain 24,000 jobs while boosting affordability and climate resilience, but is being held back by a lack of coordinated action to secure supply chains and support work force development, the Pembina Institute finds in a new report.

The Calgary think tank’s Resilient But Not Ready report concludes [pdf] that Alberta’s retrofit industry has proven its resilience in its nimble response to recent United States tariffs and trade disruption. But the sector is ill-prepared to accelerate at the rate needed to ensure the province’s building stock hits a net-zero threshold by 2050.

And there is a lot of work to be done: roughly 70% of Alberta’s 1.63 million residential buildings were built before energy efficiency requirements entered Canadian building codes in the 1970s. And the province’s retrofit rate, based on data for low-rise homes, sits at just 0.66% per year, well below the national average of 1.1%, say the report authors. (The national average, in turn, still falls far short of what it would take to achieve a national retrofit mission.)

Focused on the retrofit supply chain for multi-unit buildings (MURBs), though with findings applicable across building types, the report identifies the following chokepoints:

• High up-front costs for mechanical systems like heat pumps;

• Limited availability of high-performance building enclosure products like insulation and high-efficiency windows;

• Low inventory levels and constrained local supplies;

• Work force gaps—from a dearth of expertise in advanced HVAC systems to a serious shortfall in electricians and transportation operators.

The report provides detailed snapshots of four key retrofit technologies—heat pumps, insulation, solar panels, and windows—identifying where in Canada each technology is currently produced.

Canada, and Alberta itself, possess “significant” manufacturing capacity for enclosure systems, but remain reliant on imports for mechanical and electrical systems.

Given volatile global markets and industry competition, Pembina recommends that Alberta focus on “reshoring innovation” rather than “reshoring manufacturing.”

“Given the province’s history as an energy leader, Alberta has strong potential to expand its energy innovation capacity for both domestic and export markets,” the report authors write.

As for work force development, Pembina recommends “designing curriculum focused on whole-building retrofit delivery,” with a particular focus on HVAC, automation, and electrification to bridge an expected skills gap.

Citing earlier Pembina modelling, the report says an annual investment of $2.5 billion in Alberta retrofits could generate $5.8 billion in GDP and sustain 24,000 permanent jobs across the province.

Emphasizing the value of whole-building retrofits over incremental ones, the report calls on government, industry, and utilities to “immediately collaborate” on a market development roadmap.

Pembina sees progress on utility programs in the October, 2025 mandate letter [pdf]that instructed  the provincial minister of affordability and utilities to “work with industry on providing the government with proposals to assist with more efficient electricity usage through demand-side management.” That provision signalled “a policy shift that could help to advance a market-driven approach to retrofits,” the report states, and as “one of the few remaining regions in North America without utility-led DSM in place,” Alberta stands to benefit greatly from a policy instrument known to be a “significant driver of retrofit activity.”  

“Implementing DSM in Alberta would strengthen the retrofit supply chain through stable, long-term support for retrofit activity,” writes Pembina. “This sustained demand would, in turn, reduce the province’s exposure to damaging boom-bust cycles that have been seen from the comings and goings of incentive programs.”