Energy retrofit investments are as a powerful opportunity for Alberta to help its most financially vulnerable residents escape energy poverty while unlocking significant economic growth, the Pembina Institute says in a new report.

Investing C$212 million per year in retrofitting homes for energy-poor Albertans could spur $850 million in annual GDP growth and create more than 42,000 long-term jobs by 2050, the report by Pembina and the Alberta Ecotrust Retrofit Accelerator finds [pdf].

With 16% of Alberta households—roughly 230,000—trapped in energy poverty, retrofitting homes is essential to get rising energy costs under control and improve health and safety as climate impacts intensify, say the report authors.

“Our analysis shows that providing deep retrofits and efficient heating and cooling solutions, such as heat pumps, to households could help Alberta cut energy costs and improve indoor air quality while addressing the province’s growing affordability and resilience challenges,” Pembina writes in a release.

A Recipe For Energy Poverty

The term “energy poverty” describes the financial struggle of households to heat and cool their homes and power their appliances. Household income and a home’s physical condition are core determinants of energy poverty, and the first is significantly linked to demographics. Newcomers to Canada, seniors, single-parent households, people with underlying health concerns, and renters are all more likely to suffer energy poverty.

Whether a particular home is a site of energy poverty will depend on its age—and therefore the code or performance standard it was built to meet—as well as the age and efficiency of all space and water heating and other appliances.

Alberta’s decision in 2024 to adopt the lowest allowable building code tier in Canada’s National Building Code, and its retreat in 2020 from having any performance or efficiency standards for building or space heating and cooling, “continu[e] the problem of low-quality buildings that are expensive to operate, more vulnerable to extreme weather damage, and will require deep retrofits in the future,” Pembina writes. The problem is compounded by the fact that retrofit rebate programs across Canada usually require upfront payments, and even those geared toward people in financial need “generally do not specifically target households experiencing energy poverty.”

At present, the Alberta government does not provide financial support to homeowners or building owners for energy efficiency or adaptation measures, the think tank says.

Investing for Energy Affordability, Security, Resilience

Urging the province of Alberta, as well as local governments and utilities, to help reduce energy poverty and improve the resilience of homes, Pembina recommends 10 actions, including:

• Collaborating on data collection to determine the exact number of Alberta households facing energy poverty;

• Developing a provincial energy poverty reduction strategy with timelines, targets, and progress reports;

• Establishing an Alberta-wide retrofit program “with cross-cutting objectives on climate resilience, energy efficiency, and energy affordability,” alongside a “robust, sustained fund for 100% publicly-funded deep retrofits” for energy-poor households;

• Leveraging and investing in retrofit initiatives like the Alberta Ecotrust Retrofit Accelerator, which are already helping governments and building owners understand, communicate, and achieve the myriad benefits of retrofits;

• Getting serious about regulatory and performance standards.

“It’s time to shift from temporary relief measures to comprehensive deep retrofit programs that will help Albertans struggling with high energy bills,” report co-author Betsy Agar, buildings program director at Pembina, said in the release. “Deep retrofits are a practical solution that will ensure Alberta’s homes and buildings are reliable, safe, and affordable to heat and cool.”