Government of Canada’s New Canada Green Buildings Strategy: A Plan to Help Canadians Save Money on Their Energy Bills

July 17, 2024

On July 16, the Honourable Jonathan Wilkinson, Minister of Energy and Natural Resources, released Canada’s first Green Buildings Strategy — a strategy focused on saving Canadians money on their energy bills, creating good jobs, seizing the economic opportunities enabled by the low-carbon economy, all while reducing harmful greenhouse gas (GHG) emissions.

The Canada Green Buildings Strategy (CGBS) will drive energy efficiency improvements in Canadians’ homes and buildings, with a key focus on addressing affordability and reducing greenhouse gas emissions. 

Greenhouse gas emissions associated with heating and cooling are the cause of buildings being Canada’s third-largest emitting sector (after oil and gas and transportation). Buildings are a challenging sector to decarbonize because to succeed, collaboration is needed between the federal government, provinces, territories, municipalities and Indigenous communities. We need to take action to retrofit and upgrade the 16 million homes and half a million other buildings standing in Canada today, most of which will still be standing in 2050. And we need new builds to be built more energy-efficient from the onset, especially as Canada rapidly aims to build more homes to address the housing crisis and drive down the cost of housing across the country.

The CGBS aims to:

• Accelerate retrofits of existing buildings;
• Ensure we are building energy-efficient, climate-resilient and affordable buildings from the start; and
• Seize the economic opportunities associated with more efficient and lower carbon building materials and technologies. 

To do this, the Strategy helps Canadians adopt heat pumps and save money on their energy bills through programs targeted at low- and median-income households like the new Canada Greener Homes Affordability program and the Oil to Heat Pump Affordability Program. It includes a commitment to phase out oil heating in new construction in the coming years, a plan to promote low-carbon building materials and spur job creation, and it ensures energy efficiency is factored into decisions on federal housing funding.
 
The CGBS represents a significant step forward in addressing both affordability and climate change. The Strategy provides a comprehensive framework that will help Canada reach our climate goals, make life more affordable for people, and ensure that the cost of building homes does not rise in the midst of a housing crisis.

Central Elements of the CGBS are:

1. Where we live – residential buildings

• As announced in Budget 2024, the Canada Greener Homes Affordability Program (CGHAP) is a $800-million retrofit program that will support low-to-median-income Canadians, including renters, to reduce their monthly energy bills by upgrading their homes. Working with delivery partners, the CGHAP will include direct installation delivery, meaning it will be delivered at no cost to the household, and will stack with provincial and territorial programs to support the retrofits. The new program will provide up to four times more than the $5,000 from the Canada Greener Homes Grant.
• The Oil to Heat Pump Affordability Grant (OHPA), was launched in 2022 by the federal government to support low-to-median-income households and to complement existing provincial and territorial programs that help Canadians switch from oil heating to a heat pump. This incentive program is designed to increase the energy efficiency of the home and reduce GHG emissions by providing grants for the installation of heat pumps, saving Canadians money on their heating and cooling bills. When switching to an electric heat pump, households that were fully heating with oil, save from $1,500 to $4,500 per year on their home energy bills.
• The Canada Greener Homes Grants program was launched by the federal government in 2021, to support Canadians to retrofit their homes to increase energy efficiency with up to $5,000 in grant funding for eligible investments. The program closed intake in February 2024 to new applicants but has received over 615,000 applications. The program proved very popular, with up to $4–5 million spent each day in support of buildings retrofits and has already led to the purchase and installation of over 149,000 heat pumps (a number which will continue to grow). So far, households are saving an average of nearly $400 per year on their energy bills.
• The Canada Greener Homes Loan provides an interest-free loan of up to $40,000 with a repayment term of 10 years, open to all homeowners. Since launch in 2022, $1.23 billion in loan commitments — representing approximately 78,000 loans — have been provided.  Approximately 45 percent of the committed loans include the installation of a heat pump.
• The Green Municipal Fund (GMF), administered by the Federation of Canadian Municipalities, combines funding and capacity building to deliver clear environmental, economic and social impact in Canadian municipalities. GMF’s $300 million initiative helps municipalities deliver energy financing programs for low-rise residential properties.
• As announced in Budget 2024, the federal government has committed $30 million to continue developing a National Labelling Approach. The Government of Canada will build on its existing EnerGuide Rating System for homes by working closely with provinces, territories, municipalities, Indigenous communities and other housing sector stakeholders to develop a suite of common labelling standards, tools and guidelines which will support home labelling initiatives across Canada. This National Approach will empower homeowners and prospective home buyers with consistent information about home energy performance, which will support smart decision-making and lower energy bills. 
• Budget 2024 announced the launch of a new $6 billion Canada Housing Infrastructure Fund to accelerate the construction and upgrading of housing-enabling infrastructure, such as water, wastewater, storm water and solid waste infrastructure to enable new housing supply and help improve densification. Provinces and territories can access this funding if they commit to key actions that increase housing supply, including adopting forthcoming changes to the National Building Code to support more accessible, affordable and climate-friendly housing options.
• The Greener Neighbourhoods Pilot Program (GNPP) explores new ways to decarbonize large clusters of affordable housing. The GNPP pilots the Energiesprong aggregated deep energy retrofit model in Canada. This model, developed by the Netherlands and adopted by the United Kingdom, France, Germany and the United States, accelerates the pace and scale of retrofits by aggregating similar homes and buildings in an entire neighbourhood to create mass demand for deep energy retrofits — home renovations that cuts a home’s energy usage by at least 50 percent. The large project scale and similarity of buildings permits the use of retrofit approaches such as the use of prefabricated exterior panels to reduce on-site labour, time and overall project costs, while reducing the energy use and emissions from each retrofitted building.
• The Canada Greener Affordable Housing Program (CGAH), administered by the Canadian Mortgage and Housing Corporation (CMHC), funds low-interest repayable and forgivable loans to help affordable housing providers complete deep energy retrofits on existing multi-unit buildings through both pre-retrofit funding for planning activities as well as capital costs of retrofits.
• The Green Construction through Wood (GCWood) Program provides funding for demonstration projects that showcase the innovative use of wood, supports capacity building, research and development, technical guidance and associated code development priorities.
• The Affordable Housing Fund is one of the core programs of the National Housing Strategy, which provides capital to partnered organizations for new affordable housing and the renovation and repair of existing affordable and community housing. Funds are provided as low-interest and/or forgivable loans and contributions. To be eligible, projects must meet the minimum energy and GHG reduction requirements. Under the Fund, Budget 2024 announced $976 million over five years starting in 2024–25 and $24 million in future years to launch a new Rapid Housing Stream under the Fund.
• Promoting energy efficiency through the ENERGY STAR and EnerGuide program for products and homes. Canadians can save energy costs by buying ENERGY STAR certified products such as home appliances, which are the same or better than standard products, only they use less energy.
• The Government of Canada commits to introducing a regulatory framework that will allow the phase-out of the installation of expensive and polluting oil heating systems in new construction, as early as 2028. This phase-out would include necessary exclusions for regions with insufficient access to the electricity grid and where standby back up heating fuel is required.
• Canada’s Energy Efficiency Act (EE Act) provides for the making and enforcement of regulations concerning efficiency standards for energy-using products, as well as the labelling of energy-using products and the collection of data on energy use. Between 2024 and 2026, new amendments to the Energy Efficiency Regulations are planned, which will see the update or addition of energy efficiency or testing standards for a series of energy-using products including air conditioners, heat pumps, gas-fired furnaces (commercial) and storage water heaters, as well as electric and oil-fired water heaters (household).
• Through the Codes Acceleration Fund (CAF), the Government of Canada promotes the adoption and implementation of the highest feasible energy performance tiers of the national model energy codes or other high-performance building codes. The program is providing $100 million in supports to provinces, territories, municipalities, Indigenous governments and organizations, and other national and non-governmental organizations.
• The Local Energy Efficiency Partnerships program accelerates green home construction on a region-by-region basis by helping builders and renovators quickly adopt new innovations, while reducing their costs and risks. LEEP creates skilled, builder, renovator and supply chain networks who enhance local, energy-efficient building practices.
• The over $70M per year Energy Innovation Program funds research, development and demonstration projects, and other related scientific activities, targeting the most impactful technologies, including those related to buildings, to maximize environmental and economic outcomes.
• NRCan’s CanmetENERGY labs conduct buildings-related R&D to improve building energy systems, develop pathways to carbon-neutral housing and buildings, and advance energy technologies, as well as design and analytical tools to support the reduction of GHG emissions and improved affordability for Canadians. 

2. Where we work, study and play – commercial and institutional buildings 

• The Green and Inclusive Community Buildings Program (GICB), administered by Infrastructure Canada, is a $1.5-billion program that supports green and accessible retrofits, repairs or upgrades of existing public community buildings and the construction of new publicly accessible community buildings that serve high-needs, underserved communities across Canada. For example, just last week the Vancouver Central Library received funding to replace its current cooling systems with new heat pumps and energy recovery equipment to save on operating costs and reduce emissions.
• The Canada Infrastructure Bank (CIB)’s Building Retrofits Initiative helps to finance the capital costs of publicly and privately owned commercial, industrial and multi-unit residential buildings retrofits, using energy savings, efficiencies and operating cost savings for repayment. The CIB is working with private and public sector real estate owners and other market participants to modernize and improve the energy efficiency of existing buildings by helping to finance capital costs of retrofits and to reduce investment barriers.
• The Green Municipal Fund (GMF), administered by the Federation of Canadian Municipalities, combines funding and capacity building to deliver clear environmental, economic and social impact in Canadian municipalities. GMF is a $1.65-billion program funded by the Government of Canada and has retrofitted 2,000 larger-scale buildings to date.
• The Deep Retrofit Accelerator Initiative provides funding to organizations (i.e., “retrofit accelerators”) that help building owners in the development of deep retrofits in commercial, institutional and mid- or high-rise multi-unit residential buildings in Canada, and drive market transition in regions across Canada. Retrofits, especially deep retrofits, which dramatically reduce a building’s energy consumption, are complex projects with many moving parts — from project pre-development to financing and project implementation — and involve many players. This complexity generates barriers to deep retrofit projects across Canada, but organizations have been emerging across the country to address these challenges, and the Government of Canada is supporting them.
• The ENERGY STAR Portfolio Manager Platform, administered by Natural Resources Canada, sets an industry standard for benchmarking and comparing energy performance in commercial, institutional and multifamily buildings, helping owners and operators to track and improve energy efficiency across their portfolio of properties. To date, over 42,000 Canadian buildings are in the tool — equivalent to a third of the commercial and institutional building floor space in Canada. 

3. Where we lead – federal government buildings

•  The Greening Government Strategy (GGS) seeks to reduce environmental impacts associated with Government of Canada’s operations to help save taxpayers’ money, including GHG emissions from real property operations and from new government construction projects, enhance climate resiliency of federal government assets, services and activities, support green supply chain markets, and helps Canada meet its net-zero emissions commitments for 2050

The GGS outlines the Government of Canada’s commitment to achieve net-zero emissions in federal real property operations. The GGS commits that new federal buildings are to be net-zero emissions (unless a GHG life-cycle cost analysis indicates net-zero-emissions-ready construction), have a climate change risk assessment and incorporate adaptation measures to reduce significant risks; and major building retrofits are to have a GHG reduction life-cycle cost analysis to determine the optimal GHG savings, and include climate risk assessment and risk reduction measures.

• The Government of Canada has recently announced that Crown corporations are now expected to align with the Greening Government Strategy or adopt an equivalent set of commitments in each significant area of their operations, including the commitment to net-zero emissions by 2050 and to be climate resilient.
• The Greening Government Fund provides project funding to federal government departments and agencies to reduce GHG emissions in their operations. Funding comes from departments and agencies that generate more than one kilotonne of GHG emissions per year from air travel and from departments that are below this threshold that contribute voluntarily.
• The Government of Canada implementation of the ‘Buy Clean’ policy approach that leverages federal procurement and investment to promote the use of low or net-zero-carbon construction materials and designs by factoring in embodied carbon or carbon associated with all phases of a product’s life. This will be done through commitments to (1) reduce embodied carbon in Government of Canada infrastructure procurement (via the Greening Government Strategy), (2) reduce embodied carbon in federal investments in public infrastructure assets, (3) support broader buildings and infrastructure sector market transformation through disclosure, guidelines and demonstration projects (via the NRC’s Platform to Decarbonize the Construction Sector at Scale) and (4) complementary measures to decarbonize industry through research, development, demonstration and deployment. Investments that reduce embodied carbon in construction projects help create a market for low-carbon construction materials, designs and technologies, driving down their costs and making them more widely available.

The CGBS is about moving forward aggressively with a comprehensive approach to enhancing energy efficiency, saving Canadians money on their energy bills, creating good jobs in communities across the country and reducing GHG emissions from buildings. It is an important part of this federal government’s commitment to ensuring affordability, economic prosperity, and environmental sustainability now and for the future.  

Quotes

“Energy efficiency means cost savings for Canadians. At a time when we are facing challenges with affordability and climate change, this plan meets Canadians where they are at and delivers the action they need, at the pace and scale they are demanding. Canada’s first-ever Canada Green Buildings Strategy is a plan to save Canadians money, create jobs and seize the economic opportunities that a clean and sustainable economy presents.”

The Honourable Jonathan Wilkinson, Minister of Energy and Natural Resources, Government of Canada

“As we work towards ending Canada’s housing crisis, we need to ensure the longevity of new and existing buildings by making them more energy efficient and resilient to the impacts of climate change. We are proud to announce these investments today that will go a long way in doing just that across the country.”

The Honourable Sean Fraser, Minister of Housing, Infrastructure and Communities Canada

“The Canada Green Buildings Strategy is all about building more energy efficient and affordable homes and buildings. Cutting the wasted energy from the heating and cooling of our buildings is a win-win, both for lower energy bills and less harmful pollution going into our atmosphere. Already in Canada, we have seen a tidal shift in the adoption of heat pumps at a household level, as well as clean energy solutions for large commercial buildings and industry. It is through close collaboration of provinces and territories, municipalities, Indigenous Peoples, businesses, and individuals over the coming years that we can keep this progress going and make a big dent in the emissions coming from out buildings sector.”

The Honourable Steven Guilbeault, Minister of Environment and Climate Change

“Our government is taking ambitious steps to achieve net zero by 2050 through our Greening Government Strategy. By implementing a Buy Clean approach to a real property portfolio of over 34,000 buildings nationwide, we are maximizing energy efficiency while minimizing the environmental impact of construction materials and design. Through these efforts, we are leading the fight against climate change.”

The Honourable Anita Anand, President of the Treasury Board of Canada and Minister responsible for the Centre for Greening Government

Quick facts

•  Totalling $903.5 million, the Canada Green Buildings Strategy is funded as a part of Budget 2024 and is mentioned in Solving the Housing Crisis – Canada’s Housing Plan. It complements Canada’s National Adaptation Strategy, which lays out a framework to reduce the risk of climate-related disasters, improve health outcomes, protect nature and biodiversity, build and maintain climate resilient infrastructure, and support a strong economy and workers. New and ongoing federal initiatives are already starting to put the Strategy’s vision in practice.
• Buildings are Canada’s third-largest emitter of GHG emissions. Nearly all building emissions — over 96 percent — come from space and water heating. To tackle this, major changes in the building sector are underway, with the potential to create hundreds of thousands of jobs and help Canadians save money on their energy bills.
• Retrofitting existing buildings, building green from the start, and choosing alternatives to fossil fuel heating equipment, such as electric heat pumps, will help Canada achieve its net-zero commitments by 2050. There is also a need to build stronger to better equip communities to withstand the effects of climate change.
• To reach Canada’s climate goals, reduce energy bills and build up Canada’s supply of energy-efficient and resilient building stock, there is a need to accelerate the retrofit of approximately 10 million buildings and construct millions of new net-zero buildings in the coming decades.
• The Canada Green Building Council estimates that ambitious action on buildings could create up to 1.5 million jobs and inject $150 billion into Canada’s economy by 2030. 
• Canadian households spend an average of $2,200 a year on home energy costs and these costs are significantly higher in homes that heat with oil and in older homes with poor insulation, ventilation and heating/cooling systems.  
• The CGBS is a commitment in the 2030 Emissions Reduction Plan: a sector-by-sector approach to reach Canada’s climate target of cutting emissions by at least 40 percent below 2005 levels by 2030, laying the foundation to achieve net-zero emissions by 2050.
• As of June 8, 2024, retrofits from the Canada Greener Homes Grant alone are removing over 306,540 metric tonnes of GHG emissions, equivalent to taking nearly 94,000 fossil-fuel–powered vehicles off the road. 

Related products

• The Canada Green Buildings Strategy: Transforming Canada’s buildings sector for a net-zero and resilient future
• Backgrounder with additional details on investments
• Codes Acceleration Fund
• Deep Retrofit Accelerator Initiative
• Retrofit Hub (canada.ca)
• Toward net-zero homes and communities
• Greener Neighbourhoods Pilot Program
• ENERGY STAR Canada
• Oil to Heat Pump Affordability Program (OHPA)
• Canada Greener Homes Initiative: Highlights and Program Updates

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