Today’s federal budget will include a multi-billion-dollar plan to “solve the housing crisis” by delivering 3.87 million new homes by 2031, but reduce total funding for energy retrofits compared to the former Canada Greener Homes grant program.
The wider plan is “the most comprehensive and ambitious housing plan ever seen in Canada,” Prime Minister Justin Trudeau declared Friday in Vaughan, Ontario. “It’s a plan to build housing, including for renters, on a scale not seen in generations. We’re talking about almost 3.9 million homes by 2031.”
An Infrastructure Canada backgrounder on the new plan briefly commits to “launching the Canada Green Buildings Strategy to focus on lowering home energy bills and reducing building emissions by supporting energy efficient retrofits.” It also earmarks C$903.5 million for the Canada Greener Homes Affordability Program, the rebooted, refocused version of the popular Greener Homes grant, and pledges continuing work on “national approaches to home energy labelling.”
At least one independent observer said the plan will reduce the total funding available to increase energy efficiency in Canada’s existing building stock, months after Ottawa set off a panic among home energy advisors who had committed to what was supposed to be a seven-year Greener Homes program, only to see it run out of funding after about 30 months.
Closing the Housing Gap
Trudeau released the 28-page housing strategy just a day after Parliamentary Budget Officer Yves Giroux said Canada will need 3.1 million homes by 2030 to close the housing gap, CBC reports.
The plan aims to tackle the housing crisis by “bringing down the costs of homebuilding, helping cities make it easier to build homes at a faster pace, changing the way Canadian homebuilders manufacture homes, and growing the work force to ensure we get the job done,” the Infrastructure Canada backgrounder states. Key elements of the plan include:
• Adding $15 billion to Canada Mortgage and Housing Corporation’s Apartment Construction Loan Program, bringing the total fund to $55 billion, to help cover the cost at least 30,000 new rental units on top of the 100,000 the program was meant to support by 2031-32;
• A $6-billion fund to cover water, wastewater, stormwater, and solid waste infrastructure for new homes, most of it conditional on provinces and territories legalizing “missing middle” housing—including duplexes, triplexes, fourplexes, townhouses, and small multi-unit apartments;
• A $4.3-billion Indigenous housing strategy for rural, urban, and Northern communities to fund “culturally appropriate Indigenous housing to be delivered by Indigenous governments, organizations, and housing and service providers”;
• $4 billion to support affordable, rental, and co-op housing;
• $1 billion in additional funding over four years to support the government’s homelessness strategy, plus another $250 million to “address the urgent issue of encampments and unsheltered homelessness”;
• A new public lands program, led by a new deputy minister attached to the Privy Council Office, to “unlock underused public land to build more housing, accelerate the process of making public land available for housing, lease public land instead of selling it off, and create a new mapping tool to keep track of federal lands that can be used for housing”;
• $400 million over three years, added to the existing $4-billion Housing Accelerator Fund, to prompt more cities to “cut red tape, fast-track home construction, and invest in affordable housing”;
• Up to $40,000 in loans to help homeowners add secondary suites to their homes;
• New requirements attached to public transit funding that require communities to “directly unlock housing supply” by allowing high-density housing and eliminating minimum parking requirements near high-frequency transit lines;
• Multiple measures aimed at protecting renters, supporting first-time homebuyers and current owners, supporting municipal enforcement of restrictions on short-term rentals, and extending a ban on foreign investors buying residential property.
Cutting Energy Bills
The energy efficiency items in the new plan drew mixed reviews from some of the key climate and energy organizations that have focused their recent efforts on affordability and energy poverty.
“Affordable housing isn’t affordable unless it’s energy efficient,” Betsy Agar, director of the buildings program at the Calgary-based Pembina Institute, said in a release. “By focusing on helping homeowners lower home energy bills, this investment will also help reduce building energy demand and carbon pollution through comprehensive retrofits and by building quality new homes.”
The $903.5-million pledge from Ottawa “is a good start,” she added, “and now we hope this investment is matched by all other orders of government and utilities to increase the pace of deep retrofits and meet our carbon reduction targets and ensure new housing is built right the first time.”
“As our political leaders work to implement meaningful solutions to Canada’s affordability crisis, it’s worth remembering that the shift to a clean future brings with it serious savings,” said Joanna Kyriazis, director of public affairs at Clean Energy Canada. “The Greener Homes Affordability Program will help more Canadians unlock these savings, as families can save over $400 a year by installing a heat pump, while energy efficiency upgrades, like new double-pane windows, can similarly save hundreds of dollars annually.”
Spending Less on Retrofits
“We can take action on climate change while reducing people’s costs with energy efficiency,” said Brendan Haley, senior director of policy strategy at Efficiency Canada. “Some Canadians are spending less on food and prescription drugs because of energy bills, and a targeted program will help those in most need.”
However, the funding on offer in today’s budget “could double existing provincial investments in low-income energy efficiency, yet represents a reduction in residential retrofit effort compared to the $2.6 billion previously earmarked for the now cancelled Greener Homes Grant program,” Haley added.
That analysis echoed deep concerns among home energy advisors that began several months ago, when Energy and Natural Resources Minister Jonathan Wilkinson said the Greener Homes Grant was running out of funds. “Yes, we’ve actually started to exhaust the funds earlier than what we had anticipated, and that’s largely a function of the popularity of the program,” he told CBC last fall. But “we have a certain budgetary envelope. We have to exhaust or utilize that envelope before we can ask the minister of finance for additional money.”
By mid-February, the program was beginning to shut down, with the owner of one small energy auditing business warning of “massive fallout” as jobs in the industry began to evaporate. “The enormous popularity of the first phase of the Canada Greener Homes Grant illustrates Canadians’ desire for their homes to be affordable, comfortable, and sustainable,” Wilkinson said at the time. “We are readying the next phase of the Canada Greener Homes Initiative to offer more accessible supports to families across the country who need it most while continuing to take action on climate change.”
But that didn’t explain the gap between programs, or the anxiety it produced for energy auditors who’d signed up for training or started small businesses to throw in with Greener Homes. “It’s a fair question,” a spokesperson for Wilkinson told The Energy Mix, when asked why the new program wasn’t ready to roll by the time the original funds ran out. “The machinery of government takes time,” but “we’re really focused on duplicating the success of the first phase while making it better,” she said.
Layoffs began almost immediately afterwards, with the home retrofit industry in chaos, consumers abandoning ship, and emissions in housing still falling far too slowly, two separate open letters told Wilkinson in early March.
Cancelling Greener Homes “would set us back years in achieving our [greenhouse gas] emissions reduction goals, and denies the majority of Canadian homeowners the supports they need to create energy-efficient and climate-ready homes,” wrote Green Communities Canada. “The forests are burning, and nearly all houses in the country need to be retrofitted. Now is not the time to slow down.”
“Discontinuing this program has created uncertainty in the HVAC and energy monitoring industries and an unsustainable boom-bust dynamic that will cause considerable chaos,” agreed Environmental Defence Canada, in a separate letter to Wilkinson and Finance Minister Chrystia Freeland. “It has created uncertainty for businesses who have invested in this program and created almost 75,000 new jobs, while putting doubts into the minds of thousands of Canadians who have only recently considered switching to a heat pump.”
Those letters landed in Ottawa on the same day that the Task Force for Housing and Climate, chaired by former Conservative cabinet minister Lisa Raitt and former Edmonton Mayor Don Iveson, called for construction of 5.8 million affordable, “net-zero-aligned” homes by 2030.
In the hours before this afternoon’s budget announcement, there was no word on whether energy audits would still be mandatory for retrofits under the new Canada Greener Homes Affordability Program, as they were under the previous grant program. Green Communities Canada has warned that there will be no way to assess the impact or effectiveness of the new program without the data from before-and-after audits.
However, some climate hawks have spotted language indicating that Ottawa may allow “flexibility” on affordability and energy efficiency measures if that’s what it takes to get a large volume of housing built by 2031. That path would leave governments with the monumental task of pushing energy retrofits for those homes, and owners with the cost of getting the work done, far sooner than would be needed if the units had been built right the first time.
