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They may not make many headlines, but policies that help Canadians and businesses waste less energy are a win-win.
Families want lower utility bills. Businesses want to cut costs and improve productivity and competitiveness. And we all want to eliminate pollution and live in a cleaner environment. Put simply, improving energy efficiency achieves all of the above.
The federal government has introduced a number of policies under the Pan-Canadian Framework on Clean Growth and Climate Change aimed at energy efficiency. These include measures to make new buildings more energy efficient, retrofit existing buildings, improve energy efficiency for appliances and equipment, support energy efficiency in Indigenous communities and improve industrial energy efficiency. More recently, we’ve seen the introduction of additional programs to retrofit homes, schools, community organizations and affordable housing developments. These will seriously help reduce pollution while also helping Canadian homes and businesses save on energy costs — with real economic benefits to boot.
Clean Energy Canada is a think tank at Simon Fraser University focusing on the clean energy transition and the right measures to accelerate it. To that end, as part of our series to help Canadians better understand pre-existing federal climate policies, we’ve broken down the benefits of energy efficiency in Canada.
The pollution-fighting benefits
Buildings currently account for 12 per cent of Canada’s overall emissions. If you add indirect emissions from using electricity, that share jumps to 17 per cent. Heavy industry such as mining, pulp and paper, and cement production — used in many buildings — accounts for another 10 per cent. Improving energy efficiency can reduce energy waste and cut emissions across the board. Current efficiency measures are expected to reduce national emissions by 52 million tonnes, or 25 per cent of the way to our 2030 Paris targets.
The cost-cutting benefits
Efficiency measures help Canadians save on utility bills. According to analysis by Clean Energy Canada, the energy efficiency measures in the pan-Canadian framework are projected to save the average household $114 a year over the lifetime of the measures.
And the benefits reach beyond buildings. Reducing energy waste and boosting energy productivity will also help industry get ahead. Canada’s energy-intensity-per-unit GDP is higher than the U.S., Europe and Japan. This is a competitive disadvantage. Energy efficiency measures help our businesses improve their energy productivity, which in turn makes them more competitive. Our analysis shows that commercial and industrial savings could amount to $3.2 billion across Canada by 2030.
The economic benefits
Making homes and businesses more energy efficient also represents a big economic opportunity. Between 2017 and 2030, Canada’s GDP will see a net increase of $356 billion (or 1 per cent) thanks to the energy efficiency measures in the pan-Canadian framework. Every $1 spent on energy efficiency programs generates $7 of GDP.
Companies in the business of energy efficiency include those focused on improving home energy systems. Toronto’s Ecobee, for instance, is a leading provider of smart thermostats. Then there’s Fredericton-based Stash Energy, which makes home heating and cooling more affordable using “smart” heat pumps with built-in thermal energy storage systems that allow homeowners to store energy during cheap off-peak hours for use during peak hours. B.C.-based MineSense, meanwhile, helps mining operators cut both costs and emissions by improving how efficiently mining operators process iron ore.
What has Canada done on energy efficiency?
So, the benefits are clear. Now what exactly has the federal government done to make headway on energy efficiency?
The Government of Canada has put $182 million toward an Energy Efficient Buildings Program, which seeks to improve how buildings are designed, renovated and constructed. The program supports the development of net zero energy ready codes for new buildings (buildings designed to use as much energy as they produce); a code to retrofit existing buildings; and assistance to provinces and territories to help with them with regulating energy labelling and sharing energy-use data. The aim is to have new codes in place by 2022, with provinces and territories adopting the codes by 2030.
Canada has also updated energy efficiency standards for products ranging from refrigerators to heat pumps to air conditioners and, recently, launched the ENERGY STAR for Industry certification program to improve efficiency in industrial facilities. And, in 2018, the federal government introduced the National Housing Co-investment Fund to support the new construction and repair of energy efficient affordable housing stock.
But Budget 2019 went especially big, setting aside a significant $1 billion to increase energy efficiency in residential, commercial and multi-unit buildings. These investments will focus on three initiatives. First, the Collaboration on Community Climate Action program, which supports efficiency retrofits for large community buildings and demonstration projects in Canadian municipalities. Second, the Community EcoEfficiency Acceleration program, which supports the upfront costs installing renewable energy technologies and more efficient furnaces and allows homeowners to repay retrofit costs through their property tax bills. And third, the Sustainable Affordable Housing Innovation program, which supports energy efficiency improvements and on-site energy generation in affordable housing developments.
Finally, the federal government recently announced that it will fund $60 million in energy retrofits for schools located in provinces where the federal pollution pricing backstop applies: New Brunswick, Ontario, Manitoba and Saskatchewan. Further, the government said we’re likely to see a similar package of funding for hospitals and other institutions in the near future.
Energy efficiency may not draw as much attention as other policy solutions, but make no mistake: It’s one of the most important — and certainly most cost-effective — ways to upgrade Canada for the future.
Joanna Kyriazis is a senior policy advisor and Merran Smith is the executive director of Clean Energy Canada, a think tank at Simon Fraser University.