The federal budget’s plan to retrofit residential buildings falls short of what is needed to reduce Canada’s greenhouse gas (GHG) emissions and create well-paying jobs, experts say.
The budget, announced Monday, includes a $4.4-billion investment over five years to improve energy efficiency in residential buildings with projects like replacing oil furnaces or low-efficiency systems, fixing drafty windows and doors, installing solar panels or upgrading wall insulation. But experts estimate the actual cost of retrofitting Canada's residential buildings is more than 14 times that amount.
The Pembina Institute, a clean energy think tank, calculates 600,000 dwellings would need to be retrofitted every year from now until 2040 to get all existing housing up to date and energy efficient.
“That’s roughly $227 billion over 20 years… so about $13 billion per year that we collectively need to invest,” said Tom-Pierre Frappé-Sénéclauze, buildings and urban solutions director at the Pembina Institute.
In comparison, the federal budget estimates over 200,000 households could take advantage of its program over five years and invests less than $1 billion annually.
Funding from the federal budget would provide interest-free loans worth up to $40,000 through the Canadian Mortgage and Housing Corporation to homeowners and landlords who pursue retrofits identified through an authorized EnerGuide energy assessment.
Ballard says any investments that get homeowners thinking about energy efficiency are positive, but with a $40,000 loan, it’s basically impossible to achieve the kind of energy savings needed to make an impact.
For example, to get high energy savings, Ballard says homeowners almost always have to improve wall insulation.
Renovation costs vary greatly by home, but Ballard estimates in most cases this would cost well over $40,000, exceeding the loan amount.
Frappé-Sénéclauze is also concerned interest-free loans won’t benefit lower and middle-class Canadians who don’t want to accrue debt — even if it is interest-free.
#Budget2021 includes a $4.4-billion investment over five years to improve energy efficiency in residential buildings. Critics say it's nowhere near enough. #cdnpoli
“The risk with this is we catch a lot of people that would have made this investment anyways, but we don’t necessarily help a lot of people that were not already thinking about it,” he said.
The deep retrofits encouraged by the plan would help reduce Canada’s net emissions and also create local jobs for tradespeople and skilled workers, adding onto the $2.6 billion over seven years announced earlier this year in the federal government's climate plan. But Frappé-Sénéclauze says the new funding is also a missed opportunity to invest in well-paying jobs, as large-scale retrofits would require the creation and training of a new workforce.
Meanwhile, investments of $13 billion each year would create about 138,000 jobs across Canada, Frappé-Sénéclauze explained.
“These are good, well-paid, lasting, middle-class jobs. They are located where people live and work,” he said. “That $4.4 billion is too small at the moment… to get those 138,000 jobs we need significantly more investment from the federal and provincial governments. And that transformation we haven’t seen yet.”
Although the government’s plan is a positive start, Ballard says residential tower retrofits would reap the greatest GHG savings.
“We estimate there’s about 10,000 residential towers (in Canada)… built in the '70s and the '80s (that) are at that stage where they need to be renovated anyway. So, now is the time to make sure they’re retrofitted,” said Ballard.
Opposition parties have also panned aspects of the federal budget, including the retrofit investment. Laurel Collins, the NDP environment and climate change critic, says it doesn’t come close to what is needed.
“If we have any hope of meeting our international climate targets, if we have any hope of really having the kind of emissions reductions that are required to meet the scale of the climate crisis, then we need investments in retrofit programs that match that scale,” said Collins.
The government says landlords and homeowners will be able to access the program in summer 2021.