Green Party and NDP MPs want the federal government to ensure its popular home retrofit programs continue without disruption, and say the recently tabled fall economic statement failed to address the issue.

“Given the current climate politically, I'm really surprised they didn't say: We're going to come through with more money for eco-energy retrofits,” Green Party Leader Elizabeth May told Canada’s National Observer in an interview on Parliament Hill.

A federal program providing grants of up to $5,000 for energy-efficient home retrofits is burning through its funds faster than expected, with some in the industry suggesting it will run out in 2024, the CBC reported last week. Natural Resources Canada did not respond to a request for comment about the status of the Greener Homes grant by deadline.

On Nov. 21, NDP MP Taylor Bachrach asked Natural Resources Minister Jonathan Wilkinson if the government would commit to renewing the program’s funding and “fixing it so it finally works for low-income homeowners.”

“The program has been enormously popular,” Wilkinson replied.

“We will continue to receive applications and, of course, we are going to look, as with every program, at the results and what we will do to supplement those things on a go-forward basis,” he said.

May said it is “bizarre” the fall economic statement doesn’t mention the need to allocate more funds to the Greener Homes grant.

NDP MP Daniel Blaikie also raised concerns about the lack of a clear commitment to renew the program.

“Given the current climate politically, I'm really surprised they didn't say: We're going to come through with more money for eco-energy retrofits,” said Green Party Leader @ElizabethMay #FES2023 #GreenerHomes #heatpumps #homeretrofits #affordability

“We talk about investment and Canadian businesses, and there are a whole bunch of businesses that started up when the Canada Greener Homes initiative got started because they wanted to become the folks [who] do the evaluation of how well insulated a house is or they wanted to be the person who came in and installed the heat pump or the person who helped Canadians save on their energy bills and reduce their emissions,” said Blaikie in the House of Commons on Nov. 21.

Blaikie isn’t the only one concerned about the impact this uncertainty will have.

“The fear with federal energy efficiency funding like this has always been this boom-bust cycle,” said Brendan Haley, a policy director with Efficiency Canada, a Carleton University think tank. “A lot of people have changed their careers [and] have even created new businesses centred around this incentive program because that is what the government asked them to do.”

In 2021, when the Greener Homes grant was first made available, the federal government offered $10 million to train up to 2,000 energy advisers. These workers are essential to ensure the program runs because reimbursements for the retrofits require homeowners to undergo energy audits to ensure they are making the most effective upgrades.

This type of uncertainty can “really cause long-term damage,” said Haley. “It can destroy businesses.” A funding gap can destroy demand in the market, even if future funding is promised, Haley explained.

The Greener Homes grant doesn’t have to look exactly the same, he emphasized. The key is avoiding abrupt disruptions that will kill momentum, harm businesses and damage the trust of Canadians eager to retrofit their homes, he added.

Experts have long said the Greener Homes grant, coupled with an interest-free loan complementary program, is a step in the right direction. However, they note it neglects low-income Canadians who can’t afford to pay for renovations upfront and wait to be reimbursed. A year ago, Natural Resources Canada launched a $250-million program that provides up to $5,000 upfront to help lower-income Canadians switch from oil heating to an electric heat pump. The federal government further enhanced those financial supports in October in response to Atlantic Liberal MPs’ concerns about high energy prices in their region, but the low-income targeted program remains limited to households using heating oil.

The fall economic statement said the federal government is “also considering options to streamline eligibility requirements under the Canada Greener Homes Initiative to make it easier for Canadians in every part of the country to switch to a heat pump, including if they currently heat their home with propane or natural gas.”

Haley wants to know why all fuels aren’t included. He said many low-income tenants and homeowners heat with inefficient electric baseboards and could cut their bills and save energy by switching to a “much more efficient” heat pump.

“Saving electricity, even if it's clean electricity, will help [the federal government] meet their net-zero electricity goals,” said Haley.

The federal government has said part of the rationale for targeting heat pumps for households using heating oil is because oil is more polluting and costly than other heating fuels. Facilitating the switch to heat pumps will protect Canadians from high heating oil costs and reduce planet-warming greenhouse gas emissions.

“The lack of a low-income energy efficiency program for everyone in the country, in particular, is a huge political liability for [the Liberals’] climate change agenda,” said Haley. The federal government’s programs targeting oil-heated homes are a start, he added, but Canadians who use electricity, natural gas, propane or wood are not getting the support they need to increase energy efficiency and reduce their energy bills.

There are also no programs to help low-income Canadians make important retrofits like upgrading insulation, replacing windows and other renovations to ensure their home is as airtight as possible. These retrofits reduce bills no matter what type of heating system is used and are often needed for heat pumps to work well, said Haley. In an old, drafty house, a heat pump will simply not be as effective.

“Especially if you're working with low-income Canadians, you want to reduce their bill as soon as you exit the building,” said Haley. “That is not necessarily going to happen if all you do is heat pumps.”

In 2023, 14 per cent of Canadian households reported they kept their dwelling at an unsafe or uncomfortable temperature for at least one month in the past 12 because of unaffordable heating or cooling costs, according to recently published data from the Canadian Social Survey. It also revealed one in 10 households reported being late or unable to pay their energy bills in the past 12 months due to high energy prices.

A recent study from McGill University, published in the Canadian Journal of Public Health, found people dealing with energy poverty report poorer mental and general health.

“If we can understand the multiple benefits of helping low-income Canadians, in particular, to not spend money on energy, it should be a win-win, win-win times 10 for the government,” said Haley.

Green MP Mike Morrice pointed out a 15 per cent windfall tax on oil and gas companies could provide funds for robust energy efficiency retrofit programs.

“The governing party has already applied a one-time tax on the excess profits of banks and insurance companies through the Canada Recovery Dividend,” said Morrice in a statement on Nov. 21. “In the midst of a climate crisis, it’s deeply disappointing they wouldn’t simply apply this same measure to oil and gas in today’s economic statement.”

The Liberals have not been receptive to Morrice’s private member’s motion on the matter. A one-time application of the 15 per cent tax on Big Oil’s 2022 profits could generate $4.2 billion, a recent report from the Parliamentary Budget Officer found.

“After a summer of record wildfires across the country that displaced hundreds of thousands of Canadians, it is puzzling that Minister [Chrystia] Freeland’s speech [Tuesday] delivering the fall economic statement made not even a single mention of climate action,” said Caroline Brouillette, executive director of CAN-Rac, in a press release.

There are solutions to cut households’ energy costs and reduce our dependence on fossil fuels, said Brouillete, citing heat pumps, retrofits and convenient public and active transportation options.

Natasha Bulowski / Local Journalism Initiative / Canada’s National Observer

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Wilkinson has always been a friend to the fossil fuel industry. He's the last person that should be the minister in charge of NRCan and Greener Homes.

But why is the first place people think we should do means testing is climate crisis funding? We should be encouraging everyone to buy EVs and retrofit their houses as fast as possible. There are many things that favor the rich, why is this the place where means testing is important. Maybe start taxing capital gains the same way income is taxed?

There's much that needs to be done regarding the taxation status quo.

Regarding gov't financial assistance for retrofits, means testing could be done implicitly after the fact at tax time, by making such assistance taxable at a percentage that increases with income. What are a couple of other primary considerations, in your view? What of homes that are so run-down that it may not make sense to retrofit them?

The funding is completely inadequate. In Europe funding is much greater for retrofitting. If you can spend 30 billion on a pipeline, 300+ billion on Covid, it's absolutely ridiculous how little the federal and provincial governments are willing to spend on the greatest crisis humans have ever faced. They spend more money subsidizing the oil industry.

I'm an Energy Advisors, people want to upgrade their houses but the money is pathetic. Most people don't have thousands of dollars to spend to upgrade. Even if you get the loan of up to $40,000 and a grant, you only get 15% of the loan upfront and none of the grant, you have to wait until your upgrades are done. You will then need to wait another 6 months for the grant. How many Canadians can afford major upgrades and then wait that long?

Regarding EAs, the gov't is apparently funding training for 2000 of them. We have millions of buildings that need assessments and upgrades. The industry -- i.e. service organizations -- seems to me (I've been looking at it as a career move, myself), is quite ad hoc, without an overarching strategy to get the necessary work done; such a strategy, it seems to me, should come from gov't.

Because there will be a huge, cumulative expense for upgrading the existing building stock, I can't see how the total cost (hundreds of billions? A trillion?) can be borne by taxpayers. So, in combination with some needs qualifying, I'd like to see discussion around a gov't funded "retrofit bank" that advances sufficient funds for the total cost (need can, again, fit in there), with some proportion treated as a low-payment mortgage against the property which remains in place, through changing ownership, until paid off. That would still be a massive expenditure.

All the current grants and rebates combined, federal, provincial and industry's, will not cover enough of the cost to our household of replacing our existing gas-burning equipment and upgrading an older electrical system both in our house, which was built 111 years ago, and the decrepit neighbourhood grid. We are retired and living on our pensions, but "means testing" does not cover all situations. :-(

Governments offering the current set of benefits assume everyone lives in newer homes in the deep suburbs where 200 amp electrical panels are normal. Not so.

The Liberals are addicted to piecemeal funding as standard practice. The Conservatives hate clean energy and are poised to cancel everything remotely related to it. And the BC NDP are not offering enough to make a dent in conversion to electricity.

All this adds up to my family just continuing to burn gas because converting to hydropower and/or solar is either unaffordable or impossible given the provincial power authority's regressive policy on net metering credits.

To think that some EU counties have ramped it up to total conversion as a national climate and long term economic policy. We are very envious of their foresight.

Hey CNO, this reporter is a keeper! (Repeating myself). Another fine article.

Cart Before the Horse, however.

One glaring omission is the form of our cities, which continue to expand in ways that actively (yes, I believe it is also often intentional) preclude effective transit and, therefore, necessitate lots of car dealers to supply the many, required private motor vehicles. It's long past time for the federal government to attach serious strings (heavy rope?!) to any financial assistance to cities and provinces. "You want millions or billions for transit? Here's the legislation that your provincial legislature will pass, regarding zoning, transit-facilitative development**, active transportation facilitation, building codes, etc., before you receive a dime."

R1 must die. (Which is not to say I accept the developers' false, either/or proclivity to immediately jump to high-rises. There are a great many, very pleasing 3-4 storey options to densify long-existing R1 neighbourhoods.)

** The phrase "Transit-oriented development" having, sadly, become a codephrase for "build as many high-rise condos as we can fit around every transit stop."

Indeed.

"Here's the legislation that your provincial legislature will pass, regarding zoning, transit-facilitative development. [...]"

The BC government very recently passed such legislation province-wide, and went as far as to dictate the expected density within defined distances from transit. They not only focussed on rapid transit lines, but also on bus hubs and high-capacity routes. They did not dictate towers everywhere, and in fact go on to effectively make single family RS1 zoning obsolete and encourage low rise '"Missing Middle" forms of housing, up to six units per standard or large lot size, less for smaller lots. But, for example, there is now a minimum density within 400m of Metro Vancouver's SkyTrain stations that will take on that form to ensure their huge investment in rapid transit facilitates self-sustaining ridership.

Going that far may not make political sense in, say, Calgary, which is surrounded by thousands of hectares of undervalued agricultural land so easily snapped up for ultra-low density automobile-addicted sprawl, but Vancouver ran out of new land to develop decades ago while consecutive conservative councils protected its sprawl from the densification they allowed elsewhere. Land supply constraints due to decades of exclusionary zoning are, in my view, one of the most powerful unacknowledged drivers of Vancouver's superheated real estate prices.

More tall towers will sprout up at rail stations and major bus routes, but that will be complemented by human-scaled infill over the years on the 70+% of urban land left over, hopefully with enough zoning diversity to foster corner stores and nearby high streets chock-a-block with continuous sidewalk retail. That is a good thing, in my books, mainly because we are already living on a tiny lot with hundreds of shops just steps away, requiring only good walking shoes, not a gigantic SUV, to access groceries, services and a plethora of transit options including a subway. And to think I grew up in drudgerious suburban Calgary where walkable neighbourhoods were never on anyone's consciousness, except when Calgarians had the most enjoyable vacations in European cities and towns for reasons they really couldn't describe cuz there wasn't anything to compare them to in their hometown.