Canadians are rightly concerned about the rising cost of living. Housing affordability has reached crisis levels in many communities, while food and transportation costs are rising faster than incomes.
The same polls that highlight widespread affordability woes also show Canadians remain concerned about climate change. For all our present struggles, affordability will be much worse in a world of runaway global heating. The physical and health impacts of climate change are already costing Canada $720 per person per year. That number is rising quickly as extreme weather events become more frequent.
To make matters worse, some governments are entertaining Band-Aid solutions to our affordability challenges that will increase costs down the line. Enabling new, gas-heated suburban sprawl, as Ontario is proposing, will lock in highly inefficient infrastructure that will be even more costly to transition later on.
The good news is there are steps the federal government can take in next month’s budget to address immediate affordability concerns while also setting the economy on a path toward lower emissions.
One of the best win-win options is electric heat pumps, which can replace natural gas and heating oil systems. About 13 per cent of Canada’s emissions come from the building sector, so getting fossil fuels out of our homes will be good for the climate and our health. And, as a politically salient side benefit, heat pumps can lower home energy bills.
Canada has dabbled in support for home energy-efficiency retrofits, including through the Greener Homes Grant, which just wound up. The Oil to Heat Pump Affordability Program now offers up to $15,000 for low-income households, but its scope is unduly limited.
Canada needs a new federal program that significantly expands these initiatives to cover all manner of efficiency improvements — from heat pumps to insulation to windows. It should also focus on low-income households, older buildings and multi-unit residential buildings, which generally face the greatest financial barriers yet stand to benefit the most from reduced energy bills.
Of course, heat pumps and retrofits are just small pieces of the puzzle.
A separate but related issue is green job creation. Governments and employers are wringing their hands over looming skill shortages in many key occupations for the clean economy, including in the trades necessary for building retrofits. Meanwhile, many young people are keen to contribute to Canada’s decarbonization efforts but are struggling to make ends meet as it is. There is an obvious opportunity here for targeted programs to bridge youth into good green jobs.
In the U.S., President Joe Biden recently launched the American Climate Corps, which will employ 20,000 youth in climate and clean energy jobs, and has just asked Congress for funding to expand the program to hire another 50,000 new workers annually. In Canada, the Climate Emergency Unit has campaigned for a similar program called the Youth Climate Corps. Such a program would subsidize new green jobs for young people to help them build the skills necessary for productive green careers.
As Pierre Poilievre and Bay Street executives ring the austerity alarm bells, the federal government will inevitably be confronted with the question of how to pay for these new programs. Retrofitting 170,000 homes in the next five years could cost the government $2.5 billion, while a youth climate corps might require a budget of $1 billion per year.
And that’s just the start. Fully decarbonizing the economy to limit the destructive impacts of climate change will require spending as much as two per cent of GDP annually. To pull it off, we need to redistribute resources to the right places.
In 2022, the federal government introduced a windfall profits tax on banks and insurance companies. Extending the tax to the fossil fuel sector is a logical next step given its extravagant profitability and responsibility for climate change. Doing so could raise $4.2 billion over the next five years. Plus, it’s an idea voters support. In new polling, 62 per cent agreed Canada should tax oil and gas companies’ historically high profits, as the U.K. has done.
These three measures — a home retrofit program, a youth climate corps and a windfall tax on oil and gas profits — will not solve all of Canada’s climate and affordability challenges on their own. But they are practical, achievable steps the federal government can take in Budget 2024 to move the country onto a more affordable and sustainable path.
While households may be focused on paying the bills today, governments cannot lose sight of how to pay the bills tomorrow. That means acting now to reduce our dependence on volatile, polluting fossil fuels and to secure a livable future for all.
Hadrian Mertins-Kirkwood is a senior researcher with the Canadian Centre for Policy Alternatives.
Alex Cool-Fergus is the national policy manager at Climate Action Network - Réseau action climat. She is an experienced organizer and political campaigner with over a decade of work in the areas of local and federal climate policy.
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If u think cost of living
If u think cost of living high,ve prepared. Food will continue to be more expensive as things like chocolate and coffee are getting harder to grow. Droughts are hitting Canadian West. Canola oil, oats and wheat may be short this year. U have already seen olive oil go up as Spain and Italy had none. If China and Australia wheat crops are low what can u expect. Beer and barley go together but what happens if barley crop low quality and low quantity? Grapes in BC for wine had a double whammy as they were affected by last years smoke. Then a hard freeze killed the vines so maybe no grapes this year for wine and perhaps other tree fruits. Banana, a staple, expect to maybe even disappear in decade due to heat and disease. All those folks saying more CO2 improves growth are full of phooey as plants can't adjust and toomhch CO2 actually impedes growth.
We r going into the unknown, so save those nickels and perhaps a few seeds
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