An Open Letter from the CEO of Passive House Canada
Bear with me. This is a little long. But it is important.
Canada has a housing affordability crisis. Of that, there can be little debate.
We need to build more housing, build it faster, and find ways to make it more affordable. We need to reduce unnecessary costs, remove barriers to development, and create an environment in which builders and developers can succeed.
But we must be very careful about what we choose to sacrifice along the way.
Against the backdrop of recent provincial and municipal elections across Canada, I am increasingly troubled by a policy narrative suggesting that higher building performance standards are somehow responsible for our housing affordability crisis. That energy efficiency, durability, resilience and occupant comfort are expensive luxuries we can no longer afford.
During the election campaign, the ONEBC political party called for the elimination of the BC Energy Step Code, claiming that it raises housing costs through “unnecessary green building requirements.”
The BC Conservatives, who have now secured a decisive majority in the provincial election, have also committed to overhauling the Step Code as part of a broader effort to simplify and harmonize building regulations.
Reviewing building codes and eliminating unnecessary complexity are entirely reasonable objectives, but we should be very careful not to confuse regulatory simplification with lowering building performance.
It is worth asking: What does the evidence actually tell us about the cost of better buildings?
According to the 2022 BC Energy Step Code Metrics Report, prepared by Evoke Buildings and E3, achieving Step 3 performance in a modelled medium-sized single-family home adds approximately 1.1% to 1.2% to construction costs relative to Step 1. For row housing, the incremental cost is approximately 0.6% to 0.7%.
For larger buildings, the findings are equally interesting. Some multi-unit residential buildings can achieve higher performance at the same or lower construction cost than Step 1. The research even identifies scenarios in which higher-performing commercial buildings cost less to construct.
These findings do not suggest that better performance is always free. They demonstrate that incremental costs can be modest and are highly dependent on design decisions. They are not necessarily the sweeping financial burden some portray them as.
More recent research provides another important perspective.
A June 2024 BC Housing case study examined actual construction costs and energy performance across 38 buildings, including projects built to Step 3, Step 4 and the Passive House standard.
Its findings are revealing. The average construction cost of the Step 3 buildings was 7% higher than that of the combined Step 4 and Passive House group.
The researchers cautioned that building type, location, amenities and other factors influence costs. Nevertheless, the study found no clear relationship between higher building performance and higher construction costs.
In other words, achieving better performance does not automatically mean spending more money.
And we don’t have to rely solely on studies and averages.
Consider Timbre and Harmony, an affordable housing development completed in Vancouver in 2024.
Developed by Brightside Community Homes Foundation, the project replaced 57 aging rental units with 157 new homes, primarily serving seniors, people with disabilities and others facing housing barriers.
The two six-storey buildings were designed to meet the rigorous Passive House standard, incorporating exceptional airtightness, high-performance windows, efficient mechanical systems and thoughtful building-envelope design.
According to a case study published by Vancouver’s Zero Emissions Building Exchange (ZEBx), the final construction cost was comparable to that of a conventional building constructed to minimum code requirements.
Think about that.
A development delivering affordable housing in one of Canada’s most expensive cities, achieving a level of building performance well beyond conventional requirements, without a reported construction cost premium.
How? Through thoughtful design, simplified building forms, integrated mechanical systems, and collaboration between architects, engineers and builders throughout the design and construction process.
It is an important reminder: Better buildings are not inherently more expensive to build.
But there is another issue that is too often absent from the debate.
The cost of constructing a building is NOT the same as the cost of owning, operating or living in it.
Buildings are not disposable products. We should be designing and constructing them to serve generations of Canadians.
A building that costs marginally less to construct but consumes considerably more energy throughout its life is not necessarily more affordable. Nor is one that struggles to maintain comfortable indoor temperatures during extreme heat or cold, or is more vulnerable to moisture problems and premature deterioration.
Those costs do not disappear. They are simply transferred to someone else.
To homeowners. To tenants. To building operators. To investors. And, in the case of publicly funded buildings, to taxpayers.
And this conversation extends far beyond housing.
The decisions we make today about building performance will influence the schools where our children learn, the hospitals where Canadians receive care, the offices where we work, and the public buildings that communities depend upon.
We will live, work and play in those buildings for decades.
And there is another important economic opportunity that deserves far more attention.
Higher building performance standards do more than improve buildings. They create demand for innovation.
They encourage manufacturers to develop better windows, insulation, ventilation systems, building components and construction technologies. They create opportunities for Canadian businesses to compete, innovate and grow.
They also encourage investment in our skilled trades. Building better requires new knowledge, improved construction practices and greater collaboration across the industry. These are skills and capabilities that can make our workforce more productive and competitive.
At a time when Canada is increasingly focused on economic self-reliance, strengthening domestic manufacturing and reducing our vulnerability to global supply chain disruptions, these opportunities should not be overlooked.
Why would we lower our expectations for the buildings we construct when raising them can help strengthen the very industries and workforce we depend upon?
Of course, these benefits won’t happen automatically. We need to invest in training and developing skilled trades capacity here in Canada, support Canadian manufacturers and create the conditions for innovation to flourish.
But that is an argument for building on our progress, not retreating from it.
None of this means that higher performance comes without challenges, or that every building code requirement is beyond criticism. Codes should be regularly evaluated. Their benefits should be measurable, and their implementation practical and cost-effective.
But we should be equally critical of proposals to weaken building performance requirements in the name of affordability.
We cannot build our way out of a housing affordability crisis by ignoring the long-term cost of the buildings we construct.
At Passive House Canada, we advocate for an independently verifiable building performance standard that demonstrates what is possible when design and construction teams work together toward a clear performance goal.
We also recognize that not every building will be a certified Passive House. That is not the point.
Nor is this about partisan politics. Passive House Canada does not advocate for one political party over another. We advocate for better buildings, supported by evidence, sound economics and a commitment to the long-term interests of Canadians.
The point is that better building performance should be an ambition shared across our entire construction industry, regardless of the standard or pathway used to achieve it.
British Columbia has been a leader in establishing a predictable, performance-based approach to improving its buildings. When introduced in 2017, the BC Energy Step Code established a regulated pathway toward net-zero-energy-ready construction that attracted attention well beyond the province’s borders.
It became an important example for other jurisdictions considering how to improve building performance through clear, progressively more ambitious standards.
If the incoming government does consider changes to the Step Code, there is an opportunity to build on that leadership. Regulatory simplification, improved affordability and ambitious building performance need not be competing objectives. It is possible to create demand for new products, new skills and new ways of building, while demonstrating the value of training, innovation, collaboration and thoughtful implementation.
We can and must have a serious conversation about housing affordability. Development charges, permitting delays, regulatory complexity, financing costs, land availability and construction productivity all deserve scrutiny.
So do building codes.
But that conversation must be informed by evidence and by an understanding of what buildings actually cost over their lifetimes.
Canadians deserve housing they can afford to buy or rent. They also deserve buildings they can afford to live in.
Those should not be competing ambitions.
And we should reject the suggestion that they must be.
Michael Quast
Chief Executive Officer
Passive House Canada | Maison Passive Canada
References and further reading
- 2022 BC Energy Step Code Metrics Report Update — Evoke Buildings and e3
Research examining the incremental construction costs of different Step Code performance levels across building types and climate zones.https://www.evokebuildings.com/technical-library/step-code-metrics
- Government of British Columbia — BC Energy Step Code Guidance
Provincial guidance summarizing construction-cost estimates and the performance-based approach. - BC Housing — Building Innovation: Does High Performance Construction Cost More?
June 2024.Study examining actual construction costs and energy performance across 38 buildings in British Columbia, including Step 3, Step 4 and Passive House projects.
- Zero Emissions Building Exchange (ZEBx) — Timbre and Harmony: Passive House at Low Cost
September 2025.Case study of the 157-unit Vancouver affordable housing development, including its design approach and reported construction-cost comparison with code-minimum construction.
https://www.zebx.org/case-study-timbre-and-harmony-passive-house-at-low-cost/
- Brightside Community Homes Foundation — Timbre and Harmony
Information from the housing provider about the development and its housing objectives. - BC Energy Step Code — Research and Reports
Includes Lessons from the BC Energy Step Code, examining the development of BC’s performance-based regulatory approach and lessons for other jurisdictions. - ZEBx — The Builders Have Spoken: The Cost of High-Performance Construction
June 2021.Discussion of actual construction costs for seven high-performance, wood-framed, mid-rise residential buildings in BC.
