CEO Letter – April

This past Monday the federal government released its first budget in more than two years. It proposes significant investments to put Canada back on a path to economic recovery from Covid-19. As you’ve no doubt heard, this is the largest budget in Canadian history, with $101.4 billion in new spending over three years, including significant investment in building energy efficiency.

Because the building industry is so sensitive to the country’s financial climate, I am pleased that we in the industry (generally) continue to hold our own in these trying times. The good news is that Canada’s Gross Domestic Product (GDP – the broad measure of our country’s financial health), is rebounding by almost 10 per cent, annualized in the first quarter of this year. The bad news is that Canada remains 460,000 jobs short of where the country was before the pandemic.

A few of the highlights we find interesting in the budget include the $8 billion for the Net Zero Accelerator to help Canada achieve net zero emissions by 2050; the reduction of tax rates by 50% for manufacturers of zero emission technologies for the next 10 years; a federal green bond framework targeting $5 billion in funding, perhaps to help make large, net-zero buildings and retrofits possible; funding of the B.C. Centre for Innovation and Clean Energy to advance the scale-up and commercialization of clean technologies across Canada. This centre could be a boon for the development and export of high-performance components in BC; finally a $40,000 interest-free loan for homeowners to help them retrofit fit their homes and reduce their energy costs.

Passive House Canada members are concerned about the climate crisis and this is why many are proponents of the Passive House standard. We are pleased to see the government commit on Earth Day to reducing emissions by 40% to 45% below 2005 levels by 2030. We are also pleased to see, effective 2024, the government will eliminate capital cost allowance deduction for natural gas to electricity cogeneration systems and natural gas generating equipment, for which more than one-quarter of the total fuel energy is input from fossil fuels.

Public investment in carbon capture must be weighed against other, proven, opportunities to drive emissions reductions on a dollar per tonne basis. For example, it may be better to focus on proven tower retrofits targeting 70-80% energy use reductions to drive down GHG emissions, rather than as yet unproven carbon capture technology.

While we are generally pleased with the direction of the budget, it is not the Green Recovery Budget many environmental organizations had asked for. The home retrofit program could possibly create thousands of jobs across the country, but we know that this effort alone will fall short of getting Canada to where it needs to go when it comes to home and building retrofits. More will need to be done.

What action do we think governments need to take? For starters, increase the bare minimum energy efficiency standards that will lock in building emissions for decades to come. A few of the requirements that must be acted upon as soon as possible include:

  • Maximizing operating efficiency in buildings. This means targeting at least 60% more energy efficient new buildings and building retrofits.
  • Meeting operating energy requirements with zero carbon sources.
  • Minimizing embodied carbon.
  • Changing our building codes to require highly efficient, low carbon buildings