Housing Industry Success in Mitigating Climate Change

Given the recent focus on climate change by the federal government, it seemed timely to describe the emission reductions that have been achieved in Canada’s housing industry over the past 10 years and suggest where government policy should best be directed over the next decade.

First of all, who are the main contributors to greenhouse gas emissions? This varies significantly around the world but most sources place Canada in 9th position with total emissions that constitute about 2% of the top ten countries.  Within Canada’s seven main economic sectors, ‘Buildings’ represent about 12% of emissions versus transportation that is one of the highest at about 23%. Buildings include all residential, commercial, industrial and institutional uses but we are only going to deal with the residential sector.

In 2014, the Canadian Home Builders’ Association financed some important research to help policy makers understand just how successful emission reductions in housing had been. In order to demonstrate the relative magnitude of the reductions, they decided to compare today’s houses and cars with those from 1975. They used construction specifications from a home built in Ottawa from that period and computer simulation software developed by the Government of Canada. It was determined that a typical home, built to the current Ontario Building Code requirements would use 66% less energy that it’s 1975 predecessor. In comparison, a 2012 Chevrolet Impala delivers only a 15.8% improvement over the earlier model.

In short, the home’s energy efficiency has improved four times more than the car’s.  Other car models fared even worse with the Honda Accord showing only a 3.8% improvement over the same period. When the 2017 Ontario Building Code is introduced, it will ensure that future homes will release an estimated 80% fewer emissions than homes constructed in 1975! These advances in technology mean that despite having 38% more homes in Canada than in 1990, residential emissions overall are down 11%.

Today’s new home buyers benefit from the tremendous energy performance improvement achieved by Canada’s home building industry. Monthly costs are much lower than they would otherwise be. And other benefits, like improved indoor comfort and conveniences, are simply “part of the package”.

New housing is doing very well, and will continue to improve. We therefore do not feel it is appropriate to adopt more stringent codes unless they can be shown to have no impact on costs and affordability. New housing can and will continue its energy and climate performance improvement voluntarily with excellent success.

Where there is a huge opportunity, however, is in the energy retrofitting of Canada’s existing housing stock. Every dollar invested in the average existing Canadian home will yield four to seven times more GHG reductions than the same dollar spent on a new home.

In a recent presentation to the federal government’s pre-budget consultation committee the Canadian Home Builders’ Association recommended a permanent, refundable home renovation tax credit for energy efficiency retrofits using the government’s Energuide Rating System.

A Home Renovation Tax Credit could:

  • Achieve a number of specific public policy objectives to reduce GHG from Ontario’s 4.8 Million existing homes through energy efficient renovations.
  • Have the added benefit of strongly encouraging consumers to use legitimate contractors and create a paper trail to deter underground activity while stimulating economic activity.
  • Be funded through a portion of the funds generated from the proposed cap and trade system.

Improving the energy performance of existing homes offers the greatest and most cost-effective benefit to homeowners, utilities, governments and society as a whole.

Another tool that would be extremely helpful in implementing a program to retrofit Ontario’s existing housing stock would be the introduction of a mandatory energy labelling system for the re-sale of  existing homes. Provisions for this already exist in Ontario’s Green Energy and Green Economy Act and so all the government has to do is implement them.

Benefits of a Mandatory Home Energy Rating and Disclosure System include:

  • Consumer disclosure through greater accountability and transparency
  • Professional advice regarding potential energy-efficient upgrades
  • Market transformation as buyers make informed choices based on energy performance of housing, while sellers would invest in energy-efficient upgrades
  • Home values would better reflect energy performance
  • Reducing energy use and lowering GHG emissions

Mandatory Home Energy Rating and Disclosure in combination with a Home Renovation Tax Credit are two separate, but directly related initiatives that would target Ontario’s millions of existing and aging homes for market transformation and achieve significantly higher GHG reductions in a relatively short period of time. These opportunities represent the ‘low hanging fruit’ in using Canada’s housing stock to further reduce GHG emissions and we encourage the provincial and federal governments to pursue them vigorously.

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