Canada Green Building Strategy Discussion Paper Responses from Efficiency Canada

1. Does this discussion paper target the right strategic themes and areas requiring change, and communicate the level of action required?

The overarching emphasis on market transformation is the area where the federal government can have the greatest impact, and the framing towards helping meet economy-wide net-zero emissions goals provides the right perspective.

The “mandating change” theme is required to achieve the scale of transformation targeted by the strategy, yet there should be specific dates for when buildings need to meet net-zero emission and energy efficiency standards and when all new heating systems must be zero carbon or zero carbon ready. This theme should also not neglect supporting compliance activities to ensure market players aiming to create high performance buildings are not undercut.

A theme related to “leaving no one behind”, equity and/or energy poverty is missing. The strategy says it prioritizes equity, diversity, and inclusion as a principle, yet this principle is not reflected in themes or the actions laid out in the plan. This is a significant gap that threatens to delegitimize the entire strategy.

The grouping into themes creates risks if they lead to siloed implementation. The discussion paper recognizes the scale of the challenge, yet says little about how policy can create systemic changes to accomplish a scale-up in retrofits, which might entail new business models or combinations of regulations, investment strategies, new technologies etc. There is a danger that the strategy leads to policy silos focused on regulation, investment, and R&D without considering how the right combinations of all of these themes might lead to desired results.

2. This discussion paper identifies current and potential actions that the federal government is taking under each theme. What actions can your organization contribute to support achieving the changes needed within each theme?

Efficiency Canada has a mission to create an energy efficient economy. Our ongoing and new activities can contribute to the green building strategy through policy analysis, communications, and engagement of energy efficiency sector allies.

Our provincial energy efficiency Scorecard provides a regular tracking of provincial policy, encouraging the dissemination of best practices. It could act as a benchmark of provincial alignment with the Green Building Strategy.

Efficiency Canada research focuses on policy systems analysis. This includes how federal-provincial systems can work together, exemplified in our “Efficiency for All” report that examines provincial level energy efficiency programs and then provides recommendations for federal policy; our “Canada’s Climate Retrofit Mission” report that explores taking an innovation oriented approach to building retrofits; and our report on “Strengthening Canada’s Building Code Process to Achieve Net-Zero Emissions”, which discussed building code system governance. These systemic policy systems, and multi-level governance analyses help policymakers understand the implications of policy changes in the area of regulations, investment, technology and R&D.

We foster citizen engagement in all energy efficiency policy areas through our networks of regional champions and the action on building codes council. Our weekly DiscoverEE webinars provide an opportunity for the energy efficiency community to learn about the latest energy efficiency initiatives in Canada.

In addition, we are working to attract new people to energy efficiency careers through the DiscoverEE career hub and our Our Human Energy campaign showcasing the stories of energy efficiency professionals. Our “becoming” webinar series helps people understand what it is like to work in different energy efficiency jobs.

3. Are there other actions that you believe need to be taken, best practices we should consider, or potential risks to pursuing the Strategy?

Yes. At the moment gaps within the plan relate to low-income energy efficiency, regulatory timelines, building performance standards, and provincial policy actions.

Low-income energy efficiency

The biggest risk to pursuing the strategy as currently written, is that low-income Canadians are left out. Without specific low-income energy efficiency and decarbonization strategies, and a specific objective to eliminate energy poverty, Canada will not achieve net-zero emissions because we need to retrofit the homes where low-income Canadians live. The lack of specific consideration for low-income Canadians delegitimizes the strategy and will create opposition to green building transitions due to concerns related to affordability and equity. Low-income Canadians will be most vulnerable to price increases due to carbon taxes and due to high fixed distribution charges from natural gas systems, given the Strategy’s focus on reducing gas use. This is an injustice that threatens to create significant social and political risks to Canada’s net-zero emissions plan. These risks are entirely preventable by making the elimination of energy poverty a focus of this strategy and providing national support for low-income energy efficiency.

Heating system regulatory timelines

Mandating change is a key theme in the discussion document, which calls for clear timelines for phasing fossil fuels out of buildings and meeting energy efficiency levels required for a net-zero emissions economy. Similar to a zero emission vehicle mandate, the green building strategy should define a date beyond which all heating systems must be zero carbon or zero carbon ready, based on the lifecycle of equipment and/or performance standards required to meet economy-wide net-zero emissions objectives. For instance, the strategy should make a commitment that all new heating systems be zero carbon ready by 2030, at the latest, with accelerated goals for amenable climate zones and transition technologies like hybrid heat pumps. This is a best practice, with Germany requiring district energy and/or hybrid heat pumps by 2024 and Netherlands implementing a similar policy by 2026.^[1]

Mandatory building performance standards

A best practice not specifically considered within the strategy is mandatory building performance standards for energy efficiency and GHG intensity. The absence of this policy is striking, given the theme of “mandating change”. To reach net-zero emissions large buildings need to not only benchmark and disclose energy efficiency and greenhouse gas emission performance, we also need to make a minimum level of performance mandatory so these buildings provide the right services to occupants and tenants in a net-zero emissions future. The development of a federal Green Building Strategy is an ideal time to clearly define net-zero emission compatible performance for different building types, climate zones etc. The federal government can then direct its incentive strategies towards meeting this level of performance, or use federal powers to regulate the emissions performance from buildings in a way similar to power plants and vehicles.

The strategy should also plan to incorporate standards for the embodied carbon emissions within buildings, and develop plans to reduce emissions from building materials through demand side actions (e.g. reduce material use and material performance requirements) and supply side actions (e.g. performance standards for cement and steel manufacturing).

The federal government can lead by example through a Buy Clean Strategy that incorporates building operation performance standards and requirements for embodied carbon disclosure and phased targets for GHG performance of building materials.

Provincial action plans

The strategy should also clearly articulate the policies provinces and municipalities need to implement and the levels of performance they should be encouraged to achieve. A lack of direction to other levels of government creates uncertainty on the provincial level and leaves citizens within provinces uncertain about what they should expect from their provincial and municipal policymakers. It also means federal funds directed towards lower levels of government are less likely to spur structural market transformations called for in this strategy.

In the Green Building Strategy, Canada should consider presenting clear expectations for regulatory and policy changes, as is done under the European Union’s Energy Performance of Buildings Directive and Energy Efficiency Directive. Federal funds and policy support can then be more clearly directed towards specific policies and timelines.

A relevant example involves Canada’s new national model building codes with progressive performance tiers leading to net-zero energy-ready. The federal government has yet to publish a timeline for provinces to move up these tiers so the nation can achieve net-zero emissions. A Green Building Strategy discussion paper suggests all new buildings must be net-zero carbon ready as early as 2027, yet this year’s Efficiency Canada Provincial Policy Scorecard shows that no province is on that timeline.

The federal government can define provincial targets and policy supports related to:

• Net-zero energy-ready and eventual net-zero emission building code adoption
• Building code compliance studies and targeting 90% compliance with building codes
• Mandatory building performance standards for existing buildings
• Energy efficiency resource standards for electricity and natural gas utilities, and incorporation of net-zero GHG goals into public utility regulation.
• Mandatory energy labels publicly displayed on commercial buildings and disclosure of energy performance and actual energy usage when buildings are sold or rented
• Green workforce strategies incorporated into workforce development agreements and labour market development agreements
• Provincial/Territorial Building Renovation Plans

The strategy must also not let action stall at the federal-provincial negotiating table. Municipalities are often the champions of green building policies, and can move faster than provinces. The federal government should support municipalities seeking to implement more advanced standards for both new and existing buildings than their respective provinces, with the understanding that all jurisdictions must eventually “harmonize” towards net-zero emissions.

4. What milestones should be used to track progress toward a net-zero emissions, climate-resilient buildings sector?

Regular monitoring and access to relevant data should be incorporated into the plan. At this stage, it is worthy to highlight tracking progress towards achieving net-zero compatible building performance standards and public investment levels.

Building performance standards

To track progress the federal government should publish energy efficiency and GHG performance standards for multiple building typologies, and then encourage incentives and mandatory regulations to align with these standards. This would go beyond benchmarking towards defining net-zero compatible performance of buildings.

We wish to emphasize that publishing these standards should trigger a process of learning and experimentation of what future standards are achievable and how we can meet them. An “experimental governance” approach could be an appropriate model. This entails creating large and meaningful penalties for parties that refuse to participate or do not even attempt to reach performance standards, and comprehensive policy support for parties making good faith attempts to meet high building standards, yet running into barriers. Such an approach requires strong support for compliance with regulations, open information exchange about difficulties, and a policy system prepared to confront difficulties by exploring new solutions rather than reducing performance goals.

Monitoring on the performance of retrofits should include achieved performance via metrics such as absolute achieved energy and GHG performance intensity, and enhanced building quality and energy services. The strategy should also closely track changes to the retrofit process, such as scale of retrofit projects, cost and speed of retrofits. Progress in retrofitting buildings where low-income Canadians live and relevant to low-income and traditionally marginalized communities should also be tracked.

The strategy should find ways to require / encourage builders and renovators to share real world experiences, achieved performance, and solutions to common problems.

Public and private investment

The discussion paper notes that achieving net-zero emissions requires investments of tens of billions of dollars a year. The strategy should further define the level of public investment that must be earmarked to achieve this transition. To trigger the type of transformation required and to send a signal to markets, the public sector should lead with a funding commitment that is large enough and long-term to change expectations of the future.

The strategy should establish milestones for federal investment, as well as investments from other levels of government, and then track private sector energy efficiency and decarbonization investments to assess if and when strategies must change and if more public sector investment and/or different strategies are required to meet the net-zero goal.

5. What structures or processes should be put in place to support continued collaboration to 2050?

The governance structure required to implement this strategy deserves considerable attention. The strategy lists a number of policy ideas such as retrofit concierge, aggregation, market development teams, labeling and benchmarking etc. that could all have an important impact. However, it is the orchestration and management of all of these policies to meet the transformative net-zero mission that might make the biggest difference by fostering complementarity between policies and ensuring good policy ideas do not suffer from implementation difficulties.

At present, it is unclear what entity monitors and guides the process of achieving green buildings. Initiatives related to technology vs. business models vs. regulatory changes appear that they could easily become disconnected and siloed rather than encouraging systemic solutions to scale-up building retrofits. For example, the market development team concept is couched within the “Greener Neighborhoods Pilot Program” which restricts their potential to place based aggregation in the affordable housing sector, while there is potential to consider aggregation across similar building retrofit timelines or to have these teams play a role in encouraging innovation retrofit solutions across technology or sector boundaries.

A governance model should ensure a novel green building project can seamlessly move from a demonstration phase, to scale-up without getting delayed within different programs or due to regulatory barriers at various levels of government. An ideal structure for continued collaboration should have the capacity to closely monitor green building sector dynamics throughout the country, have the flexibility to immediately support good ideas and systemic solutions that might not easily fit within existing program boundaries or that have not been thought about yet.

In the Efficiency Canada published “Canada’s Climate Retrofit Mission” report, Haley and Torrie suggested a structure where market development teams experimented with several different novel retrofit solutions, with overall guidance and support from a “mission leader” organization with the independence and flexibility seen in other innovation oriented public sector organizations.

Without attention to governance and implementation, the Green Building Strategy will likely run into implementation bottlenecks, or find itself quickly out of date as learning and experimentation with new green building solutions evolve.

6. What modelling has your organization done that could inform modelling out all the actions that will be identified under this strategy to ensure they are ambitious enough to meet our net-zero buildings sector commitment?

The Efficiency Canada published “Canada’s Climate Retrofit Mission” by Haley and Torrie, included a basic model of retrofit rates, costs, energy and GHG reductions. The results of this work are quoted in the Green Building Strategy discussion paper and related materials.

The major takeaway from the modeling is that meeting a net-zero buildings sector commitment requires a level of ambition not previously seen, and hence a new policy approach and governance model. This is why the paper discusses the need to develop new business models, novel retrofit solutions, and to adopt an innovation oriented governance framework. The need for such a policy framework is a natural extension of the modeling results. Thus the level of ambition required should consider if public investments are at the scale required, and if the strategy introduces a governance framework focused on continuous learning, experimentation, and search for solutions to scale-up zero-carbon retrofits at an unprecedented scale.

7. How can we best consider Indigenous priorities that have been raised through existing federal processes and initiatives regarding the built environment on reserves and in other remote and northern communities (e.g. the work to close critical infrastructure gaps by 2030, conduct infrastructure needs assessments, develop and implement Indigenous distinctions-based housing strategies, and co-develop the Urban, Rural and Northern Indigenous Housing Strategy)?

This question is best answered by Indigeneous Nations, with government support for Indigenous led housing developments. If it has not already done so, we suggest the strategy development process provides financial and other relevant support to facilitate discussion with Indigenous Nations.

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