Let’s Make Eliminating Energy Poverty a National Priority

Energy poverty — when households spend a high portion of their incomes on energy bills or can’t access adequate services like warmth or cooling — affects more than two million Canadian households. 

To make energy and housing affordable in Canada, we need a comprehensive, national strategy to address energy poverty. 

Energy poverty isn’t a new issue. The United Kingdom has been working to reduce “Fuel Poverty” since at least the early 1990’s. In Canada, organizations like Ontario’s Low-Income Energy Network and Nova Scotia’s Affordable Energy Coalition have been highlighting the problem and implementing solutions since the 2000s. 

The latest cost of living struggles, combined with net-zero emission policy objectives, make energy poverty an important topic for policy groups like the Net-Zero Advisory Body and Canada’s Electricity Advisory Council. 

The last federal budget committed $800 million to delivering energy efficiency for low-to-median income households, including tenants, through the Canada Greener Homes Affordability Program. It’s set to roll out in 2025 and will be added to the existing Oil to Heat Pump Affordability Program and the Canada Greener Affordable Housing Program.

It’s a start, but Canada must go further to ensure that programs that help the lowest-income households in the least efficient homes continue to evolve and grow, rather than abruptly ending due to limited funding, as experienced with the Greener Home Grant. Here are our suggestions to make energy poverty a national priority.

Define energy poverty

Energy poverty, while a significant concern, is not officially or uniformly defined in Canada. A clear national definition would help policymakers create targeted and effective policies and allocate resources where they’re needed most. 

The United Kingdom and France defined energy poverty by legislative acts, while Ireland and New Zealand defined it through public consultation. 

The European Union defined energy poverty as “a household’s lack of access to essential energy services that provide basic levels and decent standards of living and health, including adequate heating, hot water, cooling, lighting, and energy to power appliances, in the relevant national context, existing social policy and other relevant policies, caused by a combination of factors, including but not limited to non-affordability, insufficient disposable income, high energy expenditure and poor energy efficiency of homes.”

A similarly broad definition in Canada would allow regions to develop locally specific policy actions. For example, some areas might prioritize helping residents transition off expensive heating oil, while others might prioritize tenant protections during extreme heat events.

Measure energy poverty and set targets

To make progress, Canada needs to regularly measure energy poverty and set clear targets. This involves looking beyond a single metric to capture the various dimensions of energy poverty, such as energy costs relative to income, indoor housing conditions, and health impacts. 

In the U.K., indicators linking the lowest-income households with the least efficient homes help energy efficiency programs prioritize. This approach leads to a goal of seeing as many fuel-poor homes achieve a moderately high energy performance (C on a scale from G to A). In Canada, a national home and building energy labelling system could be combined with energy poverty data to prioritize homes most in need. 

Canada should set targets for the number of energy-poor households reached per year and when energy poverty will ultimately be eliminated.

Coordinate

The Prime Minister should make the Minister of Natural Resources accountable for the national goal of eliminating energy poverty. Canada could also benefit from an independent body, like the U.K.’s Committee on Fuel Poverty, to monitor and report on progress.

Energy efficiency is a long-term, durable, solution to energy poverty. Yet, people also need immediate help. Policymakers need to coordinate across short-term and long-lasting solutions. A Universal Service Program provides on-bill rebates, arrearage management, and crisis intervention to provide a social safety net against energy poverty. The federal government can encourage the development of Universal Service Programs through funding, data provision, design of energy efficiency programs, and requirements for using federal incentives such as clean electricity tax credits.

Coordination is also needed across governments and program administrators. We have previously outlined that the federal government can complement and incentivize more robust provincial and utility programs by focusing on deeper energy savings, fuel switching, removing non-energy barriers, and helping reach more households.

No one in Canada should face poverty because of their energy bill or inadequate access to basic energy services. With a national commitment to eliminate energy poverty, we can ensure that federal programs are more effective and have the long-term backing they need to succeed. By defining energy poverty, measuring it comprehensively, and coordinating across all levels of government, Canada can build a future where everyone has access to affordable, reliable energy.