Part 1: The current state of play

The path to reaching our climate commitments goes through existing buildings  

Reaching our climate commitments, namely our net-zero by 2050 objectives, demands a marked increase in the pace and scale of how we retrofit our existing buildings far beyond today’s relatively modest and shallow retrofits. Residential and commercial building retrofits need to go beyond today’s focus on cosmetic alterations to include building envelope upgrades such as increased levels of insulation, better windows and doors, enhanced air tightness, as well as preparing each building to use zero-carbon energy sources. 

Buildings account for nearly 18% of Canada’s total GHG emissions and can make up as much as half of emissions in Canada’s major municipalities. Clearly, the path to reaching our climate commitments must include existing buildings. To make sure we reach climate targets, we need a regulatory framework for retrofit activity which places energy efficiency and carbon performance as a primary consideration.  

The recent policy history on regulating building retrofits in Canada 

Within Canada’s Pan-Canadian Framework on Clean Growth and Climate Change (PCF), federal, provincial, territorial and indigenous governments committed to developing by 2022, “a model code for existing buildings to help guide energy efficiency improvements during renovations.” The Canadian Commission on Building and Fire Codes (CCBFC) was tasked with developing this building code for existing buildings alongside action on new buildings, primarily the development of a net-zero energy ready building code.  

In 2016, a joint task group of the CCBFC and Provincial and Territorial Policy Advisory Committee on Codes (PTPACC), known as the JTG AEB and supported by technical advisors from the National Research Council, was struck and set about defining the overarching principles, scope and key priorities for a national renovation code. Shaped by a jurisdictional review of national and international standards and codes as well as input from leading jurisdictions the JTG AEB’s articulation of the overarching principles for a national retrofit code and recommendations on how code requirements for the alteration to existing buildings would be triggered can be found in the Final Report – Alterations to Existing Buildings. It is expected that the CCBFC Standing Committees will use this report to develop the technical requirements when work on the AEB resumes in late August of 2021. 

Released in Spring of 2020, this report highlights that it is the voluntary action of the building owner that will trigger any of the AEB requirements. The report also notes that energy efficiency is the driving force behind the AEB but will not consider carbon performance as it does not fall within the existing five objectives of Canada’s national model codes.  

Is a national retrofit code the only option? 

While development of the AEB has begun to take shape over the last several years, leading jurisdictions have been exploring alternatives to regulating retrofit activities beyond conventional codes, namely minimum energy performance standards (MEPS). MEPS are a type of building performance standard that can drive deeper and more certain energy savings and emissions reductions, and faster. Set at a national, provincial/territorial, or municipal level MEPS set predefined minimum energy performance standards for specific groups of building archetypes. In the Canadian context this could be, for example, an EnerGuide energy rating or energy and GHG intensity metrics tracked through Energy Star Portfolio Manager. A specific level of energy and/or GHG performance would have to be reached by a specific date, or on the sale or change in occupancy of a given building.  

To be most effective these whole-building performance standards can be developed as progressive tiers, aligned with Canada’s climate and energy objectives, that ratchet up over time. Building code requirements, including those under consideration for the AEB, typically apply only to those buildings undergoing significant maintenance or repair activities, changes of occupancy type, a new addition or substantial reconfiguration, or system upgrades. MEPS, on the other hand, can be designed to target the energy retrofit of the worst performing buildings using building performance benchmarks that identify those with below-average performance, individually or in aggregate.  

Paired with existing programs, they can also provide a focal point for funding mechanisms designed to tackle a jurisdiction’s most energy and emissions intensive buildings, leading to deeper energy reductions carried out more quickly and across a larger number of buildings. For these reasons, MEPS are standard practice in leading European Union countries as part of the Energy Performance of Buildings Directive (EPBD), which sets minimum performance levels for new buildings as well as those undergoing major renovations. MEPS are also gaining momentum in select North American jurisdictions, including Vancouver’s minimum energy performance standard which aims to cut carbon in buildings to half their 2007 levels by 2030. 

National AEB Code, MEPS, or both? 

Development of the AEB began several years ago, and in that time an increasing number of sub-national governments have recognized the urgency of our climate emergency and the need to take bold action. Municipalities, in particular, are seeking regulatory tools that can help them quickly cut energy waste and emissions from the built environment. This means that, alongside an AEB code based on the voluntary action of the building owner and triggered by major equipment changes, change of occupancy type, or by the adding or reconfiguration of building spaces, these jurisdictions can look to MEPS to reach deeper energy and emissions reductions, in a broader swath of buildings in less time.  

MEPS can also help governments pursue their policy priorities in ways the AEB is not structured to. For example, as seen in early iterations of MEPS introduced in the United States, MEPS can be part of a strategy to improve carbon performance, or as in the UK, MEPS can be used to improve specific segments of the buildings sector that contribute to the health and well-being of building occupants while reducing energy poverty.  

MEPS are one of the select regulatory tools that set a clear path towards reducing energy use and emissions in buildings, and in a way that conventional building codes cannot. By signalling the desired end-state of the existing building stock, MEPS provide the certainty needed to encourage deeper energy retrofits while providing policymakers with the flexibility to target specific segments, building archetypes, and/or specific municipal objectives.  

What’s next? 

Regulating retrofit activity, and in such a way that encourages more intensive energy retrofit measures, poses a unique set of policy challenges to overcome, well beyond the conventional framing of building codes as a minimum standard of building and energy performance. Nonetheless, the need for a practical regulatory framework that encourages deep reductions in energy and emissions in the existing building stock can be expected to become more urgent as the pace of retrofit activity increases over time. 

This points to a role for MEPS, as part of a policy package that includes financing and technical support, as a way to overcome the significant barriers that have hindered energy retrofits to date. MEPS have the advantage of signalling a long-term transition of the built environment and, in doing so, encourage continued investments in coordinated supply chains as well as innovative technologies and process that will further accelerate the pace and depth of retrofits.  

In our next article, we will look at the key considerations that go into the effective design and implementation of MEPS and draw lessons from leading jurisdictions that have leveraged MEPS to successfully elevate energy performance standards in their jurisdiction.