I’ve been fielding questions from some of our industry partners about what impact the results of the next federal election could have on Net Zero and energy performance targets.
Here comes a short, hopefully not too boring civics lesson. This is crucial to understanding how and/or why political change will impact our industry.
The first thing to clarify are the differences between federal and provincial jurisdictions.
- The federal government is responsible for developing a national-level model building code, doing the heavy lift of research and guidance for the provinces.
- The federal government makes national policy, which informs a national budget, which is then put into action through funding initiatives that go to the provinces.
- Housing regulation (implementing and enforcing building codes) is a provincial jurisdiction, each province or territory has it’s own building code, built off the model code developed at the federal level. Depending on their charter, cities can also have their own building by-laws or standards.
Policy and Funding
With regards to energy and net zero, here’s how it shakes out the national level: in 2016, Canada and the provinces committed to the ‘Pan Canadian Framework on Clean Growth and Climate Change’.
Released in 2017, the Framework is a 10-year commitment to growing the economy while reducing carbon emissions. This includes an aspirational goal of hitting net zero across all sectors, including net zero energy ready housing by 2030.
National-level policy in pretty much every sector is driven by this framework.
The current Liberal housing strategy – Canada’s Housing Plan – made up a significant part of the 2024 budget. The plan aims to solve the housing crisis by investing in programs to increase housing supply, expand the workforce, preserve and build affordable housing, protect renters, and address homelessness.
Housing is a provincial jurisdiction. The federal government cannot dictate how houses get built.
Each province or territory has funding in it’s budget for housing. Each one is also the recipient of federal funding for housing. Under the 2024 Canada’s Housing Plan, cities and municipalities can also be direct recipients of federal money.
Canada’s Housing Plan does not tie funding to energy performance targets. A different federal funding initiative could include energy performance targets as criteria for eligibility (that’s what the Greener Homes grant and loan program did/does). This is the only way that the federal government can stipulate how houses are to be built.
Performance targets are incorporated into building codes.
Codes and Regulations
As part of the Pan-Canadian Framework, the provinces agreed to harmonize their building codes with national regulations so that a Net Zero Energy Ready standard could be possible.
Provinces and territories have agreed to reach net-zero energy-ready standard by 2030.
The National Building Code (NBC), is a model code, with an update released every 5 years. The model code is adopted or adapted by the provinces and territories, and that’s when it becomes the legal instrument that dictates structural and fire safety, and now, energy performance.
Building codes (unlike fire codes) work on a ‘go forward’ basis, meaning that structures built under old codes don’t have to meet new code requirements unless/until the structure is undergoing a major alteration/renovation or is being re-purposed. Buildings always have to be brought up to compliance the current fire code.
The National Building Code is fairly neutral when it comes to politics, mainly because it’s developed via a thorough consensus process on that 5 year cycle. The content is developed by the Canadian Commission on Building and Fire Codes (CCBFC). This independent commission collaborates with hundreds of volunteer industry experts and public members across nine standing committees, each of which has several task groups and working groups.
What’s Included in the Building Code?
Prior to energy efficiency measures being included in the NBC, it was a prescriptive document for structural and fire safety. To build legally, you followed the tables and charts that dictated foundation parameters, framing spacing, fire separation, and so on. ‘Thou shalt’ language.
After mechanical ventilation and energy efficiency measures were included, things had to change a little, because all of a sudden, there were variations on approaches based on things like climate, regional fuel types, different mechanical equipment optons, air sealing approaches, and a wide range of insulation materials with differing characteristics.
‘Thou shalt’ still works for structural and fire, but the code changed to ‘objective-based’ language meant code compliance could be met by demonstrating that an approach or assembly or design met the objective of the code (ie, ‘ensure energy efficiency’).
It turns out that that’s not quite enough, either. It can be expensive to ‘demonstrate code compliance’, there were some significant gaps and there was no guidance on the level of ‘energy efficiency’ to be met.
What’s a ‘Performance-Based’ Building Code
We moved to ‘performance based’ code in 2020. Now we have explicit tiered energy performance targets that are confirmed by energy modelling prior to, and after, construction. Some jurisdictions also include mandatory air tightness testing with a blower door.
While there are several ways to confirm the energy performance target, in home construction (Part 9), code compliance is primarily via an EnerGuide for Houses Rating, which includes energy modelling and air tightness testing to verify the performance.
It feels important to note here that ‘building to code’ is always the bare minimum legal standard, even with energy performance targets.
The Path to Net Zero
The two-pronged goal of the tiered National Building Code is exactly the same as the BC Energy Step Code:
- To incrementally improve building energy performance
- To establish a viable path towards net-zero energy-ready construction standards.
Each ‘tier’ is an improvement on energy performance of a building.
The top tier is the Net Zero Energy Ready target - with roughly 60% lower energy use than a Tier 1 house.
The NBC 2025 will be released shortly. It includes three key additions:
- Operational GHG targets
- An absolute EUI (energy utilization index) compliance pathway
- Enhanced retrofit considerations (Part 10: Alterations to Existing Buildings)
It’s important to note that provinces and territories can adopt/adapt the NBC 2025 at will after it has been released by the National Research Council.
What Provinces Have Adopted NBC 2020?
NBC 2020 has been adopted by all provinces (except BC and Quebec). Ontario incorporated NBC 2020 into it’s new building code January 1, 2025.
The Yukon has also adopted NBC 2020, while the building code in the other territories and Quebec meet energy efficiency requirements found in NBC 2015.
Let’s talk about BC:
BC introduced the Energy Step Code in 2017. Five steps, with the goal of hitting Step Five,or Net Zero, by 2032.
As of May 2023, the BC Building Code requires 20%-better energy efficiency for most new buildings in BC (Step 3 for houses and Step 2 for large buildings). The BC Building Code also incorporated Zero Carbon Step Code guidelines in May 2023.
In addition, major cities, like Vancouver and Toronto, have their own stringent performance-based building by-laws or standards.
Performance-Based Building Code: Flexibility + Guidance
All large-market regions require housing to hit a minimum energy performance target. That’s baked into the applicable building code.
It’s a bit of a patchwork, with some provinces adopting only Tier 1, some starting at Tier 2, and others adopting all tiers for builders to choose from. It’s important to note that he initial tier chosen as minimum performance target can be changed at will by each province.
The harmonized, tiered model building code eliminates the need for jurisdictions to develop their own regulations to pursue energy efficiency objectives.
Using performance-based targets for energy efficiency and carbon reduction gives builders, renovators, and property owners flexibility. Meeting a performance target versus following a set of ‘thou shalt’ tables means a builder could choose to install best-in-class high performance windows and doors instead of increasing the insulation throughout the building. Or maximize the insulation levels and hit a low air tightness target.
Tiered energy performance targets allows for a path to net zero that works best for the client, climate and circumstances.
Can The Current Building Code Be Abolished
Short answer: No.
The building code is not going to change back in the near term. Builders are bound to meet code requirements around energy performance.
Longer answer:
Provinces and territories are constitutionally responsible for regulating building construction and enforcing building codes.
I’m not a legal scholar or constitutional expert. But I can say this:
The model building code is relatively well insulated from immediate or even long-term upheaval due to political change. It’s on a 5 year cycle, there is a large number of people volunteering on committees, and the consensus decision-making model. The provinces are in charge of enforcing building codes and standards and have their own cycles of revision, updating, and reviewing.
It would require a massive upheaval of Canada’s legal and regulatory frameworks - right down to the constitution - for the current performance-based building codes (model or enacted provincial codes) to be abolished.
Future of Net Zero Housing in Canada
Let me say it again: there is no federal legislation with regard to Net Zero Housing.
However, building codes with a baseline energy performance standard are now law, or will be law, due to harmonization efforts and commitments made by provinces and territories.
Current housing policy at the federal level is driven by the net zero energy ready goals of the Pan-Canadian Framework. (This includes the harmonization of building regulations across the country via the adoption of the model NBC.)
The current government has the Green Building Strategy in place to encourage the path to net zero energy and carbon emissions.
Canada’s Housing Plan is in place to accelerate the rate of new construction.
The funding associated with the current federal initiatives around energy and buildings has been allocated with most of it locked into multi-year contracts across the country
Breaking millions of dollars’ worth of contracts a costly endeavour.
The tiered code also allows us to create standards and guidelines that also ease the learning curve.
Federally-funded projects are aimed at supporting industry to get to Net Zero. There are several regional accelerator programs as well as national programs such as CHBA’s 3-year project ‘Enabling Tiered Codes – Implementation and Market Preparedness’ are aimed at easing the way to Net Zero Ready houses through “Builder Option Packages” and training.
With this kind of support in place, the industry is able to move the Net Zero agenda. I’d say that’s a good thing for ‘real’ change vs. change based on incentives and politics, given what happened with the Greener Homes Grant program.
Triple Threat Housing Crisis
A change in government will bring in a new mandate, whomever wins.
There is no clear policy identified by the federal Conservatives with regards to housing and energy. Most of the focus of any discussion is on the energy sector and the carbon tax.
In that regard, according to editor-at-large Sean Speer of The Hub, a right-leaning media platform: “market forces are now driving emissions reductions faster than top-down technocrats could ever aspire to.”
The plain fact is, that whatever party makes up the government in 2025, nobody can ignore the three headed beast of housing: not enough supply, not enough workforce, not enough affordability.
The long-term implications of affordability and energy security can be addressed in part by a slightly higher capital cost for minimal operating costs over the lifespan of a new or retrofit building.
As shown in BC over the years, and through programs like the CHBA’s Net Zero labelling program, the incremental costs of getting to higher performance buildings get smaller as the learning curve goes down. This is partially why we have a tiered code - to build in an easy learning curve for builders and renovators.
However, the threat of US tariffs is a real cause for concern. Tariffs and material supply chain disruptions translate directly into higher costs to build, creating a whole cascade of consequences that will likely mean fewer housing starts. The opposite of what we need.
Update: and just like that, another aspect of the real world and the economic impacts of energy efficiency kicks in as to why we're still on the Path to Net Zero, regardless of political change:
The Ontario government announced plans to nearly triple its annual investment in energy efficiency with $10.8 billion in funding for demand-side management programs, while also reducing electricity system costs by an estimated $23.1 billion over 24 years. Rebates will be turned on 28 Jan 2025.
Efficiency Canada's Sr. Director of Policy Strategy Brendan Haley in The Energy Mix:
"They are doing this because it is a lower cost option than power plants and transmission lines and it saves the entire electricity system money. It’s better than supply-side options because you pay people instead of power plants."
