Building Retrofit Jobs -Investments to Reduce Emissions

Eliminating carbon pollution from homes and buildings by mid-century, essential to meeting Canada’s Paris target, opens important opportunities to save money for Canadians and strengthen communities through well-paying jobs. Investing in our buildings and the people that design, build, and maintain them is an investment in our safety from a range of vulnerabilities—from health emergencies like this one to the floods, fires, extreme heat events and other extreme events we have experienced and will continue to experience as a result of climate change.

We recommend that the federal government invest in refurbishing existing buildings, with a focus on schools, hospitals, social housing, and residential buildings, to get them off fossil fuels, improve energy efficiency, make them more responsive to fluctuating demand on the electrical grid via storage, on-site generation, and load shifting, and make them more resilient to climate impacts and health crises such as the current pandemic.

The budget allocations for these programs should be commensurate with a major nation-building infrastructure investment. Canadian building owners and homeowners will need to invest $200 billion to $300 billion over the next thirty years to retrofit Canada’s buildings. Before governments can regulate major changes, the supply chains and trained workforce must be in place, and building owners and managers must integrate these objectives in their capital plans. For this, Canada needs a long-term investment strategy, leveraging public and private capital, administered by a dedicated agency.

RECOMMENDED INVESTMENT:
$10 billion for economic stimulus through climate resilient retrofit of Canada’s buildings and homes [NRCan] and ensure its rapid outlay through the following four strategies:
1) Increase the ambition of the residential retrofits programs announced in the 2019 platform:
• Increase the Greener Home retrofit target (currently of 1.5 million homes) and expand the program to include multi-unit residential buildings;
• Increase loan maximums from $40,000 to $100,000 and provide grants to cover a significant portion of the retrofit cost, ranging from 20% for basic measures up to 40% of total costs for deep retrofits, similarly to the German KfW Bank programs;
• Provide top-ups to these measures for non-profit housing societies and low income households, and create a dedicated channel for rental apartment
owners; and
• Wherever possible, partner with provincial and territorial agencies to deliver these programs, providing flexibility to re-allocate funds to supplement existing provincial offers and ensure there is a single point of access for homeowners

2) Enhance the National Housing Strategy funding:
•   Create a top-up fund for retrofits and new construction projects, funded through the National Housing Strategy co-investment fund, that achieve deep carbon reductions. Right now, projects accessing NHS  funding must achieve at least a 25% reduction in carbon pollution. Adding a top-up fund to enable societies to go directly to deep retrofits (60-80% GHG reductions) would seize opportunities that would otherwise be missed for increased resiliency, carbon reductions, and economic activity in projects that are scheduled in the coming years.

3) Increase the institutional and  commercial retrofit rate  by  co- financing deep retrofits of public and  commercial buildings:
•   This could be achieved by instructing the Canada Infrastructure Bank to create a specific strategy for energy retrofits, and by endowing the four long-term funds to support retrofits in large buildings mentioned in the December 2019 mandate letter to the Minister of Natural Resources. The CIB should provide loan guarantees to de-risk private lending and grants to close the gap in the business case for deep retrofits. It should also support national harmonization of commercial PACE programs. There are significant costs associated with a new financing mechanism for construction projects or major retrofits (e.g., business case analysis, implications for insurance, distribution of risk, legal review of contracts); the CIB can help reduce this initial cost for national portfolio managers by providing some of this analysis and by ensuring the rules of programs are similar across different provinces and territories.

4) Invest to grow the green building workforce :
This transition to low-carbon buildings will require many more professionals, contractors and trades to be trained in high performance construction and renovation. The economic slowdown provides an opportunity to  invest in upskilling the current workforce as well as attracting more people to work in the sector.

•   The Green Budget Coalition supports the Canada Green Building Council’s call for a $500 million investment in training for Canada’s low-carbon building workforce.  [ESDC, NRCan]

CONTACT
Tom-Pierre Frappé-Sénéclauze – tompierrefs@pembina.org