Department: Natural Resources Canada

NRCan

Retrofits for resiliency and affordability

Governments across Canada are starting to show leadership in making sure homes are affordable, healthy, safe and resilient to extreme weather. However, addressing our twin housing and climate crises will require significant investments in upgrading homes and buildings.

Total Recommended Investment:

$12.44 billion over five years (detailed breakdown can be found below)

In light of rising energy costs and a housing affordability crisis, retrofit programs have emerged as a critical emissions reduction and climate adaptation solution. Retrofits also contribute to a more equitable and sustainable energy landscape while fostering long-term resilience for vulnerable populations.

Financial and regulatory support for new home construction is advancing rapidly, but we must remember that affordable housing isn’t affordable unless it’s affordable to heat and cool, and is energy-efficient and climate-safe. As we collectively work to increase housing supply across all regions of the country, we must ensure that these new homes are resilient to climate change and do not add to future retrofit and upgrade burdens.

Budget 2024 highlighted the important role that all levels of government play in ensuring all Canadians have access to housing. To ensure all homes have safe levels of indoor air quality, protect occupants from the impacts of climate change, and are able to reduce energy use, costs and emissions, we must:

  • Commit to a plan and process to phase out the on-site combustion of fossil fuels and ensure homes are connected to reliable, clean electricity;
  • Establish the regulations and policy tools required to advance large capital investments in upgrading building envelope and ventilation systems while establishing a market for high-performance buildings; and
  • Recognize that climate-safe housing is a human right and accommodate the unique needs of Indigenous communities.

Over the past few years the critical strategic building blocks have been put in place with the National Adaptation Strategy, the National Housing Strategy, and the Canada Green Building Strategy, which are critically linked to the national climate and energy plans. These strategies require cross-departmental alignment and designated accountability. Also required are targeted regulations and capital funding to stimulate labour and industry growth and retrofit market demand while addressing the needs of Canadians facing the impacts of climate change, as well as those living with high energy burdens.

The Canada Greener Homes Affordability Program takes the right step in partnering with provinces to deliver energy efficiency retrofits to low- and medium-income households. However, the program budget and scope was dramatically reduced and is not sufficient to continue supporting medium and low-income families in upgrading their homes. The recently launched Deep Retrofit Accelerator Initiative offers an opportunity to leverage and enhance funding through locally-focused concierge and market accelerator programs.

Background:

  • The total public investment needed to stimulate decarbonization and climate- proofing of Canada’s existing building stock has been estimated at $10- 15 billion per year for ten years, covering 50-75% of the incremental cost of the required upgrades (above normal replacement costs).
  • The Indigenous Clean Energy (ICE) Indigenous Housing Energy Efficiency Data Set estimates 209,000 homes in Indigenous communities across Canada require energy efficiency upgrades. Combined with the need for about 72,000 new climate resilient homes, it represents an investment of $7.4 billion.
  • Migrant farmworkers are exposed to extreme heat both in their workplaces and often in their on-farm housing, creating serious cumulative health risks. The federal government requires that the housing provided to migrant farm workers be clean and adequate, yet according to the Employment and Social Development Canada’s “What we Heard” survey of migrant worker housing, approximately 43% of on-farm homes for workers are not mechanically cooled.

Detailed Recommended Investments:

To begin ramping up to the full investment level needed, the Green Budget Coalition recommends that the 2025 federal budget allocate $12.44 billion over five years, including:

  • $7 billion over five years for no-cost home efficiency retrofits and heating electrification for low-income households experiencing energy poverty, with assurances to include and protect renters. Within this funding stream, special attention should be paid to rental buildings, non-market and social housing. Funding should also address climate adaptation measures to make these homes healthier, safer and more resilient. [NRCan, CMHC, HC, HICC]
  • $3.8 billion over five years for deep retrofits and energy efficiency investments for housing in Indigenous communities, as identified by Indigenous Clean Energy. [ISC, CMHC, CIB, HICC]
  • $10 million over five years for targeted retrofit funding to make on- farm homes provided for migrant workers more efficient, safe and include mechanical cooling. [CMHC, CIB, ESDC]
  • $1.5 billion over five years for skill development, capacity building and recruitment, with funds earmarked to increase equity and diversity in the retrofit economy. [NRCan, ISED, HC]
  • $125 million for last-mile capital investment in 15-20 transformative deep retrofit demonstration projects identified by the teams participating in the Deep Retrofit Accelerator Initiative. [NRCan]
  • $5 million for the development of a National Affordable Home Energy Strategy with clear actions and outcomes to address energy affordability in Canada. This national strategy should be developed with a focus on energy poverty, with the input of a new advisory group. It should fill gaps in federal policy on energy poverty that remain after the publication of the National Adaptation Strategy and Canadian Green Building Strategy. [NRCan, HICC]
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Delivering on nature commitments

In 2019, Canada made a leadership commitment to protect 30% of land and ocean by 2030, and in 2021 put in place significant investments to support implementation through the Enhanced Nature Legacy and Marine Conservation Targets programs. With the adoption of the Kunming-Montreal Global Biodiversity Framework (GBF) in December 2022, and the recent release of Canada’s 2030 Nature Strategy which includes all the GBF targets, Canada now has a broader suite of commitments to halt and reverse biodiversity loss by 2030. This year’s feature Nature recommendation will ensure foundational progress towards achieving 30% protection of land and ocean continues, including through long-term investments in Indigenous led conservation, while also advancing implementation of broader commitments on ecological restoration, planning, and subsidy reform. Other critical investments to more fully implement the GBF and Canada’s 2030 Nature Strategy are provided as complementary recommendations.

Total Recommended Investment:

  • Renew and build on Enhanced Nature Legacy and Marine Conservation Target programs: $4.6 billion over five years then $1.1 billion per year, ongoing.
  • Advance other key elements of Canada’s 2030 Nature Strategy: $885 million over five years, then $15 million per year, ongoing, plus redirecting $2.5 billion in existing funding, and accelerating efforts on subsidy reform.

Renewing and Building on the Enhanced Nature Legacy and Marine Conservation Targets Programs

Recent significant federal investments have had enormous positive impacts for nature and Canadians, putting us on a hopeful path towards delivering on the commitment to protect at least 30% of land and ocean, contributing to Canada’s reconciliation and climate goals, as well as supporting nature and culture-based economies which provide good, local jobs and support community prosperity. To ensure this positive progress continues across Canada, renewal of the Enhanced Nature Legacy (ENL) and Marine Conservation Targets (MCT) investments is critical, along with further advancing on implementing Canada’s new 2030 Nature Strategy. ENL and MCT funding has already resulted in major progress, including:

  • Support for Indigenous-led conservation initiatives across Canada, including Indigenous Protected and Conserved Areas (IPCAs) and Guardians programs
  • A fourteen-fold increase in marine protected and conserved areas in the past eight years
  • A vast increase in land and ocean protection initiatives underway, led by Indigenous Nations, local land trusts, and other community-based organizations
  • Nature Agreements with BC, NS, and YT, leveraging provincial and territorial investments and commitments
  • Development of pan-Canadian protection standards (ocean and terrestrial) for protected and conserved areas
  • Ecological corridors identified and community-based projects supported to enhance connectivity across the landscape
  • Increased investment in protecting species at risk and their habitats

Building on the ENL and MCT programs, enhanced investment is also needed to deliver on the federal government’s signature commitment to create 10 new national parks, 14 national marine conservation areas (10 in the ocean and 4 freshwater), and 15 national urban parks by 2030, in partnership with Indigenous Nations. While funding has been allocated to move park proposals through the feasibility phase, federal investment

to establish and steward these parks with Indigenous partners once negotiations are complete is still urgently needed. Providing certainty upfront that long-term funding will be available to support stewardship, jobs and economic prosperity is critical to build trust, negotiate in good faith, and meet community expectations.

Evidence shows that investing in protected natural areas generates a significant return on investment. For example, in 2022-23 every dollar spent by Parks Canada resulted in a 4.2 dollar contribution to Canada’s GDP and Parks Canada and resultant visitor spending supported 38,000 full time equivalent jobs across Canada, many in rural and remote communities. Select programs also attract matching investment from the private sector, charitable foundations and other levels of government to maximize overall investment in conservation.

Advancing Canada’s 2030 Nature Strategy

In June 2024, the federal government released Canada’s 2030 Nature Strategy, which includes the 30% land and ocean protection target as well as a broader suite of important actions to deliver on the full Kunming-Montreal Global Biodiversity Framework obligations under the Convention on Biological Diversity. The GBF reflects the urgency for transformational change to halt and reverse nature loss and establishes ambitious targets that Canada must meet by the end of this decade. Expanded and longer term investment is needed to support new conservation initiatives identified in the Strategy to ensure we reach all our national and international biodiversity targets by 2030. Designed well, this investment can result in the added benefit of engaging and mobilizing Canadians from coast to coast to coast in efforts to protect and restore our country’s beloved natural heritage—a core value of Canadians—and contribute to resilient, diversified economies and community well-being.

In addition to protecting land and ocean, restoration of plant and animal communities is also critical to reverse biodiversity loss in areas where ecosystems have been degraded. Restoration benefits both people and nature, providing ecosystem services such as water purification, flood protection and resilience, recreational values, and climate change mitigation through the restoration of blue carbon ecosystems as well as the forests, grasslands and wetlands that sequester carbon. Restoration activities are also a great way to engage Canadians in activities that support Nature. Robust efforts and an ambitious plan are required to meet Canada’s ecological restoration commitments which include Target 2 of the GBF, commitments under the Freshwater Challenge, and the initial pledge of restoring approximately 19 million hectares of terrestrial ecosystems under the Bonn Challenge.

Over the past decade, Canada has shown leadership on Nature both domestically and internationally. However, more is required to follow through on ambitious commitments to tackle the urgent crisis of biodiversity loss. The stark realities of biodiversity loss are increasingly evident across Canada and pose existential threats to our society, environment, and economy. Studies show that more than half of global GDP, amounting to $44 trillion, depends on nature. The World Economic Forum has identified biodiversity loss and ecosystem collapse as a top global risk.

Much of the work to protect, connect, restore and sustainably manage biodiversity hinges on an integrated effort across and among federal, provincial, territorial and Indigenous governments and sufficient long-term and consistent funding. The cost of not adequately investing in maintaining and restoring healthy ecosystems will far outweigh the investments required now to halt and reverse biodiversity loss.

Corporate nature-positive commitments and finance initiatives such as the Task Force on Nature Related Financial Disclosure are building a strong case for private sector investment in nature. However, this private investment will often rely on partnerships and financing initiatives that are blended with public money. To leverage greater private investment, the federal government needs to double down on its investments into nature, not retreat.

Target 18 of the GBF and 2030 Nature Strategy requires Canada to reform subsidies that harm nature, offering an opportunity for the federal government to not only reduce harm to nature but also to invest more in supporting nature protection and restoration priorities. This, combined with a greater emphasis on developing incentives, tools, and strategies to encourage and enable the private sector to invest in nature, as called for in Target 19, could help to raise additional resources to meet biodiversity goals through innovative conservation finance opportunities.

To help ensure implementation of the GBF commitments, a new Nature Accountability law has been tabled in Parliament and is expected to establish a nature advisory committee to help guide implementation of the Nature Strategy. Ensuring this Committee is well resourced will also be important.

Recommendations:

Renew and build on the Enhanced Nature Legacy and Marine Conservation Target programs:

  • $1 billion over five years and then $200 million per year ongoing for Marine Conservation Targets (Targets 1, 3, 22) [DFO, PC, ECCC, TC, NRCan, CIRNAC]
  • $2.9 billion over five years and then $500 million per year ongoing for protecting and connecting land and freshwater (Enhanced Nature Legacy), with a priority on supporting Indigenous-led conservation initiatives, encouraging action by provinces and territories, building Canada’s National Ecological Corridors Program and supporting other implementation partners (Target 1, 3, 4, 22) [ECCC, PC, HICC]
  • $675 million over five years and then $400 million per year ongoing to establish and manage the promised 10 new national parks, 14 new NMCAs, 15 National Urban Parks, in partnership with Indigenous Nations. (Target 3, 12, 22) [PC]

    Advance other key elements of Canada’s 2030 Nature Strategy:
  • Marine spatial planning: $75 million over five years, then $15 million per year, ongoing to complete collaborative marine spatial planning processes in all ocean bioregions [DFO, ECCC, PC, NRCan, TC]
  • Ecological restoration: $810 million over five years of new investment, and directing existing funding (estimated at $2.5 billion) to focus on delivering on international and national restoration commitments [NRCan, ECCC, DFO, AAFC]
  • Subsidy reform: Accelerate efforts to identify federal subsidies that harm nature and reform them to support nature-positive actions. [FIN, ECCC, DFO, AAFC, NRCan]

More detail about these and other important investments required to implement Canada’s 2030 Nature Strategy are provided later in this document, in the Delivering on Nature Commitments – Detailed and Complementary Recommendations section.

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