BC Energy Step Code Statement by CHBA CO

When it comes to climate change and greenhouse gas emissions, the housing sector is a Canadian success story. The residential sector is the only sector to meet original Kyoto Protocol reduction targets. From 1990 to 2014, GHG emissions in the housing sector were down 11%, despite the number of houses having grown by 38% nationally.

As an association, CHBA has been a leader and champion of energy efficiency, leading development and adoption of Canada’s world‐leading R‐2000 program, participating extensively in ENERGY STAR initiatives, supporting the first‐ever energy requirements in the national building code, and advocating for more incentives like the very successful national energy retrofit program that addressed the real challenge in the housing sector—the older existing housing stock.

Today, CHBA is leading on voluntary advanced energy efficiency through its Net Zero Energy Housing Council and its Net Zero Home labelling program.

It is important to note that this success in the housing sector did not come about through mandating energy efficiency in codes, but from ongoing innovation—thanks in large part to joint government and industry research and development. It also came from very successful retrofit programming for the existing housing stock, and voluntary improvement in new
construction through programs like Energy Star.

British Columbia already has progressive codes and standards that result in excellent housing. While CHBA supports efforts to go further to improve energy efficiency and address climate change, care must be taken to ensure that this doesn’t come at the cost of reduced housing affordability. BC is facing serious housing affordability challenges and it is important that
regulation not result in the next generation of home buyers being locked out of the market.

It is time for Provincial priorities for housing and the environment to pursue a single, simple but extremely important goal: let’s build better houses for the same price or less.

If there is a need to address a given issue with the code, then it needs to be done in a way that doesn’t increase costs. If there isn’t such a means, then R&D and innovation is needed to find a solution before regulating it. This is the time for real innovation—and BC has the capacity to lead the way.

Given today’s affordability challenge, this is a position that should be taken by the Provincial and Municipal Governments at large and with respect to the BC Building Code, Bylaws and regulations. It should be supported by Provincial & Federal R&D dollars, leveraged with those of the private sector.

For instance, the Provincial government has stated that it would like to see Net Zero Ready energy performance in all new homes by 2032. While this level of performance is attainable today, it has a steep price tag – approximately $47,000 on average per home based on recent research done by the CHBA. In colder climates zones, that cost will be even higher. This is fine for those who can afford that investment, but for many, that simply isn’t the case.

We need to drive this cost down to the point where it does not impact affordability and lock even more people out of home ownership. We have about 13 years to figure out how—or less if the province and municipalities implement these levels even faster, which is likely and a concern.

Adopting such levels faster without cost effective solutions will be very problematic for those aspiring to join the ranks of the middle‐class through homeownership. Our only chance for success is if government at all levels focuses R&D investment to yield the necessary cost savings, and code changes are implemented to respect cost considerations.

Which leads to the Provincial investment in housing R&D, which has been woefully lagging in recent years compared to investments in other industries which employ much less than the over 200,000 jobs created by the residential construction sector. This type of Provincial investment is particularly important in housing because the industry is principally made up of small businesses; also, most innovation in construction is non-proprietary, so public sector investment in R&D is a very appropriate Provincial role.

Another key tool is voluntary programming. Initiatives like ENERGY STAR, R‐2000 and CHBA’s Net Zero Home Labelling Program enable homeowners to choose higher levels of performance on a voluntary basis, moving the market forward without damaging affordability in entry‐level homes.

This approach supports innovation and provides market streamlining, ensuring that incremental costs are optimized and linked to homeowner benefits.

Providing leading‐edge, voluntary programming is key to advancing energy efficiency and supporting innovation in housing while protecting choice and affordability. Regulation if necessary can follow, after costs have been reduced. With new housing energy efficiency 37% better than it was in 1990, and accounting for less than 1% of the total housing stock each year, it is also critical to recognize that the real opportunity for reduced GHG Emissions in housing is through energy‐efficient retrofits.

Every dollar invested in an existing home will yield four to seven times more GHG reductions than the same dollar investment in a new home.

Statistics Canada reports 60% of existing stock in BC was built before 1990. National studies report on average, homes built before 1990 consume 100% more energy than a home built today. Stats Canada also reports another 39% of existing stock was built between 1990 and 2014. The same National study reports homes built in that time frame on average consume 60% more energy than a home built today. For clarity – 99% of all existing housing in BC on average consume between 60% and 100% more energy than homes built today.

Emphasis should be placed on energy efficient retrofits through policy measures like energy‐efficiency tax credits that also combat the underground economy.

A permanent, refundable home renovation tax credit, using the EnerGuide Rating System, will most effectively address the government’s climate change goals related to housing. And by requiring homeowners to get receipts to qualify, our research suggests reduced underground economy activity can make such a program cost neutral to government.

BC’s housing sector has an important role to play in helping to meet Canada’s climate change goals. Much has already been accomplished, and much more can be done, but it must be done in a way that addresses the real issues and doesn’t erode housing affordability. We have a uniquely Canadian history of industry/government collaboration in this area, and we need to build on this for the future.

In conclusion, the CHBA CO can not endorse mandatory implementation of the BC Energy Step Code at this time. The ‘Step Code’ does not provide a cost neutral solution and fails to address the largest energy use – existing stock. The CHBA CO endorses any voluntary steps taken to reduce GHG emissions and encourages government at all levels to incentivize consumers and builders to do so.