The federal government provided $2.6 billion for heat pumps, solar panels, insulation and other green upgrades to Canadians’ homes through the Canada Greener Homes Grant. But what difference did that actually make?
A new report released this week by the non-profit Green Communities Canada suggests the program didn’t do enough to meet Canada’s targets to reduce greenhouse gas emissions.
That’s because “the savings aren’t deep enough and because we’re not doing enough retrofits,” said Kai Millyard, the group’s energy manager and co-author of the report.
What was the Canada Greener Homes Grant?
The federal grant program launched in December 2020, with stated goals of helping Canadians lower their energy bills, create new jobs for energy advisers and fight climate change. Natural Resources Canada says buildings account for 18 per cent of Canada’s emissions, making them the third-largest emitting sector of the economy, after oil and gas and transportation.
The program offered up to $5,000 per household for green retrofits that could be added to other funding, such as provincial and territorial programs. The money could be used to subsidize the costs of electric heat pumps, more energy-efficient windows and doors, air sealing, home insulation and solar panels.
Applications opened in December 2020 and abruptly closed in February 2024. While the program was supposed to last for seven years, by 2023, the government said funds were running out earlier than anticipated due to the program’s popularity. However, grants are still being paid out to existing applicants.
A popular federal rebate that provides homeowners up to $5,600 to retrofit their homes to make them more energy efficient is running out of money sooner than expected. The Greener Homes Grant was expected to last until 2027 but could dry up well before then.
Grants led to huge heat pump uptake …
Over 500,000 Canadian households applied to the program. As of this past January, 366,786 had completed retrofits and received a rebate averaging $4,498, the federal government reports.
It estimates that has cut 704,000 tonnes of greenhouse gases, equivalent to taking 215,670 cars off the road. On average, it says, each participating household is saving $386 on energy costs and has cut their greenhouse gas emissions 1.92 tonnes as a result of their retrofits.
About 60 per cent of applicants chose to install a heat pump, and they were the top retrofit by homeowners in British Columbia, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario and Quebec. The federal government says it expects 250,000 heat pump installations by the program’s end.
Millyard acknowledges the grant program made a huge difference in adopting the electric heating technology, which replaces gas- and oil-burning furnaces and boilers in many homes — a major source of greenhouse gases from buildings.
“It’s built a meaningful market,” he said. “The industry is learning quickly, and there’s demand all across the country for heat pumps. This has been a really important development.”
There has also been an increase in solar installations over the course of the program. In 2024, they represented 56 per cent of retrofits in Alberta and were the top retrofit in P.E.I., Yukon and Nunavut.
Some Islanders are nervously waiting to learn more about the future of the province’s solar rebate program, after it was put on pause recently. Businesses are sitting on equipment they expected to use this summer, and those hoping to put panels on their homes are worried they may not be approved if changes are made. CBC’s Tony Davis has the story.
… but less insulation
Meanwhile, the report found that over the course of the program, the use of grants for insulation upgrades declined.
The program required people to get an energy audit from an energy adviser, who recommends what upgrades to make — a service that Green Communities Canada provided through member organizations. The audits could also be provided by private businesses.
But the report found that most people whose energy advisers recommended insulation and air leakage work didn’t do it.
Millyard said wall insulation is often done in conjunction with other projects, such as finishing a basement, that can cost tens of thousands of dollars, “so there were a lot of people who had recommendations to make upgrades to the houses that they just couldn’t afford to get to.”
Dylan Trebels trained to help people with their home energy retrofits. The 30-year-old left his corporate tech desk job hoping to become part of an army of registered energy auditors.
Only 29,000 of 600,000 retrofits by the end of 2024 were “deep retrofits” that cut energy use by 50 per cent. That typically requires doing three things: upgrading the building envelope with things like better insulation, electrifying heating and hot water, and adding renewable energy such as solar panels.
The new report argues that’s what’s needed to reach Canada’s target of net-zero emissions by 2050, and it should be a priority in future greener home grant programs.
Canada also needs to step up the pace of retrofits, it says. While the Greener Homes Grant was designed to retrofit 100,000 homes a year, the report says it would take more than 100 years to retrofit all of Canada’s 11 million existing homes at that rate. Meanwhile, 2050 is only 25 years away.
Scientists set out to explore the impact of covering every rooftop on Earth with solar panels. Their research found that swapping traditional energy sources for rooftop solar could actually cool the planet — lowering global temperatures by up to 0.13°C.
What retrofits are most effective?
Maya Papineau is an associate professor of economics at Carleton University in Ottawa who compared actual energy savings to the savings projected by energy advisers during the ecoENERGY program, the predecessor to the Greener Homes Grant.
The study of homes that participated in Medicine Hat, Alta., found that air sealing and attic and wall insulation were relatively effective, but basement insulation and energy-efficient windows had no effect on energy bills.
Overall, home retrofits achieved only about 60 per cent of energy savings that energy advisers predicted, the study found. Even deep retrofits achieved only 50 per cent of estimated energy savings.
Papineau said that’s likely because the Natural Resources Canada energy modelling used by energy advisers for both the ecoENERGY program and the Greener Homes Grant program underestimates the energy efficiency of most homes.
She said she has flagged this problem to the government, and it’s planning to work on it.
Getting a heat pump wasn’t an option during the ecoENERGY program, but it’s something that has a significant impact on a home’s carbon emissions, and Papineau thinks it’s one of the best things a homeowner can do with a green energy grant.
Ottawa is giving Atlantic Canadians more time to switch to heat pumps. Last week, the federal government announced it would pause the carbon tax on heating oil for three years. CBC Nova Scotia’s Amy Smith spoke to Dalhousie University environmental studies professor Wayne Grosko about the impact.
Does Canada need another green homes program?
Transforming Canada’s economy is needed to reach net zero, and households need to be a part of that, Papineau said.
“I think that energy efficiency can be and should be a key part of climate change policy. But it has to be done in a way that improves the returns to households,” she said. Otherwise, they may no longer want to participate.
Millyard, of Green Communities Canada, said any new program needs bigger grants so people can actually do all of the retrofits they need. He also said the programs can’t last only a few years and then disappear, like the Canada Greener Homes Grant and previous programs.
“For organizations like us in the energy-efficiency industry, it’s murder,” he said. “You know, you train up a whole bunch of people and then you have to let them go.”
Canada still has a Greener Homes Loan program, but the uptake has been relatively low. Millyard said loans are “generally not good enough in the residential sector,” which needs grants.
“The pressure to reduce our greenhouse gas emissions is only growing,” he said, “so we need to return to … a better version of a program like [the Canada Greener Homes Grant] so we can get back to retrofitting our houses.”
Election promises
At this point in the federal election campaign, the NDP has promised $1.5 billion annually to retrofit 2.3 million low-income homes over 10 years, as well as loans to help a million other households.
On their websites, the Liberal Party says it will provide home retrofit grants of up to $5,000 and interest-free loans of up to $40,000, while the Green Party promises a nationwide retrofit program, but it has not provided details. Retrofits aren’t mentioned on the Conservative Party website.
