The opportunity for Canada to support vibrant, low-carbon cities is upon us with budget season underway. Across the country, the cost of living and impacts of climate change are mounting pressures, and the federal budget process for 2023 is a chance for government to address both.
Kickstarting climate solutions at scale is no small feat, but it offers historic prospects to boost the economy. The U.S. will spend $369 billion for energy and climate programs over the next ten years to lower costs for consumers to fight inflation and reach their carbon targets. In Canada, we have the same opportunity to make life more affordable and dramatically cut carbon. It means reaching all Canadians with incentives that make life better, healthier, and more comfortable. Let’s zero in on the sectors ripe with possibilities for new jobs and quality of life improvements.
TAF’s top budget recommendations prioritize three key areas of funding:
1: Go big on heat pumps
TAF recommends allocating at least $2 billion over four years to implement a widely available incentive framework for heat pumps. To align with Canada’s binding 2030 and 2050 climate targets, heat pumps need to be installed in over half a million homes and buildings per year on average. Achieving this pace will result in 23 million tonnes of carbon emission reductions each year, create thousands of localized job opportunities, provide energy affordability, and protect human health by providing air conditioning to more homes.
A great Canadian heat pump program would directly improve the cost of living for Canadians. For example, Enbridge Gas Inc., which supplies natural gas for heating for around 75% of Ontario residents, hiked their rates from 5-10% as of October 1st, and further increases are predicted this winter. Rapid uptake of heat pumps will help insulate Canadians from future gas price increases, while creating new local jobs. Canada Green Building Council estimates the green buildings industry could support about 1.5 million direct jobs and $150 billion in GDP by 2030.
The program should also be equitable, tailored to reach all Canadians. Urban, rural, low-income households need easy streamlined access, and the government has the right tools. The Oil to Heat Pump Affordability Grant announced last year provides an excellent model for program design.
And heat pumps also deliver critical, household level resilience to increasingly common extreme heat events. Last year’s devastating heat dome in British Columbia resulted in over 600 deaths, where 93% occurred in homes without air conditioning. Heap pumps are a cost-effective way to provide cooling for everyone.
2: Invest in distributed energy resources
TAF recommends investing at least $600 million in distributed energy resources (DERs). With forecasts showing continued growth, and today’s exciting opportunity to electrify everything, we know we need more clean, reliable, affordable electricity. Canada has committed to a net-zero electricity system by 2035 through its proposed Clean Electricity Regulations, and significant investment is needed for provinces and territories to reach the standard.
DERs (small-scale electricity supply or demand resources that are interconnected to the electric grid, including roof top solar and battery storage) are a contemporary approach to a flexible, reliable system. Our recent modelling study in Ontario shows immediate and significant investments in DERs are needed as a cost-effective solution to rising demand. In comparison, the U.S. is investing over $100 billion in electricity infrastructure, including DERs, set to reduce the cost of electricity in the U.S. between 5.2 to 6.7% over the next decade. Investment in domestic manufacturing and jobs as well as cross-border support between provinces and international partners will also be essential.
3: Prioritize investment for electric vehicle infrastructure in multi-family buildings
TAF recommends investing $500 million over five years for a targeted funding stream to support EV infrastructure in multi-family buildings. EVs cost less to own and operate in the long run, and represent new economic opportunities, so they need to be available to everyone who can’t reach their destination by transit, cycling, or walking.
Nearly one third of Canadians live in multi-family buildings, and a disproportionate number of lower income households specifically. With 80% of electric vehicle charging happening at home, serving apartments and condos is the only way to enable a large swath of the population to go electric. Natural Resources Canada projects we’ll need 500,000 more EV chargers in existing multi-residential parking lots by 2025 to meet Canada’s charging needs, and only 50,000 of the needed spaces are installed today.
The simplest solution to jumpstart installations would be to expand the successful federal Zero Emission Vehicle Infrastructure Program. Informed by TAF’s own experience delivering the program, the need and demand is clear and still unmet. Our EV Station Fund was fully subscribed within six months, with more applications from multi-family buildings than funding available. With federal sales targets for EVs now shifting the market, the government is responsible for supporting adequate charging access for everyone.
Prioritize climate solutions that create a better quality of life for all of us
In difficult economic times, governments often default to postponing funding for short-term saving. With this upcoming budget, the Government of Canada has the opportunity to prioritize climate investments that also serve to manage the impacts of inflation. Getting off systems reliant on fossil fuels reduces many burdens, including everyday costs to live and get around in our cities. Municipalities are depending on this funding to achieve their climate targets and other public goals — we’ll all be much happier and healthier in comfortable, efficient homes, with access to clean, affordable power.
We encourage our readers to support these actions. You can submit comments to the government at LetsTalkBudget2023.ca until February 10, 2023.
Photo credit: Pickering 2018, Nhan Ng