Environment Committee on Oct. 6th, 2026

[Tim Watchorn, Liberal, Les Pays-d'en-Haut, QC]

Thank you, Madam Chair.

Thank you to the witnesses for joining us.

I live in a slightly more rural area where there aren't many multi-unit buildings. Often, those with limited means are not eligible for the programs we are talking about. These programs are often based on the property assessment of the house and, in a region like mine, the property assessment criteria do not allow people with limited means to access these programs.

I'll give you an example. The septic systems in the region often fail and cause pollution issues in the lakes. Working with the municipalities, we found a solution, which is to allow people to add the expense of having their septic systems repaired to their property tax and spread it out over several years. There is no credit issue with banks, the interest rate is very low and we are solving the environmental problem.

Let's talk about energy efficiency. There is a mayor back home who very strongly supports the property assessed clean energy, or PACE, funding model, which we talked about.

Mr. Purcell, I would like to know whether you think this model could apply in my region and whether it would allow people who don't normally have access to assistance programs for energy retrofits to benefit from this model.

[Bryan Purcell]

The question relates to what's called PACE, property assessed clean energy, financing. That's a mechanism whereby municipalities can finance energy retrofits in homes or other buildings and have homeowners repay that over a long period of time through the property tax system. We've seen it succeed in some markets in Canada. It has widespread use in the United States as well. I think it makes home retrofits more achievable for many people.

There are still challenges. For example, many PACE programs require homeowners to get the consent of their primary mortgage holder, and most banks will not approve that for people on the middle- to lower-income spectrum. Unless programs are enhanced for them, they won't necessarily make it accessible for lower-income households, though that's a challenge that could be managed in different ways, such as loan guarantees or loan loss reserves that would offset the risk for banks.

It is a good mechanism, though. It's been used in many markets. We have it here in Toronto, and hundreds of homeowners have taken part already. It's a promising mechanism, and it's good as a complement to things like the greener homes grant program. You have that small rebate to get homeowners interested in putting in a heat pump or insulating their home, and then you have a municipal financing PACE program to help them recover the residual costs. I think it works quite well with that kind of program.

[Tim Watchorn, Liberal, Les Pays-d'en-Haut, QC]

Thank you very much.

I recently had the opportunity to work with Hydro-Québec. We announced that 20,000 households with limited means would be allowed to install a heat pump in their home to increase energy efficiency.

My question is for both witnesses: Do you think the federal funding model and its application in the provinces are working well? I would like to hear what your experience is with that. It works very well in my region, but homeowners have to pay first and wait for a refund.

Is it something that works for you?

[Lorrie Rand]

I'm happy to answer that first.

Helping people get heat pumps is extremely valuable. Certainly, it is more successful when the property owners, when they have a low income or are in a lower-income bracket, have the funds up front. Nova Scotia has a long history of heat pump incentives, and for a little less time than Nova Scotia, the Atlantic provinces have as well. The thing I would say about that is when we're looking at retrofits, heat pumps are absolutely worth investing in, but they're not the only answer, and we need to look at things more holistically than just heat pumps.

[The Chair, Liberal, Shannon Miedema]

Thank you very much.

Thank you, Mr. Watchorn.

Thank you, witnesses, for your time today. We really appreciate it.

We will now suspend and switch over to our next set of witnesses.

Thank you.

[The Chair, Liberal, Shannon Miedema]

I call the meeting back to order.

We are back with our second hour of testimony for the home energy efficiency study.

We have three witnesses with us for this hour. In person, we have Brendan Haley from Efficiency Canada. He's the the senior director of policy strategy. We also have Daniel Dicaire, senior manager of conservation and sustainability with Ottawa Community Housing. Online, we have the Pembina Institute and Kevin Lockhart, director of buildings.

Welcome.

Thank you to our witnesses for joining us today. You will each have five minutes to provide opening statements. I will give a little reminder when you have one minute and when time is up for you.

We will begin with you, Mr. Haley. The floor is yours.

[Brendan Haley, Senior Director of Policy Strategy, Efficiency Canada]

I'm the senior director of an energy efficiency policy think tank that's based out of Carleton University, where I'm also an adjunct professor.

I want to present to you today three policies to make home retrofits available to everyone at the speed and scale required.

To introduce my first solution, I want to say home retrofits are a lot more than just a challenge of delivering a lower-interest loan. The problem is often that we put too much responsibility and too much risk on customers, who must often navigate quite a complex market, often with predatory lenders or bad advice.

We also don't give customers the solutions they need at the right time. A critical moment is, let's say, if your furnace breaks down. You're not going to replace that furnace with a heat pump unless the financing is available on that same day and the customer trusts that it's the right solution for them. Previous zero-interest loans couldn't be accessed during those emergencies. The customer also really didn't have much recourse if the equipment wasn't installed properly or if the work was not effective.

To make retrofits work, we need delivery platforms that specialize in financing the most effective solutions at the right time, delivered by someone that the customer can trust and that can stand behind their work. Some examples of these platforms could be utility on-bill financing or financial technology companies partnering with contractors that can provide financing at the point of sale.

My first recommendation is that the federal government provide low-cost capital to a variety of different delivery platforms. I would call it a national home energy performance fund. It would learn from examples like Australia's home energy upgrades fund, green banks and other public banks.

A key benefit of this approach is more bang for the federal buck, because the platforms can blend low-cost public capital with capital from other investors, also using platforms that can solve these non-financial barriers around trust, convenience and performance. This means that you don't necessarily need a large interest rate subsidy, which would avoid competing with private capital and enable public capital to be recycled into more retrofits.

Again, this isn't about just low-cost finance that could just subsidize banks temporarily. Instead, it's about transforming markets to work for customers and high-value contractors. A national fund can meet that goal by setting requirements for the use of its capital. It can refuse financing to HVAC contractors that give bad advice, such as that a heat pump doesn't work. We've heard that. It can also offer better terms to business models that prioritize customer fairness, accountability for performance and building science-based advice that can support high-road business models that can give them a competitive advantage over predatory lenders or laggards.

These platforms will work well, I think, for middle- and upper-income households. However, when it comes to low-income households, they don't need to take on more debt. They need lower bills right now. That's why the greener homes affordability program supports no-cost, direct-install retrofits.

My second recommendation, given that the government has committed to retrofitting one million homes, is that we should dedicate 20% of that budget to expanding retrofit programs for low-income and indigenous communities.

My third recommendation is to change the retrofit process to increase its speed, scale and performance. Right now, how we retrofit is quite bespoke. We could, instead, retrofit entire communities, retrofit groups of buildings, develop economies of scale and deploy what we're calling modernized methods of construction. There are two programs that are supposed to be working on this. These are the greener neighbourhoods pilot project and the deep retrofit accelerator initiative. Both of them are more short-term pilot projects that are running out of money. I would suggest giving them much clearer, mission-oriented objectives to improve retrofit productivity, adopt modern methods of construction and support Canadian businesses and technologies.

That's a three-point plan, if you will, to make home retrofits work for everyone at the pace and scale required.

Thanks for your consideration.

[The Chair, Liberal, Shannon Miedema]

Thank you very much, Mr. Haley.

We will now turn to Mr. Dicaire for five minutes. It's over to you.

[Daniel Dicaire, Senior Manager, Conservation and Sustainability, Ottawa Community Housing]

Thank you, Madam Chair.

Good afternoon and thank you for the opportunity to appear before the committee.

I'm Dan Dicaire, senior manager of conservation and sustainability for Ottawa Community Housing.

OCH is Ottawa's largest community housing provider and the fourth largest in Canada. We manage approximately 16,000 affordable homes and have direct experience delivering energy retrofits at portfolio scale. That experience has shown us that retrofits are not simply environmental projects. They are investments in preserving social housing, protecting affordability and extending the value of public assets for future generations.

OCH delivers across the full housing mandate. We build new affordable homes, preserve existing housing and acquire properties to protect long-term affordability.

Today, I will focus on preservation. Much of our portfolio was built during the 1960s, 1970s and 1980s, when federal and provincial governments made significant investments in public housing. This increased supply greatly, but energy efficiency was not a central design consideration. Housing is not truly affordable if high energy costs simply shift the burden to tenants and housing providers for decades.

When critical maintenance and retrofits are deferred, those costs compound and affordable homes are placed at risk of being lost. The national Human Rights Commission estimates that Canada loses 10 to 15 affordable homes for every new one it builds. Preservation must therefore be treated as a core housing and infrastructure investment.

To illustrate the value of retrofits, I'll focus on Canada's first net-zero panelized deep energy retrofit. This is OCH's Presland project, which the committee has received photographs of. That project started with a four-unit block of three-bedroom townhomes built in the 1960s. OCH staff and local contractors built and installed 24 panels, measuring 20 feet by nine feet, to create a whole new high-performance building envelope over the existing structure. The project replaced natural gas-burning equipment with electrified heat pumps for heating, cooling and domestic hot water. The retrofit reduced the building's energy consumption by 66% and greenhouse gases by 100%. We added a 35-kilowatt solar array, which generates as much as the building consumes, making the project net-zero energy and net-zero GHG. This was all done with the tenants in place.

The impacts extend beyond the environmental benefits. First, the retrofits lowered utility bills for low-income households. Before accounting for the solar generation, total utility costs were reduced by 30% to 40%. With the solar generation, they were reduced by 50% to 70%. The value proposition for social housing is lower costs for tenants and providers today, combined with more durable affordable buildings over the long term.

Second, the retrofits freed up capacity on our energy network. The Ontario Clean Air Alliance has found that conservation costs about one-tenth of new generation because it utilizes existing infrastructure. Significant qualities of low-cost energy can be recovered from existing buildings and should receive attention alongside investments and new generation. Alternatively, retrofits can also free up the capacity for the additional housing Canadians need.

Third, the project employed local workers and entrepreneurs with materials and technologies that Canada has in abundance. The manufacturing facility that OCH developed was intentionally designed with a very low barrier to entry. Quite simply, it was a poured concrete slab and two sea containers with trusses over them, filled with non-technical or non-specialized equipment. Any contractor from coast to coast to coast could replicate this approach and create local jobs while retaining more investment within Canadian communities.

These are just a few examples of the multiple co-benefits that retrofits bring, which extend to health, safety, housing stability and affordability. This approach is also supported by studies, like “The Public Housing Dividend”, which have estimated that for each dollar invested in energy efficiency and affordable housing, we get three dollars of economic benefit back.

The opportunity is to treat housing and home energy retrofits as core infrastructure. As you heard earlier, federal funds are already supporting market development efforts through the greener neighbourhoods pilot program, which the Presland project is based on, and the deep retrofit accelerator initiative, with dozens of teams across the country ready to support broad-scale deployment for these types of projects.

For social housing, this is a practical nation-building opportunity in protecting homes, lowering long-term costs and extending the value of public investment. Think of it this way: Every envelope retrofit makes kilowatt hours of capacity available on our grid, just like a power plant, and every single heat pump installation extracts heat from our backyards, just like a mine.

Overall, major investments in housing retrofits could employ Canadians in every community across the country and keep profits in our communities while improving affordability and making our economy more resilient.

Thank you. I would be pleased to answer any questions.

[The Chair, Liberal, Shannon Miedema]

Thank you, Mr. Dicaire.

We will now turn to Mr. Lockhart, who is online.

It's over to you for five minutes.

[Kevin Lockhart, Director, Buildings, Pembina Institute]

Thank you.

Thank you for the opportunity today to share the Pembina Institute's perspectives on home energy and adaptation retrofits today. My name is Kevin Lockhart—

[The Chair, Liberal, Shannon Miedema]

Could you move your mouthpiece more in front of your mouth? Then we'll see if translation can work.

Go ahead. I'll interrupt you if we need to make an adjustment.

Thank you.

[Kevin Lockhart]

Thank you.

Retrofitting our homes and buildings is a high-return investment that's increasingly important to prepare Canadians for the coming decades. It's also important [Technical difficulty] and affordable [Technical difficulty]—

[The Chair, Liberal, Shannon Miedema]

Mr. Lockhart, we're going to take you off-line to test your audio. Translation can't hear you well. Actually, we can't hear you well in this room. I think we'll go to our first round of questions for the two witnesses in person and see if we can come back to you. Thank you very much.

To begin, we will go to Mr. Bexte, please, for six minutes.

[A voice]

[Inaudible—Editor]

[David Bexte, Conservative, Bow River, AB]

Burn it down.

[Voices]

Oh, oh!

[The Chair, Liberal, Shannon Miedema]

Save the trees.

[David Bexte, Conservative, Bow River, AB]

Save the trees, yes. Trees are renewable. They're renewable.

Thank you, Chair, and thank you, everyone.

Thank you to the witnesses for being here today. I really appreciate the opportunity to ask some questions and get some answers. We've heard a lot about the nature of retrofits. Some of the plans are very ambitious and some of them are very incremental. I think there's a place for lots of them across our broad nation with lots of different circumstances.

I guess both Mr. Dicaire and Mr. Haley can comment on this.

Given the challenges, what are your views on how we measure, really analytically, the effectiveness of these programs?

Mr. Dicaire, you're a chemical engineer. Spreadsheets and numbers are right in the wheelhouse. How do we measure effectiveness? Is it in terms of ROI, value for money?

[Daniel Dicaire]

Before retrofit energy modelling, we have extremely good technical tools, whether they're static models or dynamic models, that are able to really give us an answer on what that building should operate. Obviously, there's always the factor of how people are going to operate the building. Once you actually have completed a retrofit, a whole building air test is pretty much the gold standard. You'll actually be able to see how well you've sealed up that building and be able to confirm if you actually hit the target of what your retrofit was intended to do.

[David Bexte, Conservative, Bow River, AB]

Let me back up and maybe clarify my question: It's how to do it in terms of the effectiveness of that assessment and what to do when it's not. We've heard some testimony and evidence in those discussions that these retrofits aren't really as effective as we had hoped they would be, especially based on modelling. We're trying to measure reality versus hopes. How do we address that discrepancy?

[Brendan Haley]

I think this is much more sophisticated, I would say, than the federal government in that public utilities that run demand-side management programs have all their programs evaluated after the fact and are compared with basically the cost of power plants and transmission lines. The data back from that is that saving kilowatt hours of electricity costs about three cents to six cents a kilowatt hour through most programs, as compared with power plants, which can cost 13¢ or more a kilowatt hour.

The other thing that is often measured, and is hard to measure but is very important, is what we call non-energy benefits, such as benefits to health, benefits to productivity—

[David Bexte, Conservative, Bow River, AB]

Can I back up and clarify something? Did you just say that power plants are 13¢ to 15¢ per kilowatt hour or per kilowatt?

[Brendan Haley]

It's kilowatt hour.

[David Bexte, Conservative, Bow River, AB]

A kilowatt is a fixed unit of energy.