HEAT EXCHANGE

The report argues that Canada's cost-optimal path to net zero requires a significant shift from gas to electricity for building heat. It warns that continued expansion of gas networks and a 'business-as-usual' approach to utility regulation create financial risks for ratepayers and threaten climate goals. The authors recommend that provincial governments legislate net zero targets, end the default expansion of gas infrastructure, and provide clear energy roadmaps to guide regulators and utilities.

• Achieving a cost-optimal net zero pathway in Canada requires a significant increase in the use of electricity for space heating and a corresponding decline in gas use. Heat pumps with electric resistance backup are identified as the most cost-optimal long-term solution, despite the need for substantial electricity system expansion.
• Continuing to expand gas distribution networks is inconsistent with cost-effectively reaching net zero. Such expansion risks creating stranded assets that ratepayers must pay for or locking in high-cost heating methods. The use of hybrid heat systems or low-carbon gases like hydrogen and biomethane does not justify further network expansion, as these are either too costly or too scarce to replace gas on a large scale.
• Current utility regulation is not aligned with ratepayer interests during the energy transition. Gas utilities have an economic incentive to expand infrastructure because they earn returns on capital investments rather than fuel sales. Regulators, often operating under mandates established before climate change became a priority, continue to approve gas expansion due to a lack of clear policy direction from provincial governments.
• There is a critical lack of provincial and territorial policy leadership, which prevents energy systems from transitioning to a cost-effective net zero path. No province has yet issued a long-term direction on the future of gas for building heat or mandated the necessary transformations of gas and electricity systems. This policy gap contributes to rising emissions in the buildings sector.

APA

Canadian Climate Institute (n.d.). HEAT EXCHANGE. https://climateinstitute.ca/wp-content/uploads/2024/06/Heat-Exchange-Executive-Summary-Canadian-Climate-Institute.pdf

Chicago

Canadian Climate Institute. HEAT EXCHANGE. n.d. https://climateinstitute.ca/wp-content/uploads/2024/06/Heat-Exchange-Executive-Summary-Canadian-Climate-Institute.pdf.

Wikipedia

{{cite report |author=Canadian Climate Institute |title=HEAT EXCHANGE |url=https://climateinstitute.ca/wp-content/uploads/2024/06/Heat-Exchange-Executive-Summary-Canadian-Climate-Institute.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{canadianclimateinstitutendheat, author = {{Canadian Climate Institute}}, title = {{HEAT EXCHANGE}}, institution = {Canadian Climate Institute}, url = {https://climateinstitute.ca/wp-content/uploads/2024/06/Heat-Exchange-Executive-Summary-Canadian-Climate-Institute.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }