Upgrading Canada's Homes: Path to Net-Zero

This policy brief from the International Institute for Sustainable Development (IISD) outlines the economic and social imperatives for decarbonizing Canada's building sector. It emphasizes the need for deep energy retrofits (DERs), the adoption of higher building code standards, and innovative financing to reach net-zero targets while addressing housing affordability and public health.

• Buildings are the third-largest source of greenhouse gas emissions in Canada, accounting for 18% of the total. Energy use in residential buildings is dominated by space heating, which represents 63% of usage, followed by lights and appliances (19%), water heating (15%), and cooling (3%).
• Deep energy retrofits (DERs) are defined by the federal government as achieving at least a 50% reduction in energy consumption compared to previous standards. These comprehensive upgrades—including improved insulation, air sealing, and heat pumps—are necessary for the vast majority of Canada's 11 million residential buildings to meet net-zero targets.
• The transition to net-zero buildings presents a significant economic opportunity, with the green building industry potentially contributing CAD 150 billion to the Canadian economy by 2030. Decarbonizing buildings requires an estimated annual investment of CAD 10 billion to CAD 15 billion until 2040, which could result in CAD 10.8 billion in annual energy bill savings.
• Electrifying heating systems without improving energy efficiency could strain electrical grids. For instance, reducing natural gas space-heating by half in Manitoba would necessitate at least doubling the province's current electricity generation.
• There is a risk of uneven energy performance standards for new prefabricated housing announced by the federal government in March 2025, as the policy does not specify energy-efficiency standards, likely leaving them to vary by provincial building codes.
• The document recommends several policy actions to scale decarbonization: adopting the highest tier of the National Building Code of Canada, implementing financing like Property Assessed Clean Energy (PACE)—already enacted in Alberta and Saskatchewan—and adapting the Dutch 'Energiesprong' model of prefabricated retrofits.
• Switching from gas stoves and furnaces to electric heating improves indoor air quality. Gas stoves are linked to respiratory and cardiovascular issues, with a report citing approximately 40,000 premature deaths annually in Europe due to heart and lung diseases caused by gas stove emissions.

APA

Rempel,, Z. (2025). Upgrading Canada's Homes: Path to Net-Zero. International Institute for Sustainable Development. https://www.iisd.org/articles/deep-dive/upgrading-canadas-homes-path-net-zero

Chicago

Rempel,, Zachary. Upgrading Canada's Homes: Path to Net-Zero. International Institute for Sustainable Development, 2025. https://www.iisd.org/articles/deep-dive/upgrading-canadas-homes-path-net-zero.

Wikipedia

{{cite report |last1=Rempel, |first1=Zachary |title=Upgrading Canada's Homes: Path to Net-Zero |publisher=International Institute for Sustainable Development |date=21 August 2025 |url=https://www.iisd.org/articles/deep-dive/upgrading-canadas-homes-path-net-zero |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rempel2025upgrading, author = {Rempel,, Zachary}, title = {{Upgrading Canada's Homes: Path to Net-Zero}}, institution = {International Institute for Sustainable Development}, year = {2025}, month = aug, url = {https://www.iisd.org/articles/deep-dive/upgrading-canadas-homes-path-net-zero}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }