Ottawa's green grants program for homeowners is running out of money faster than expected
People in the energy efficiency sector fear the program will stop accepting applications in 2024
Prime Minister Justin Trudeau spoke with Ernest Moral about a heat pump he was installing during a visit to an apartment construction site in Hamilton, Ont. on July 31, 2023. He was joined by Mayor of Hamilton Andrea Horwath. (Peter Power/The Canadian Press)
A federal grant program that offers homeowners money to make their homes more energy efficient is running out of money faster than anticipated — alarming homeowners and industry stakeholders who fear the program might end earlier than expected.
Natural Resources Minister Jonathan Wilkinson confirmed the program is spending its allocated budget quickly because of high demand for home retrofit grants. He stopped short of saying Natural Resources Canada (NRCAN) could abruptly close applications and suggested the program could be extended.
"Yes, we've actually started to exhaust the funds earlier than what we had anticipated, and that's largely a function of the popularity of the program," Wilkinson said.
The Greener Homes Grant program, launched by the federal government in 2021, provides homeowners with up to $5,000 for energy efficiency retrofits and home energy evaluations and up to $600 to help with the cost of home energy evaluations.
Homeowners must spend the money upfront and then be reimbursed. The $2.6 billion program was supposed to last until 2028, but some suggest the money will run out in 2024.
Diana Birsan thought she had until 2028 to apply. She said she has been delaying committing to renovations and signing up for the program as she juggles mortgage payments on her new Ottawa home.
"So it's a shock to me," Birsan said when CBC told her the program is burning through cash faster than planned.
Birsan said she hoped the program would help her replace her gas furnace with a heat pump and swap out her leaky windows. Birsan said that if the program is cancelled, she and her partner may have to invest in a fossil fuel heating system.
"It would be such a shame because I would love to be more environmentally friendly," Birsan said. "But it does come down to what can I afford, what's possible with the money that we have."
She called on Ottawa to extend the program, given the large number of Canadians struggling with the cost of living.
Natural Resources Canada says more than 124,000 applicants have received funding through the national portal or co-delivery partners in Quebec, Ontario and Nova Scotia. The department has paid out over $450 million from the $2.6 billion budgeted for the program.
Wilkinson said heat pumps are the most popular retrofit funded by the program so far.
He left the door open to topping up the program with new funds in the next federal budget.
"We have a certain budgetary envelope. We have to exhaust or utilize that envelope before we can ask the minister of finance for additional money," Wilkinson said.
"Typically, the budgets happen in March or in April, but at this stage, we have money for some number of months to be able actually to continue to accept applications."
'Significant havoc in the sector'
Brent Kopperson, executive director of Durham's Windfall Ecology Centre, said one of his staff members attended a meeting in November with NRCAN officials and was warned the program could wind down soon.
Kopperson said the program's current plight feels like déjà vu. He pointed out that the previous federal government pulled the plug on a similarly popular ecoEnergy home retrofit program in 2012.
Kopperson said that retrofit program led to the emergence of new firms specializing in decarbonizing homes. History could repeat itself, he warned.
"We are in a climate emergency and we can't be putting our feet on the brakes. We need to really be accelerating the program," he said. "So to end this program prematurely without an immediate replacement would cause significant havoc in the sector."
After launching the retrofit program, the Trudeau government announced it would provide up to $10 million in contracts to recruit, train and mentor 2,000 energy auditors to advise homeowners on energy efficiency.
Dylan Trebels was one of the trainees who went through the NRCAN program. The 30-year-old left his corporate tech job hoping to become part of an army of registered energy auditors. Trebels calls himself a "climate quitter" who took a pay cut and joined a movement to decarbonize homes and electrify them.
Greenhouse gas emissions from buildings accounted for 13 per cent of Canada's total emissions in 2021 — about 87 megatonnes — making it the third-highest source of emissions after oil and gas production and transportation. Canada has vowed in its emissions reduction plan to slash emissions from buildings by 37 per cent by 2030 and achieve net zero by 2050.
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Trebels said that if the Greener Homes program abruptly ends, he may not be able to continue his work.
"I've been doing this about a year now. And so to have the rug pulled out a little bit ... We knew this program was going to end at some point, but it feels a little soon," he said.
Others connected to the energy efficiency industry urge Ottawa to refrain from interrupting growth in a nascent clean tech sector that includes registered energy auditors and heat pump installers.
"All these people who entered into this sector with the hopes of a better career and livelihoods, I worry that this kind of start-and-stop funding cycles could put their livelihoods at risk," said Abhilash Kantamneni, a research manager at Carleton University's advocacy and research centre Efficiency Canada.
He called on the government to commit early to extending the program, and to other supports that could help all Canadians boost their homes' energy efficiency.
"What the government should be doing is to signal an intention for long-term policy commitment and policy certainty … as a way to ... get to our climate goals and [do] so in a way that leaves no one behind," Kantamneni said.
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