If you thought housing in Canada was already expensive, buried in the Trudeau government’s Emissions Reduction Plan (ERP) is a little-noticed provision that would raise the cost of building new homes even higher. On page 201 of the ERP, in the bottom of a table listing proposed building code revisions, lies an astonishing requirement: “Increase energy efficiency such that new (residential) buildings use 61 per cent less energy by 2025 and 65 per cent less energy by 2030 in comparison to 2019.” A companion proposal requires commercial buildings to meet a 47 per cent target by 2025 and 59 per cent by 2030, compared to 2019.

A 65 per cent reduction in energy use compared to 2019 is an extraordinary hurdle to new home construction. It would be hard enough to make new Canadian homes 65 per cent more efficient compared to ones built in 1919! But in 2019 new homes were already highly energy efficient, so to try to force another 65 per cent in efficiency gains will cost a great deal.

How much exactly? In a new study published by the Fraser Institute, I use Canadian Home Builders Association estimates of cost increments on new home construction for many types of energy-efficiency gains. By compiling these, I estimated that hitting the 65 per cent target will raise building costs across the country by 8.3 per cent (on average). New home construction costs vary across the country. I estimate the increase will be $22,000-$35,000 in Atlantic Canada and on the Prairies, $38,000 in Quebec, and more than $70,000 in Ontario and British Columbia, yielding a national average of about $55,000 per home.

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