A new report by Efficiency Canada finds that provinces and territories are ramping up their efforts to improve energy efficiency and affordability, but more can be done to realize the full benefits of managing and reducing energy consumption.
The research institute’s latest policy scorecard provides results from a national survey of energy efficiency policies and programs and highlights achievements as well as opportunities yet to be tapped.
The report comes at a politically tumultuous time in Canada. Four provincial elections were held in the fall, another is likely soon and a federal election is coming next year. The intersection of climate and energy policy is a common theme, particularly around choices seen to increase costs.
Recent public opinion polls from Nanos and Abacus Data have found Canadians increasingly focused on the cost of living, housing and energy affordability.
These are all issues that energy efficiency can address, provided governments put in place the necessary frameworks to support further improvements.
The national picture
The scorecard reflects surveys of provincial and territorial governments, utilities and energy efficiency program administrators. Questions addressed a range of developments and trends, including transportation electrification, utility resource planning, building codes and industrial energy management.
The research found that provincial investment in energy efficiency programs has steadily increased since 2019 and surpassed $1.5 billion in 2023. National energy savings have also reached a new high, jumping 25 per cent in 2023 and reaching levels equivalent to the annual energy consumption of approximately 290,000 households.
Growth in provincial spending has been most pronounced in programs targeted toward low- or moderate-income households. Spending on these programs doubled from 2022 to 2023, reaching nearly $250 million. As a national average, that works out to $130 per household that spends more than six per cent of its income on energy expenses (a key measure of energy poverty). Some provinces spent considerably more — $317 per household in British Columbia, $426 in New Brunswick and $2,739 in Prince Edward Island. Much of this spending was toward incentives for heat pumps to help Canadians move away from expensive heating oil.
Other provinces have significant opportunities for improvement. For example, no income-targeted energy efficiency programs were identified in Alberta or the Yukon.
The study also found significant changes in transportation electrification. Nearly every province reported incentive programs for private and commercial electric vehicles. Ontario and Saskatchewan were the only provinces with neither. In Quebec, which led the scorecard’s transportation section, nearly 25 per cent of new passenger vehicle registrations in 2023 were battery or plug-in electric vehicles. In British Columbia, that figure was 20 per cent. The availability of public charging stations increased in every province between 2022 and 2024, particularly in Prince Edward Island, which added nearly 20 ports per 10,000 residents.
These trends are causing provincial energy planners to reconsider future electricity needs and the role that managing energy demand can play in meeting them. Forecasts in Quebec suggest the province’s electricity needs will be double what they are today by 2050. This has led Hydro Quebec to commit to doubling its energy efficiency efforts by 2032.
Similarly, BC Hydro has expanded and sped up its energy efficiency programming. And Ontario recently released a paper that forecasts electricity demand could grow 75 per cent by 2050. The province has proposed a 12-year electricity demand-side plan to begin next year.
Policy opportunities to improve affordability
Despite progress, much can still be done to firm up energy efficiency in the country. Efficiency Canada’s report identifies opportunities for provinces and the federal government around three key issues: demand flexibility, housing and energy poverty.
Demand flexibility: Managing electricity demand fluctuations that will come with increased electrification will be a critical challenge for provincial grid operators. Energy efficiency programs and other measures can provide flexibility by reducing, co-ordinating and shifting electricity demand to times most useful to the grid. But our research shows no province saves more than five per cent of peak demand through such practices.
The federal government should enable greater savings and affordability by modernizing its Energy Efficiency Act, which governs appliance and equipment efficiency standards. The act could be amended to allow the government to set requirements for certain products (like water heaters) that would make demand flexibility programs easier and cheaper to roll out. This would help create opportunities to pay people, not power plants, for this valuable resource.
Housing policy is another area with considerable opportunity to meld energy efficiency with affordability. Canada faces a twin crisis in housing. We need many more homes by 2030 to improve affordability, but we also need to reduce environmental impacts and long-term costs. Establishing the country’s highest building codes nationwide would help foster innovation in housing construction, lower costs, speed up construction time and reduce environmental impacts. Only British Columbia, New Brunswick, Prince Edward Island and the Yukon have set a target date to meet the highest codes in residential buildings. The federal government should help by requiring such standards as a condition for receiving federal funding for new housing construction.
Energy poverty should be a concept embedded in plans at all government levels to improve energy affordability and availability. Ottawa should establish a strategy to eliminate energy poverty by defining it precisely, establishing a dedicated advisory body and increasing funding to protect Canadians from rising energy costs. This would follow in the footsteps of countries like the United Kingdom and help to ensure more effective and long-term support for affordable, reliable energy in Canada.
Efficiency Canada’s research suggests that the future is promising if provincial and federal governments continue to strengthen their energy efficiency policies and programs. Doing so will be necessary to fully realize affordability benefits and demand flexibility, and ensure that all Canadians can share in them.
This article first appeared on Policy Options on Dec. 20, 2024. It is republished here under a Creative Commons license.
