Opinion Leader: Federal funding for energy efficiency must tackle impact on low-income Canadians

Low-income Canadians should be insulated from carbon price increases, yet so far they have been left out of federal funding for energy efficiency.

Even without the planned price increase on greenhouse gas-emitting fuels, 20 percent of Canadian households already face energy costs that amount to more than 6 percent of their incomes. These Canadian households carry an energy burden that is double the national median, which places them in what is called “energy poverty.”

Energy poverty can force households to choose between energy use (heat, light and communication) and other essentials (food, water, and transportation) in order to make ends meet.

Since the start of the pandemic and the “build back better” agenda, the federal government has announced efficiency policies aimed at buildings in the large commercial, municipal-community, federal government, and “ability to pay” residential segments. The Home Energy Retrofit Initiative, announced November 2020, promises free EnerGuide energy assessments and grants of up to $5,000 to help homeowners make energy efficiency upgrades such as insulation.

For those who can access them, these programs deliver benefits beyond just reducing energy consumption since retrofits can lower energy bills, make buildings more durable and comfortable, and lead to health improvements from better indoor air quality.

Thus far, low-income Canadians and those experiencing high energy cost burdens are left out. Low-income homeowners and market renters cannot reasonably be expected to pay the up-front costs required to access federal grants or to take on additional debts from the planned federal low-interest loan. Supporting low-income households requires a separate approach.

To ensure everyone can enjoy the benefits of an energy-efficient economy, the federal government should fund low-income efficiency at a level that is, at least, equal to what has already been earmarked for commercial buildings and home retrofits for higher-income Canadians ($2-$3 billion).

In 2019, despite every province having an existing low-income energy efficiency program, only $90 million in total spending was reported at the provincial level and there are no existing federal programs. Many of these provincial programs focus on shallow energy savings across a large number of homes rather than deep retrofits, and lack a comprehensive cost-benefit analysis that considers non-energy benefits such as health improvements, and reduced risk of fires and carbon monoxide poisoning.

Funding low-income energy efficiency programs could also contribute to building back better. Underserved communities can be hired into the good jobs this work creates, and once savings are realized, low-income households are more likely to spend their newfound disposable income.

An effective federal initiative promoting energy poverty and emission reduction objectives will need to coordinate with existing utility, provincial, and community level programs to leverage their expertise, effectively engage low-income communities, and avoid customer confusion by offering one-stop-shop services. Three principles can guide this work.

First, remove low-income specific barriers by offering no-cost and turnkey retrofits. All costs should be covered by the program rather than shifting the burden to low-income households. For example, delivery partners need to be able access funds for safety and structural repairs that are often required before energy efficiency upgrades can begin.

Second, programs should be driven by a focus on making meaningful reductions in energy use. Maximizing energy savings while preparing homes to eliminate fossil fuel use can help address unjust energy burdens and insulate households from rising carbon prices. Improvements should also target health benefits, such as better indoor air quality.

Third, lower-income, rural and racialized Canadians should be trained and hired to do the upgrade and outreach work these programs will generate. Energy efficiency upgrades create good jobs, which is an opportunity for those traditionally under-represented in the skilled trades to join the sector. Trusted community members, who might share the same first language as recipient households, will also act as energy-efficiency ambassadors and increase program participation.

The opportunity is clear, and the threat of rising carbon costs is on the horizon for households already struggling to make ends meet. Low-income energy efficiency funding must be an urgent priority in the next federal budget to ensure a socially just and inclusive net-zero-emissions economy after the pandemic. We must make energy efficiency services available to everyone and ensure the transition to a net-zero economy is a benefit rather than a burden for lower-income Canadians.

Kirstin Pulles is an environmental and social justice activist. She's currently building a movement for energy efficiency in Canada as the Community Organizer for Efficiency Canada.

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