Alberta home prices are surging. Now, new federal regulations aimed at “decarbonizing” the building sector will push housing prices in the province even higher with very little environmental benefit.
As part of the Trudeau government’s 2030 emissions reduction plan, which aims to reduce Canada’s greenhouse gas emissions to 40% of 2005 levels, the government has mandated new net-zero building codes. For residential homes, the plan mandates that “new buildings use 61% less energy by 2025 and 65% less energy by 2030 in comparison to 2019.” And new commercial buildings must “use 47% less energy by 2025 and 59% less energy by 2030 in comparison to 2019.
And when supply can’t keep up with demand, prices increase. For instance, in just a year, Calgary home prices have increased by 4.2%, the biggest increase among more than 50 markets, including Toronto and Vancouver. In Alberta more broadly, according to the Canadian Real Estate Association, the average home price will increase by $30,470 in 2024. Again, higher building costs associated with Ottawa’s emissions reduction plan will only further push up housing prices.
These types of regulations might be warranted if they led to environmental benefits that exceeded these costs, but evidence suggests otherwise. Energy efficiency mandates, in practice, often fall short in achieving meaningful reductions in emissions. While they make it cheaper to heat or light your home due to greater energy efficiency, for instance, they can also inadvertently lead to increased energy usage, a phenomenon known as the “rebound effect.
New federal regulations will come with huge costs to Albertans at a time when the economy is struggling and housing is already unaffordable. Federal policymakers should seriously rethink these policy changes, particularly as they will have very little environmental benefit.Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site.