Canada Greener Homes Loan Program has helped more than 120,000 homeowners with pricey home improvements such as better insulation, heating pumps and solar panels.Jeff McIntosh/The Canadian Press
Ottawa’s sudden cancellation of a $3.2-billion loan program for energy-saving home upgrades threatens housing affordability and hundreds of jobs, green-housing advocates say.
Last week, the administrators of the federal government’s Canada Greener Homes Loan Program revealed that they will stop accepting applications on Oct. 1. The program, launched in 2021, offers interest-free loans of up to $40,000 to help homeowners afford energy-efficient upgrades.
The program has helped more than 120,000 homeowners with costly home improvements such as better insulation, heating pumps and solar panels. Ottawa initially provided $2.6-billion to fund the loans, but last year the government added another $600-million, to meet strong demand.
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However, Canada Mortgage and Housing Corp., which administers the program, said that nearly all those funds have now been allocated. Home-energy service providers and past applicants received notice last week that applications would be closed, and the government updated its web page for the program to announce the Oct. 1 deadline.
This ends a popular incentive that helped Canadians make their homes more eco-friendly, while fuelling growth in the green renovation industry.
Efficiency Canada, along with more than 80 businesses and organizations, sent an open letter to Housing Minister Gregor Robertson last month urging the federal government to recapitalize the program in its upcoming budget. The letter warns that without additional funding, home-energy upgrades could be delayed, contractors could lose work and progress on climate goals could stall. They’re calling for multiyear funding and program improvements.
Brendan Haley, senior director of policy strategy at Efficiency Canada, said the abrupt end to the loan program has created uncertainty for businesses, making them hesitant to expand and potentially forcing layoffs if demand drops. He added that homeowners may now scale back renovation plans, missing out on more effective upgrades and long-term energy savings.
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“There are likely going to be difficult conversations between auditors, contractors, and consumers that were making renovation plans in anticipation of the loan being available,” Mr. Haley said.
The ending of the program also raises fears of job losses in green-energy and home-improvement trades, as the consumer demand aided by the loans could dry up.
“Government and utility incentive programs are incredibly useful to scale up businesses but also have a negative impact when they close, usually from their own success. Contractors and skilled workers have long urged these programs to be more long-term, reliable and well-funded for certain measures,” said Jay Nordenstrom, executive director at NAIMA Canada, a trade group representing Canada’s insulation manufacturers.
Government officials declined further comment on the loan program.
The Canada Greener Homes Loan program is the second major component of the federal government’s green-homes initiatives to run out of money. The Canada Greener Homes Grant program – which also had a pool of $2.6-billion – shut down last year, more than three years ahead of Ottawa’s original plan, after its funds were exhausted. The grant offered up to $5,000 in support for household upgrades, plus $600 for energy evaluations.
In its place, Ottawa this month introduced the Canada Greener Homes Affordability program, which offers no-cost retrofits for low- to median-income homeowners and renters. The new program, which will be run by individual provinces, is so far only available in Manitoba. Energy leaders argue that too many Canadians won’t qualify for the plan.
“Our concern with ending the loan program is that it leaves a major gap for middle-income households,” said Jillian McArthur, senior director of communications at NAIMA Canada.
A recent survey by Clean Energy Canada in metropolitan Toronto and Vancouver found that while the majority of people want energy-smart upgrades to their homes, they cite cost as their biggest barrier.
“The next [federal] budget should provide clarity that zero-interest loans will be available for years to come, so that businesses can invest in staff and equipment stock and households can plan to make their homes energy efficient when they’re ready,” said Jana Elbrecht, senior policy adviser at Clean Energy Canada.