How building performance standards could help green up the sector

Buildings may not spew pollution from tailpipes or smokestacks, but they do produce 18 per cent of Canada’s annual greenhouse gas emissions. While there are efforts underway to reduce them, new research says mandatory building performance standards present an untapped opportunity to green the sector.

A new report released by Efficiency Canada notes existing voluntary measures used by individuals and some municipalities to reduce emissions from buildings in Canada have been unsuccessful. Building emissions have gone up by about three per cent since 2005. The report suggests a more effective approach would involve implementing mandatory building performance standards in combination with support from the federal government.

Unlike incentives for homeowners to install heat pumps in residential homes, mandatory standards are designed to gradually cut back on emissions in buildings over a specific size and carry penalties if unmet. They typically include targets for emissions or energy use.

The standards target large buildings, explains report author Sharane Simon, who notes that some Canadian jurisdictions have indicated their intention to implement performance standards. So far, only Vancouver has adopted a building performance standard program, requiring commercial office and retail buildings over 100,000 square feet to comply with carbon emission limits as of 2026.

What’s missing, explained Simon, is a federal push to get performance standards in place across Canada and government support to help jurisdictions make the targets feasible. Her report points to other places that have successfully followed this model. In the United States, for example, there is significant support from high levels of government for states and municipalities to implement performance standards tailored to their specific region.

The building standards are more than just a set of rules, explained Simon, and must include studies on the current state of building emissions, extensive stakeholder engagement, technical support to administer and support the standards once they are in place, and more.

Canada has approximately 550,000 commercial buildings, which make up about half of emissions from the building sector, compared to nearly 16 million residential buildings. Simon notes that from a numbers perspective, “it is actually strategic to have a plan to target commercial buildings because they are contributing just as much [emissions] as residential buildings,” but there are significantly fewer.

The U.S. and building performance standards

While the U.S. has not mandated performance standard programs for all states or cities, the federal government has measures to encourage other jurisdictions to sign on. As a result, 14 programs have been adopted in cities across the country since 2018. Simon notes the federal government has invested “heavily in technical studies” and funds to support states and local governments, especially those who “may be under-resourced.”

The federal government in Canada is in a good position to do the same, Simon said. While U.S. programs have only been operating for a few years, they are set to significantly cut emissions. In cities, buildings are typically the largest source of emissions. Boston’s building performance standard program will account for emissions reductions comprising about 30 per cent of its climate reduction target. The report notes that without federal support, performance standard programs “might have remained limited to a few large and well-funded coastal cities.”

In Canada, the federal government publishes model building codes, the most recent of which presents a pathway for all new buildings to be constructed to net-zero, energy-ready standards by 2030. Simon notes they are a good example of the federal government taking on jurisdictional responsibility and working in tandem with provinces to decarbonize their building sectors.

The federal government could do something similar with building performance standards, notes Simon, while also leveraging tax credits and other financial incentives to encourage them. Long-term funding is essential, she explains, because the programs need to run long-term to be effective.

The report notes Natural Resources Canada (NRCan) is set to release a building performance standard toolkit this year: a good resource, but short of the needed support to address barriers faced by jurisdictions, said Simon. Meanwhile, the federal government is receiving backlash for prematurely stopping funding for the Canada Greener Homes Grant, which reimbursed people for retrofits such as heat pumps and solar panels.

In response to Canada's National Observer, NRCan said decarbonizing the building sector is essential to meet climate targets, and mandatory building performance standards "can achieve significant savings in existing buildings." While the department said it does not administer a performance standard program, it "develops and provides tools and resources to support jurisdictions in implementing policies that increase energy efficiency and reduce GHG emissions in the buildings sector."

The department noted the Energy Star portfolio management tool, which over a third of commercial buildings use to measure and compare energy use, as a "cornerstone of energy reporting initiatives in Canada" and their Codes Acceleration Fund. NRCan said it "will soon publish its first Building Performance Standard Toolkit, which will provide guidance on the implementation of [mandatory building performance] initiatives in Canada."

The big takeaway for Simon is that mandatory building performance standards would impact much more than emissions reductions. They would make buildings healthier and more comfortable and extend the life of the most polluting buildings, which would reduce the need for new buildings, and in turn, more emissions. The standard would propel retrofit rates, and therefore jobs.

“Our buildings ... they are the places we live, the places we play, the places we work, and improving them, it's proven that it really has a positive impact on the people who occupy these buildings,” she said.

“I think everyone should be starting to have this conversation at all levels of government and within the industry on how to really support a program like this.”