Last week, HRAI submitted its recommendations to the federal Department of Finance for measures that should be included in the upcoming 2024 federal budget. Pulling from themes that have been raised by members over the past year, the recommendations focused on sustained financing for the Greener Homes Rebate program, roll-out of the Green Buildings Strategy, broadening of the Clean Technology Investment Tax Credit, support for workforce development, and support for higher standards for Indoor Air Quality.
The pre-budget consultation process presents a mechanism for Canadians to tell the federal government what their top priorities are. While cutting taxes and reducing or harmonizing regulations are always at or near the top of HRAI member priorities, when it comes to programs and spending, the focus has been on incentive programs, workforce development and IAQ.
The consultation period is now closed. The Department of Finance will review all submissions before releasing the budget some time in late March or April.
The main themes of the budget submission are described below. To see a copy of the submission click HERE.
For more information, contact Martin Luymes at 1-800-267-2231 ext. 235, or email mluymes@hrai.ca.
Summary of HRAI-Canada’s Recommendations
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Re-invest in the Canada Greener Homes Initiative or a suitable replacement for this program, to ensure continuity in the positive trend to decarbonizing homes.
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Launch the much-anticipated Green Buildings Strategy that will map out how the government will address carbon reductions in the built environment in the years ahead.
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Extend the Clean Technology Investment Tax Credit (or an appropriate alternative incentive mechanism) to non-taxable entities that may have an interest in making similar clean technology investments in the buildings that they own.
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Extend a tax credit to homeowners as a supplement to existing incentives in the residential market that encourage low-carbon technology investments.
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Commit $100,000,000 over 10 years to subsidize the costs of re-skilling workers in the HVACR sector.
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Work with the HVACR industry and relevant building science and health experts to establish a professional workforce capable of identifying and addressing indoor air quality (IAQ) problems in homes and buildings, with a view to minimizing health risks and creating healthy indoor environments.
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Partner with the HVACR industry to develop and implement a communications program that seeks to educate Canadians about the health benefits of investing in improved indoor air quality (IAQ).
Rationales for HRAI’s Budget Recommendations
THEME 1: Maintain Commitments to Support Private investment in the Decarbonization of Homes and Buildings in Canada
As noted in HRAI’s submission, the industry is making important progress towards reducing carbon emissions from homes and buildings in Canada but for progress to continue, industry players (and their customers) need clear, consistent and sustained direction from governments:
Programs like Greener Homes significantly affect consumer choices in the market, so it is important that our supplier members have as clear a view as possible into what demand will look like in the year ahead. The uncertainty around government action, or inaction, can have major impacts on our business. More importantly, the wind-down of the Canada Greener Homes program will hinder progress towards Canada's climate goals. Given the urgent need to address climate change, we believe it is crucial to maintain and expand initiatives that promote energy efficiency and reduced emissions.
The submission further notes that, while there has been some indication of more funding to come,
the ambiguous messaging has created confusion and uncertainty within the HVACR sector. This uncertainty has consequences. Disruptions to programs of this sort can create supply-chain concerns. While the HVACR industry employs tens of thousands of Canadians who install and service heating and cooling systems, the products themselves are, for the most part, manufactured elsewhere and shipped to Canada. Accessing products – the right products – for the market can often take six months or more, and suppliers in the country need long planning timelines to anticipate what products will be in demand.
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The Government of Canada should re-invest in the Canada Greener Homes Initiative or a suitable replacement for this program to ensure continuity in the positive trend to decarbonizing homes. If the program is to be re-designed, the government must at least engage in a dialogue with industry stakeholders about viable appropriate solutions that align with economic and environmental objectives.
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Alongside the Canada Greener Homes Program, the Government of Canada should launch the much-anticipated Green Buildings Strategy that will map out how the government will address carbon reductions in the built environment in the years ahead.
THEME 2: Expand the Clean Technology Investment Tax Credit
HRAI acknowledged and applauded the government’s introduction of the 30% Clean Technology Investment Tax Credit (CTITC) early in 2023, as a proven vehicle for incentivizing business investment in a variety of technologies that will not only save energy but will significantly reduce carbon emissions. However, as currently defined, CTITCs are only available to taxable Canadian corporations. This limitation will limit the overall effectiveness of the program by excluding key sectors where similar investments are sorely needed (e.g. not for profits, condominiums, charities). On feedback from members, HRAI also recommended that the credits be extended to homeowners, as they are in the US under the Inflation Reduction Act.
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HRAI proposes that the Government of Canada extend the CTITC (or an appropriate alternative incentive mechanism) to non-taxable entities that may have an interest in making similar clean technology investments in the buildings that they own.
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HRAI also proposes that the Government of Canada extend a similar tax credit to homeowners, as a supplement to existing incentives in the residential market that encourage low-carbon technology investments.
THEME 3: Invest Now in the Low-Carbon HVACR Workforce of Tomorrow
A soon-to-be released study by BuildForce Canada1 reports that, for Canada to meet its carbon reduction goals for the built environment, a significant investment in workforce development and training will be needed over the next 10 years. According to the report:
The work associated with transitioning Canada’s buildings away from fossil-fuel-powered heating equipment to meet the greenhouse gas emissions reduction goals of the federal government will have significant impacts on the country’s economy, and particularly the construction industry. The residential construction sector alone could see investments of over $81 billion between 2023 to 2032 as the sector is tasked with installing 4.9 million cold-climate air-source heat pumps and 4.6 million electric water heaters to replace existing heating equipment powered by fossil fuels and build new homes powered by electricity. Additionally, the residential sector will be required to renovate older homes to improve their energy efficiency to minimize the increase in electrical demands.
A significant number of heating, refrigeration and air conditioning mechanics… are expected to be created through the scenario period (2023-2031). These demands stem from fuel-switching in both existing and new homes. These will create significant labour market challenges as the direct new employment created are nearly 4 times (387%) the size of the 2022 workforce for this trade [emphasis added].
The report points to an important pool of existing workers in the HVACR sector that can be re-trained over time to meet the needs arising from the transition away from fossil fuels:
Moving away from fossil fuels should limit the demand for gas fitters across the country. This presents a potential for these workers to transition to heat pump installations, which could alleviate the current heavy demand for heating, refrigeration, and air conditioning mechanics. […] The majority of gas fitters do not currently have the training and certification to do this work, so retraining would be required.
As it has stated on many occasions before in discussions with governments, HRAI believes that the industry and the training community across Canada can and will rise to meet these challenges in due course. However, to facilitate the upskilling and retraining that will be needed to meet the timeframes associated with national carbon reduction goals will require a great deal of targeted assistance. While the federal government is not in the business of trades training, it can deploy funds to assist workers and employers in managing the costs of retraining through tuition subsidies. Because the need is so urgent and the benefits will accrue to the people of Canada, the full cost of retraining and up-skilling should not be borne exclusively by skilled workers and their employers.
THEME 4: Improve Indoor Air Quality in Canadian Homes and Buildings
The recent pandemic put a new light on the importance of maintaining healthy indoor environments in homes and buildings. Ventilation, humidity control, air cleaning, and filtration provide important indoor environmental protections against the spread of harmful airborne contaminants, including the potential transmission of viruses. Measures to improve indoor air quality are among the key mitigation actions that Canadians can take in the environments where they live, work, learn and play to reduce the spread of the virus and other harmful pathogens.
HRAI has communicated to governments that its members are prepared to do more to provide needed expertise and guidance for minimizing the risk of aerosolized virus transmission while optimizing indoor air quality and improving the health, productivity and well-being of Canadians. But there is a need to establish/adopt professional standards to guide activities and a need to raise public awareness about the need for acting on sound advice.
There is a role to play for the federal government in setting and promoting appropriate standards for indoor air quality.
To assist in creating effective indoor air quality solutions for homes and business, HRAI recommends that the Government of Canada:
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Work with the HVACR industry and relevant building science and health experts to establish a professional workforce capable of identifying and addressing indoor air quality (IAQ) problems in homes and buildings, with a view to minimizing health risks and creating healthy indoor environments. Relying on guidance from existing authorities (e.g. ASHRAE) this initiative would include professional standards, identification of testing equipping and setting standards for training and certification of IAQ professionals.
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Work with the HVACR industry to develop and implement a communications program that seeks to educate Canadians about the health benefits of investing in improved indoor air quality (IAQ), relying on proven technologies and practices.
