Proposed Change 2026

Approximately 13% of Canada's total greenhouse gas (GHG) emissions can be attributed to houses and buildings. This is primarily a result of using fossil fuels for space and water heating. Additionally, the combined impact of electricity consumption for cooling, lighting and running other appliances raises the overall contribution of buildings to GHG emissions to approximately 18%.^[1] The 2020 GHG emissions from residential and building sectors are outlined in Table 1, which shows the sources and their percentage of electricity consumption.

 Table 1. 2020 GHG Emissions in the Residential and Building Sectors⁽¹⁾

Note to Table 1:

(1) https://oee.nrcan.gc.ca/corporate/statistics/neud/dpa/menus/trends/comprehensive_tables/list.cfm

There has been a growing recognition of the importance of addressing climate change and reducing GHG emissions from all sectors, including the built environment. However, the National Model Codes (the Codes) do not presently consider the type or quality of energy sources used by buildings and houses, nor do they address or regulate embodied and operational GHG emissions. As the industry moves towards higher energy efficiencies, the differences between energy sources must be examined because they contribute to GHG emissions differently. Historically, the Codes focused on design and construction requirements related to safety, structural integrity, accessibility and energy efficiency. With the latter, the emphasis was on reducing energy consumption during the construction and operational phases, but did not explicitly address operational GHG emissions. Furthermore, Canada is a large and diverse country with different climatic regions and building practices. This reality has led to regional variations in building codes and regulations, making it challenging to establish a unified approach to address operational GHG emissions at the national level.

The Codes currently contain an energy-efficiency objective and related requirements for the design and construction of new buildings and houses. In the 2020 editions of the National Energy Code of Canada for Buildings (NECB) and National Building Code of Canada (NBC), energy-efficiency tiers were introduced, containing measures that progressively increase energy efficiency and reduce the amount of energy needed to operate a building. These requirements play a crucial role in reducing GHG emissions by focusing on the amount of energy used. However, the Canadian Board for Harmonized Construction Codes (CBHCC) recognizes that energy savings alone will not lead to reducing emissions to meet the national goals stated in the Pan-Canadian Framework.

GHG emissions across Canadian provinces and territories exhibit substantial variations, influenced by factors such as population density, climate, energy sources and economic considerations.^[2] Provinces and territories with larger populations, resource-based economies or heavy reliance on fossil fuels for electricity generation generally register higher emissions levels. This demonstrates a greatly varied energy landscape across Canada.

Ultimately, the goal is to reduce operational GHG emissions to zero or near zero across provinces and territories by 2050. Consequently, authorities having jurisdiction require a flexible framework to regulate GHG emissions due to building operation by using "levels" that move towards lower operational GHG emissions.

References

[1] https://www.canada.ca/en/services/environment/weather/climatechange/climate-plan/climate-plan-overview/healthy-environment-healthy-economy/annex-homes-buildings.html

[2] https://www.canada.ca/en/environment-climate-change/services/environmental-indicators/greenhouse-gas-emissions.html

Since 2010, the NBC and NECB have included requirements to prevent excessive use of energy. Though these requirements have improved the energy efficiency of new houses and buildings, the Codes remain silent on the type of energy used and the emissions associated with production, distribution and use. As a result, many new Code-compliant buildings contribute GHG emissions through their year-over-year operation. Reducing these emissions is an important step to enable action towards climate goals. Climate change is the biggest challenge facing humanity today, consequently, it is vital that the Codes address this gap to support Canada in reaching its emissions reduction target of 40% below 2005 levels by 2030 and net-zero emissions by 2050. Furthermore, achieving long-term climate goals requires early action on operational GHG emissions. Failure to address this pivotal issue could impede Canada's progress towards its emissions-reduction targets, jeopardizing the ability to effectively combat climate change and protect the future well-being of the country. The commitment to a sustainable future demands that these emissions be addressed comprehensively and urgently.

If these emissions are to be regulated, designers, builders and enforcement officials need a consistent and accurate means to convert expected energy use into expected GHG emissions. For years, governments and industry have relied on emissions factors (also referred to as emissions intensity factors) for this task. Emissions factors describe the amount of GHG emissions (in kg CO­₂ equivalent) per unit of energy consumed, for instance, of electricity (in kWh), of natural gas (in m³), and of heating oil (in L). Environment and Climate Change Canada compiles this data annually and publishes estimates as part of Canada’s national greenhouse gas inventory report. Emissions factors reflect the carbon intensity of different fuels, as well as regional differences in energy production and distribution. Data is generally published after two years; factors reflecting 2021 data were published in April 2023.

If Canada’s energy sector were unchanging, this data would suffice for building design and Code-administration purposes. But provincial, territorial and regional utilities are presently undergoing unprecedented transition. Electric utilities are shifting away from coal power generation, while gas utilities are experimenting with new technologies to lower emissions through use of hydrogen and renewable biogas sources. These changes are expected to occur rapidly; some provincial utilities expect to reduce electric emissions by 60% or more by 2030. In this environment, referencing the most recent (2021) emissions data currently available in the Codes could encourage the construction of buildings with higher-than-expected emissions. For this reason, this proposed change is based on the best available future-looking forecasts for utility emissions, averaged for the years 2031 to 2035. Emissions factor forecasts for electricity are sourced from Environment and Climate Change Canada’s most recent (2023) projections. While no similar projections are currently available for natural gas utilities, such projections are expected in future years and could be incorporated into the Codes at a later date.

This section describes the approach that was adopted for performing an impact analysis of the tiered prescriptive operational GHG emissions requirements for the NBC. The analysis is in accordance with the methodologies developed PCF 2004 to propose operational GHG emissions requirements in Section 9.36. The impact analysis was performed using simulations that use reference emissions factor values of 235 g CO₂e/kWh and 260 g CO₂e/kWh for determining the GHG emissions target for space heating and service water heating, respectively. The GHG emissions of all non-heating regulated loads were calculated taking into account the emissions factor of electricity for each province or territory (average projected 2031–2035 values). PCFs 2004 and 2026 were developed based on average emissions factors, not marginal emissions factors.

The introduction of tiered operational GHG emissions levels would provide the provinces and territories with the option to adopt the operational GHG emissions level that is the most suitable for their needs. Even though energy performance modeling is commonly used in the industry currently, in order to provide simplicity in achieving compliance with the proposed operational GHG emissions levels, in addition to the performance path, Section 9.36. would provide a prescriptive compliance path as well.

The 2020 edition of the NBC introduced energy performance tiers for buildings and houses, with increasing levels of energy performance improvement. The amount of annual operational GHG emissions is directly correlated with the annual energy use of the house. In order to provide simplicity for Code users in achieving both energy efficiency and operational GHG emissions reduction, the following correlation between energy tiers and operational GHG emissions levels was proposed.

Table 1 presents the operational GHG emissions performance levels that can be achieved through the implementation of energy conservation measures, using utility gas as the energy source for space heating and service water heating in the proposed house.

Table 1. Operational GHG Emissions Performance Levels using Utility Gas as the Energy Source for Space Heating and Service Water Heating

According to Table 1, using utility gas as the energy source for the proposed house, achieving Energy Performance Tier 5 would result in operational GHG emissions Level C (GHG emissions percentage improvement less than 75% and greater than or equal to 50%). The achievement of higher performing GHG emissions levels would require either more stringent energy-efficiency measures or an energy source having emissions factors less than the emissions factor of utility gas.

The scenario using electricity as the energy source was investigated as well. Depending on the emissions factor for electricity for each province or territory (2031–2035 values), there is a significant variability between provinces and territories, as such the electric grids were divided into groups based on the emissions factor value (high, moderate or low), as presented in Table 2.

Table 2. Classification of Provincial and Territorial Electric Grids. 

Note to Table 2:  

(1) High: emissions factor greater than 100 g CO₂e/kWh

Moderate: emissions factor greater than 25 g CO₂e/kWh and less than or equal to 100 g CO₂e/kWh

Low: emissions factor less than or equal to 25 g CO₂e/kWh

Table 3. GHG Emissions Performance Levels for Electric Space Heating and Service Water Heating

Note to Table 3: Nunavut with an electricity emissions factor of 465.16 g CO₂e/kWh (significantly higher than the average emission factor for utility gas) was excluded from the analysis.

According to Table 3, a noticeable improvement in operational GHG emissions performance levels can be observed across all provinces/territories at higher energy performance tiers. For example, achieving Energy Performance Tier 2 would result in operational GHG emissions Level A for grids with low emissions factors, Level C for grids with moderate emissions factors, and Level D for grids with high emissions factors.

Table 4 presents the operational GHG emissions levels for the scenario of the proposed house using utility gas for space heating and electricity for service water heating.

Table 4. GHG Emission Performance Levels for Utility Gas Space Heating and Electric Service Water Heating

As Table 4 illustrates, replacing utility gas with electricity for service water heating results in better operational GHG emissions levels without implementing any energy-efficiency measures. The provinces and territories with low and moderate emissions grids are able to achieve Level D (compared with Level F when utility gas is the energy source), while the provinces and territories with high emissions grids can achieve Level E (compared with Level F when utility gas is the energy source).

Installing an air-source heat pump in the proposed house contributes to significant energy savings. Code users who choose to install a high-efficiency air-source heat pump would benefit from the additional energy savings provided by the equipment and, at the same time, from the reduction of operational GHG emissions. Table 5 presents the operational GHG emissions levels that can be achieved across provinces and territories when installing an air-source heat pump for space heating and a heat pump water heater for service water.

Table 5. GHG Emissions Performance Levels for Electrically Operated, Air-Source Heat Pump for Space Heating and Heat Pump Service Water Heating

According to Table 5, when using an air-source heat pump for space heating and a heat pump for service water heating, the provinces and territories having low emissions grids would be able to achieve operational GHG emissions Level A. The provinces and territories having moderate emissions grids would be able to achieve Level A or B, while the ones having high emissions grids would achieve Level A, D or C, depending on climate and grid emissions factor.

For some locations, a cold climate air-source heat pump would be more appropriate than a regular air-source heat pump. Table 6 presents the operational GHG emissions levels that could be achieved by each province or territory where the air-source heat pump is replaced with a cold climate air-source heat pump.

Table 6. GHG Emissions Performance Levels for Electrically Operated, Cold Climate Air-Source Heat Pump for Space Heating and Heat Pump Service Water Heating

As in the previous scenario, when using a cold climate air-source heat pump for space heating and a heat pump for service water heating, the provinces and territories having low emissions grids are able to achieve operational GHG emissions Level A. The provinces and territories having moderate emissions grids are able to achieve Level A or B, while the ones having high emissions grids achieve Level A, C or D, depending on climate and grid emissions factor.

From the results presented in Tables 1 to 6, it is evident that the majority of house archetypes are able to meet the minimum level of operational GHG emissions without implementing energy-efficiency measures (Tier 1 in Section 9.36.). As Table 3 illustrates, when electricity is the energy source, depending on the emissions factor of the grid, some house archetypes compliant with Tier 1 are able to reach better operational GHG emissions levels. However, in some cases, changing the energy source is not enough to achieve better operational GHG emissions levels. The prescriptive trade-off path in Subsection 9.36.8. allows Code users to obtain energy conservation points associated with the energy savings and implicitly with operational GHG emissions reduction from a variety of measures, such as increasing the insulation of exterior walls, improving the energy performance of windows or installing mechanical equipment exceeding NBC minimum requirements (Energy Performance Tier 1 and operational GHG emissions Level F). All of these energy performance/operational GHG emissions conservation measures would have incremental costs associated with their implementation.

Table 7 presents the average cost of equipment for space heating and service water heating to meet or better the minimum performance requirements in Section 9.36. However, since the cost associated with reaching a specific GHG emissions performance level cannot be generalized for all provinces and territories, the incremental cost must be evaluated in more depth, individually case by case.

Table 7. Cost of Energy-Efficient Mechanical Equipment for an Average House

Notes to Table 7:

(1) The cost:

• takes into account the equipment, materials and installation,
• of the heating equipment is based on the sizing for an average house (floor area approx. 200 m²),
• of the service water heating is based on the load for a family of four members, and
• does not take into account inter-province/territory variability. For some locations (especially in the North), the cost may be higher.

(2)    Homedepot, Gas Furnace Prices (including Installation), https://www.homedepot.ca/en/home/ideas-how-to/heating-and-cooling/cost-install-gas-furnace.html

(3)    HomeAdvisor, How Much Does an Electric Baseboard Heater Cost?,  https://www.homeadvisor.com/cost/heating-and-cooling/install-an-electric-baseboard-or-wall-heater/

(4)    Modernize Home Services, 2023 Buying Guide: Electric Furnace Costs,  https://modernize.com/hvac/heating-repair-installation/furnace/electric

(5)    2 Ton, 24000 BTU, HVACTrust, https://hvactrust.ca/

(6)    24000 BTU, 1Click Heating&Cooling, https://1clickheat.com/

(7)     Enercare, 2023 Water Heater Buyer’s Guide for Homeowners,  https://www.enercare.ca/water/water-heating/buyers-guide-to-water-heaters

(8)    Homedepot, Tank Electric Water Heaters, https://www.homedepot.ca/en/home/categories/building-materials/plumbing/water-heaters/tank-water-heaters/tank-electric-water-heaters.html

Building envelope measures exceeding the minimum energy performance for tier 1 result in energy conservation points that allow the Code user to obtain credit for the energy savings associated with the building envelope measures adopted. The energy savings associated with envelope measures result in a reduction of operational GHG emissions of the house as well.

A further estimation of the costs associated with building envelope improvement will be presented. RSMeans data for residential costs was used to estimate the incremental costs associated with the improvement of exterior wall insulation. A range of estimated values was calculated to account for the inter-province/territory variability (location factors provided by RSMeans).

Table 8. Incremental Costs Associated with the Improvement of Insulation of Above-Ground Walls

Source: RSMeans 2023 – Residential costs.

Note to Table 8:

(1) Insulation type: non-rigid insulation (batt), fibre-glass, kraft-faced. 

As Table 8 illustrates, the energy savings and the incremental costs increasewith an increase in the effective RSI value of the exterior wall. In Section 9.36., no-cost measures, such as a decrease in the volume of the house, can result in between 1 and 10 energy-saving points, depending on the volume reduction.

Section 9.36. provides energy conservation measures for fenestration as well. Table 9 presents the costs associated with window performance improvement.

Table 9. Costs Associated with Window Performance Improvement

Note to Table 9:

(1) WWR = window-to-wall ratio

According to Table 9, the incremental costs associated with performance improvement of windows increase with a decreasing U-value (or increasing RSI value) of the window. The percentage energy savings depends on the U-value of the window and the climate zone.

Taking into account the costs presented in Tables 6 to 9, an incremental cost can be calculated for various combinations of building envelope and mechanical system improvements (i.e., “packages”). It is assumed that when the energy source is either natural gas or electricity and the properties of the building envelope meet tier 1 in Section 9.36. the incremental cost is zero. Table 10 presents the incremental costs for certain packages resulting in decreased energy use and, implicitly, decreased annual GHG emissions.

Table 10. Incremental costs associated with the adoption of energy performance/GHG emissions reduction measures

Note to Table 10:

(1) Incremental cost varies with climate zone and house size. The example assumes climate zone 4 and floor area of approximately 200 m².

As Table 10 illustrates, the incremental cost depends on the energy conservation measures adopted to reach a specific energy performance tier/GHG emissions level. Section 9.36 provides detailed prescriptive measures for achieving Energy Performance Tier 2. The proposed changes for the 2025 edition of NBC provide Code users with prescriptive measures for achieving energy performance tiers beyond tier 2. According to Tables 1 to 6, the GHG emissions level achieved depends on the energy source and value of electricity grid emissions factor of each province or territory. Together with the tiered energy prescriptive path, the operational GHG emissions prescriptive path would provide an acceptable means of achieving the goal of reducing energy consumption and GHG emissions.

Enforcement of the technical requirements to minimize the excessive emission of operational GHG emissions would require additional effort by authorities having jurisdiction. 

A consistent set of technical requirements to minimize the excessive emission of operational GHG emissions across Canada would contribute to meeting provincial, territorial and federal GHG emissions reduction targets and climate action plans, including Canada’s goal to reduce total national GHG emissions to 40% to 45% below 2005 levels by 2030 and to reach net-zero by 2050.

Designers, engineers, architects, builders, and building officials.