First the feds came after the electricity sector with punitive ‘decarbonization’ rules. Then it was the oil sector. Now they’re coming for the farm and the picket fence, too..That’s because proposed new building codes to ‘decarbonize’ the housing sector will have a potentially debilitating impact on housing affordability, according to a new report from the Fraser Institute..According to Ross McKitrick, a Senior Fellow and economics professor at the University of Guelph, a mandated 65% reduction in energy consumption for new residential buildings translates into an extra $55,000 on average for a new home — almost $80,000 in British Columbia — with no real benefit in terms of emissions reductions..“With housing costs already a major concern for so many Canadians, Ottawa’s new building energy efficiency regulations will increase the cost of housing even more and achieve very little in the way of reduced emissions,” McKitrick said..The study, Wrong Move at the Wrong Time: Economic Impacts of the New Federal Building Energy Efficiency Mandates, finds the cost increases are mainly due to a proposal in the federal government’s Building Energy Efficiency (BEE) components of the 2030 Emissions Reduction Plan (ERP) that require energy consumption in new residential buildings be reduced to 65% below 2019 levels by 2030..While the BEE requirements are initially minor, they quickly ramp up in the middle of this decade and will increase home construction costs by an average of about 8.3% by 2030, it said..Across Canada, the increased home costs range from a high of $78,093 in British Columba to $22,144 in New Brunswick. It works out to about $35,500 in Alberta..What’s more, the new regulations will affect the Canadian economy broadly, reducing economic activity by 1.8%, which translates to roughly $1,700 per worker starting in 2026..“These are very high costs to impose on Canadians at a time when the economy is struggling and housing is already unaffordable for so many people,” McKitrick said. “Given these new building regulations will only reduce Canada’s emissions by less than one per cent, policymakers should maybe ask whether the costs are worth it.”.As a result of the large loss of GDP relative to reductions in emissions, the overall emissions intensity of the Canadian economy actually rises slightly due to the regulation. And it comes on top of the carbon tax..Moreover, because it mostly affects buyers of new homes, it falls disproportionately on young people looking to buy their first homes..“Overall the proposed Building Energy Efficiency package is a very costly addition to the federal carbon tax. It will impose substantial costs while contributing relatively little to Canada’s greenhouse gas reduction targets. Additionally the rules will affect mainly purchasers of new homes,” McKitrick wrote..“Since older, higher-income households tend already to own their homes, the costs discussed in this study are likely to fall disproportionately on younger and lower-income people trying to enter the housing market.
