‘Affordability and sustainability don’t need to compete’: green housing advocates urge Carney to see big picture

Brampton resident Anna Persaud “definitely” doesn’t see homeownership “being an option in the near future.” Her frustration is not unique. Across Canada, young people, families and seniors are increasingly shut out of the housing market and struggling to secure homes they can afford.

That could change with Ottawa’s recently announced new federal agency tasked to build affordable housing: Build Canada Homes.

The move has been welcomed by housing experts, builders, business leaders, and environmental organizations. But experts warn that new housing, no matter how desperate the recently elected federal government is to rush homes onto the market, must align with Canada’s emissions targets.

“We're excited and applaud the launch of Build Canada Homes. Their mission is really important, both to accelerate affordable housing development in Canada, but also to support the modernization of the construction industry and the adoption of prefabrication and other advanced building techniques that can help address sustainability as well as affordability in the housing sector,” The Atmospheric Fund’s vice president, policy and programs, Bryan Purcell, told The Pointer.

Just weeks before the agency’s launch, on August 29, 111 organizations including businesses, tradespeople, and climate advocates wrote a letter to Prime Minister Mark Carney and housing minister Gregor Robertson urging them to ensure Build Canada Homes uses modern, low-carbon heating technologies like high-efficiency electric heat pumps, geothermal, or direct electric systems instead of oil or gas furnaces.

When Carney was sworn in on March 14, one of the heaviest responsibilities on his shoulders was the country’s worsening housing and homelessness crisis. Many environmental advocates have cautioned against rushing to launch initiatives without considering the significant emissions that new homes create, pointing to a range of modern solutions to dramatically curb the massive carbon footprint of homes across the country. 

According to 2024 data, the Canada Green Building Council reported that 18 percent of emissions in the country are directly caused by residential, commercial and institutional buildings and when construction work and building materials are factored, the overall pollution footprint of the building sector represents more than 25 percent of all GHGs in Canada, nearly on par with the oil-gas sector and the transportation sector.   

In 2023, an estimated 118,329 people used emergency shelters in Canada, a sharp increase from 2022 and nearly identical to pre-pandemic levels in 2019. Shelter use has steadily rebounded since the sharp decline during the early stages of COVID-19, with an average of 16,627 people staying in shelters each night in 2023, up slightly from the year before.

(Government of Canada)

The balancing act between the desperate need for affordable housing and finding green solutions is difficult. More and more Canadians do not have a home. In 2023, 118,329 people experienced homelessness in emergency shelters, a 12 percent increase from 105,655 the year before, according to national data.

Green housing advocates believe solutions can be found without sacrificing emissions reduction targets, but with pressure mounting on politicians to end the affordable housing crisis, data keeps rolling in that shows Ottawa can no longer wait for municipalities and provinces to finally address an emergency that has been ignored for more than a decade. 

Ontario has been particularly hard hit. The Association of Municipalities of Ontario reported earlier this year that more than 80,000 Ontarians experienced homelessness in 2024, a 25 percent jump in just two years. Without major intervention, the association warned, the number could double within a decade, leaving nearly 300,000 people without stable housing.

The same report highlighted the immense strain on Ontario’s housing system. More than 268,000 households across the province are currently on waitlists, with average waits exceeding five years and in some cases stretching beyond two decades. 

“Ontario is at a tipping point in its homelessness crisis,” the association cautioned. 

The warning resonated in Peel region, where officials reported in April that of 2,799 individuals experiencing homelessness, more than 2,500 were staying in shelters or transitional housing. Another 141 people were unsheltered, living in encampments or public spaces. The need for emergency shelter in Peel has strained the Region’s resources for years, pushing the shelter system well beyond its safe capacity.  

Ontario’s role in the crisis looms large since housing starts nationwide have been strong in recent years (over one million new units built in the last four years) but in Ontario since mid-2024, the province has experienced a steep decline, especially in the Greater Toronto Area (GTA). 

British Columbia has also seen a dip in housing starts, though much less severe. Experts argue that while Canada as a whole is not in a housing slump, Ontario’s faltering pace is dragging down progress toward national goals.

(CMHC, Statistics Canada, RBC Economics)

The Doug Ford government recently updated Ontario’s housing tracker for the first time in eight months, revealing that all three Peel Region cities missed their new-home targets, with first-quarter 2025 housing starts at their lowest since 2009 and the province's six-month average falling to a decade low, pushing the PCs further from their goal of 1.5 million new homes by 2031.

A recent Canada Mortgage and Housing Corporation (CMHC) report warned that Toronto is on pace for its lowest annual housing starts in 30 years, with condo construction down 60 percent in the first half of 2025 and overall starts expected to remain well below the level needed to restore affordability for at least two more years—even as the Ford government contends it is on track to meet its targets, citing 88.42 percent progress for 2024.

In comparison, housing starts in much of the rest of Canada remain near all-time highs.

All three municipalities in the region of Peel are not on track to meet their housing goals set forth by the Progressive Conservative government.

(Anushka Yadav/The Pointer, Data: Ontario housing tracker)

Over the years, Ford has introduced controversial legislation after controversial legislation such as Bill 17, the Protecting Ontario by Building Faster and Smarter Act, which passed in May 2025, Bill 23, the More Homes Built Faster Act and Bill 39, the Better Municipal Governance Act in November 2022 to accelerate housing construction, which have often come at the cost of environmental protections, including opening parts of the Greenbelt. It is increasingly becoming clear the province is not on track to meet its ten-year target.

To address the failures at the municipal and provincial levels, Carney announced in May a plan to build 500,000 new homes annually, led by a new public developer that would focus on scaling up affordable housing construction, especially on public lands, and bring in $25 billion in financing to support innovative prefabricated home builders.

The plan echoed the previously ignored proposals from Peel councillors Joe Horneck and Alvin Tedjo, who pushed for modular-style housing construction in July 2023 after two deaths associated with the region’s overwhelmed  emergency shelter system.

Carney also committed an additional $10 billion in low-cost financing, restricted to builders who focus on affordable home construction, not those developing high-cost units that dominate the market in cities like Mississauga and Brampton.

The initiative culminated in the formal launch of Build Canada Homes on September 14.

Carney announced former Toronto city councillor Ana Bailão will serve as chief executive officer of the new agency, tasked with combating homelessness and expanding access to affordable housing for low-income Canadians. 

The Prime Minister said $13 billion have been earmarked for the new agency which will work with provinces, territories, municipalities, Indigenous communities and private developers to construct a broad spectrum of housing, from transitional and supportive units to homes within reach of middle-income earners.

It also includes $1.5 billion in the Canada Rental Protection Fund to preserve affordable rental housing and $1 billion to build transitional and supportive housing. 

To begin, the government will start developing six federal land sites in Dartmouth, Longueuil, Ottawa, Toronto, Winnipeg, and Edmonton to deliver 4,000 factory-built homes, with an additional 45,000 units planned. 

Build Canada Homes is also partnering with the Nunavut Housing Corporation to build over 700 affordable and supportive housing units, about 30 percent of which will use off-site, factory-built methods.

“Build Canada Homes will transform the way government works with the private sector to build. We will create an entirely new housing industry using Canadian technology, Canadian workers, and Canadian resources – and give builders the tools they need to build more, build sustainably, and build at scale,” Carney said in a statement.

Purcell described the initial focus on six communities and the Rental Protection Fund as “positive steps”, but broader support will be needed to help the prefabricated housing industry scale up and “meet growing demand”.

 

New housing construction presents a unique opportunity to build for the future, designing homes that are airtight, energy-efficient and equipped with clean technologies like heat pumps, which can both heat and cool spaces while lowering operating costs. Though sustainable builds carry about a five to ten percent higher upfront price tag, these costs can be offset quickly through energy savings and supported further by policy tools such as mortgage incentives and consistent net-zero building codes across municipalities. The bigger challenge lies in embodied carbon, the emissions from producing materials like concrete, steel, and glass which can equal nearly 20 years of operating emissions, making innovation in materials such as mass timber, low-carbon concrete, and prefabricated designs critical if Canada’s housing push is to align with climate goals.

(Daniels’ Corporation Decarbonization Roadmap, RBC Climate Action Institute)

“In line with the Build Canada Homes goal of building faster, better and smarter, requiring government-funded homes to be equipped with the latest technologies would send an important market signal to the construction industry, creating green jobs and spurring the training needed for Canada to fully step into the modern building age,” the letter stated.

“Choosing low carbon heating options would also ensure that Build Canada Homes does not undermine the government’s own climate reduction targets.”

Canada aims to cut emissions by 40 to 45 percent by 2030. 

Buildings account for roughly 18 percent of the country’s greenhouse gas emissions when including electricity-related emissions, and are the country’s third-largest source of emissions after oil and gas, and transportation.

The national 2030 Emissions Reduction Plan notes emissions from the buildings sector need to fall to 53 megatonnes by 2030, down from 85 megatonnes in 2005, a 37 percent reduction.

“It’s crucial to ensure that the housing built through these initiatives meets the highest standards for carbon emissions and energy efficiency. The goal is to create homes that last 100 years without requiring major retrofits within a decade, while remaining affordable to heat and cool,” Purcell said.

The organizations noted that heat pumps work in extreme cold, provide cooling in warming climates, improve air quality and are far more efficient than fossil fuel systems.

Toronto and Region Conservation Authority (TRCA) program manager Gil Amdurski explained air source heat pumps are not only cost-effective, with lower upfront and utility costs, but they are also quieter, offer better dehumidification, and produce lower greenhouse gas emissions.

One of the letter’s co-authors, Stand.earth climate campaigner Lana Goldberg, told The Pointer that heat pumps have already been widely adopted in Scandinavian countries, where they are the primary heating technology for residents, proving their effectiveness even in the coldest climates.

As a major oil and gas producer, Norway shares similarities with Canada, but their climate trajectories differ sharply. 

Norway ranked eighth in the 2021 Climate Change Performance Index as Canada lagged far behind, landing 58th out of 61 countries.

How did it get there?

By 2020, Norway had the highest penetration of heat pumps worldwide, with about 60 units for every 100 households, most of them air-to-air systems. The market expanded dramatically after 2001, growing from just 2,000 annual installations to more than 155,000 sold in 2022.

The result has been dramatic: since the 1990s, heating-related carbon emissions fell by 83 percent in the country.

During the global energy crisis of the 1970s, Denmark was one of the first countries to shift its energy policy and adopt district heating solutions. The result? Greater efficiency and stable energy prices.

Today, nearly 70 percent of Danish households are connected to district heating systems powered by renewable energy, results that are detailed in a 2024 study.

Heating accounts for half of the world’s total energy consumption and more than 40 percent of global energy-related carbon dioxide emissions.

In Canada, residents in the Niagara region have been leading the push toward clean energy by embracing sustainable heating and cooling technologies like air-source and geothermal heat pumps. 

Port Colborne residents Tim and Rosy, who shared during a recent webinar that they installed an air source heat pump in 2019, said they found it effective even in temperatures as low as -15 degrees Celsius, with the heat coming into their home being “subtle and clean.” 

“We are completely happy with our choice, both economically and environmentally, and have since electrified our home completely. Natural gas meter, and line, are gone and we only have to deal with one utility,” they shared.

“From a builder’s perspective, all-electric homes with heat pump heating for air and water are simpler than older systems since there is one energy source and one appliance for both heating and cooling,”  Bruce Murdoch, a homebuilder from Cranbrook, B.C., with building company K-Country Homes, said.

“Building electric also offers a triple benefit of reducing building costs, production time, and operational costs for homeowners. We need to ensure that federally funded new homes are all-electric and eliminate costly retrofits of obsolete equipment down the road.”

Goldberg says the advantages of heat pumps are well known, “the only thing we (Canada) need to do is actually implement their use, and a government program gives us the opportunity to do that, both to ensure that taxpayer dollars are used in line with our climate climate targets, but also to set up a positive direction for the construction sector to ensure that they are adopting the most modern technologies going forward.”

She says the Carney government has not yet responded to the letter. 

Canada’s overall climate rating is currently ‘Insufficient’, reflecting slow progress amid urgent environmental challenges like record-breaking wildfires. While existing policies have begun to reduce emissions, the pace of implementing the full 2022 climate plan remains too slow to meet the country’s 2030 climate target (NDC). The Environment Commissioner has emphasized that Canada “cannot afford a fourth decade of failure on climate action,” highlighting the critical need for faster and more ambitious measures. Although Canada’s rating has improved due to better policies and actions, it still falls short of an ‘Almost Sufficient’ level. The rating does not account for emissions from Canada’s oil and gas exports, which, when burned abroad, exceed the country’s domestic emissions, underscoring the need for broader, more comprehensive climate strategies.

(Climate Action Tracker)

Purcell said it is important for stakeholders and the public to stress the strategic value of building for the future, not for yesterday’s market. “At this stage, it could go either way, and it’s difficult to balance multiple priorities. But if we get it right, sustainability and affordability don’t have to compete—they can be complementary and mutually reinforcing,” he remarked.

“What the government does with the left hand should be consistent with what it’s trying to do with the right hand,” Goldberg added.

“Yes, we desperately need to build new affordable homes. We’ve also made commitments to tackle the climate crisis. Fortunately, we can do both at the same time, but only if the federal government can act as a coherent unit.”

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