Fraser Forum

Ottawa’s new ‘energy efficiency’ regulations will increase home prices in Saskatchewan

Printer-friendly version
Ottawa’s new ‘energy efficiency’ regulations will increase home prices in Saskatchewan

New federal regulations aimed at “decarbonizing” the building sector will push housing prices in the province higher with very little environmental benefit.

Specifically, according to Ottawa, new residential homes must now “use 61 per cent less energy by 2025 and 65 per cent less energy by 2030 in comparison to 2019.” And new commercial buildings must “use 47 per cent less energy by 2025 and 59 per cent less energy by 2030 in comparison to 2019.”

Consequently, according to a recent study, these new regulations will add more than $26,436 to the cost of newly constructed homes in Saskatchewan by 2030.

That’s a big problem.

Moreover, recent population growth has already pushed up housing prices. In 2022, the province’s population grew by 29,307 people while just 3,479 new homes were built. Clearly, new construction is not keeping up with Saskatchewan’s growing population. When supply can’t keep up with demand, prices increase. In other words, Saskatchewanians already face an affordability crisis, and higher building costs due to Ottawa’s new regulations, part of Ottawa’s broader plan to reduce emissions, will only drive up prices further.

And because older and higher-income Saskatchewanians are often already homeowners—and these regulations will only directly affect the price of new homes—the costs will fall disproportionately on younger people and families looking to enter the housing market.

Finally, the study also predicts the new federal regulations will lead to a 1.0 per cent contraction in Saskatchewan's economy as of 2030. So not only will Ottawa’s plan increase housing prices, it will hinder provincial prosperity more broadly.

Of course, the Trudeau government claims these regulations are necessary to protect the environment. But energy efficiency mandates, in practise, often fall short of achieving meaningful reductions in emissions. While they make it cheaper to heat or light your home due to greater energy efficiency, for instance, they can also inadvertently lead to increased energy usage, a phenomenon known as the "rebound effect." Basically, homeowners use the savings from greater energy efficiency to purchase other goods and services, which can then increase emissions. Over time, this phenomenon can effectively cancel out most of the initial energy savings achieved through stricter efficiency rules. In fact, the same study estimates that these new federal regulations will reduce emissions in Saskatchewan by a paltry 1 per cent by 2030. That’s a lot of pain for little gain.

The Trudeau government’s new regulations will impose huge costs on Saskatchewanians at a time when the provincial economy is struggling and housing is already unaffordable. Federal policymakers should rethink these policy changes, particularly as they’ll have very little environmental benefit.

Blog Category: 

Subscribe to the Fraser Institute

Get the latest news from the Fraser Institute on the latest research studies, news and events.