Over the last two years, Canadian households have been getting on board with the energy transition. The Greener Homes Grant helped Canadians from coast to coast to coast install heat pumps and retrofit their homes, while EV sales have risen rapidly thanks to growing model availability and purchase incentives.
Accordingly, thousands of Canadians have made a shift away from fossil fuels, reaping the affordability benefits. In fact, our latest analysis finds that a household in Toronto that switched out its gas cars for electric versions, ditched its natural gas appliances, installed a heat pump and made some modest energy efficiency upgrades would cut $550 off its monthly bill, even taking into account upfront costs.
And no wonder, Canadians’ continued reliance on fossil fuels is costing them. In fact, a recent study found that energy prices are the most volatile component of inflation in the country.
But despite the savings benefits of clean technologies, upfront price can be a barrier to entry for many middle-income Canadians. And in many cases, these costs have been moving in the wrong direction — particularly for Ontarians who receive comparatively little provincial support.
Over the past year, the federal government’s Greener Homes Grant (that offered up to $5,000 off the price of a heat pump and other energy-saving measures) was discontinued in favour of a program for lower income households.
Also, many of the most affordable and bestselling EVs in Canada have either increased in price or disappeared. Production of both the sub-$45,000 Chevrolet Bolt and the Kia Soul EV has been paused or discontinued, leaving gaps in the more affordable end of the market. And now the cheapest Tesla will no longer be available in Canada following new tariffs imposed on Chinese-made EVs.
Our evidence is clear: switching your fossil fuel-powered car for an EV saves money in every scenario, in every region of the country — even when upfront costs are included and even in Ontario. A driver opting for an electric Volkswagen ID.4 instead of a gas-powered Honda CR-V would save over $2,400 a year over the lifetime of the car. The problem is that not everyone can finance a pricier car that will start saving them money in the future.
Indeed, despite clear upsides, upfront cost remains the No. 1 concern for prospective EV buyers, despite EV sticker prices dropping in recent years. It needn’t be the case.
Europeans can choose from at least 12 different fully electric options with a purchase price of less than $45,000, compared to just three in Canada. And the playing field isn’t level across the country, either. Most provinces and territories offer some kind of rebate for buying a new or used EV. But Ontario isn’t one of them.
The implications are written in the sales numbers: Ontario continues to trail the national average and has now even fallen behind the Yukon on electric market share. In fact, EVs now make up 32 per cent of new vehicle sales in Montreal and 25 per cent in Vancouver, compared to just 9 per cent in Toronto. Ontarians are missing out on EV options. The new Ontario-made electric Dodge Charger, for instance, will initially only be available in B.C. and Quebec.
This points to the critical importance of government policy, to both help cut the upfront cost via purchase incentives and encourage automakers to make more affordable models. But rebates are not universal and some key policies are at risk.
In fact, another recent report found that the federal Electric Vehicle Availability Standard (which requires automakers to make an increasing portion of EVs available for sale) will be key to incenting automakers to bring more affordable EVs to market. And yet, the future of the policy remains uncertain with the official opposition publicly stating they would repeal it if elected.
When it comes to home upgrades, many provinces stepped up after the federal government dropped its program earlier this year, retaining or expanding support for heat pumps and energy retrofits. But the result is a geographically unequal transition.
A median-income family in B.C. can receive up to $12,000 in government subsidies to switch from natural gas to a heat pump, while that same family in Ontario would receive no government support (and only up to $2,000 from the utility).
We are at a critical time in the energy transition. We have the solutions to lower energy bills and fight climate change, but it is vital that every Canadian can benefit. To that end, all levels of government must take action, offering rebates to cut upfront costs, improving charging access, simplifying financing and improving electricity rates to further incentivize cleaner options.
Anyone considering a clean energy shift can visit Clean Energy Canada’s new online calculator, mycleanbill.ca, to get a better sense of potential savings based on your location, vehicle type, and home.
After all, the door to cleaner homes and lower bills must be open to all Canadians.
This post was co-authored by Jana Elbrecht and first appeared in the Toronto Star.
