5 reasons improving energy efficiency is a good nation-building project

Canada is abuzz with talk of nation-building projects. Mark Carney’s mandate letter priorities include “identifying and expediting nation-building projects that will connect and transform our country.”

Much of the current nation-building talk centres on energy supply — building more pipelines, transmission lines, and nuclear generators. But big physical megaprojects come with big risks: environmental disruption, community opposition and attempts to avoid compliance with standard rules.

Energy efficiency doesn’t carry those risks. It delivers the same (or better) housing, manufacturing and public infrastructure — for less energy. Combined energy savings can add up to that of a big megaproject — enough to account for 40 per cent of Canada’s energy needs by 2050. It increases self-reliance by using local resources instead of foreign energy imports, and it boosts productivity by increasing the level of economic benefit we get for each unit of energy consumed.

That’s why energy efficiency deserves to be treated as a nation-building project — one that the federal government should lead. Here are five benefits such a project could deliver:  

1. Quick results

 Most proposed nation-building projects, even if expedited, will take 10-15 years to show results. That’s too slow for the current Parliament or the urgent need to increase self-reliance in the face of U.S. trade uncertainty. 

Energy efficiency can be implemented quickly and show results in 1-2 years thanks to existing municipal, federal and utility-led program delivery infrastructure. 

2. Increased productivity 

Prime Minister Carney highlights productivity as a fundamental national challenge. 

Energy efficiency addresses this challenge head-on: every unit of energy saved produces more GDP — a $4-$7 increase for every $1 invested. Canada has also committed to an energy-saving target that directly relates to productivity by measuring energy intensity improvements by the amount of energy used to produce a unit of GDP.

In addition, Canada joined 133 other nations in pledging to double the pace of energy efficiency improvement until 2030. That would make a good target for a nation-building project. 

3. Support for Canadian businesses and innovations 

Energy efficiency is a made-in-Canada resource, powered by Canadian technologies and expertise. 

Almost all energy efficiency products and services could be purchased from Canadian companies or companies manufacturing in Canada. We have Canadian companies building internationally competitive businesses and innovating in areas such as smart thermostats, pump and motor systems, natural refrigerants, carbon sequestering insulation, and heat exchange. 

Products and components not made locally could be sourced from globally competitive supply chains. 

4. Regional fairness 

 Some nation-building projects are contentious because they depend on region-specific resources. Climate federalism often pits hydro versus oil resource-rich provinces, for example. 

Energy efficiency avoids these conflicts. Energy waste is everywhere, and strategies to improve energy efficiency can be tailored to regional industrial structures and local communities.

However, provincial priorities for nation-building projects are likely to mirror regional resource endowments and the political power of regional industry. This introduces the need for the federal government to play a leadership role in supporting a project that creates broad benefits across Canada.

5. A more adaptable and tariff-proofed economy 

Energy efficiency strategies like energy management systems or the retrocommissioning of existing building energy systems are largely tariff-proof because they optimize existing systems without any material upgrades. They can actually extend the life of existing equipment, which can prevent the need to make a new capital purchase from outside Canada in a highly volatile trade environment.

Almost all energy efficiency strategies rely on Canadian professionals and engineers who can strategically work around supply chain disruptions. 

Efficiency program administrators can move between residential, commercial, and industrial sectors, and across several different types of programs to save energy. That diversity of options makes energy efficiency a highly adaptable energy resource that doesn’t face the same risks as energy supply options that have locked-in production processes and fuel dependencies.

Bonus: Energy efficiency will make all other nation-building projects better

 Energy efficiency is more than a standalone win — it optimizes and complements every other nation-building project under discussion. 

• Transmission lines: Energy efficiency will free up more electricity for energy trades and support community-based strategies that make transmission truly transformative. 
• Pipelines: An efficiency potential study showed that improved efficiency would improve Canada’s oil and gas trade balance by $70 billion by capturing more value for every barrel sold.
• Artificial intelligence: Canadian companies are already using AI to save energy, and saving electricity frees up space for data centres.
• Housing: Building new homes to high energy efficiency standards will ensure long-term affordability and resilience against extreme heat and other weather extremes. Stable demand for both new buildings and retrofits is needed to spur a “modern housing industry” built on digital, pre-fabricated, and modular technologies.

What the federal government can do now 

Canada already has the building blocks for a national project. Existing programs and initiatives could be aligned under a transformative goal like doubling the rate of annual energy productivity. The federal government can act immediately by:

• Maintaining and expanding the Greener Homes Loan Program before funds run out. Then, it should be reoriented as a patient financier that strategically spurs innovative business models that can make the retrofit process easier and more affordable.
• Increasing funding for the new Greener Homes Affordability Program and making the elimination of energy poverty a component of a nation-building goal. 
• Making improving energy efficiency in affordable housing part of the Build Canada Homes mandate.
• Transforming how we retrofit buildings by coordinating and aggregating many buildings into larger initiatives. This will spur supply chains to develop new solutions, building on the Deep Retrofit Accelerator Initiative and the Greener Neighbourhood Pilot Project. The Canada Infrastructure Bank can play a key role by providing patient capital for both large and small buildings, and by actively supporting their aggregation into large-scale projects.
• Modernizing the Energy Efficiency Act so consumers can see energy labels when shopping online, and aligning equipment standards with Canada’s clean electricity advantage.  
• Insulating Canada from disruptions to the ENERGY STAR labelling and benchmarking system, and developing made-in-Canada efficiency standards.
• Ensuring all new federally supported housing projects meet the top tiers of the national model building code. This will lead by example and help pre-fabricated and modular construction techniques transform the construction industry by demonstrating the value they provide via higher performance building envelopes.
• Developing a unique industrial strategy to improve the productivity of small and medium-sized contractor businesses. This will create secure, future-proof jobs that digital tools will enhance, not replace. 
• Encouraging energy management across all industries as a fast way to boost productivity and protect against tariff risks.

These steps would establish federal leadership, which could be complemented by initiatives led by provincial and territorial governments, utilities, municipalities and the private sector.

Nation-building doesn’t have to only mean pipelines or power lines; it can mean investing in knowledge, innovation and community strengths to get more from the energy we already produce and use. Energy efficiency is Canada’s fastest, most affordable nation-building project — delivering megaproject benefits without the risks, creating jobs, boosting productivity, and lowering costs in every community.

Energy efficiency would be a strategic addition to Canada’s portfolio of nation-building projects.