But the province is just beginning to ask a question that some other places have been considering more carefully: what if the first step to delivering on our most immediate needs – affordable homes, safety in the next storm, cooling to get through the next heat wave, a power supply we can count on – is to tackle them together with a single set of common-sense energy choices? 

Ontario has announced major investments in non-renewable power projects, including a long-term bet on new nuclear plants. But there’s still time to embrace energy efficiency and smaller renewable– energy options (also known as distributed energy resources, or DERs) as cost-effective, quicker-to-deploy approaches to community resilience. These include rooftop solar panels, small-scale wind turbines and battery storage.  

As cities in Canada’s largest province prepare to face more than 50 days with a humidex over 35°C, our vulnerability in summer is alarmingly clear, especially for seniors. Better air sealing and filtration in buildings and shifting away from natural gas can also improve indoor air quality and health, while lowering utility bills.  

 Today’s power grid was never meant to meet challenges like volatile natural gas prices, more frequent severe weather, rapid population growth or the pressing need to decarbonize. Nor was it designed to capitalize upon the massive opportunity to deliver more reliable, cheaper, cleaner electricity by shifting to smaller, renewable energy sources that generate power closer to where it’s needed. 

That’s why it’s time for Ontario decision-makers – public, private, and community – to make the visionary decision to rethink and reinforce our top-down grid from the bottom up.  

1. Make energy efficiency the starting point.

Nobody wants to waste money or see low return on public investments. Whether you’re battling your home heating bill, looking over your company balance sheet or planning the power grid of the future, energy efficiency is the gift that keeps on giving. In fact, the Canadian Climate Institute’s latest analysis shows average household energy savings of 12% through 2050 as the system electrifies. 

And there are big wins for the power grid. The Atmospheric Fund found that Ontario could save $9.5 billion by maximizing energy efficiency instead of relying more heavily on natural gas power plants. And the Royal Bank of Canada Climate Action Institute concluded that timely conservation could save enough electricity to power three million homes by 2045 and save ratepayers $500 million per year.

2. Build new electrical generation closer to demand.

The surest way to decarbonize energy is to shift heating and cooling, transportation and industrial processes from fossil fuels to electricity. But the need for a major increase in generating capacity has produced eye-popping cost figures in the tens of billions of dollars that may mean burning more natural gas and increasing carbon pollution. 

Installing DERs like solar, microgrids, and energy storage closer to where they’re needed can cut losses from power outages 20% while delivering a 5:1 benefit-to-cost ratio on the investment. DERs coupled with deep efficiency help the electricity system control costs, boost reliability, clear grid bottlenecks, ensure business continuity and keep the lights on. 

A recent Independent Electricity System Operator report found that efficiency and DERs could completely clear the province’s projected electricity shortage over the next decade, eliminating the need for new gas-fired power plants. And Ontario wind and solar farms with battery backup are already cheaper to build than new gas plants. If anything, Ontario is likely to run out of demand for gas-fired electricity during the operating life of today’s power plants, and plant owners will find their assets stranded – unless taxpayers pick up the tab.

3. Make grid reliability a priority.

Ontario’s existing electricity system has served us pretty well for more than a century. But it must evolve as we navigate an era of high costs, severe resilience challenges and the opportunity to embrace more affordable, distributed generation options. For businesses, the cost of those outages averages $100,000 per hour – adding up to billions in economy-wide losses. And climate change is a threat multiplier to the key risk factors for power system failures. 

The grid is an aging system in need of refurbishment and reinvestment. But that’s the opportunity of a lifetime: Ontario can direct those dollars to building a modernized grid that emphasizes energy efficiency and distributed generation. The right choices now will deliver returns for generations to come.

4. Integrate and scale the best solutions at the neighbourhood level. 

We can hit our net-zero targets if we apply all the tools and technologies in our carbon– reduction toolbox, pick the ones that deliver the fastest, best results at lowest cost, and scale them up. 

Until now, options like energy retrofits, heat pumps, battery storage and rooftop solar have mostly been directed to individual households. But we’ll see the fastest gains, highest financial returns and greatest contributions to local resilience when we scale those solutions to whole neighbourhoods. 

That’s where options like mass, deep building retrofits, geoexchange, district energy, microgrids, wastewater energy transfer, community solar farms and electric vehicle hubs move from interesting concept to practical reality. We’ll need new approaches to financing and project management, and deep collaboration among communities, governments and businesses.  

And the neighbourhood scale is where we can ramp up efficient travel choices. Sprawling development can double or triple driving, tailpipe emissions and household transportation costs. With many of us working at home, the need for more “complete,” walkable neighbourhoods where we can quickly access most of our daily needs has never been greater. Municipal and provincial policies that bolster infill housing deliver strong economic, climate and community benefits and can increase housing affordability – and business is onboard. 

5. Get prepared and plan ahead.

Anyone who’s lived through the latest storm, flooded basement, heat wave, power outage or wildfire-driven smoke alert will want to be fully prepared for the next one. And we must plan wisely to minimize costs and maximize economic and community benefits: improved energy affordability, local jobs for retrofits and renewables, reduced business interruption, better health and fewer heat-related deaths. 

The evidence is clear. The economic case is compelling. The community benefits are impressive. As we plan our future energy systems, let’s maximize both ROIs: return on investment and resilience of investment. 

Steve Winkelman is executive director of the Ottawa Climate Action Fund and Mitchell Beer is publisher of The Energy Mix.

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Canada is committed to spending an unprecedented $85 billion on housing and public transit over the next decade: more than $70 billion to meet critical housing needs through the National Housing Strategy (NHS) and $15 billion for public transit. Together with the $13 billion the federal government has already spent on transit since 2015, this will be the biggest transit investment in Canadian history.

The NHS provides grants, low-cost loans, tools and research to improve housing security and quality for one million Canadians – including building 160,000 new homes. During the election campaign, the Liberals’ Housing Plan called for 1.4 million homes to be built, preserved or repaired, and their proposed $4-billion Housing Policy Accelerator calls for 100,000 new “middle class” homes by 2025. While both the National Housing Strategy and the Liberal Housing Plan note transit-oriented development as a priority, more robust policies and incentives are needed to achieve location efficiency.

And in order to maximize the returns on these investments to address the twin crises of climate change and housing affordability, the federal government must place land use and location at the centre of its housing and carbon-reduction plans. 

All levels of government must also seize this moment for the one-third of Canadians who live in unaffordable dwellings. Improving public and policy-maker understanding of how land use impacts housing affordability and carbon emissions from transportation will be key. 

Housing and transportation account for the vast majority of household carbon emissions. Moves toward net-zero buildings and electric vehicles are essential. But green tech is not enough – we must also drive less. Just as we need deep energy-efficiency retrofits for our buildings, we need to retrofit our cities and suburbs to make them more location efficient. 

Location-efficient, “15-minute” neighbourhoods are designed for pedestrians and include a mix of land uses so that people can safely and conveniently walk to jobs, stores, services and parks. “Smart growth” policies focus new development in 15-minute neighbourhoods and link them together along regional transit corridors and bike networks. People drive half as much in compact, transit-oriented areas because destinations are closer together. Car trips are shorter, more trips are practical on foot, by bike or on public transit – cutting carbon emissions in half.

In the Greater Toronto Area, 81% of home buyers would prefer to live in walkable, transit-friendly neighbourhoods but can’t afford to. Households in location-efficient neighbourhoods can meet their daily needs with one car instead of two, saving $8,000 to $15,000 annually. 

Carbon and household cost savings are among the many economic, community and environmental benefits of smart growth policies – including better health, a higher quality of life, more customers for neighbourhood businesses and protection of habitat and farmland.

This is a win for municipal governments, as well. Smart growth costs billions of dollars less in infrastructure than sprawl because it allows for more people to be served by fewer roads, tracks, pipes and wires. Developers don’t pay for the full costs of the offsite infrastructure required to support new suburban development, and municipal tax coffers are responsible for covering significant operating, maintenance and replacement costs. On the other hand, compact development can produce significantly higher municipal tax revenues. 

Smart growth costs billions of dollars less in infrastructure than sprawl because it allows for more people to be served by fewer roads, tracks, pipes and wires.

For the past 75 years, government policies have incentivized car-oriented, single-family neighbourhoods. Traditional neighbourhoods with bustling sidewalks and active main streets have become expensive because today’s market under-supplies walkability. As this pent-up demand grows, location-efficient housing commands higher prices – and that dynamic drives gentrification of established neighbourhoods that displaces or further disrupts the lives of Black, Indigenous, racialized and low-income communities.

The urgent and obvious solution is to increase the supply of affordable housing in accessible locations, providing a range of “missing middle” multifamily housing to meet diverse economic and social needs. From duplexes and triplexes to mid-rise apartments and secondary suites, this new supply must be affordable to lower-income and middle-income renters and homeowners.

We need to build and retrofit more “15-minute neighbourhoods” where people can access almost everything they need on foot, by bike or by transit. We do that by adding in missing components to existing neighbourhoods – be they sidewalks, shops, housing or parks, and planning new neighbourhoods around transit stations and designing them for pedestrians.

We should also consider ownership and sharing models that save money, cut carbon and improve quality of life. Shared walls in multifamily buildings reduce heating demand, car and bike “sharing” reduce total kilometres driven, and common rooms in apartments and co-housing cut costs and strengthen community.

Here are three steps the next federal government can take to increase the supply of affordable, location-efficient housing:

1. Federal policies must be part of the solution and not the problem. A key step will be for the federal government to apply transportation affordability and location-efficiency lenses to housing and public transit programs to identify conflicts and opportunities for better alignment between the two. This should be supported by increased research funding on location efficiency, such as through the Canada Mortgage and Housing Corporation’s Housing Supply Challenge.

2. Provide technical and financial support to increase municipal capacity to plan, implement and evaluate location-efficient solutions – in coordination with provincial authorities. To do this, the federal government should enhance programs run by the Federation of Canadian Municipalities (FCM) that support land-use planning, active transportation, public transit and sustainable and affordable housing (and FCM should better align them to generate efficiencies and multiple benefits).

The government should also develop planning and evaluation tools to assess the full costs and benefits of different urban development futures, including a Canadian version of the U.S. Housing + Transportation Affordability Index. This calculates total costs of housing plus transportation for specific locations, illuminating the affordability benefits of efficient locations. We must support the development of affordable housing on underutilized public land near transit hubs, develop best-practice guidance on channelling revenues from commercial development to support affordable housing and enhance public space, and develop guidance on how to integrate secondary suites and laneway housing into residential retrofit programs to generate income to support deep efficiency and affordability.

3. Provide financial incentives and establish performance criteria for federally funded projects to deliver transportation and housing affordability and carbon reduction. For example, municipalities that receive federal transit funding should be rewarded for enhancing 15-minute neighbourhoods and for increasing affordable housing. Performance incentives could also be incorporated into infrastructure funding agreements with provincial governments. In early years, municipalities could receive technical support to plan for transit-oriented development, active transport, and affordable housing and be rewarded for performance. Over time, these practices would evolve into the new normal.

The time has come to build the homes of tomorrow in a smarter and more equitable way by making location efficiency a top policy and spending priority of the federal government when it comes to climate, housing, transportation and infrastructure. 

Carbon down. Community up.

Steve Winkelman is executive director of the Ottawa Climate Action Fund.

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