By Alex Whalen and Elmira Aliakbari from the Fraser Institute
The housing market is top of mind for many Nova Scotians these days, with widespread concern over availability and affordability. Unfortunately, new federal “energy efficiency” regulations are about to make the problem even worse.
The regulations, part of the Trudeau government’s emission-reduction plan, mandate several different types of energy efficiency requirements in building construction such as more efficient heating and cooling systems, lighting and refrigeration. The scale of the requirements is massive—according to Ottawa, new homes must use 61 per cent less energy by 2025 (from 2019 levels), and 65 per cent less by 2030, while commercial buildings must use 47 per cent less by 2025 and 59 per cent less by 2030.
While the term “energy efficiency” may seem to imply Canadians will save money, this policy will in fact do the opposite. Government-mandated construction requirements come with a steep cost for homeowners. According to a new study published by the Fraser Institute, these regulations will add an estimated $30,677 to the cost of a new home in Nova Scotia by 2030—at a time when record population growth and stagnant housing supply combine to create record-high housing prices.
Unfortunately, the effects of this policy will not be limited to higher housing prices. According to the same study, these new regulations will shrink the economy in Nova Scotia by an estimated 1.6 per cent by 2030, hindering provincial prosperity more broadly. To make matters worse, these regulations will do very little for the environment, reducing GHG emissions by just 0.4 per cent by 2030. Put differently, the gains from these new federal regulations will be almost meaningless, while substantially increasing the price of a home.
Finally, because many older higher-income Nova Scotians already own homes, and the costs of the new regulations primarily affect new construction, the costs will likely fall disproportionately on younger lower-income Nova Scotians looking to enter an already-difficult housing market.
At a time when many Nova Scotians worry about their ability to afford a home, the Trudeau government is about to make things worse with new regulations that will do little for the environment, make homes more expensive, and harm the provincial economy.
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