Ontario cities are preparing buildings for the climate crisis. The Ford government is set to make that more expensive

Summary

• With the climate changing and energy demands increasing, many cities set out energy efficiency and other green requirements for new builds.
• Across Ontario, cities have also created grants and other programs to help home and business owners retrofit older buildings with things like heat pumps or insulation.
• The Ford government’s Bill 98 will prevent municipalities from requiring new builds to be green, meaning a whole new generation of buildings could be added to the retrofit backlog.

Over the past decade, Ontario municipalities — and the taxpayers who foot their bills — have spent tens of millions of dollars retrofitting buildings to stave off the worst effects of climate change.

Local governments across southern Ontario have given homeowners grants to transition houses away from natural gas, protect them from extreme temperatures and safeguard their basements from flooding. Businesses have used such funds to cut office energy consumption, reduce the risk of birds crashing into their windows and increase access to nature around their buildings. 

For cities, the idea was simple: fortify structures built before the climate emergency and create rules that ensure new development is prepared for it to worsen. 

At the local level, there’s been broad demand for the initiatives, and positive outcomes as a result. 

In Kingston, Ont., one homeowner lowered the annual emissions of their 1,500-square-foot semi-detached house by 91 per cent by replacing windows, installing a heat pump and insulating the attic, basement and exterior walls. And that translates directly to lower energy bills.

In Toronto, more than 4,000 development projects have met the city’s green standards, which have been in place since 2010. These rules mandate that each building has shared outdoor spaces that aren’t covered by concrete or asphalt, but permeable coverings that absorb stormwater to prevent flooding, among other eco-friendly features. 

Yet despite the climate imperative and public interest, the ability of cities to incentivize greener builds like these is about to get a lot more complicated — and costly in the long run.

Earlier this month, the Doug Ford government introduced new legislation that would block municipalities from taking action to ensure future development is sustainable. The government’s Bill 98, the Building Homes and Improving Transportation Infrastructure Act, prevents Ontario cities from requiring developers to include electric-vehicle parking spots or bird-friendly windows, among other things. If the majority Progressive Conservative government passes this bill, local governments won’t even be able to require trees on residential properties.

The Narwhal spoke to four officials who serve in the planning or environment departments of Ontario cities, all of whom asked for confidentiality as they weren’t authorized to speak on the issue. All four said their teams are still analyzing the impacts of Bill 98 to properly respond to the government’s proposal, but that ultimately, they expect local budgets to absorb the likely higher — and unavoidable — costs of deep retrofits. 

“Anything that we require as a standard to protect the environment or reduce emissions through the planning process, we could no longer do if this bill passes as is — including requiring developers to make sure there’s a tree in every yard,” one rural Ontario official said in an interview. “That essentially means that we can’t hold developers accountable, and we’ll have to spend money ourselves to fix what they don’t do. So brace for impact, I guess.” 

Municipal green standards developed in place of scant provincial requirements for building efficiency

For more than a decade, green standards were adopted in either mandatory or voluntary forms by Ontario cities including Toronto, Mississauga, Halton Hills, Markham, Vaughan and Richmond Hill. 

Cities across Durham Region, including Whitby, Ajax and Pickering, for example, have standards for private development that promote green roofs, urban forest protection, stormwater management, renewable energy systems and green spaces. These have been implemented as Durham as a whole develops a green development program for new builds, in an effort to have 100 per cent of new housing achieve net-zero emissions by 2030. 

These cities introduced their standards in part because the provincial building code hasn’t been updated since 2017 and makes no mention of eco-friendly features. It came under scrutiny from the provincial auditor general in 2020 for not being strong enough to substantively reduce greenhouse gas emissions. 

Buildings are the source of 24 per cent of Ontario’s emissions, mainly from the use of fossil fuels like natural gas for heating. And these emissions are likely to increase as the province encourages faster construction to support a rapidly growing population, without requiring energy efficiency. 

If Bill 98 passes, developers would only be held to that now decade-old rulebook on building standards. Municipalities would be thwarted in their efforts to keep new building emissions down. The province recognized this in its own analysis of the changes, stating that ending green standards will result in not just “shifting burden from the development sector to municipalities for sustainability measures” but “unintended environmental impacts.”

“Unfortunately, right now, the only way that municipalities can really afford to build those kinds of infrastructure projects is by borrowing money, incurring debt and then paying it over time … or through development charges,” Markham Mayor Frank Scarpitti said last week, explaining why he opposed the bill’s provisions on green standards. 

“We do not have to turn our back on environmental standards,” Scarpitti said. “The environmental standards can actually be set, and then those projects will meet them.” 

Cities have already been trying to soften the blow of energy efficiency costs on developers. Local green standards are often tied with financial incentives to urge developers to make the shift to greener construction. In 2021, the City of Kingston created a program that offers property tax rebates to builders and private developers who voluntarily construct buildings that strive for net-zero emissions. 

Toronto’s green standards offer a partial refund on development charges for buildings that meet their rules. The more rules a building meets, the higher the refund. Since its inception, this scheme has delivered almost $120 million in refunds to developers.

The success of these programs has inspired other Ontario municipalities to begin working on their own green standards. That includes Hamilton, Ottawa, Waterloo Region, Guelph, Clarington and Oshawa. But their efforts have been paused since Bill 98 was proposed, because it makes building green more complicated.

Ottawa officials, for example, have noted the bill would prevent municipalities from even asking developers to include electric-vehicle spaces in their buildings, even though a process for putting them in place has already been developed.

In an April 8 memorandum, Marcia Wallace, general manager of planning, development and building services for the City of Ottawa, said staff would explore “enabling approaches” like partnerships with the private sector and financial incentives. It did not note whether those incentives could come from taxpayers’ dollars.

Axing green standards means Ontario municipalities have to spend more taxpayer money on building retrofits 

It’s difficult to quantify the cost of building sustainably from the get-go, which depends on size, location and other factors. One study from The Atmospheric Fund in 2012 and another from City of Toronto staff in 2017 suggest the cost of construction would increase by two to four per cent, depending on the building type and community. 

What’s more certain is that retrofitting existing buildings to both lower emissions and withstand some of the symptoms of climate change is a lot more expensive than building green from the start. One Canadian green homebuilder says retrofits can be 50 per cent more expensive. A 2023 study by United Way Greater Toronto estimates a deep energy retrofit of an existing apartment building in Toronto would cost $200,000 per unit.

And all of that is cheaper than leaving homeowners to rebuild after severe flooding. Flood insurance premiums in Ontario have jumped up to 26 per cent in the last two years, according to a new report by a Canadian real estate firm and insurance-rate aggregator.

Many Ontario municipalities are already spending millions to retrofit public buildings and incentivize companies and homeowners to do the same. Now, rather than being able to shrink that budget over time as modern buildings are made more resilient, cities are looking at an exponential growth in cost. 

Guelph and Kingston, for example, have robust home retrofit programs that have been financed to the tune of millions of dollars with support from the federal government. Residents have been eager to take them up on it. 

In April 2022, Kingston’s local retrofit program had to be paused due to “overwhelming interest” resulting in a lengthy waitlist. As of October 2024, it had supported 250 projects. These programs, and several others aimed at lowering greenhouse gas emissions, fall under the city’s climate leadership division, which in 2025 had a budget of more than $800,000. That works out to $11 on the average tax bill, according to the budget. For a city of 130,000 people, with a limited tax base, that investment is paying off. 

In Guelph, 637 households have registered for this kind of funding and 448 have either completed their retrofits or are currently doing so.  

In Durham Region, more than 1,600 residents have signed up to lower energy consumption and reduce emissions. By 2023, almost 200 retrofits had been completed. In 2024, the region expanded the program to include commercial buildings. 

One Greater Toronto Area official said they expect demand for retrofits to increase if Bill 98 passes: “If there’s no way for us to ensure development is done according to the needs of the climate emergency, I imagine we’ll have more buildings to retrofit than we can handle in the very near future.”

The costs of doing so will ultimately be borne by taxpayers, especially as the province is still in the process of amending its own building code to acknowledge the realities of how climate change will affect buildings across Ontario.

“The building code will be updated. We’re going to go through it section by section,” Ontario Housing Minister Rob Flack told The Narwhal last week. “With respect to green standards, we’ve asked various stakeholders to be part of the process. … They’ll be involved in the process of redefining the building code.”

When pressed on the timeline of this process, Flack said, “ASAP.”

“We’ve started the process of getting people in place,” he said. “It’s going to take a while. It’s a big document.”