Vancouver and Quebec recently banned certain kinds of fossil fuel-based heating in new home construction. Similar — and, in some cases more extensive — bans are happening around the world, from Norway to New York City. The goal? To cut CO2 emissions from buildings by replacing fossil fuel burning with electric heating. But are such bans necessary? And what impact will they have on people who live in those cities? Here’s a closer look.
Where are fossil fuel heating bans happening in Canada so far?
At least two jurisdictions have implemented recent restrictions on fossil fuel heating:
This map shows the energy sources used for heating in different provinces in 2015. (CER/Statistics Canada)
Why are fossil fuels for heating being banned now?
During the recent United Nations COP26 climate summit in Glasgow, Canada and more than 80 other countries signed a Global Methane Pledge to cut emissions of methane — a greenhouse gas far more potent than carbon dioxide — by at least 30 per cent below 2020 levels by 2030.
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How would banning fossil fuel heating help Canada and the world reach net zero?
In 2019, buildings were the third largest source of greenhouse gas emissions in Canada, after oil and gas and transport.
Space and water heating represent about 85 per cent of residential greenhouse gas emissions and 68 per cent of commercial emissions.
A 2021 report from the Canadian Institute for Climate Choices on different ways to get Canada to net zero said its modelling consistently shows “electrification of heating as a necessary part of the transition to net zero in Canada’s building sector.”
It’s a strategy endorsed by the International Energy Agency (IEA), an intergovernmental organization affiliated with the Organization for Economic Co-operation and Development that’s focused on secure and sustainable energy.
The IEA recommended in May that bans on new fossil fuel boilers need to start being introduced globally in 2025 and that most old buildings and all new ones must comply with zero-carbon-ready building energy codes. That’s because the lifetime of heating equipment can be a couple of decades.
Local/municipal gas bans and state laws prohibiting restrictions on gas in the U.S. as of Jan. 29, 2022. (S&P Global Market Intelligence)
How would banning fossil fuel heating help to cut methane emissions?
Methane is emitted in the production of all fossil fuels, including coal and heavy oil, even if it isn’t collected for use in the process.
It’s also the main component — 95 per cent — of natural gas, the source of 52 per cent of the energy used to heat Canadian homes in 2018.
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Chris Bataille is an associate researcher with the Institute for Sustainable Development and International Relations (IDDRI), a think-tank based in Paris, and an adjunct professor at Simon Fraser University in British Columbia who researches decarbonization of the economy.
Bataille said the entire system is leaky right from the production wells to consumers’ stoves and furnaces. Eliminating methane from people’s homes would reduce leaks throughout the system.
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What is replacing fossil fuel heating?
In most cases, fossil fuel combustion is being replaced with electric heating. That can include more traditional but less efficient options, such as baseboard heaters and electric furnaces. However, there has been a big push to instead choose more efficient heat pumps. The Canadian Institute for Climate Choices report found that to drive deeper emissions cuts, the switch to heat pumps “would play an essential and growing role.”
Are similar bans being implemented in other parts of the world?
Yes. They’re most widespread in Europe,which imports 90 per cent of its gas, mostly from Russia, representing a strategic vulnerability beyond climate change itself.
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Some of the leaders include Denmark, which banned installation of oil-fired boilers and natural gas heating in new buildings in 2013, and is now subsidizing the electrification of older buildings, and Norway, which banned the use of oil heating in 2020 and has almost completely electrified its building heating.
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Meanwhile, in the United States, there are bans in dozens of municipalities. The largest is in New York City. It passed legislation in December that bans fuel-burning systems in new buildings and major renovations. The ban includes heating, hot water and cooking appliances, although there are exceptions for laundromats and commercial kitchens. It goes into effect on Dec. 31, 2023, for buildings fewer than seven storeys, and on July 1, 2027 for taller buildings.
Mike Henchen is the principal of the carbon-free buildings program at RMI, a U.S.-based think-tank focused on the clean energy transition. He said such policies are popular at the municipal level in the U.S. because cities want to take climate change action, and building codes are something over which they have jurisdiction.
Why is new construction being targeted?
New construction is being targeted largely because electrification of a new home is cheap and relatively simple, Bataille said. He estimates it would add between $5,000 and $20,000 to the cost of a home, which is “virtually nothing” on the scale of the total average Canadian home price of $720,850.
In comparison, retrofitting an older home could cost up to $100,000, he estimates.
Henchen said targeting new buildings also stops the emissions problem from getting worse by preventing the installation of new fossil fuel infrastructure. And it helps to expand the market and industry expertise for solutions such as heat pumps.
What is the natural gas industry’s response to bans?
The industry has lobbied hard against them. There are now state laws pre-emptively outlawing municipal gas bans in close to 20 U.S. states, eliminating one option for local climate action, Henchen said.
“These are certainly backed and encouraged by the gas industry, which is concerned about losing some of their market and especially some of their growth with new customers,” he added.
The Canadian Gas Association says it disagrees with bans on energy sources “because they take away customers’ ability to choose what is best for them, based on their needs and circumstances.” It told CBC’s What On Earth that they also kill opportunities for developing solutions such as renewable natural gas (RNG), hydrogen and carbon capture. RNG is derived from biological sources such as food waste from plants that absorbed carbon as they grew and therefore can be theoretically carbon-neutral.
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5:23FortisBC is proposing “renewable natural gas” for every new home connected to the gas system
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Enbridge Inc. says the company sees itself as a “bridge to a cleaner energy future,” and its approach is “to continue to provide people with the energy they need while taking steps to reduce the carbon content of the natural gas we distribute” through technologies such as RNG and hydrogen.
FortisBC, which delivers natural gas and electricity to customers in British Columbia, successfully lobbied for Vancouver to allow an exception for renewable natural gas in its new regulations. Doug Slater, the utility’s vice-president of external and Indigenous relations, said that will allow customers to gradually decarbonize using existing gas infrastructure. It aims to have 15 per cent of its gas supply from renewable sources by 2030.
Are these gas bans working? And are they enough?
“They definitely work in eliminating the burning of fossil fuels in new buildings,” Henchen said.
But both he and Bataille acknowledged that they’re not enough to decarbonize cities.
Henchen said governments also need to stop allowing gas companies to subsidize the expansion of gas infrastructure and the connection of new customers through existing customers’ bills (something that’s happening in Ontario). He said there are already proposals in Colorado and California that will require customers to pay the full cost of new gas connections.
Policies are also needed to electrify existing buildings, and gas bans alone aren’t the right solution, given the cost of retrofits, Bataille said. “We do need some sort of federal and provincial support for people to switch,” he said.
In the meantime, Bataille urges homeowners to think ahead about decarbonization of their heating systems. He suggests they look at hybrid gas and electric heat pump systems now and take the option to use renewable natural gas if the option is offered.
“Those kinds of things really do help — and they help build the market in the long run.”
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
Dollarama Inc.’s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector.
“It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.
“We will keep an eye on all retailers — like all retailers keep an eye on us — to make sure that we’re competitive and we understand what’s out there.”
Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets.
However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store.
The No Name stores being tested by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20 per cent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise.
Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar.
“All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,” he said.
Rossy declined to reveal how much of the chain’s sales would overlap with Loblaw or the food category, arguing the vast variety of items Dollarama sells is its strength rather than its grocery products alone.
“What makes Dollarama Dollarama is a very wide assortment of different departments that somewhat represent the old five-and-dime local convenience store,” he said.
The breadth of Dollarama’s offerings helped carry the company to a second-quarter profit of $285.9 million, up from $245.8 million in the same quarter last year as its sales rose 7.4 per cent.
The retailer said Wednesday the profit amounted to $1.02 per diluted share for the 13-week period ended July 28, up from 86 cents per diluted share a year earlier.
The period the quarter covers includes the start of summer, when Rossy said the weather was “terrible.”
“The weather got slightly better towards the end of the summer and our sales certainly increased, but not enough to make up for the season’s horrible start,” he said.
Sales totalled $1.56 billion for the quarter, up from $1.46 billion in the same quarter last year.
Comparable store sales, a key metric for retailers, increased 4.7 per cent, while the average transaction was down2.2 per cent and traffic was up seven per cent, RBC analyst Irene Nattel pointed out.
She told investors in a note that the numbers reflect “solid demand as cautious consumers focus on core consumables and everyday essentials.”
Analysts have attributed such behaviour to interest rates that have been slow to drop and high prices of key consumer goods, which are weighing on household budgets.
To cope, many Canadians have spent more time seeking deals, trading down to more affordable brands and forgoing small luxuries they would treat themselves to in better economic times.
“When people feel squeezed, they tend to shy away from discretionary, focus on the basics,” Rossy said. “When people are feeling good about their wallet, they tend to be more lax about the basics and more willing to spend on discretionary.”
The current economic situation has drawn in not just the average Canadian looking to save a buck or two, but also wealthier consumers.
“When the entire economy is feeling slightly squeezed, we get more consumers who might not have to or want to shop at a Dollarama generally or who enjoy shopping at a Dollarama but have the luxury of not having to worry about the price in some other store that they happen to be standing in that has those goods,” Rossy said.
“Well, when times are tougher, they’ll consider the extra five minutes to go to the store next door.”
This report by The Canadian Press was first published Sept. 11, 2024.
TORONTO – The U.S. Consumer Financial Protection Bureau has ordered TD Bank Group to pay US$28 million for repeatedly sharing inaccurate, negative information about its customers to consumer reporting companies.
The agency says TD has to pay US$7.76 million in total to tens of thousands of victims of its illegal actions, along with a US$20 million civil penalty.
It says TD shared information that contained systemic errors about credit card and bank deposit accounts to consumer reporting companies, which can include credit reports as well as screening reports for tenants and employees and other background checks.
CFPB director Rohit Chopra says in a statement that TD threatened the consumer reports of customers with fraudulent information then “barely lifted a finger to fix it,” and that regulators will need to “focus major attention” on TD Bank to change its course.
TD says in a statement it self-identified these issues and proactively worked to improve its practices, and that it is committed to delivering on its responsibilities to its customers.
The bank also faces scrutiny in the U.S. over its anti-money laundering program where it expects to pay more than US$3 billion in monetary penalties to resolve.
This report by The Canadian Press was first published Sept. 11, 2024.
