Natural Gas Technology Exclusions from Federal Greener Homes Grant

June 02, 2021

Dear Prime Minister,

This letter requests, on behalf of the members of the Canadian Gas Association (CGA), an amendment to the eligibility criteria of the Canada Greener Homes Grant (CGHG) to include natural gas technology solutions for Canadian homebuyers.

As presented last week, the CGHG fails to offer choice to Canadians in their energy options, focusing only on electricity. It excludes natural gas-fueled technologies and the use of gaseous infrastructure from the eligibility for financial assistance for Canadians undertaking energy efficient improvements to their homes. This exclusion occurs despite the fact that no changes are required to natural gas appliances for them to use net zero emission renewable natural gas (RNG), and the fact that most natural gas appliances are expected to be able to burn natural gas-hydrogen blends with minimal or no modifications. A project scope amendment to include efficient natural gas solutions could change this exclusion, and give Canadians the opportunity to choose, rather than be told, the technology options they can pursue.

As you may know, CGA and its members have been leaders in driving efficiency for many decades. In 2020, gas utilities invested over $250 million in energy efficiency programs. These funds offer significant leverage for the CGHG. Over many years, gas utility programs across the country have contributed to one of the largest single efficiency gains – the implementation of millions of high-efficiency furnaces – raising the average furnace efficiency from below 80% to over 90% today. These energy efficiency improvements have saved Canadian consumers thousands of dollars in fuel costs over the life of a furnace, while also reducing emissions.

The gas industry is a leader in driving continued performance improvements. This is most clearly demonstrated by our work on innovation, particularly through our Natural Gas Innovation Fund (NGIF), through which in the last four years we have funded over 50 cleantech projects with emission reduction solutions. Currently, through our recently announced venture fund (NGIF Cleantech Ventures), we are beginning to make equity investments in startup companies, including in high-efficiency technologies that would serve the objectives of the Government of Canada’s CGHG. The investments we are making offer opportunities to use what is Canada’s most reliable, cost-effective energy delivery system – the country’s 570,000 kilometres of gaseous energy infrastructure – even more effectively and efficiently, all while reducing emissions.

A specific technology example might help explain things here: gas heat pumps. This is a technology that can deliver significant cost and fuel savings without the cold weather efficiency and operating issues facing electric air source heat pumps. Natural gas heat pumps represent a new step change in efficiency – from over 90% today for furnaces to 130-140% for heat pumps. Further, gas-driven heat pumps are being designed with the capacity to use a variety of fuels including renewable natural gas (RNG) and hydrogen. Finally, gas heat pumps offer the elimination of refrigerant gases used in electric heat pumps and air conditioners, as well as the elimination of toxic working fluids such as ammonia used by absorption heat pumps, adding significant additional environmental benefits. The restricted eligibility requirements of the CGHG would exclude gas heat pump technologies and send a powerful and negative signal to the emerging gas heat pump market and its manufacturers.

We believe the CGHG, as it is currently proposed, is inconsistent with the objectives of the NRCan space and water heating roadmaps. As drafted, the criteria in the program signal to Canadians that the federal government is mandating the use of electricity systems and will offer taxpayer dollars to help citizens invest in electric technologies – technologies that will mean dependence on the electric system to the exclusion of other systems, despite the fact that the electric system is less reliable and usually more expensive.
The CGA does not understand why a more reliable, more affordable, energy pathway – gaseous infrastructure – would be excluded. We do not understand why choice is being taken way from Canadians. We do not understand why, after several statements (including statements from Ministers of the Crown) indicating that the government does not have an electrification agenda, it is in effect implementing one.

We hope this is an oversight, and that the program eligibility criteria can be amended. We ask the Government of Canada to revisit their program design and ensure emerging technology solutions are not arbitrarily excluded. We would be happy to work with the appropriate departmental officials to craft technology-neutral CGHG criteria that meet the needs of all Canadians.

Respectfully,

Timothy M. Egan
President and CEO, Canadian Gas Association
Chair, NGIF Capital Corporation

C.c.  – The Honourable Seamus O’Regan, Minister, Natural Resources Canada
– The Honourable Jonathan Wilkinson, Minister, Environment and Climate Change Canada
– Sarah Goodman, Senior Advisor, Prime Minister’s Office
– Zoe Caron, Senior Policy Advisor, Prime Minister’s Office

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