Energy Poverty in Canada

Canada is one of the world’s major producers of energy and one of its biggest users. Canada has a high energy intensity – the amount of energy used for a given level of output or activity.  This is due to Canada’s frigid temperature, dispersed population, cheap energy prices, and high level of living. Yet 6 to 19% of Canadian households are experiencing energy poverty (Riva et al. 2021).The livability of Canadian cities is being hampered by this difficult and complex problem. Policymakers can make progress on a number of these crucial issues and make sure we “leave no one behind” in the low-carbon transition by identifying and solving energy poverty.

What is Energy Poverty?

Energy poverty is defined as the experience of households and communities that struggle with meeting their home energy needs (Anon 2019, Anon n.d.; Riva et al. 2021). Home energy needs typically include heating and cooling of homes and electricity to power homes. In Canada, energy poverty is not yet formally and officially defined. However, it is most frequently described as having high home energy costs compared to the household income, and terms such as energy  affordability are typically used. In Canada, most households spend less than 3% of their after-tax income to cover their energy requirements. Households that spend more than 6% of their after-tax income on home energy services (or approximately twice the national median) are burdened by their home energy costs and are said to be living in energy poverty (Anon 2019).

According to Anon (2019), and Riva and al. (2021),  energy poverty is described using the following characteristics:

  1. Energy poverty across Canada is most prevalent in Atlantic Canada.

With 41% of the population living in energy poverty, the Maritimes have the highest rates in Canada. Prince Edward Island homeowners are struggling with high home energy costs. However, Ontario, the province with the largest population in Canada, has the highest rates of households that experience energy poverty around 1.1 million households.

Energy poverty rates across provinces in Canada

2. Energy poverty is both an urban and rural problem.

In Canada, rural households are more likely than their urban counterparts to endure energy poverty. This is often brought on by several circumstances, including larger size of homes in rural settings as well as higher transmission charges on utility bills. However, because most Canadians reside in cities, most homes who experience high energy costs are located in urban areas. Around 29.3% of households residing in rural areas experience energy poverty and 16.7% of households residing in urban areas experience energy poverty.

3. Households across different ranges of income experience high energy costs. 

Although there is a clear correlation between low-income households and energy poverty, many high home energy costs are a burden for households with moderate incomes as well. This is partly because energy poverty results from the combination of several factors, including household incomes, home energy performance, and access to networks of cheap energy i.e. sources like wind energy, as well as energy prices. Hence, a person with a median household income and a larger suburban home may experience high energy burdens, whereas a lower-income family residing in a more compact and efficient apartment building might not.

4. Characteristics of the home are important factors in shaping energy cost .

Home energy performance, which includes a building’s airtightness, insulation, and system efficiency, affects the energy use of the home. Due to this, families who reside in less energy-efficient homes will often spend more to heat and cool than equivalent homes with better energy efficiency. The possibility of households being burdened by high home energy costs depends on the age and kind of dwelling. People living in mobile homes and in houses built before 1960 are emphasized as having the greatest chance of being in energy poverty. However, in terms of the number of households, single family households (which accounts for 1.8 million households) have the most significant energy cost burdens.  

Recommendations to address energy poverty in Canada (Efficiency Canada 2021)

1. Target least efficient and low-income households in your energy poverty reduction plan. The federal government can significantly reduce energy poverty by supporting the long-term solution of increasing energy efficiency as a crucial component of their policy mix. Through thorough retrofit programs for the most inefficient and low income Canadian houses, other national targets can be met such as reducing GHG emissions and making sure vulnerable populations are not left behind in the transition to a net-zero future.

2. Dedicate funding for low-income households and mobilize provincial action. The federal government can allocate funds for low-income households and set performance goals when spending money on energy upgrades and climate action. Creating federal climate funding can encourage provinces to make larger commitments to spending on initiatives to help vulnerable households become more energy efficient and less energy poor.

3. Leverage existing delivery capabilities and complement them to achieve greater savings. Creating a national weatherization assistance program dedicated with federal funding can make use of the delivery capabilities of provincial low-income energy efficiency programs. This program can support eradicating energy poverty, reducing emissions, and achieve deeper energy savings for all Canadians.

 References 

Anon. 2019. Energy Poverty in Canada: A CUSP Backgrounder.

Anon. n.d. “The Energy Poverty and Equity Explorer.” Retrieved September 29, 2022 (https://energypoverty.ca/).

Efficiency Canada. 2021. “A National Energy Poverty Strategy for Canada? – Efficiency Canada.” Retrieved September 29, 2022 (https://www.efficiencycanada.org/national-energy-poverty-strategy/).

Riva, Mylene, Sophie Kingunza Makasi, Philippe Dufresne, Kimberley O’Sullivan, and Megan Toth. 2021. “Energy Poverty in Canada: Prevalence, Social and Spatial Distribution, and Implications for Research and Policy.” Energy Research & Social Science 81:102237. doi: 10.1016/j.erss.2021.102237.

Elena Edo
2 Thoughts on Energy Poverty in Canada
    leslie fotso
    3 Oct 2022
    11:47am

    Interesting article! I would like to know the reason why Atlantic Canada has such a high percentage of its population experiencing energy poverty?

      Elena Edo
      4 Oct 2022
      1:16pm

      Atlantic provinces face challenges that other provinces do not such a limited access to natural gas as an affordable home heating alternative, and widespread access to hydro to provide clean electricity. These regional differences lead to higher transition costs for Atlantic Canadians. And, as the cost of living is rising rapidly across the Atlantic region, paying more for clean electricity isn’t a realistic option for many.

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