Budget 2026 expands building investment, but a stronger focus on performance is needed

The Canada Green Building Council (CAGBC) welcomes the investments in housing, energy efficiency and clean electricity announced in Budget 2026.

The budget also supports the continued development of sustainable finance tools to mobilize private capital toward better buildings. However, realizing the full value of these measures will require stronger alignment to better building performance and access to reliable building data, ensuring that public and private investments deliver housing and buildings that are affordable to operate, energy efficient and resilient over the long term.

Budget 2026 proposes an additional $13 billion over ten years for Build Canada Homes, bringing its total capitalization to $45 billion and supporting the delivery of 200,000 homes over the next decade. The budget also aims to triple annual non-market housing starts while expanding supportive, transitional and Indigenous housing and end homelessness within ten years. This is an important and ambitious goal. However, success must be measured not only by the number of homes built, but also their quality and long-term affordability.

Every new home supported by public investment should be resilient, healthy, energy efficient and affordable to live in Build Canada Homes can advance this objective by making climate resilience, energy efficiency, and verified performance integral to its funding decisions, helping to lower residents’ utility costs, manage operating expenses for non-profit housing providers, and protect public investments over the long term.

Budget 2026 also supports building electrification and energy efficiency. CAGBC welcomes the renewal of the Deep Retrofit Accelerator Initiative, which CAGBC participates in through Purpose Building and Retrofits Now. Extending this program with and additional $107.1 million over three years will support much-needed deep retrofits in commercial, institutional and mid- and high-rise multi-unit residential buildings. The budget also extends the Clean Technology and Clean Electricity investment tax credits to qualifying investments available for use before 2041. Together with the National Electricity Strategy, these measures can help attract private investment, strengthen grid capacity and provide the clean, reliable electricity needed as more buildings and industries electrify.

The budget reaffirms ongoing work on the independently developed Made-in-Canada sustainable investment guidelines, with draft criteria for buildings expected by the end of 2026. CAGBC is contributing to this work as a member of the technical expert group . The proposed Sustainable Bond Framework, which will align federal green and transition bond issuance with the guidelines, can help demonstrate their use and mobilize capital toward credible investments. However, the government’s broader approach to climate disclosure may remain voluntary, potentially limiting the consistency and comparability of information available to investors and financial institutions.

Despite these investments, a significant gap remains around building performance and access to reliable, consistent building data. Public investments through Build Canada Homes and retrofit programs should be supported by clear performance expectations and the ability to verify results. At the same time, investors and financial institutions need comparable data to apply Canada’s sustainable investment guidelines, assess risk and direct capital toward credible green and transition projects. Strengthening this foundation will help ensure that new and existing buildings are affordable to operate, energy efficient and resilient over their full life cycle.

“Budget 2026 makes important progress, supporting the development of the sustainable taxonomy for buildings and finance tools to direct capital toward credible green investments. But on housing and retrofits, the budget falls short of tying public funding to measurable building performance. This impacts reducing utility bills for Canadians, protecting public health from a changing climate, lowering operating costs and creating long-term value for building owners. From sustainable finance to housing, investors and taxpayers need the same things: credible data and measurable results that ensure every dollar delivers value.” Thomas Mueller, President & CEO, CAGBC

CAGBC will be diving deeper into the budget over the coming weeks, but remains ready to work with governments, industry and the financial sector to embed these outcomes in the implementation of Budget 2026.