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Vancouver’s Plan Will Hurt Residents and Local Businesses

Co-authored by Greg D'Avignon and Jock Finlayson

Affordability is a key challenge for people residing in the City of Vancouver (COV).  Yet, earlier this week, the COV’s Green Buildings Policy for Rezoning[1] (the Policy) came into effect. Once implemented, it is sure to exacerbate this problem, not just for citizens of COV but for the province as a whole as well as for the surrounding municipalities of Metro Vancouver.  The policy effectively bans the use of natural gas in new buildings.  It also sets the stage for Vancouver to squeeze out natural gas as an energy source for existing buildings and facilities over time.

As natural gas is the most cost efficient and accessible energy source available for many uses, we believe Vancouver should revisit this matter.  COV has been slowly taking steps to restrict natural gas demand by introducing policies that limit the use of natural gas fireplaces, furnaces and boilers.  Eliminating access to an efficient, affordable form of energy with the infrastructure already in place is an unwise decision for Vancouver and its residents.    

The City’s latest policy is a part of a plan approved by Council[2] to have no operational GHG emissions by 2030.  In simple terms, this means natural gas, eventually, will be banned from use in all buildings across the board, since it unavoidably produces GHG emissions.  What the COV intends to do is contrary to provincial and federal government policy and runs directly counter to concerns over affordability in Vancouver.  Further, many leading jurisdictions around the world are promoting natural gas as one way to advance progress on climate and facilitate the shift to a lower carbon economy.  BC itself generates substantial tax and royalty revenues from natural gas extraction that support cities like Vancouver through fiscal and capital transfers from the province – transfers that benefit everything from transit to social housing and Infrastructure.

The COV’s new policy requires that GHG emissions be reduced in new rezoned buildings by 50 per cent or more. Buildings like high-rises, retail shops, hotels, schools, hospitals and offices rely on natural gas for hot water, heating, fireplaces, pools and other appliances.  A 50 per cent reduction in GHG emissions implies that all new buildings will be restricted to little or no use of natural gas.  If electricity is the replacement energy source, FortisBC has calculated that a family of four will see a $250 to $1,500 annual increase in their utility bills[3], adding to the financial burden on households and further squeezing businesses in this expensive city. 

People who live outside Vancouver’s municipal boundaries will be impacted by Council’s decision too.  Our natural gas infrastructure is an integrated system crossing municipal boundaries, with the costs to maintain the system of pipes, pumps and services borne by all customers.  If the COV moves forward and eliminates this energy source in Vancouver, approximately 100,000 fewer customers will be sharing these costs; the obvious consequence is higher rates for everyone, regardless of what community they call home.

The Business Council of BC supports sensible, cost-effective measures to reduce GHG emissions.  For nearly ten years, the province and business have been leaders in developing energy efficiency programs, lowering carbon emissions from industry and transportation, and investing in technologies and other programs to reduce emissions and lessen the environmental impact of industrial and human activity.  This, coupled with the highest carbon price in North America, has demonstrated BC’s leadership – leadership that has already come at a cost to the province’s industrial and export competitiveness.

The COV bylaw also ignores the broader context.

  1. BC has one of the most sustainably extracted and largest natural gas reserves in the world.  Natural gas has been a significant contributor to the tax base and to the province’s exports. 
  2. Millions of BC families and many businesses, schools, hospitals and social service organizations rely on natural gas for their own consumption needs, including hundreds of thousands in the City of Vancouver. 
  3. Energy development and distribution in Canadian jurisdictions, including BC, is based on almost a century of public utility design and regulations designed to ensure that the consumer is well served, utilities are appropriately regulated, and prices are the lowest possible while allowing a reasonable rate of return for suppliers within shifting market environments.  This model has generally worked well.  It is put in jeopardy when individual municipalities seek to dictate energy policy and energy use – issues that properly belong within the purview of senior levels of government.

The COV’s (effective) natural gas ban will impact affordability and raise energy costs for residents and businesses in the City, with small businesses, institutions like hospitals and schools, and people at the lowest end of the income scale proportionally paying more; that’s the hard truth and unfortunate bottom-line.