Canada’s construction sector operates within a fast-evolving policy backdrop aimed at decarbonizing buildings, reducing operational energy use, and aligning new development with broader climate commitments. At the same time, other construction objectives, such as affordability of new housing stock and the speed of development, are increasingly prioritized by all levels of government. In different contexts, these objectives either harmonize or conflict, and in some instances have prompted the reconsideration or rollback of certain green construction requirements. This article considers recent developments in green construction at the federal and select provincial and municipal levels.
Federal Updates
The Federal Government’s green construction strategy is built on two complementary tracks: (a) the National Building Code of Canada (“NBC”) and National Energy Code of Canada for Buildings (“NECB”) and (b) federal policy instruments that use financial incentives to impact procurement and financing, as articulated in the Canada Green Buildings Strategy (“CGBS”). CGBS has the stated goal of promoting greener, more energy efficient and affordable homes and buildings. The NBC is the core model building code, which addresses nearly all aspects of many buildings’ construction. The NECB is a stand-alone, specialized model code that focusses on energy regulation for buildings that are not governed by the NBC, but is referenced in the NBC where applicable. For instance, provisions in Section 9.36 of Division B of the NBC address the environment objective for housing and small buildings, whereas the NECB captures all new buildings, additions, and certain alterations, including large and multizone buildings.
Since their introduction, the NBC and NECB have moved towards heightened standards for energy efficiency and other green construction elements. The latest version of both documents, published in late 2025, continues that trend.[1] For example, the 2025 NBC introduces both performance and prescriptive requirements, within a framework of gradually increasing reduction levels, to establish limits for operational greenhouse gas emissions resulting from the supply and consumption of energy used by the building, as determined at the time of design. The 2025 NECB introduces performance requirements to establish limits for operational greenhouse gas emissions from the supply and consumption of energy used by the building. The Federal Government has offered other indications that strengthening green construction remains a priority, providing a target that by 2026, additional climate change resiliency considerations will be incorporated into the National Building Code.
On the financing front, CGBS provided or currently offers several programs that promote green construction practices, including the Canada Greener Homes Grants program, the Canada Greener Homes Loan, and the Canada Greener Homes Affordability Program, launched in Budget 2024. These programs are designed to address the dual objectives of green construction practices and affordability by offsetting the cost incurred by homeowners. For instance, these programs supported the installation of heat pumps in homes heated by oil through grants and loans that led to over 280,000 new heat pumps being installed since 2020. Other homeowners used the program to fund retrofits improving windows and doors, home insulation, and air sealing—thus decreasing energy loss in those homes.
In Fall 2025, the Federal Government announced the creation of Build Canada Homes, an agency with an initial capitalization of $13B and the mandate to accelerate housing development across the country. As part of that mandate, Build Canada Homes intends to invest in modular and factory-built housing, generally considered a greener method of construction.
Provincial and Municipal Updates
Ontario
One of the more significant changes in recent years has been Ontario’s adoption of the NBC and NECB through amendments to the Building Code Act, 1992, S.O. 1992, c. 23 along with the document “Ontario Amendments to the National Building Code of Canada 2020”. Ontario-specific modifications have been made to the NBC, including heightened mandatory energy efficiency levels, mandatory CO2 emission reductions, and stronger water conservation requirements for plumbing systems. The NECB, as amended in 2020, also requires heightened thermal performance of the building envelope.
On the other hand, some of the more aggressive measures to promote green construction are being reexamined, including the long-standing requirement by the City of Toronto for certain buildings to be built with “green roofs”, meaning a building roof partially or fully covered with vegetation. In October 2025, Ontario released a public consultation which asked the public to weigh in on municipally enforced “enhanced development standards” that included requirements for bioswales, permeable pavement, and other vegetative elements, or direction around matters such as native tree planting, soil volume, and bicycle parking. Subsequently, by way of Order in Council 1374/2025, the province repealed the section of the City of Toronto Act, 2006, SO 2006, c. 11, Sch A, which authorized the City of Toronto to have a by-law requiring and governing the construction of green roofs, ending the requirement after approximately 15 years. The province’s interest in this matter indicates at least a perceived tension between the goals of green construction and increasing the pace and affordability of construction.
Western Canada
In Spring 2024, Alberta adopted the then latest version of the NBC, with modifications for the provincial context and the NECB. Section 9.36 of the modified NBC provides that Tier 1 is the minimum energy efficiency standard for housing and small buildings. The Tier system for energy codes was introduced at the federal level in 2022 and designed as a measure to move construction towards net zero. There are five tiers, with 1 being the lowest and 5 being the highest, fully net zero. Alberta has reserved the right to determine the timeline on which it will adopt higher tiers and as of today has not increased the mandatory tier level. Functionally, industry experts suggest that the adoption of the Tier 1 standards in the modified NBC is not expected to significantly alter construction practices. For example, BILD Alberta notes that the increase to construction costs is likely to be less than half a percentage point as Tier 1 is substantively similar to the previous code in Alberta. Notably, in many cases Alberta’s adoption of the NBC and NECB allows municipalities to adopt stricter local energy efficiency requirements.
In Alberta’s largest cities, Calgary and Edmonton, no green construction bylaws akin to pre-2025 Toronto exist and neither city has adopted stricter local energy efficiency requirements, though Calgary does have a sustainable building policy that guides city-owned facility construction.
Other Western municipalities, however, have taken more stringent approaches to enforcing green construction. In 2022, the City of Vancouver approved the Greenhouse Gas and Energy Limits Bylaw, which aimed to reduce emissions from the largest building sources (heating and hot water), thereby regulating greenhouse gas emissions from larger buildings. Reporting under that bylaw has been required since June 1, 2024, for owners of commercial buildings over 100,000 square feet, and since June 1, 2025, for all commercial buildings over 50,000 square feet and multi-family buildings over 100,000 square feet. On June 1, 2026, owners of multifamily buildings will be subject to the same reporting requirements. The bylaw also sets limits on the intensity of greenhouse gas emissions and heat loss for certain classes of buildings, which are also set to take effect in 2026.
The City of Vancouver has also updated the Vancouver Building By-law, instating higher energy performance and sustainable energy source requirements for single family and small multi-family residential buildings..
Green construction is therefore incentivized through both rules governing the actual construction process, and the fact that building performance is subject to reporting requirements. Owners should consider the outcomes of their current construction plans to ensure that their future buildings will comply with the greenhouse gas emissions and heat loss caps, understanding that such information is subject to annual disclosure. Together with the availability of Federal programs offering grant funds for green construction retrofits and new construction, the regulatory environment in Vancouver significantly prioritizes green construction.
Conclusion
While green construction continues to develop in Canada, more stringent efforts have faced significant setbacks. At the municipal level, measures that require green construction in city-owned buildings appear to still have significant uptake, however, attempts to impose green construction requirements on private development have been curtailed by higher levels of government.
At the same time, participants in the construction industry are still incentivized to adopt and practice green construction methods. Significant investment of public funds into infrastructure, as well as residential and commercial development, comes with requirements for such construction to be performed in line with green construction practices. From a market perspective, buildings certified by organizations such as LEED or BOMA BEST tend to have lower operating costs, incentivizing owners to seek out green construction methods at the construction phase. The bottom line is that notwithstanding certain setbacks, green building methods continue to gain traction in the construction industry, particularly when such measures do not conflict with other policy objectives surrounding affordability and faster timelines to completion.
[1] Note that no Canadian provinces or territories have, as of the date of publication, adopted the 2025 version of the NBC.