Patience Required: Canada Greener Homes Grants and Loans

Evelyn Jacks

The red tape is significant, and the governmental processes are not ready. Unfortunately, that’s what your clients will find if they want to get a head start on energy efficient retrofits with new government assistance programs before the winter comes. The federal process involves several government departments and sharing of data that could also put clients at increased risk principal residence audits.  The help of a tax professional can be invaluable to access an interest free loan of up to $50,000, a $5000 grant and up to $600 to get a required home-energy evaluation.

Backdrop to the budget:  Recall that to help homeowners retrofit their home for energy efficiency, the 2021 Federal Budget proposed $4.4 billion over 5 years, starting in 2021-2022.  It is estimated this will help up to 200,000 homeowners complete deep home retrofits through grants of up to $5000 and interest-free loans of up to $40,000. 

For those interested in the $40,000 interest-free loan under these government programs, applications will be processed through Canada Mortgage and Housing Corporation (CMHC). Unfortunately, no further information has been made available by CMHC since the last update to the website on this on May 26.

However, there are a few steps to follow first:

• Get the authorized EnerGuide assessment. It appears you’ll need to get that by apply for the Canada Greener Homes Grant.
• This grant, however, is accessed through another department, Natural Resources Canada, which the government abbreviates to NRCan.Note, the website instructions:
  • Quoting for services.  NRCan warns prominently about unscrupulous solicitations from third parties (but don’t provide information about scrupulous ones).  Advisors may be able to help their older clients, especially, to steer clear of fraud.
  • Loan access.  NRCan doesn’t cross reference to the $40,000 interest free loan opportunity, but does mention  “Updates will be provided over the life of the initiative to keep homeowners informed (last update June 14). 
  • . It appears the required EnerGuide Assessment won’t be happening for a while.  The website notes:  “We are working on building a diverse network of energy advisors to provide career opportunities to all Canadians and to meet the need of our communities.”  The government will only supplement up to $600 of these costs.
  • 5000 Grant applications.  To get the $5000 grant, login to apply: 
  • Sharing of Client Data.  Note the sharing of data requirements and the potential tax cross-referencing for principal residence owners:
    • Required: Sharing EnerGuide Evaluation Data with Partners:In the event that another federal department, provincial/territorial or municipal government, or a utility company that has an agreement with NRCan offers a homeowner benefit based on the NRCan assessment, I authorize NRCan to provide my personal information directly to this party.
    • Required: Natural Resources Canada’s Use of Data for Statistical Analysis and Quality Assurance: The data collected in the electronic file will be provided to NRCan for the purpose of statistical analysis and quality assurance.
    • Required: Consent to be Contacted by Natural Resources Canada. I give permission to be contacted by Natural Resources Canada or its representatives by phone, email, or other electronic means with respect to my experience with the Canada Greener Homes Grant to inform future programs and policies related to energy efficiency. I acknowledge that I may withdraw my consent at any time by providing the required notice by sending an email to: nrcan.canadagreenerhomesgrant-subventionmaisonsvertes.rncan@canada.ca
    •   Property tax roll number and a declaration on whether or not this is  your principal residence is required. It is unclear whether this will affect the declaration of principal residence for tax purposes, which allows for a year-over-year declaration.  It is important to point out to clients that this is a cross-referencing opportunity for CRA for those purposes.
    • Not Required:Public disclosure of data:You are asked to complete this section whereby you chose whether or not you consent to publically disclose information about your EnerGuide evaluation. Your written consent allows NRCan to share and disclose your information on a publically accessible website that would provide information on your home’s energy use.
    •  Onus is on you:  Any consents continue until NRCan receives notice from the client that they have updated or withdrawn their consent to disclosure.  

Decisions your clients will want to make with you.  Help clients determine whether they want to wait for government assistance or move forward with retrofits without it.  Note the list of items that will qualify for assistance:

• Replacing drafty windows and doors.
• Replacing oil furnaces or low-efficiency systems with a high efficiency furnace, air source heat pump, or geothermal heat pump.
• Better wall or basement insulation and/or wall or roof panels.
• Installing a high-efficiency water heater or on-site renewable energy like solar panels.

Also, note the actual dollar amounts available for various retrofits; they are not 100% of the cost; here’s an example:

Eligible retrofits

Also note that all equipment must be purchased in Canada. Online purchases are only eligible if they are ordered from an online distributor in Canada. Online purchases are only eligible if they are ordered from an online distributor in Canada.

Bottom line. Unfortunately, it doesn’t appear that most homeowners will be able to get through the red tape soon enough in some areas of the country at least, to get this scheduled and done before winter 2022.  Homeowners will also want to consider whether they wish to be part of this data collection activity in assessing whether or not to sign up for the loan.

There are lots of ways to add value. Advisors may wish to discuss other ways to jump start energy conservation activity.  There may be an opportunity to leverage savings that are making little to no interest in non-registered accounts.  Alternatively, it may be smart to borrow for the home retrofit repairs and taking advantage of current low interest rates, especially if home values increase by more than the costs of borrowing. Those self-employed taxpayers who are writing off a portion of the home running a home-based business will want to know the value of their interest deduction, too, in making their decision.  

Additional educational resources: Join us at the September 23, 2021 Virtual CE Summit where Tax Compliance Issues – Personal, Corporate, GST and Payroll is on the agenda and you’ll have the opportunity to learn more about Audit Defence: Managing Risk in Compiling Financial Statements, GST and Payroll.