Photo credit: François Flibotte via Flickr
On November 5, the federal government tabled Budget 2026. At OCAF, we read it with an eye to figure out what it could mean for climate action in the City of Ottawa.
OCAF currently has a strong focus on home and building retrofits, affordable housing, low-carbon infill housing through our Fill it First program, and local energy resilience. The budget has meaningful measures for each of these. Some highlights are as follows:
Retrofits: support for households and apartment buildings
The budget confirms the federal plan, first announced in October, to support one million home retrofits in Canada. This includes a new National Heat Pump Rebate that will support up to 820,000 households to access rebates for cold-climate heat pumps: up to $10,000 for those below the median income and $2,000 for others. As a bonus, these rebates are stackable with provincial programs.
The program also includes long-awaited changes to rebate programs, including eliminating the energy audit pre-requirement and approval of payment within five days of submitting receipts. Since more than 80 per cent of heating systems are replaced only after they break down, fast approval means that a heat pump can be quickly substituted in place of a furnace. Under past programs, rebates often took months, shutting out households that couldn’t carry the cost in the meantime.
Additionally, CMHC and the Canada Infrastructure Bank will help residential building owners finance retrofits in 280,000 units over eight years, and a renewed Deep Retrofit Accelerator Initiative will guide the owners of larger buildings through complex retrofits, helping to increase their uptake.
These measures align with some of the recommendations OCAF made to the House of Commons Environment Committee last month. Still, these programs remain focused on homeowners or building owners, missing a large proportion of households that rent their homes. We still need capital support for non-market housing retrofits, private-market tenant protections tied to retrofit financing and help for older low-rise apartments that fall between programs.
Affordable housing: more non-market homes and room for gentle density
In an effort to further boost the construction of affordable housing, the budget adds $13 billion over ten years, starting in 2028-29, bringing Build Canada Homes’ total capital to $45 billion. The government’s aim is to build 200,000 across the country this decade, with at least 10 per cent allocated to Indigenous housing. Some of this investment will also go to the Canada Rental Protection Fund, which helps non-market community housing providers buy existing affordable (below-market) rental buildings, an important tool in Ottawa, where for every new affordable unit built, 31 are being lost.
The budget commits $1.5 billion over four years to prepare federal land for housing. With a large federal footprint in the capital, this could matter more for Ottawa than most cities, especially as building homes near transit helps us to grow inward rather than outward. At the same time, changes to mortgage insurance rules starting early in 2027 will make three- to fifty-unit buildings easier to finance. This measure supports the gentle density that underpins our Fill it First analysis, which found that housing more people on existing lots can cut emissions from new housing by up to 50 per cent.
The budget aims to triple non-market housing starts to 24,000 a year and to fund e-permitting for modern methods of construction, including panelization, that has the potential to reduce the carbon emissions associated with new builds. Supporting new, sustainable, non-market housing is part of OCAF’s work, and we believe these homes should be low- or zero-carbon and infill from the start. Otherwise, we risk locking in emissions, outdated technology, and car-dependent built form that is challenging to retrofit or change in the future.
Local energy resilience: a big bet on the grid
Electricity is the biggest-ticket energy and climate related focus in the federal budget, receiving about $8.7 billion over five years for Powering Canada Strong – which aims to double Canada’s electrical grid by 2050 – plus clean electricity and clean technology tax credits extended to 2040.
The budget commits about $4 billion over ten years to the Smart Renewables and Electrification Pathways Program (SREP), which funds renewables, storage and grid upgrades, including projects led by local utilities and communities.
A cleaner grid can make electrification much greener than fossil fuel use and makes a stronger climate case for cleaner consumer choices from heat pumps to EVs. To help build a cleaner, electrified economy, OCAF supports local district energy and decarbonization projects that strengthen community energy resilience. This includes our Kanata North Decarbonization Analysis with Hydro Ottawa and the Kanata North Business Association to identify pathways for a clean energy tech district. It is also why OCAF is supporting the Thumbs Up for Renewable Energy project, led by Community Action for Environmental Sustainability (CAFES) and the Ottawa Renewable Energy Co-operative to advance renewables and battery storage in rural Ottawa.
Electric vehicles: more chargers where they are needed most
Finally, the budget proposes $587 million over five years, starting in 2027-28, to renew the Zero-Emission Vehicle Infrastructure Program and support more than 55,000 additional EV chargers, plus $45 million for research on more affordable, grid-friendly charging. Charging remains a barrier for renters and people who rely on street parking, and public charging can cost two to eight times more than charging at home. To be equitable, the program should prioritize multi-unit buildings and neighbourhoods where charging is scarce.