Industry group says City of Vancouver natural gas limits drive up housing costs | Daily Hive

Industry groups say City of Vancouver's energy rules limiting natural gas use hurt housing affordability

Example of a modern hot water boiler that uses natural gas. (Kinek00/Shutterstock)

Business and industry groups are rallying behind Vancouver mayor Ken Sim’s proposal to amend some of the City of Vancouver’s natural gas restrictions in building systems, asserting that it would reduce housing and operating costs for homeowners, renters, and small businesses by scaling back some energy regulations imposed by the municipal government.

The BC Coalition for Affordable Dependable Energy (BC CADE) has issued a strong endorsement of a member motion by Sim that would review the City’s housing and energy requirement policies and repeal a bylaw restricting the replacement of natural gas hot water systems.

That bylaw was enacted in January 2026, and its applicable restrictions expanding the limitations of natural gas use in these building systems would begin on Jan. 1, 2027.

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The coalition says the proposed changes would help address affordability pressures at a time when housing and living costs remain high across Metro Vancouver.

“This is one of the most important motions on housing affordability and reducing costs for homeowners, renters and small businesses that Council has seen in this term of office — and it’s critical that it be passed,” says Bill Tieleman, director of the BC CADE, which represents over 300,000 people through its business, labour, and community members.

According to the coalition, one of the biggest financial impacts would come from restoring consumer choice for replacement water heaters.

The group argues that allowing residents to continue using natural gas systems instead of requiring electric-only replacements could save homeowners and strata buildings thousands of dollars over time.

“If passed, it will save tens of thousands of homeowners and renters literally thousands of dollars per home in the years ahead simply by allowing choice when existing natural gas water heaters need to be replaced, instead of imposing electric-only water heaters,” said Tieleman.

Industry groups are also supporting the motion’s proposal to pause enforcement of the City’s Energize Vancouver bylaw while staff conduct a broader affordability review. The coalition said current rules requiring strata condominium buildings to file annual energy-use reports have created added costs with little benefit.

“And the other measures proposed — pausing the Energize Vancouver program and ending the expensive and ineffective imposition of regulations forcing strata condominiums to produce annual reports on their use of energy — will also save thousands of dollars for every strata condominium building across the city,” continued Tieleman.

BC CADE also criticized what it described as a growing patchwork of municipal energy rules across British Columbia, arguing that different local standards increase construction costs and complicate development.

“This proposed Vancouver by-law would sensibly align the city’s regulations and policies with those of the province, using an affordability lens to ensure they do not unnecessarily add to the cost of building needed housing and businesses,” said Tieleman.

“Reducing costs, delays and duplication will all help reduce new construction and ongoing operational costs for homeowners and businesses alike.”

The coalition linked the proposal to broader economic pressures and noted that both the federal and provincial governments recently removed carbon taxes on consumers, including residential natural gas users.

“It’s a welcome recognition that the world has changed and that affordability must be the priority for every level of government,” said Tieleman.

The organization represents a wide range of business and labour groups, including the BC Chamber of Commerce, Greater Vancouver Board of Trade, Surrey & White Rock Board of Trade, Canadian Federation of Independent Business, Restaurants Canada, and dozens of construction and trades organizations.

Sim’s motion, which will be considered by City Council in a public meeting this week, directs City staff to review Vancouver’s building and energy regulations “through an affordability lens” and identify rules that may be increasing housing costs or slowing development.

The proposal also calls for City staff to report back with recommendations to align more closely with provincial building standards and eliminate regulations that add “cost, delay, or complexity without a compelling local justification.”

The City’s gradual implementation of natural gas restrictions in building systems has been highly controversial and divisive. This general direction, part of an aggressive climate action strategy, was initially made by the previous Vision Vancouver’s governing majority in City Council more than a decade ago.

Since January 2022, as part of the gradual rollout of the policies, the City has also required low-emission (electric) equipment for space and hot water heating in new low-rise residential buildings.

City staff were initially directed by City Council in July 2024 to draft policies that restore the ability for natural gas heating in new home construction, with City Council at the time narrowly passing a member motion by Montague in a 6-5 vote.

However, in November 2024, when City staff returned with the requested policy recommendations, City Council effectively moved to continue its natural gas ban for the heating needs of new homes in the city, following a 5-5 tied vote that rejected any deviation from policies. Prior to that decision, City Council heard from about 140 public speakers.

Efforts to pivot from natural gas have led to a far greater dependency on electricity. At the same time, the province’s electrical grid is increasingly under strain from escalating demand, due in large part to not only population and economic growth but also the accelerated transition from fossil fuel-powered building systems and transportation to electrical systems, including the use of water boilers and space heating based on electrical systems and battery-electric vehicles.

Even though the new Site C hydroelectric dam is now operational, BC Hydro is making extraordinary short- and medium-term investments in supporting new wind power projects, as there is a growing need for even more power before the end of this decade. This is in addition to major investments in upgrading substations and transmission lines across the province. As well, this spring, there has been discussion of looking at considering other options of generating more power, including an additional dam on the Peace River — in addition to Site C.

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