GUEST SUBMISSION: Across Canada, governments are accelerating climate targets and tightening building standards. The 2020 National Building Code and National Energy Code for Buildings are moving toward a requirement that all new buildings be net-zero energy ready by 2030.

British Columbia’s own regulatory roadmap goes further, with most municipalities now requiring new projects to meet upper tiers of the BC Energy Step Code, and many are adopting the Zero Carbon Step Code for large buildings. These shifts are essential in a country where buildings account for roughly 13 per cent of national greenhouse gas emissions, according to Canada’s official inventory.

But as requirements increase and timelines compress, they raise a central question: can we meet ambitious sustainability goals while keeping projects financially viable for developers and the communities they serve? This tension is becoming one of the defining issues for Canada’s construction sector.

Facing real cost challenges 

Statistics Canada’s building construction price indexes show ongoing cost pressures in the sector, with residential building costs up 3.3 per cent year-over-year across major urban centres (and with past years showing significantly higher escalation than that). Although material price growth has slowed from pandemic-era highs, tariffs and trade-related pressures continue to affect pricing and availability for key construction materials, creating ongoing uncertainty for project budgets.

Sustainability requirements add further costs. Triple glazing, advanced air barriers, heat recovery ventilation, low-carbon concrete, enhanced commissioning and third-party certifications all increase upfront spending. These added costs cannot always be offset through rents or sale prices, especially in affordability-constrained regions like Metro Vancouver. If total project costs outpace feasibility, new housing delivery may slow at exactly the moment Canada needs to build faster than ever.

To remain competitive, developers and builders need practical, scalable pathways that balance performance expectations with budget discipline, a balance that isn’t always straightforward under current market conditions.

Innovation is closing the gap

Innovation is steadily reducing the divide between sustainability and cost. Prefabrication and industrialized construction methods are advancing quickly, allowing envelope and structural systems to be fabricated off site with better quality control and less waste. 

Factory-built envelope panels increase airtightness and reduce on-site labour, while prefabricated mechanical rooms simplify installation and commissioning. Mass timber has expanded nationwide as codes evolve, particularly in British Columbia where recent BC Building Code updates now allow up to 18 storeys for residential and office buildings. These approaches are not only more efficient, but they are also lower-carbon.

Cities are moving in the same direction. Vancouver requires embodied carbon reporting and reduction targets for many large rezonings, while Toronto phases in similar requirements through its Toronto Green Standard to encourage lower-carbon materials and methods. As these practices normalize across the supply chain, the cost premium for low-carbon construction should gradually diminish, particularly when paired with repeatable designs and standard details.

In essence, the path to financial viability will depend on scaling these innovations, improving supply chains, and reducing the “first-mover” premium currently associated with low-carbon systems.

Insights and best practices

What I’ve seen work is when high performance design aligns with financial responsibility when sustainability is integrated from the outset rather than added later. Across projects such as 981 Davie Street, a complex mixed-use, hybrid mass timber development using advanced structural and envelope systems, and 5085 McHardy Street, a Passive House multifamily building delivered with Community Land Trust, the same principles consistently hold true.

Efficient material strategies, such as pairing mass timber or optimized concrete structures with low-carbon mixes, reduce embodied emissions while improving installation speed and predictability. High performance envelopes and mechanical systems deliver long term operational savings that benefit both residents and owners, especially when combined with programs that support deep energy efficiency in affordable housing.

These projects show that careful coordination between trades, suppliers and designers, especially during pre-construction, is essential and that ambitious performance standards like Passive House can be achieved in dense urban multifamily settings without compromising comfort or cost discipline. They also demonstrate that early integration of sustainability objectives reduces redesign risk, limits costly change orders, and keeps construction timelines predictable, which are critical contributors to overall financial feasibility.

Collaboration is the path forward

Meeting Canada’s climate commitments while delivering the millions of new homes the country needs will require a collaborative, system-wide effort. Clean Energy Canada projects Canada must build roughly five million additional homes by 2030 to restore affordability, a scale that will determine the emissions profile of the building sector for decades. If these homes are constructed using traditional, carbon-intensive methods, embodied emissions could seriously undermine Canada’s national climate targets.

This massive build-out amplifies the urgency that every decision on materials, methods, and performance standards now shapes whether we hit housing goals without sacrificing environmental progress. The only way to ensure both climate and affordability goals are met is through shared accountability, with policymakers providing a clear and consistent framework, developers investing in scalable innovations, and builders coordinating early and often to deliver predictable outcomes.

The bottom line: sustainable construction can be financially viable, but only if we continue to innovate, collaborate and design with both performance and affordability in mind from Day One.