Energy
Unpacking the Growing Cost of Home Heating Bills
From EnergyNow.ca
By
Bills are one of life’s certainties, and in Canada, so is winter. When combined, the two add up to a growing affordability crisis across the country.
Lots has been said about the rising cost of daily essentials such as groceries and gas, but another factor weighing heavily on Canadians’ pocketbooks is the cost of heating their homes.
According to data from Statistics Canada:
- 15% of Canadians reduced or had to forgo necessities such as food or medicine for at least one month to pay an energy bill last year. To put that in perspective, based on the number of households there are in Canada today, roughly 2.5 million households had to forgo necessities in 2023.
- 14% of Canadian households kept their home at an unsafe or uncomfortable temperature because of unaffordable heating costs (approximately 2.3 million households).
- High energy prices also caused 10% of Canadian households (approximately 1.7 million households) to be late or unable to pay their energy bills in the past year.
In total, nearly 27% of households (4.5 million households) said it was difficult, or very difficult to meet financial needs in the second quarter of 2023.
These numbers concern us, and we know they are also a big concern for women across Canada who have told us they are adjusting their living conditions to keep costs down.
Engaged women are making trade-offs
Hilary Krauss, a 28-year-old who lives with her partner Mitch in Vancouver, told us that their apartment setting is now fixed at an “affordable” temperature, and they are now bundling up and adding layers of clothing to compensate for lower house temperatures.
Even those who can currently afford their heating bill are considering investing in technology such as solar panels to lower home heating costs over time.
“I want energy security and care about the environment,” said Angela Chung, a Calgary woman who told us she pays $400 per month for her utility bill. “The heating costs for my modest home are exorbitant. If I invest in solar panels, it will have an upfront cost. But I may break even in a decade, saving money in the long run.”
With costs ballooning, and concerns rising about affordability, that drove us to ask what exactly we are paying for in our energy bills.
Taxes are driving up energy costs
The three main components of your heating bill are energy charges, delivery and administration (what you pay utility companies), and various government taxes, including the federal carbon tax.
- Used energy (GJ or KWH)
The gigajoules or kilowatt hours of energy you used in the billing period. (This number can be an estimate or exact number.) - Delivery charges
Delivery charges include fixed and variable costs based on the length of your billing period and natural gas consumption. Both charges are often summed on your heating bill under “Delivery Total.” - Rate riders
Provincial utility commissions approve temporary charges/credits. Rate riders adjust for under/over collection of approved costs. - Transmission charge
A fee for accessing high-voltage wires and towers to transmit power from generation plants to distribution systems. - Federal carbon tax
A federal government tax on natural gas consumption.
These numbers vary across Canada based on different energy and home heating sources, so we collected bills from people in Alberta (Calgary and Sylvan Lake), Ontario (Barrie and Whitby) and British Columbia (Vancouver and Victoria) to compare.
Here’s what we found.
(1) Energy cost varies by province, and are rising every year
Just over half of Canadian households that reported having a primary heating system use a forced air furnace (51%) and one quarter (25%) use electric baseboard heaters, so we focused on these two sources.
Of the bills we looked at, people are paying an average of $135 per month to heat their home. With natural gas, the average winter month costs $160, compared to $110 with electricity.
Canadians are facing increased costs year-over-year for both natural gas (up 23.7% in 2023 over the year before), and electricity (up 1.6% in 2023).
The cost of electricity varies across Canada and can be a challenge to compare because there is a wide variation in market and rate structures.
Some provinces use tiered rates that increase or decrease based on usage, some provinces use flat-rate billing, and Ontario uses time-of-use rates where peak hours are billed at a higher rate than off-peak hours.
According to Statista, the average cost per kilowatt hour (kWh) for electricity in Canada is 19.2 cents, with the Northwest Territories paying the most, and Quebec paying the least per kWh.
(2) The carbon tax is nearly doubling home heating costs
The bills we examined show that the carbon tax accounts for 30% of heating costs for those who heat their homes with forced air furnaces that use natural gas.
In Alberta, for example, it costs about $1.80 per gigajoule (GJ) of natural gas, and an additional $3.33 per GJ in carbon tax. This means the tax is greater than the actual energy cost, nearly doubling the cost of a monthly bill.
For every $1 an Ontarian spends on natural gas, they pay an extra $1.66 on the carbon tax, according to the bills we examined. Again, the cost of the carbon tax is greater than the cost of energy used.
In Eastern Canada where home heating oil is the most used heating source, the carbon tax has been exempted (a fairness issue we’ve already explored in depth) so we have excluded it from this analysis.
Carbon tax increases will raise cost further
The federal carbon tax is set to increase by 23% on April 1, 2024, and it will rise every year until it nearly triples by 2030 over today’s rate.
The federal carbon tax was intended to incentivize people to consume less oil and gas, but we know from our national research that more than half of engaged women (52%) feel it isn’t working because it isn’t changing behaviour. It’s also putting undue pressure on remote and rural communities where alternative energy sources are not available.
Home heating is a necessity, not a luxury, and many Canadians do not have options on how they heat their home. With 46% of engaged women across Canada telling us they are concerned about energy affordability, it begs the question: Do you think what you pay for home heating is fair?
Let us know what you think about rising heating costs and these findings, and reach out to tell us how you’re managing the rising cost of living.
“If Ottawa had it’s way Albertans would be left to freeze in the dark”
The ineffective federal net-zero electricity regulations will not reduce emissions or benefit Albertans but will increase costs and lead to supply shortages.
The risk of power outages during a hot summer or the depths of harsh winter cold snaps, are not unrealistic outcomes if these regulations are implemented. According to the Alberta Electric System Operator’s analysis, the regulations in question would make Alberta’s electricity system more than 100 times less reliable than the province’s supply adequacy standard. Albertans expect their electricity to remain affordable and reliable, but implementation of these regulations could increase costs by a staggering 35 per cent.
Canada’s constitution is clear. Provinces have exclusive jurisdiction over the development, conservation and management of sites and facilities in the province for the generation and production of electrical energy. That is why Alberta’s government is referring the constitutionality of the federal government’s recent net-zero electricity regulations to the Court of Appeal of Alberta.
“The federal government refused to work collaboratively or listen to Canadians while developing these regulations. The results are ineffective, unachievable and irresponsible, and place Albertans’ livelihoods – and more importantly, lives – at significant risk. Our government will not accept unconstitutional net-zero regulations that leave Albertans vulnerable to blackouts in the middle of summer and winter when they need electricity the most.”
“The introduction of the Clean Electricity Regulations in Alberta by the federal government is another example of dangerous federal overreach. These regulations will create unpredictable power outages in the months when Albertans need reliable energy the most. They will also cause power prices to soar in Alberta, which will hit our vulnerable the hardest.”
Finalized in December 2024, the federal electricity regulations impose strict carbon limits on fossil fuel power, in an attempt to force a net-zero grid, an unachievable target given current technology and infrastructure. The reliance on unproven technologies makes it almost impossible to operate natural gas plants without costly upgrades, threatening investment, grid reliability, and Alberta’s energy security.
“Ottawa’s electricity regulations will leave Albertans in the dark. They aren’t about reducing emissions – they are unconstitutional, ideological activist policies based on standards that can’t be met and technology that doesn’t exist. It will drive away investment and punish businesses, provinces and families for using natural gas for reliable, dispatchable power. We will not put families at risk from safety and affordability impacts – rationing power during the coldest days of the year – and we will continue to stand up for Albertans.”
“Albertans depend on electricity to provide for their families, power their businesses and pursue their dreams. The federal government’s Clean Electricity Regulations threaten both the affordability and reliability of our power grid, and we will not stand by as these regulations put the well-being of Albertans at risk.”
Related information
- Conference Board of Canada socio-economic Impacts of Canada’s 2030 Emissions Reduction Plan – (April 2025)
- Alberta Electric System Operator’s position on Canadian Energy Regulations
Oh, Canada
We find it endlessly fascinating that most Canadians believe they live in a representative democracy, where aspiring candidates engage in authentic politicking to earn their place in office. So accustomed are Canada’s power brokers to getting their way, they rarely bother to cover their tracks. A careful reading of the notoriously pliant Canadian press makes anticipating future events in the country surprisingly straightforward.
Back in December, when Pierre Poilievre was given better than 90% odds of replacing Prime Minister Justin Trudeau—and Mark Carney was still just an uncharismatic banker few had heard of—we engaged in some not-so-speculative dot-connecting and correctly predicted Carney’s rise to the top spot. Our interest was driven by the notoriously rocky relationship between Ottawa and the Province of Alberta, home to one of the world’s largest hydrocarbon reserves, and how Carney’s rise might be a catalyst for resetting Canada’s energy trajectory. In a follow-up article titled “The Fix Is In,” we laid out a few more predictions:
“Here’s how the play is likely to unfold in the weeks and months ahead: Carney will be elected Prime Minister on April 28 by a comfortable margin; [Alberta Premier Danielle] Smith will trigger a constitutional crisis, providing cover for Carney to strike a grand bargain that finally resolves longstanding tensions between the provinces and Ottawa; and large infrastructure permitting reform will fall into place. Protests against these developments will be surprisingly muted, and those who do take to the streets will be largely ignored by the media. The entire effort will be wrapped in a thicket of patriotism, with Trump portrayed as a threat even greater than climate change itself. References to carbon emissions will slowly fade…
In parallel, we expect Trump and Carney to swiftly strike a favorable deal on tariffs, padding the latter’s bona fides just as his political capital will be most needed.”
The votes have barely been counted, yet the next moves are already unfolding…
“Alberta Premier Danielle Smith says she’ll make it easier for citizens to initiate a referendum on the province’s future in Canada, after warning that a Liberal win in Monday’s election could spur a groundswell of support for Alberta separatism. Smith said on Tuesday that a newly tabled elections bill will give everyday Albertans a bigger say in the province’s affairs.
‘(We’re giving) Albertans more ways to be directly involved in democracy, and to have their say on issues that matter to them,’ Smith told reporters in Edmonton.
If passed, the new law would dramatically lower the number of signatures needed to put a citizen-proposed constitutional referendum question on the ballot, setting a new threshold of 10 per cent of general election turnout — or just over 175,000, based on Alberta’s last provincial election in 2023.”
“US President Donald Trump said on Wednesday that Canadian Prime Minister Mark Carney is looking to make a trade deal and will visit the White House within the next week. Trump said he congratulated Carney on his election victory when the Canadian leader called on Tuesday.
‘He called me up yesterday – he said let’s make a deal,’ Trump told reporters at the White House after a televised Cabinet meeting.”
Remember where you read it first.
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