About half of Canadian homes are heated with gas furnaces, and energy analysts say those homeowners should get used to the idea that gas prices aren’t going to fall back to the lows seen in recent years.
Although winter has not yet arrived, higher utility bills are another new cost facing Canadians already battered by months of inflation in the prices of food and many other goods and services.
“It depends on where you are in Canada, but typically about a 30% increase in your electric bill,” said Jackie Forrest, executive director of the ARC Energy Research Institute in Calgary.
“And I expect that won’t go away.”
Natural gas, which is mostly methane, a fossil fuel, is widely used to heat homes in western Ontario, while electricity and fuel oil are the main sources of home heating from Quebec to Atlantic Canada .
While several factors are contributing to the rising price of natural gas, experts say homeowners can take steps to lower their heating bills, including, for some, turning off gas altogether.
“There are actually a number of things you can do even without spending a lot of money,” said Violet Kopperson, energy advisor at the Windfall Ecology Center in Aurora, Ont., just north of Toronto.
Warming up at home could take up a bigger chunk of Canadians’ budgets this winter, as natural gas prices start to climb. Experts say Canada is selling its natural gas abroad because of global demand, putting pressure on domestic supply.
Price fluctuations, war and exports
This summer, natural gas prices in Canada climbed to about nine dollars a gigajoule (GJ), about three and a half times the average rate for the past six years, says Forrest, an energy analyst with 25 years of experience.
They’ve eased off lately, but she says they won’t return to the average of around $2.90 per GJ that Canadians have grown accustomed to since around 2016.
“I think the last six years have been an unusual time when we had very cheap gas. I don’t think that’s the future,” Forrest said.
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For several years, there were high levels of natural gas production in North America and, she explained, a tiny level of exports.
More recently, however, North American natural gas producers have increased their exports. The change is due in part to increased demand from European countries that severed ties with Russia following its invasion of Ukraine, or were cut off from access to Russian by Vladimir Putin in retaliation for economic sanctions.
While roughly 10% of North American production is currently exported, Forrest says exports will continue to grow.
“Before the end of this decade, we’ll be sending about 20% of North American production overseas,” she said, adding that she doesn’t see the industry ramping up production to control prices.
“We’re going to have structurally higher gas prices than before,” she said, “so that really changes the dynamics of North American gas markets.”
Your bill and tips for reducing it
A gas bill is more than the cost of gas, notes Forrest.
“The energy cost is about a third of your bill. You have other things like distribution and transmission costs and you have carbon prices and things like that.”
But there are simple ways to reduce that complicated heating bill.
Kopperson, whose job is to assess the energy efficiency of homes and provide advice to homeowners, has plenty of advice.
Simple and inexpensive actions include things like:
- Lower the thermostat while you sleep.
- Make sure exterior doors have weatherstripping and sweeps to prevent heat from escaping.
- Sealing around small holes for cables and vents.
- Replace your toilets with low-flow showerheads.
A low-flow shower is cheaper because “the more hot water you use, the more energy you use,” Kopperson said.
More expensive changes can include upgrading to triple-glazed windows and adding insulation to your attic or walls.
Stop the gas, with subsidies
Kopperson also recommends owners take a look at the federal government. subsidies and ready to improve your home’s energy efficiency, which can offset some of those renovation costs. Some provinces and cities also offer financial incentives for renovations.
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Suzanne Kettley of Ottawa is taking advantage of these programs to improve the energy efficiency of her home and go completely off gas.
She has just replaced her furnace with a heat pump to keep her house comfortable in the winter and cool in the summer. Soon, it will add a hybrid water heater that uses a heat pump and electricity to produce hot water.
“I’m lucky because at the same time as I’m going to reduce my carbon footprint, I’m also going to avoid rising gas prices.”
She also hopes to achieve long-term cost savings by dealing with one utility company and one form of electricity.
“If I pay delivery and administration costs, if I only pay them once to one company, it will be cheaper.”
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High prices are relative
As prices rise in Canada, consumers may find some relief in the fact that the situation here is not as bad as in Europe.
There, governments have asked people to reduce their consumption and limit the temperature of their homes, while some businesses have reduced their hours or even closed due to higher heating costs.
This week, the leaders of the European Union debated but without reaching an agreement on the price cap for petrolalthough earlier this year the idea was backed by 15 EU countries.
The new European market for North American gas means that Canada is no longer a “bottled island” where the gas supply has no destination other than domestic and American consumption.
“We’re more influenced by what’s happening in the rest of the world,” Forrest said.
“We still have cheap energy, but it’s just not as cheap as we’re used to.”
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