The green building industry has made significant strides over the past two decades, but current market dynamics are presenting challenges. While there’s been progress in building standards and the adoption of high-performance technologies, concerns remain about the pace of retrofitting existing buildings, the need for deeper decarbonization, and the potential impact of market fluctuations due to U.S. tariffs.
“2025 has been off to a rough start. There is a lot of uncertainty in the marketplace,” said Thomas Mueller, Canada Green Building Council (CAGBC) CEO, at the Building Lasting Change conference in Vancouver.
Mueller said the impacts of the U.S. tariffs and global tensions are not fully known during his state of industry overview, but present potential challenges for rising material costs, supply chain disruptions and reduced consumer demand.
The U.S. is also set to end the Energy Star Program as of Oct 1, 2025. The Energy Star program is widely used in Canada, most notably Energy Star Portfolio Manager, which is used to benchmark building energy performance and is tied to many energy efficiency policies and rating systems, explained Mueller.
“We want to make sure the program stays in Canada and that the Portfolio Manager stays accessible,” he said.
Another concern is ESG pushback, particularly south of the border, with companies stepping back from climate commitments.
“In Canada, there is a new term called ‘greenhushing’ – basically saying that we deliberately avoid communicating about environmental efforts,” said Mueller.
The focus for companies has shifted from public commitments to refining internal strategies, managing risks and prioritizing measureable outcomes. Investors are prioritizing actionable business impacts over broad ESG narratives. The good news, however, is that CAGBC members and stakeholders stand firm on ESG despite the greenhushing trend, according to Mueller.
He said it’s not only U.S. issues impacting the green building industry – pointing out the introduction of Bill C 59 in Canada, which is reshaping corporate climate commitments.
“The last 10 years, the government was very pro climate change and encouraged the building sector to be ambitious. Now we have a new prime minster and the government’s priorities on climate change are not clear right now,” he said, underscoring that green buildings contribute significantly to the Canadian economy with CAGBC expecting the sector to generate $150 billion in GDP by 2030.
He cited another concern is the new Ontario Bill 17, which removes municipal authority to create green building standards. Unfortunately, “green is still considered an impediment to housing development,” he said, adding it is understandable that public sentiment has shifted to affordable housing and strengthening the economy. So the focus needs to be on “tangible, measurable solutions to drive the industry forward.”
Other barriers to decarbonization include: access to clean and reliable low carbon energy; a skilled and robust workforce and access to cost effective technology. The rate of retrofitting existing buildings is also lower than required.
Mueller went on to highlight the recently launched LEED v5 and the Zero Carbon Building Design Standard which is being expanded to include Part 9 buildings as a limited pilot. The Zero Carbon Building – Performance Standard v3 is also set to be released, reflecting the latest approaches, data, and best practices in carbon accounting and zero carbon performance.
“Moving forward, I think it’s important that whatever we do is outcome based and real,” he said, stressing the need for common metrics and that access to whole building data is critical in the business case for green buildings. “We have to work harder to increase energy efficiency and incentives. A lot of work still needs to be done. ”
Cheryl Mah is managing editor of Construction Business
