Tracking the costs of and savings from implementing the Greening Government Strategy

Our approach

The Greening Government Strategy requires departments to estimate the overall costs of project alternatives and to select the option that ensures that a project will have the lowest overall cost and the lowest GHG emissions over its lifetime. Doing so employs a technique known as GHG life-cycle cost analysis. Focusing on full life-cycle costs (initial capital investment and operational savings) at the beginning of projects achieves greening outcomes at the lowest cost.

The Centre for Greening Government has implemented a three-step approach to costing:

1. Departments are required to develop and maintain long-term costed pathways to decarbonize their operations by 2050, for example, plans for a net-zero, climate-resilient real property portfolio
2. Major projects and initiatives are required to minimize the total cost of ownership by reducing life-cycle costs and maximizing reductions in GHG
3. The Centre tracks the strategic initiatives it manages, including the Low-Carbon Fuel Procurement Program and the Greening Government Fund

In addition, departments report to Parliament on their capital expenditures through the Main Estimates and public accounts. They also report on the overall progress of greening their operations through their departmental sustainable development strategies.

Costs to decarbonize real property

The Treasury Board of Canada Secretariat (TBS) has conducted studies with the Canadian Green Building Council that demonstrate the cost-effectiveness of zero-carbon buildings and the value of deep energy retrofits for existing buildings.

With 32,000 buildings, 23 million m² of floor space, approximately 20,000 engineering assets, and 39 million hectares of land, the Government of Canada owns and manages the largest fixed asset portfolio in Canada. The government spends approximately $10 billion annually to administer this portfolio, which has an estimated replacement value of $100 billion. TBS worked with an expert organization to aggregate the results of departmental net-zero plans to determine that the incremental cost of achieving net-zero real property operations by 2050 is $3 billion or about 3% of the replacement value of the portfolio.

Cost to decarbonize the conventional fleet

For conventional fleet operations, total cost of ownership assessments determined that, in most cases, it is more cost-effective for the government to procure electric vehicles. Over the typical seven-year life cycle of government-owned conventional fleet vehicles, the cost of operating and maintaining electric vehicles is less than that of internal combustion vehicles. Generally, this cost difference more than offsets the higher initial purchase price of electric vehicles.

For example, a plug-in-hybrid or battery-electric sport utility vehicle can cost several thousand dollars less to own over its seven-year lifespan relative to the cost of owning a gasoline-only internal combustion engine vehicle. These savings result from not paying for gas, lower servicing and maintenance costs, and from the higher resale value of electric vehicles.