Canada's renovation contractors got a boost recently when the federal government extended its poplar ecoENERGY Retrofit – Homes program. One in 20 homeowners took advantage of the original program, which ran from April 2007 to March 2010. Now renewed until March 21, 2012, the program provides grants of up to $5,000 to help homeowners make their homes more energy efficient.

Those who took part in the program realized savings of 20 per cent on their energy bills, say government administrators.

The grants apply to upgrades for a variety of projects, including heating and/or cooling systems, ventilation systems, domestic hot water equipment, insulation, air sealing, windows/doors/skylights and water conservation. The average grant is about $1,400. There are also complementary regional programs in several provinces that provide additional grants, rebates and other financial incentives.

To take advantage of the program, residents must register with the program. Those who have received grants in the past are still eligible to get more money if they didn't receive the maximum $5,000 grant.

Next homeowners must contact a local service organization that's licensed by Natural Resources Canada to arrange a pre-retrofit energy evaluation. In most cases this will cost about $300 to $400, but in Ontario the province will pay half the cost or up to $150. The evaluation includes a blower door test that depressurizes the house and measures the air leakage, from the basement to the attic. The homeowner receives a full report and an EnerGuide label, similar to the labels on new appliances, which rates the energy efficiency of the home. Based on the report and the government's grant table homeowners then choose the best upgrades to improve their rating.

Prior to the renewal of the program, Canada Mortgage and Housing Corp. (CMHC) said that 39 per cent of homeowners in 10 major centres surveyed were planning to renovate this year, spending at least $1,000 on the job.

In 2010, CMHC says more than $22.8 billion was spent on renovations in the major centres. A separate report from BMO Economics predicts that across Canada, about $45 billion will be spent on home renovations, a slight increase from last year.

BMO says the top renovation plans for Canadians are kitchens, bathrooms, landscaping, basements and exterior renovations such as roof replacement or new windows.

CMHC's report says in 2010, 28 per cent of homeowners undertook painting and wallpapering as part of their project. Remodelling of rooms and flooring and carpeting were the next most popular jobs, followed by installing windows and doors, landscaping, roofs and eavestroughing and plumbing.

Most people planning a renovation will finance it with their savings (57 per cent), says BMO, while 19 per cent will take out a line of credit and six per cent will take out a home equity loan. The CMHC survey says that in 2010, most people did pay for their renovations out of their savings and did not increase their debt load because of the work.

Last year about 73 per cent of renovators completed some kind of alteration or improvement of their home, and 46 per cent said their work was more related to maintenance and repairs. Nineteen per cent did both.

Among those who renovated in 2010, 41 per cent contracted out all the work, 29 per cent did the job themselves with the help of friends and family, and 25 per cent did some of the work themselves and contracted out the rest. Four per cent bought the materials and then had someone else do the work.

The average renovation job cost $12,972, says CMHC, up from $12,100 in 2009. Vancouver had the priciest average cost at $15,709, while the lowest average cost was recorded in Winnipeg at $10,339. Toronto is the renovation capital of Canada, accounting for $7.9 billion of the total of $22.9 billion spent in the major centres.

Asked if the renovation cost more than they had anticipated, 34 per cent said yes. Fifty-one per cent said the cost came in as expected, while 10 per cent of lucky renovators said it cost less than planned.

At some point in every renovation, usually when the kitchen or bathroom has been out of commission for awhile, the homeowner is tempted to ask, "Why did we ever start this job?" CMHC's survey said 61 per cent of households renovated to update, add value to their home or to prepare it for sale. Twenty-two per cent said the house needed repairs, and 21 per cent said it needed maintenance.

Only seven per cent cited energy efficiency as their main goal in renovating, but with the re-introduction of the ecoENERGY Retrofit – Homes program, that number may start to climb.

Published: August 2, 2011

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Jim Adair is editor of REM: Canada's Real Estate Magazine, a business publication for real estate agents and brokers. He has been writing about Canadian real estate, home building and renovation issues for more than 30 years. You can contact Jim at .