What the Energy Code Means for a New House in the GTA

The 2024 Ontario Building Code came into force on January 1, 2025, and its energy provisions, known as SB-12, changed what every new house must include. If you are planning custom home construction in Toronto, Vaughan, Markham or anywhere else in the GTA, your mechanical system, envelope details and budget now answer to a tighter standard. The code applies to all new houses permitted after that date, which means the file you submit this year or next.

SB-12 is not voluntary. It sets minimum performance requirements for space heating equipment, ventilation and airtightness, and those minimums eliminate some systems that were common three years ago. The changes add line items to the mechanical budget and push envelope decisions earlier in the design process. Homeowners who understand the requirements before drawings are locked save money and avoid surprises at the permit counter or during the final inspection.

What SB-12 is and when it applies to new custom homes

SB-12 is Supplementary Standard SB-12 of the Ontario Building Code, the section that governs energy efficiency in new houses. It replaced the 2012 code's energy provisions and now requires that every new house meet performance targets for heating equipment efficiency, airtightness and ventilation. The standard applies to detached houses, semis, townhouses and any other building classified as a house under the code. It does not apply to renovations or additions to existing houses, only to new construction.

The code applies when you submit a building permit application for a new house. If your application was deemed complete before January 1, 2025, the old code governed. If you apply now, SB-12 applies in full. The municipality reviews your mechanical schedule, your envelope assembly details and your airtightness testing plan as part of the permit review, which in the GTA typically takes 10 business days for a complete application, longer if the drawings are missing required details or if zoning issues need resolution first.

Heat pump requirements: air source, ground source and hybrid systems

SB-12 requires that the primary space heating system in a new house be a heat pump. That means an air-source heat pump, a ground-source (geothermal) heat pump, or a hybrid system that pairs a heat pump with a backup heating source. The code does not prohibit gas furnaces outright, but it does prohibit using a gas furnace as the sole heating system. A furnace can serve as backup to a heat pump in a hybrid configuration, but the heat pump must be sized to carry the heating load down to a specified outdoor temperature, typically around minus 15 degrees Celsius.

Air-source heat pumps are the most common choice in GTA new builds. A cold-climate air-source unit rated for Ontario winters costs roughly $18,000 to $35,000 installed, including the outdoor condenser, the indoor air handler, refrigerant lines and controls. Ground-source systems cost more, typically $35,000 to $65,000, because they require drilling vertical boreholes or trenching horizontal loops in the yard. Ground-source systems deliver steadier performance in deep winter, but the payback period against air-source is long, and most GTA lots do not have space for horizontal loops.

A hybrid system pairs a heat pump with a gas furnace or electric resistance backup. The heat pump runs as the primary system, and the backup engages only when outdoor temperatures drop below the heat pump's efficient operating range or when heating demand spikes. Hybrid systems cost roughly $22,000 to $42,000 installed, depending on the furnace specification and ductwork complexity. The code allows hybrids, but the heat pump must still meet the minimum efficiency and sizing requirements, so the furnace cannot be the dominant system.

Airtightness testing: what the standard is and who performs it

SB-12 requires that every new house undergo airtightness testing, commonly called a blower door test, and achieve a maximum air leakage rate of 2.5 air changes per hour at 50 pascals of pressure (2.5 ACH50). The test is performed by a qualified energy advisor or building science technician after the house is weather-tight but before drywall is installed, so that leaks can be found and sealed. A second test is typically performed after drywall to confirm the final result.

The blower door test uses a calibrated fan mounted in an exterior doorway to depressurize the house. The technician measures how much air the fan must move to maintain 50 pascals of negative pressure, then calculates the air change rate. Common leak points are electrical boxes, plumbing penetrations, the rim joist, window rough openings, attic hatches and any place two building assemblies meet. If the house fails the 2.5 ACH50 target, the builder must find and seal the leaks, then retest.

Airtightness testing in the GTA costs roughly $800 to $1,500 for a single-family house, including the initial test and one retest if needed. Most custom builders include the testing cost in the mechanical or envelope budget line. The test is scheduled after the air barrier is complete and the HVAC rough-in is done, which typically falls about halfway through the construction timeline. Passing on the first test depends on detailing decisions made months earlier, during the permit drawing stage.

How the energy code affects your mechanical and HVAC budget

The shift to heat pumps and the airtightness requirement together add roughly $8,000 to $18,000 to the mechanical and envelope budget compared to a gas furnace and standard insulation under the old code. A cold-climate air-source heat pump costs $4,000 to $10,000 more than a mid-efficiency gas furnace. Envelope upgrades to hit the airtightness target (improved window and door sealing, spray foam at the rim joist, careful detailing of the air barrier) add another $4,000 to $8,000 on a typical custom house. Airtightness testing, energy modeling if required, and commissioning the heat pump add the rest.

For a 4,000 square foot custom house in the GTA, the mechanical and HVAC budget under SB-12 typically lands between $50,000 and $85,000, depending on whether you choose air-source or ground-source, single-zone or multi-zone, and whether you add heat recovery ventilation (HRV) or energy recovery ventilation (ERV). HRV systems are not strictly required by SB-12 but are common in tight houses because they provide controlled fresh air without opening windows. An HRV adds roughly $4,500 to $8,500 to the mechanical package.

These costs sit inside the overall custom home cost per square foot, which in the GTA runs $350 to $600 and more depending on architecture and finish level. The energy code moves some dollars from the gas line and furnace budget into the heat pump and envelope budget. It does not add a new category of cost so much as it reallocates existing mechanical spending toward equipment that meets the new standard.

Windows, insulation and envelope details that pass the test

Hitting 2.5 ACH50 depends on the air barrier, not the insulation value. The air barrier is the continuous layer (polyethylene, spray foam, taped sheathing) that stops air from moving through the envelope. Every penetration through that layer (every electrical box, every plumbing stack, every window rough opening) is a potential leak. The details that pass the test are the ones that treat the air barrier as a single unbroken plane and seal every joint, seam and penetration before drywall goes up.

Windows must be flashed and sealed to the air barrier with acoustical sealant, backer rod or spray foam, not just nailed into the rough opening and cased over. Most GTA custom homes now use triple-glazed windows or high-performance double-glazed units with low-E coatings and argon fill to meet the code's thermal performance requirements and to reduce condensation risk in a tight house. Window upgrades add roughly $8,000 to $18,000 to the budget on a 4,000 square foot house compared to builder-grade double glazing.

Insulation values under SB-12 are higher than under the old code: walls typically require RSI 3.5 to RSI 5.5 (R-20 to R-31 in imperial units), roofs RSI 7.0 to RSI 10.6 (R-40 to R-60), and basement walls RSI 3.5 (R-20). Most custom builders in the GTA now use two-by-six wall framing with batt or blown insulation plus exterior rigid foam, or advanced framing with spray foam. The rim joist, the board that sits on top of the foundation and carries the first-floor joists, is the single most common air leakage point and is almost always sealed with closed-cell spray foam in new builds.

What happens if your house fails the blower door test

If the first blower door test shows an air change rate above 2.5 ACH50, the technician's report identifies the zones where leakage is concentrated. The builder then seals those areas (caulking electrical boxes, sealing plumbing penetrations, adding gaskets at the top plates, taping sheathing seams) and retests. Most failures are in the 2.8 to 3.5 ACH50 range and are resolved with a day or two of sealing work and a retest. Houses that fail badly, above 4.0 ACH50, usually have a missing or poorly installed air barrier, which is expensive to fix after framing is closed in.

The municipality will not issue an occupancy permit until the house passes the airtightness test and the energy advisor submits the compliance report. That makes the blower door test a critical path item on how long it takes to build a custom home. Builders who detail the air barrier correctly in the drawings and train their trades to seal as they go typically pass on the first test. Builders who treat airtightness as an afterthought often face delays and change orders at the end of the job, when the schedule has no slack.

Top House details the air barrier and the heat pump specifications in the permit drawings, includes airtightness testing in the contract schedule, and walks the trades through the sealing sequence before rough-in starts. A tight envelope is cheaper to build than to retrofit, and it shows up in every utility bill and every January morning thereafter.