BC Step Code Energy Requirements for New Laneway Houses

New laneway houses in Metro Vancouver must comply with the BC Energy Step Code, and as of March 2025, the baseline requirement across the province is the 2024 BC Building Code's integrated energy performance standards, which effectively set a minimum equivalent to the former Step 3 or higher for most municipalities. The exact Step Code level your laneway house must meet depends on which municipality you are building in, as local governments can adopt higher steps than the provincial minimum.

The BC Energy Step Code is a graduated performance framework with escalating levels of energy efficiency. For Part 9 residential buildings (which includes laneway houses), the steps range from baseline code compliance through to net-zero-energy-ready construction at the highest level. Each step specifies maximum energy consumption intensity (measured in kilowatt-hours per square metre per year) and airtightness targets (measured in air changes per hour at 50 pascals of pressure). Higher steps require better-insulated building envelopes, higher-performance windows, more controlled ventilation, and in many cases, heat pump space and water heating systems.

The 2024 BC Building Code, which took effect on March 10, 2025, consolidated and raised the baseline energy requirements across the province. All new building permit applications submitted after that date must comply with the new code, which includes enhanced insulation values, airtightness testing requirements, and for the first time at the provincial level, a Zero Carbon Step Code component that sets greenhouse gas emission intensity limits. This means your laneway house may need to demonstrate not just energy efficiency but also low carbon emissions from its heating and hot water systems — effectively pushing designs toward electric heat pumps and away from natural gas furnaces and water heaters.

In the City of Vancouver, requirements exceed the provincial baseline. Vancouver has been an early adopter and leader in Step Code implementation, requiring Step 3 or higher for laneway and carriage houses since May 2023. The city's Zero Emissions Building Plan further requires that new buildings, including laneway houses, be designed to produce zero operational emissions, which in practice means all-electric mechanical systems — no gas fireplaces, gas stoves, or gas heating. If you are building a laneway house in the City of Vancouver, plan for an electric air-source heat pump for space heating and cooling, a heat pump hot water heater, and an HRV (heat recovery ventilator) for fresh air.

Other Metro Vancouver municipalities set their own Step Code adoption levels. Burnaby, New Westminster, and North Vancouver have also adopted relatively aggressive Step Code requirements for small residential buildings. Richmond, Surrey, and Delta have adopted the Step Code but in some cases at slightly lower steps, though the 2024 provincial code update effectively raises everyone's floor. You should confirm the current requirement with your municipality's building department before finalizing your design, as these levels continue to evolve.

From a cost perspective, meeting Step Code requirements adds approximately $15,000 to $40,000 to the construction cost of a typical laneway house compared to a hypothetical code-minimum build, depending on the step level and the specific measures required. The largest cost items are typically high-performance windows and doors ($8,000 to $15,000 premium), enhanced insulation and air barrier detailing ($5,000 to $12,000), a heat pump system ($8,000 to $14,000 installed), and the mandatory blower-door airtightness test ($500 to $1,000). However, these investments pay back through substantially lower energy bills — a Step Code-compliant laneway house with a heat pump system typically costs $60 to $100 per month to heat and cool in Metro Vancouver's mild marine climate, compared to $150 to $250 for a conventionally built and gas-heated unit of similar size.

Your builder or architect should engage an energy adviser early in the design process to run energy modelling and confirm that the proposed wall assemblies, window specifications, and mechanical systems will meet the required step level. This modelling is a mandatory part of the permit application for Step Code compliance and must be completed by a certified energy adviser registered with Natural Resources Canada.

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