Foundation Insulation

Reviewed by a working tradesman with 17+ years in the field.

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Insulation, barrier and drainage are one system. Fix the moisture first, then add the foam.

I am a:

Tap your level and the boxes below open to the advice for you. Remembered on this device.

What it isRigid foam or other insulation on the outside or inside of a foundation wall, so the basement stays warm and dry.

Your jobFix any moisture first, choose foam the maker rates for the use, protect it above grade, and keep it from blocking the drainage layer.

The hard ruleNever insulate over a leaking or damp wall, and never leave foam exposed above grade.

The checkThe foam type, thickness and coverage against the plans and the energy requirements for your project.

By the end you can

Say why moisture is fixed before insulation goes on.
Choose between outside and inside insulation for a wall.
Protect exterior foam above grade without blocking the drain layer.
Figure how many boards and how thick, and know whose number applies.

Stop and read

Rigid foam burns, and the smoke is toxic. Keep torches, heat guns and welding sparks away from it. Solvent-based adhesives and sprays can melt foam, so use only products the maker approves. Wear a dust mask and eye protection when cutting, and ventilate when using a hot-wire cutter. Foam inside a building normally needs a fire-rated covering. Natural Resources Canada says to protect interior foam with 12.7 mm (1/2 in.) gypsum board or equivalent, and to check your local code for coverings on spray foam.

Exterior work means a deep hole beside the footing. A hole 1.2 m (4 ft) or deeper must be sloped, shored or boxed, and you must never dig below or too close to the footing. See Trench Safety.

The big idea

Foundation insulation cuts heat loss, keeps the wall warm and protects the interior from cold and moisture. It also has to work with the dampproofing and drainage, because foam in the wrong place can trap water or block the drainage layer. Think of the wall as one system: structure, barrier, drainage, insulation.

A cross-section of a foundation wall with rigid foam on the outside over the dampproofing, a dimpled drainage layer, and a protective panel over the foam above grade. Inside, a concrete slab sits on gravel with foam under it and a vertical strip of foam at the slab edge as a thermal break. — **Foundation and slab insulation.** Rigid foam on the outside of the wall over the dampproofing, a drainage layer (its position relative to the foam depends on the product), and protection over the foam above grade. Inside, a foam strip at the slab edge acts as a thermal break, with foam and polyethylene under the slab where the design calls for it. Not to scale. R-values and thickness: confirm with the energy requirements for your project.

Fix the moisture first

Natural Resources Canada (NRCan) says major water leaks must be corrected before insulating, and to correct any sump pump or sewer backup problem first. It says not to insulate a basement with moisture problems from the inside, or the new walls may rot.
A US Building America guide says moisture "must be addressed before insulating a basement", with the grade sloping away, free-draining backfill or drainage mat, and an exterior footing drain. Insulation over an unresolved water problem can hide damage or trap water.
NRCan's simple test: tape plastic sheeting to the slab or wall, and check for condensation.
See Drainage Corrections and Waterproofing Repairs if water is getting in.

Outside or inside?

	Outside	Inside
What NRCan says	"Insulating on the outside is best, but it is often necessary to insulate from the inside." Recommended for rubble, brick or stone foundations, and for walls with water, dampness or moisture problems.	Easier and cheaper, and can be done in stages. It makes the foundation wall colder, and finishes can hide moisture problems.
What a US lab handbook says	Continuous coverage with no thermal bridges, keeps the wall near moderate temperature, and saves floor area.	More common, mainly because exterior work is harder and costlier, especially in retrofits. Thermal bridging can cut the savings.
Main catch	Needs a deep dig beside the footing, and the foam above grade needs protection.	Raises the risk of moisture in the assembly if the wall is not dry and drained.

The US handbook (undated, from a Department of Energy lab) says equal amounts of insulation on either side of a concrete wall perform similarly, and the choice comes down to cost, ease and moisture. Many homes do both: foam outside where it can be reached, and interior insulation to finish the job. Your design sets it.

Foam types

XPS (extruded polystyrene): good moisture resistance and strength, often used below grade. Nominal R-5 per inch (about RSI 0.88 per 25 mm).
EPS (expanded polystyrene): lower cost, nominal R-4 per inch (about RSI 0.70 per 25 mm). NRCan names Type IV EPS as the most common exterior choice. Use a type the maker rates for ground contact.
Rigid mineral wool or fibreglass: NRCan lists rigid mineral wool as an exterior option. A US handbook says porous rigid fibreglass or mineral wool panels (about R-4 per inch) can also provide drainage space, which only works with an effective footing drain.
Polyisocyanurate (polyiso) and polyurethane boards: NRCan lists them among exterior options, and says foil-faced board may deteriorate in contact with cement. Whether a given board is rated for ground contact is product-specific, so ask the maker.
Closed-cell spray polyurethane: NRCan suggests it for uneven walls and dampness control, applied by a certified installer. A US guide says open-cell foam can absorb a lot of water, so it is a poor fit against a foundation wall.

Check the product's CAN/ULC-S701.1 type and compressive strength with the maker. A 15-year US lab study (from the handbook) found that below-grade foam can take on moisture, cutting its effective R-value by about 35 to 44%, so designs should not count on the full nominal value.

Exterior insulation

Goes over the dampproofing, from the footing up. NRCan says to extend it at least 600 mm (24 in.) below grade, or to the footings.
Use adhesives that the membrane maker and the foam maker both approve.
Do not block the drainage layer. NRCan says drainage-type insulation must run full depth to the footings with no horizontal seams breaking the drainage path. The drain tile is essential, with 150 mm (6 in.) of gravel over it.
Protect it above grade. NRCan says to cover the exposed foam from the top of the insulation to at least 100 mm (4 in.) below settled ground level, and says 300 mm (12 in.) may be better. Its options: lath with cement parging, polymer-modified parging, pressure-treated plywood, or matching siding. The US handbook lists fibre cement board, parging, treated plywood or membrane.
Termites: the US handbook says exterior foam can create a termite path and block inspection. NRCan does not address termites, so ask your building department whether it is a local issue.

Example (numbers made up). A 36 m (118 ft 1 in) perimeter, 2.4 m (7 ft 10 in) tall, is 36 × 2.4 = 86.4 m² (930 ft²). A 1.2 m × 2.4 m (4 ft × 8 ft) board is 2.88 m² (31 ft²), so 86.4 ÷ 2.88 = 30 boards, and 33 with 10% for cuts. Your board size and the height that gets foam come from the design.

Interior insulation

Use it when you cannot insulate outside, or as well as outside insulation, on a wall that is dry and drained.
NRCan suggests moisture-resistant foam board (XPS or Type IV EPS) against the wall. For its interior boards it says to install a minimum of RSI 2.1 (R-12) unless local codes require more. At about RSI 0.88 per 25 mm that is about 61 mm (2.4 in.) of XPS. That minimum is NRCan's retrofit advice, not a Part 9 number, and your tier may need more.
A US guide says non-fibrous insulation belongs directly against the concrete, with no air gap, and that fibrous insulation should not touch it. Air-seal the assembly so basement air cannot reach the cold wall.
NRCan says not to put polyethylene over foam board, because of the risk of a double vapour barrier. Follow the design.
Protect interior foam with 12.7 mm (1/2 in.) gypsum board or an equivalent covering.
Rim joist: NRCan says this area is prone to air leakage and seldom properly insulated. Air-seal and insulate it, with spray foam from a certified contractor and a fire-resistant covering.
Radon: if a radon rough-in is required (Part 9, Article 9.13.4, as printed in a BC municipal reprint), keep the pipe and the sealing intact. NRCan also says to check for radon.
Keep access to sump pits, cleanouts and panels.

How much?

No single number applies across Canada. The R-value for foundation walls depends on the climate, the code edition, and the energy tier or step your province or municipality has adopted. Look up the current requirement for your project in your provincial code and with your energy advisor, and write it on the drawing. The ranges in this lesson come from NRCan's retrofit guide and from US sources, so treat them as examples, not as your requirement.

Common mistakes

Interior insulation over a wet wall
Foam that blocks the drainage layer
Foam exposed above grade
Foil-faced or other board used without the maker rating it for the use
Gaps and open joints
Adhesive that attacks the membrane or the foam
Insulating only below grade and leaving the top of the wall bare

Pro note

Insulation, barrier and drainage are one system. Look at all three together before anything is covered.

Weather note

Cold stiffens foam and weakens adhesives. Rain can leave water behind the foam. Install on a clean, dry wall in temperatures the adhesive maker allows.

What the inspector looks at

The type, thickness and coverage of insulation against the plans and the energy requirements, and the protection above grade. Confirm what your building department checks.

✅ Check yourselfTap a question

A basement wall is damp and you want to insulate it. What comes first?

Fix the moisture. Natural Resources Canada says major leaks must be corrected before insulating, and not to insulate a basement with moisture problems from the inside, or the new walls may rot. Check the grade, drain and sump first.

Foam is exposed above grade on the outside of a wall. What is wrong?

It needs a protective cover. NRCan says to cover exposed exterior insulation from the top of the insulation to at least 100 mm (4 in.) below settled ground level, with lath and cement parging, polymer-modified parging, pressure-treated plywood, or matching siding.

Why do the dampproofing, the drainage layer and the foam have to be thought of as one system?

Foam placed wrongly can block the drainage layer or trap water, and a wet wall makes foam and framing fail. Check all the layers together before they are covered.

A 36 m (118 ft) perimeter wall is 2.4 m (7 ft 10 in) tall. How many 1.2 m × 2.4 m (4 ft × 8 ft) boards, with 10% extra?

Wall area is 36 × 2.4 = 86.4 m² (930 ft²). Each board is 2.88 m² (31 ft²), so 30 boards plus 10% is 33. The sizes are made up, and your product may come in other sizes.

How thick must interior foam be to reach RSI 2.1 (R-12) at about RSI 0.88 (R-5) per 25 mm (1 in.)?

About 61 mm (2.4 in.), so in practice the next size up, such as 63 mm (2.5 in.) if the product comes that way. RSI 2.1 is NRCan's retrofit minimum for interior rigid board, unless your local code requires more.

Can you put polyethylene over interior foam board?

NRCan says not to, because of the risk of a double vapour barrier. Follow the design, or the foam maker's system.

🧰 Gear for this stepMust-haveRent itNice to have

Must-haveLayout and cutting:
Must-haveFoam:
Must-haveAdhesives and fasteners:
Must-haveProtection above grade:
Must-haveInterior work:
Must-havePPE:
Must-haveDust and fumes: a dust mask or respirator (CSA Z94.4) when cutting, and ventilation when using a hot-wire cutter

👷 Who can do thisTap your level

Home DIY

A capable owner can fit rigid foam over cured dampproofing, or add interior foam board on a dry wall. Do not insulate over a leaking or damp wall, change the design thickness or cover a radon pipe. Ask the building department which energy tier applies before you buy foam. Exterior work means a deep hole beside the footing, so a hole 1.2 m (4 ft) or deeper needs a sloped, shored or boxed trench, and often a pro.

Laborer or helper

Carry and hold foam, clean the wall, and keep sheets out of mud and puddles. Do not cover a radon pipe or a wet wall. Tell the lead if foam is damaged, the wall is leaking or the drainage layer is covered.

1st-year apprentice

Cut, fit and adhere foam under supervision. Learn the foam types, which adhesives attack foam and membranes, and why foam must never block the drainage layer.

Apprentice, 2nd to 4th year

Cut and fit foam to the layout using the adhesive the supplier approves for the foam and the membrane. Never block the drainage layer or cover a radon pipe. Ask before gluing over a wall that looks damp. Stay out of any exterior trench that is not protected.

Journeyperson

You own foam selection, coverage, protection above grade, and the readiness check on the layers as one system before they are covered. Stop-work triggers: the wall is wet or leaking, a radon or energy-tier detail is unclear, or the foam is wet or damaged. Call the energy advisor or engineer, not a guess.

Lead hand or foreman

Walk the layers (dampproofing, drain, foam, protection) as one system before cover, and reject wet or damaged foam. Stop if the radon or energy-tier details are unclear, and call the energy advisor or engineer to settle them.

Contractor or business owner

Price to the energy tier and to the foam, adhesive and protection spec. Keep product data sheets and photos of every layer. Wet or missing insulation shows up as a callback, so document the install and the inspection.

Starting a new business

Learn the energy tier for your area from the building department before you quote, and price to it. Keep product data sheets and photos of every layer. Confirm radon rough-in rules with the authority, and ask your insurer about warranty claims on wet insulation.

By Province:

The national baseline is Part 9, Section 9.36 (energy), with Sections 9.13 and 9.14 for dampproofing and drainage. Each province adopts its own edition, and many set their own energy tier or step, so foundation R-values differ by province, by municipality and by date. I dropped the old list of provincial adoption dates and tiers because I could not verify it. Ask your building department which tier your permit is under, and look up the foundation R-values in the code table that goes with it.

See Canada by Province for the full comparison.

Sources:

Natural Resources Canada, Keeping the Heat In, Section 6: Basement insulation (issued 2014, modified December 2024: retrofit advice, not a code)
Foundation Handbook, Insulation (US Department of Energy lab, undated: placement, foam types, below-grade moisture, termites)
Building America Solution Center, Air Sealed, Insulated Basements (US Department of Energy, undated; US building code references not used)
Vancouver Building Bylaw 2014, Part 9, Section 9.13 (municipal reprint of NBC Part 9, possibly older than your province's edition: radon rough-in, Article 9.13.4)
Part 9 energy tables (Section 9.36), provincial energy tiers and CAN/ULC-S701.1 were not read. The foam-safety advice is general practice and follows the makers' data sheets. Board counts and thickness are calculated and re-checked.

Last reviewed October 2026. General information, not engineering or legal advice.