Eligible Canadians could receive up to $10,000 through new heat pump rebate program

The federal government has announced a $2-billion national heat pump rebate program intended to lower energy costs, reduce emissions and improve the energy efficiency of Canadian homes. Prime Minister Mark Carney said Thursday the program will support more than one million home retrofits across the country. He said that, when fully taken up, the upgrades would save Canadian families more than $1 billion each year on energy bills.

The government says more than seven million Canadian households still heat their homes with oil, propane, diesel, electric baseboards or outdated furnaces. Heating is among the largest household expenses in winter. A government news release says about one million Canadian homes replace their heating systems each year, and more than 80 per cent of those replacements happen because an old system breaks down without warning. Electric heat pumps use less energy than traditional heating systems and cost less over the long run. For households currently using oil or electric baseboards, the government estimates a heat pump could save an average of $1,400 a year.

The program’s main component is a rebate to help cover the upfront cost of buying and installing an electric heat pump. Some Canadians could receive up to $10,000 from the federal government, depending on household income. Households with incomes below the median will be eligible for up to $10,000, while other eligible households can receive $2,000. The government says the rebates can be combined with existing provincial programs to further reduce upfront costs.

The program and its online application portal are not expected to launch until early 2027. Once they do, applicants are expected to receive confirmation of their eligibility and rebate amount within 24 hours. Homeowners will need to upload receipts online, and eligible applicants will then receive their rebate by direct deposit within five days.

The federal government also plans to help apartment building owners improve the energy efficiency of their properties. It is working with the Canada Mortgage and Housing Corporation (CMHC) and the Canada Infrastructure Bank (CIB) to support retrofits for 280,000 apartment units over the next eight years. The government says the measures together will support one million home retrofits and reduce Canada’s emissions by more than 25 megatonnes, equivalent to taking nearly 8.5 million cars off the road for one year.