The federal government has unveiled a new $2-billion national rebate program aimed at encouraging Canadians to replace older heating systems with energy-efficient heat pumps, Prime Minister Mark Carney announced Thursday.
According to the government, the initiative is designed to lower household energy costs, reduce emissions and improve energy efficiency across the country. Senior government officials, speaking to reporters on background ahead of the announcement, said the program could support up to one million home retrofits in total.
Of that total, the government says 820,000 households would be eligible for the heat-pump rebate specifically, while another 280,000 multi-unit residential properties could access energy-efficiency upgrades through existing programs.
Why Heat Pumps
A senior government official said during the technical briefing that heat pumps are more efficient, cleaner and safer than oil and propane heating systems, using less than half the electricity consumed by electric furnaces or baseboards. The official said households currently heating with oil or electric baseboards could save about $1,400 a year on energy bills by switching.
“Our government is focused on giving Canadians options to lower their energy costs,” the official said.
How the Rebate Works
Under the program, homeowners who install eligible heat pumps will receive grants, with amounts varying according to household income. The government said low- to median-income households could receive grants of up to $10,000, while households with incomes above the median would be eligible for up to $2,000.
Officials said the program is intended to help households facing emergency heating system replacements, though an emergency situation will not be a requirement to qualify.
Application Process and Timeline
Applicants will be able to apply through an online portal, with officials saying people should receive confirmation of their eligibility and grant amount within 24 hours. After installing a new heat pump, applicants will upload receipts through the same portal and can expect confirmation within five days, followed by reimbursement via direct deposit.
Government officials said they are aiming to launch the program in early 2027 and are exploring options to allow retroactive eligibility for installations completed before the launch date.
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