The federal government will launch a $2-billion, eight-year rebate program in early 2027 to help homeowners install heat pumps, aiming to reduce both annual heating costs and carbon emissions. Prime Minister Mark Carney announced the initiative in Sherbrooke, Que., on Thursday, stating the program will support up to 820,000 households across Canada. The investment is part of a National Electricity Strategy to help one million Canadian households make retrofits. Carney noted that “Canada strong starts in a warm home.”
Rebate Tiers Based on Household Income
The financial support available to homeowners is tied to their income relative to the median. Households earning below the median can receive up to $10,000 in rebates. Those earning above the median are eligible for a maximum of $2,000.
Unlike that earlier initiative, which focused primarily on replacing oil furnaces, the new program covers replacements for heating systems. It includes natural gas, propane, diesel, and electric systems. To qualify, heat pumps must be on an Eligible Products List featuring over 100,000 options suited for the Canadian climate, according to a government background document. The government is currently winding down a previous program for oil-heated homes.
Government Portal Streamlines Emergency Heater Rebates
The government is designing the program to accommodate homeowners facing sudden system failures. Federal officials stated that 80 per cent of HVAC replacements in Canada occur because of an emergency breakdown.
To facilitate quick transitions, the government will launch an online portal. Homeowners can check their eligibility within 24 hours of applying. Once a heat pump is installed, users upload their receipts to the portal and receive a direct deposit rebate within five days. The government confirmed that no pre- or post-installation energy audits are required to participate. Environment and Climate Change Canada is also investigating if the rebate could apply retroactively as early as this fall.
Political Response to the Federal Investment
Conservative Leader Pierre Poilievre criticized the program during a news conference in Ottawa on Thursday. He argued that the $2-billion cost represents a removal of capital from the pockets of Canadians, suggesting that the funds should remain with homeowners to spend as they see fit rather than being distributed through a bureaucratic process.
Eligibility for Proactive Heat Pump Replacements
Can I apply for a rebate if my heating system hasn’t broken down?
Yes. While the program targets emergency replacements, officials confirmed that homeowners may also apply when their current system is approaching the end of its life and they wish to transition to a heat pump before a failure occurs.
Does the program cover all types of existing heating systems?
The program covers the replacement of oil, propane, diesel, and electric heating systems.
Is there a requirement for an energy audit?
No. The federal government stated that homeowners do not need to conduct pre- or post-installation energy audits to participate in the rebate program.
How much will this save me annually?
Households currently using electric baseboards or oil will save an average of $1,400 a year. This comes as heating with oil now costs 70 per cent more than in 2024, an increase of at least $2,500 per household annually.
What is the goal of this investment?
Carney stated that by supporting these retrofits, the government is “lowering costs, reducing emissions, and building a stronger and more sustainable economy for all.”