Ottawa launches $2 billion heat pump rebate for 820,000 homes

The federal government has launched a $2 billion National Heat Pump Rebate Program that Clean Energy Canada says could help as many as 820,000 Canadian households switch to electric heat pumps, the research organization said in a statement on Oct. 8.¹

Rachel Doran, executive director at Clean Energy Canada, said the program delivers on a key piece of the government's electricity strategy, which committed to retrofitting one million homes. The announcement also renews $110 million for the Deep Retrofit Accelerator Initiative, which has launched retrofit programs across the country.¹

What the rebate offers

A design feature Doran singled out is a 24-hour approval time for receiving the rebate. She said most households do not think about replacing a furnace until it breaks and cannot wait for a lengthy application process before installing a heat pump, so the quick turnaround ensures support arrives when it is needed.¹

The federal government's newly launched $2 billion National Heat Pump Rebate Program is a huge step forward to help as many as 820,000 Canadian households benefit from the efficiency and cost savings of an electric heat pump.¹Rachel Doran, executive director at Clean Energy Canada

Doran said the majority of Canadian households can save by switching to a heat pump, which she said are two to five times more efficient than the alternative. Analysis by Clean Energy Canada shows a household in Nova Scotia can save over $1,800 in fuel costs per year by switching from an oil furnace to a heat pump, while a household in B.C. switching from natural gas could save $262 and cut 97 per cent of heating emissions.¹

Upfront cost cited as top barrier

In 2025 market research of the greater Toronto and Vancouver areas, the number one barrier to adopting a heat pump that participants cited was upfront cost, Doran said. She said the new rebate will help more households make the switch and benefit from monthly fuel savings over the lifetime of their heating and cooling system.¹

Polling conducted by Abacus Data on behalf of Clean Energy Canada found that 78 per cent of Canadians say affordability should be a top priority for how additional power is used, according to the statement. Doran said Canadians want the government's electricity strategy to deliver on affordability.¹

On top of cost savings, Doran said heat pumps provide cooling, which she said is especially relevant in parts of Canada that have historically seen lower uptake of air conditioning but are now faced with hotter summers. In B.C., which has seen deadly heatwaves in recent years, less than half of households reported having access to cooling, she said.¹

A recent survey of Canadian heat pump owners found that 91 per cent would recommend a heat pump to a friend or neighbour, citing increased comfort, cooling and lower bills as the main benefits, according to the statement.¹

Doran said Clean Energy Canada is pleased to see the renewed funding for the Deep Retrofit Accelerator Initiative and hopes the new round will turn it into a force for market transformation, improving access to energy efficiency technologies and helping more households complete energy retrofits.¹

Prime Minister Carney has said that electricity is the clear solution to Canada's energy security, affordability, and competitiveness. Today's announcement sets Canada's electricity strategy up to help deliver on all three and to ensure everyday Canadians reap the cost-saving and energy security benefits electrification provides.¹Rachel Doran, executive director at Clean Energy Canada