The federal government is starting a rebate program worth $2 billion aimed at helping homeowners across Canada cut their heating costs while also lowering emissions when they install heat pumps in their homes.
This funding will offer rebates for as many as 820,000 homeowners over the next eight years, potentially saving them around $1,400 each year on their heating bills when they switch out old heat pumps or heating systems, officials said Thursday.
“Homeowners can apply quickly for the rebate when their existing heating system breaks down and they decide to replace it with a new heat pump system,” a background document said.
“They can also apply as their existing heating system approaches end of life, and they want to make the transition before a breakdown occurs.”
The federal government mentioned it will collaborate with the Canada Mortgage and Housing Corporation (CMHC) to offer low-interest financing for owners of apartment buildings aiming to retrofit more than 280,000 homes over the next eight years.
“When fully taken up, these upgrades will save Canadian families more than $1 billion every year on their energy bills; that is a great return on investment,” Carney said in Sherbrooke, Que.
The federal government is also putting forward $110 million in funding over three years starting in 2027-28 to renew the Deep Retrofit Accelerator Initiative.
That program offers funding for energy and emission reduction retrofits in commercial, institutional, and mid- or high-rise multi-unit residential buildings
Targeting emergency heating system replacements
The program is set to begin early next year and focuses on homeowners needing urgent replacements because their current systems have failed.
According to the federal government, about one million Canadian households replace their heating systems annually, with around 80 percent doing so because theirs has broken down.
In most instances, officials explained that people tend to replace their existing systems with similar ones. The goal here is to shift that trend.
Officials indicated that announcing the program months before its launch gives them time for consultations within the industry and allows installers to stock up on heat pumps.
Rebates and eligibility
Households earning below the median after-tax income in their province can receive rebates of up to $10,000. Those earning above that threshold can get a maximum rebate of up to $2,000.
Carney noted that this program could be paired with provincial grants and rebates for installing heat pumps which means even more upfront savings.
Officials explained that eligibility will be determined similarly to how it was done for the now-closed oil-to-heat pump initiative aimed at low- and middle-income households launched in 2022.
That earlier program focused only on replacing oil furnaces in certain provinces. The new initiative not only encompasses households nationwide but also includes replacements for other types of heating systems like natural gas, propane, diesel, and electric.
WATCH | More about heat pumps:
Why people in Ottawa are choosing heat pumps to warm their houses
CBC’s Stu Mills spoke with some homeowners who have installed heat pumps about their pros and cons.
To qualify for the rebate , heat pumps must be on the Eligible Products List , an extensive selection of over 100 ,000 options at various price points and configurations , all suited for the Canadian climate ,”a government background document said.
People wishing to apply for rebates can do so before having any installation done through an online portal where they’ll find out if they qualify within 24 hours.
Once they buy and install a heat pump , homeowners can head back online , upload receipts, and receive approval within five days. The federal government will then directly deposit funds into each homeowner’s bank account.
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