Canadian Prime Minister Carney announced on October 8 in Sherbrooke, Quebec, that the government will invest C$2 billion over eight years, alongside home retrofit financing measures, to drive energy-efficiency retrofits in one million homes nationwide.
The newly created national heat pump rebate program is expected to benefit as many as 820,000 households. Eligible families with incomes below the median can receive up to C$10,000, while other eligible households can receive C$2,000.
The heat pump rebate is planned to launch early next year, with application approvals compressed to 24 hours. The new program is set to begin in early 2027, focusing on helping households switch to electric air-source heat pumps suitable for cold climates when their existing heating systems fail or approach the end of their service life.
Federal rebates can be stacked with existing provincial rebates. The application process announced by the government removes the requirement for energy audits before and after installation.
Homeowners submit personal information and details of the equipment they intend to purchase through an online platform, and the government promises to confirm approval within 24 hours. After purchasing and installing the approved equipment, applicants upload receipts, and payment approval will be completed within five days.
Rebate-eligible equipment must be on the qualified products list, and each person can receive the rebate only once. The government will consult with heating, ventilation and air conditioning installation companies on implementation details, and work with technical colleges and industry associations to support installer training and certification.
The fast approval process targets the urgent need when households replace heating systems. About one million homes in Canada replace their heating systems each year, with more than 80% of cases caused by sudden equipment failure. The government hopes to shorten application wait times so households can still choose a heat pump when they urgently need to restore heating.
Condo retrofits bring in private financing
In addition to household heat pump rebates, the Canada Mortgage and Housing Corporation and the Canada Infrastructure Bank will use financing measures to support retrofits of 280,000 apartment homes over the next eight years.
Among them, the Canada Mortgage and Housing Corporation plans to use multi-unit residential mortgage loan insurance to provide financing support for energy-efficiency retrofits of up to 250,000 rental homes, helping owners obtain more favorable financing terms from approved lenders.
The Canada Infrastructure Bank will drive retrofits of another 30,000 homes through its existing building retrofit program, with funds coming from the bank's existing appropriations.
The government will also invest nearly C$110 million starting in the 2027–2028 fiscal year over three years to renew the Deep Retrofit Accelerator Initiative, with third-party organizations helping building owners complete complex retrofit projects from planning to construction.
Lower heating bills, with savings depending on the original energy source
The government estimates that households using oil or resistance heating can save an average of about C$1,400 per year in energy costs after switching to heat pumps. Heat pumps also provide cooling, helping address summer heat.
Clean energy research organization Clean Energy Canada's earlier surveys in Toronto and Vancouver showed that upfront purchase and installation costs were the primary obstacle for surveyed households adopting heat pumps.
The organization's estimates show that households in Nova Scotia switching from oil furnaces to heat pumps can save more than C$1,800 per year in fuel costs, while households in British Columbia switching from natural gas to heat pumps save about C$262 per year on average.
Energy prices in different regions can also change post-retrofit bills. Government officials said at a technical briefing that in some areas with lower natural gas prices, switching to heat pumps may increase usage costs, and the government will explain the relevant cost differences to households.
Home retrofits are part of Canada's national electricity strategy. The strategy proposes doubling grid capacity by 2050. The government expects this round of home retrofit measures to reduce more than 25 million tonnes of greenhouse gas emissions in total.