Making Home Heating More Affordable for Canadians While Fighting Climate Change
November 21, 2022 Stellarton, Nova Scotia Natural Resources Canada
The Government of Canada is continuing to invest in making life more affordable for families across the country by helping homeowners switch from expensive home heating oil to energy-efficient cold-climate heat pumps.
Today, the Honourable Sean Fraser, Minister of Immigration, Refugees and Citizenship, on behalf of the Honourable Jonathan Wilkinson, Minister of Natural Resources, announced a $250 million investment for the Oil to Heat Pump Affordability (OHPA) Grant, a new stream to add to the existing Canada Greener Homes Initiative. This program will help tens of thousands of households move to affordable, reliable electric heat pumps instead of expensive home heating oil. The OHPA Grant builds on $250 million announced in September, 2022, by Minister Guilbeault to make home heating more affordable – and cut pollution – by helping households move to electric heat pumps.
While national in scope, the OHPA Grant’s design reflects the fact that a higher proportion of Atlantic Canadians use oil as their primary source of heat. Today’s announcement is another way that the Government of Canada is following through on its commitment to deliver practical solutions on home heating, especially for Atlantic Canadians, while fighting climate change.
The new OHPA Grant focuses on households that need it the most and is designed to benefit low-to-median-income Canadian households. On average, homeowners who switch from oil to cold-climate heat pumps to heat their homes would save between $1,500 and $4,700 per year on home energy bills.
Eligible homeowners will be able to combine OHPA Grants with funding from existing federal, provincial, territorial and utility programs. The OHPA Grant will provide up to $5,000, which would cover costs including:
the purchase and installation of an eligible heat pump;
electrical upgrades required for the new heat pump; and
safe removal of the oil tank.
Recognizing that many low-to-moderate-income homeowners are often unable to carry upfront costs associated with the installation of heat pumps, money will be delivered to Canadian households before the installation of their new heat pumps, and the program will feature robust verification processes to ensure the program is being used as intended.
Canadian households may be eligible for the OHPA Grant if:
their household has an after-tax income at or below the median household after-tax income;
their home is oil-heated as of January 2023 (this must be demonstrated with copies of their oil fuel bills from the 12 months preceding their application); and
they are the primary resident and owner of their home.
The OHPA Grant will be available starting in early 2023 through the Canada Greener Homes Initiative Portal. The $2.6-billion Canada Greener Homes Initiative (CGHI) already provides eligible homeowners with up to $5,000 to retrofit their home to reduce energy use and save money. Homeowners can therefore benefit from both the OHPA and CGHI grants to replace their oil furnace with heat pumps.
As of the most recent Quarterly Update, the CGHI had issued close to $106 million in grants to almost 28,000 homeowners and approved interest-free loans for almost 4,300 homeowners. As with the Canada Greener Homes Initiative, Natural Resources Canada will seek to co-deliver the OHPA Grant with existing provincial, territorial or utility programs where appropriate, and will be approaching Atlantic provinces in particular about their interest in co-delivery of the OHPA Grant.
Helping households transition to heat pumps not only helps lower energy costs for Canadians, but also helps cut pollution. The OHPA Grant is yet another example of the government’s commitment to making life more affordable for Canadians while fighting climate change from coast to coast to coast.
“Heating and cooling our homes more efficiently — with technology like electric heat pumps — costs Canadians less money and reduces pollution. We’re pleased to help Canadians do just that.”
The Honourable Jonathan Wilkinson
Minister of Natural Resources
“These are challenging times for Canadians, particularly when regions across Atlantic Canada are facing higher heating bills. To continue providing immediate relief, our federal government is reducing Canadians’ heating bills by helping homeowners cover up-front costs in federal grants up to $5,000 to replace their oil heating systems with brand new heat pumps. By transitioning away from oil heating, homeowners can save thousands of dollars in their annual heating bills, putting more money back in peoples’ pockets while also reducing pollution and creating new jobs across the country.”
The Honourable Sean Fraser
Minister of Immigration, Refugees and Citizenship
In September, the Government of Canada announced $250 million through the Low Carbon Economy Fund to help, based on early estimates, tens of thousands of households across Canada transition off home heating oil to affordable, reliable electric heat pumps.
Heat pumps are a proven and reliable technology in Canada, capable of providing year-round comfort control for a home by:
heating it in the winter;
cooling it in the summer (heat pumps, despite their name, can also act as air conditioners); and
in some cases, heating water.
Heat pumps are one of the best ways for homeowners to save money on energy bills and fight climate change. When compared to other electric home heating sources, they are also two to three times more efficient, meaning greater savings for homeowners and reduced energy intake for utilities and grids.
Atlantic jurisdictions have the highest proportions of homes using oil for home heating. Estimates put P.E.I. at 56%, Nova Scotia at 39%, New Brunswick at 15%, and Newfoundland and Labrador at 15%.
Natural Resources Canada is also working with the U.S. Department of Energy, the U.S. Environmental Protection Agency, and manufacturers on developing and commercializing the next generation of cold climate heat pumps through the Residential Cold-Climate Heat Pumps Technology Challenge.
Canada’s world-leading climate plan has invested over $100 billion in clean growth toward a target of 40%–45% emissions reductions by 2030, and net-zero emissions by 2050.
The Canada Greener Homes Initiative will deliver up to 1.5 megatonnes (Mt) in emissions reduction annually by 2026 and is expected to generate over 110,000 direct and indirect jobs across Canada, building on the more than 436,000 direct jobs the energy efficiency sector accounted for in 2018.
Canada’s building sector is responsible for 13% of Canada’s direct greenhouse gas emissions, or 88 Mt, in 2020. When accounting for off-site generation of electricity for use in buildings, it brings the total to around 18%. That’s why the federal government is developing a Canada Green Buildings Strategy to reduce sector emissions by 37% below 2005 levels by 2030. Other federal measures already in place are contributing to this effort, such as:
$1.5 billion for the Green and Inclusive Community Buildings program that will support green and accessible retrofits, repairs or upgrades of existing public community buildings and the construction of new publicly accessible community buildings that serve high-needs, underserved communities across Canada;
$4.4 billion for up to 175,000 interest-free loans through the Canada Mortgage and Housing Corporation for energy-saving retrofits;
At least $2 billion in financing through the Canada Infrastructure Bank’s Building Retrofit Initiative, which invests in the decarbonization of public and commercial buildings and provides attractive financial terms to reduce investment barriers and drive energy bill savings; and
$950 million for the Green Municipal Fund under the Federation of Canadian Municipalities, including for the Community Buildings Retrofit initiative which enables communities to undertake retrofits and other upgrades to lower emissions and improve energy performance of community buildings.
Natural Resources Canada
Office of the Minister of Natural Resources
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