Canada to launch $2 billion heat pump rebate program in early 2027
- The federal government will launch a $2-billion rebate program in early 2027 to assist Canadian homeowners in replacing aging heating systems with heat pumps.
- The program offers tiered financial support based on household income.
- Officials noted that the program does not require pre- or post-installation energy audits.
The federal government will launch a $2-billion rebate program in early 2027 to assist Canadian homeowners in replacing aging heating systems with heat pumps. The initiative, announced by Prime Minister Mark Carney on October 8, 2026, aims to support up to 820,000 household retrofits over eight years, according to government officials speaking on background.
Income Levels Determine Heat Pump Rebate Amounts
The program offers tiered financial support based on household income. Low to median income households can receive up to $10,000, while those above the median household income are eligible for a maximum rebate of $2,000. The government will utilize an online portal to determine eligibility within 24 hours of application. Once a system is installed, homeowners must upload their receipts to the portal to receive a direct deposit, with approval expected within five days.
Officials noted that the program does not require pre- or post-installation energy audits. The heat pumps must be selected from an established Eligible Products List, which includes over 100,000 options.
Targets for Emergency Heating Replacements
Government data indicates that 80% of HVAC replacements in Canada happen when current systems break. Officials stated that the program is specifically designed to incentivize homeowners to choose heat pumps during these urgent situations. While the program is geared toward emergency replacements, it is not restricted to them; homeowners may also apply as their current systems approach the end of their functional life.
Government Funds Financing for Apartment and Commercial Retrofits
Beyond the primary rebate program, the government plans to work with the Canada Mortgage and Housing Corporation (CMHC) to provide low-interest financing for retrofitting 280,000 apartment units. $110 million will be allocated over three years starting in the 2027-28 fiscal year to renew the Deep Retrofit Accelerator Initiative, which targets commercial, institutional, and mid- or high-rise multi-unit residential buildings. Prime Minister Carney stated that these combined efforts are expected to save Canadian families over $1 billion annually on energy bills.
Officials acknowledged that switching to a heat pump may not result in immediate savings for all homeowners. In provinces where natural gas is less expensive than electricity, the transition could increase operational costs for some residents. Officials stated that the government intends to provide clear information regarding these cost implications to applicants.
Political Response to the Funding Allocation
Conservative Leader Pierre Poilievre criticized the $2-billion expenditure, arguing that the government should leave the funds with taxpayers rather than managing the distribution through a bureaucracy.
“Here’s an idea: why don’t you leave the $2 billion in the pockets of Canadians — people like you, whom I trust,” he said. “And if you want to spend your money on a heat pump, then the government should leave the money in your pocket for you to do so.”
Conservative Leader Pierre Poilievre
Implementation Timeline
The program is scheduled to launch in early 2027. The government is also exploring options to make the program retroactive to the fall of 2026.