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 OPHA 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, as defined by Statistics Canada's Low Income Measure Threshold (e.g., $53,140 after-tax for a family of four);
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.
