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Feds Launch Interest-Free Loan Program For Eco-Friendly Home Upgrades

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Canadians can now apply for interest-free loans up to $40,000 to make their homes more eco-friendly, thanks to a new program launched by the federal government.

In an effort to help up to 175,000 Canadians make their living space more energy efficient, the Canada Greener Homes Initiative will now provide loans between $5,000 and $40,000 per household for major green retrofits. This is a new addition for the initiative, which launched in May 2021 and initially only offered grants ranging from $125 to $5,000 to households making eco-friendly upgrades.

Canadian homeowners whose primary residence is a single or semi-detached house, row or town house, mixed-use building, mobile home on a permanent foundation, permanently-moored floating home, or a multi-unit residential building of three storeys or less can apply. Under the program’s rules, there are specific types of retrofits that are eligible to be covered, and the list can vary from home to home depending on the results of a required assessment from an energy advisor. They can include changes like improving insulation, windows, doors, thermostats, space and water heating, and implementing a renewable energy source such as a solar panel system.

But there are also a number of retrofits that are ineligible for anyone who applies, including air conditioners, skylights, tankless water heaters, and roofs. The cost of furnaces and boilers also won’t be covered for anyone who doesn’t live in a northern or off-grid community. The grants and loans are also not available to landlords, renters, or anyone who has already started or completed their retrofits. Homes built less than six months ago are also ineligible.

This is the first phase of the Greener Homes loan program and is open to homeowners applying for the first time or who already have an open application. The second phase, which will begin in the fall, will open up to homeowners who have already received a grant but still have remaining eligible retrofits that they’d like to carry out.

The launch comes two months after the federal government announced an additional $458.5M investment in the Canada Greener Homes program as part of its 2030 Emissions Reduction Plan.

Canadians interested in applying for either the grant or loan can do so online. Applications are then reviewed and approved by Natural Resource Canada. A pre-retrofit evaluation is carried out — the cost of which can be covered by a $600 grant from the Greener Homes Initiative — and applicants can decide, based on the evaluation report, which approved retrofits they’d like to carry out. After the work is complete, a post-retrofit evaluation is then done. And for those who’ve taken on a loan, there’s a 10-year repayment period.

As of June 8, the Greener Homes initiative has already received 171,000 applications and has issued $38,000,000 in grants to 10,300 homeowners.

“That represents grants in the hands of three-quarters of all homeowners who have completed their retrofits to date,” reads a June 17 update on the program. “We have worked hard to issue payments within our service standard of 40 business days from the time we receive the final receipts and required documentation from the homeowner. Right now, we are meeting this standard 92% of the time, surpassing our 90% target, and we are getting faster as we go.”

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