The federal government is dishing out dollars to help some Canadians switch from oil to electric heat pumps. 

Yesterday, Immigration Minister Sean Fraser announced the $250M Oil to Heat Pump Affordability Grant, a new stream to add to the existing Canada Greener Homes Initiative. The grant will offer low and middle-income homeowners up to $5,000 to make the switch. Fraser told reporters that the funds will cover costs like the installation of heat pumps, electrical upgrades needed for new equipment, and the safe removal of oil tanks. 

The grant will be available early in the new year, and eligible homeowners will be able to combine the Oil to Heat Pump Affordability Grant with existing federal and provincial programs that assist with home heating. 

The OPHA Grant builds on $250M announced in September, 2022, by Minister Guilbeault to make home heating more affordable -- and cut pollution -- by helping low-to-median-income households move to electric heat pumps. 

On average, the feds say 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 -- and help the environment. The grant money would be delivered to households prior to the installation of their new heat pumps so that homeowners don’t have to cover any upfront costs. Naturally, the program will feature a thorough verification process to ensure its being used as intended. 

CMHCPhoto by Tom Rumble on Unsplash

“These are challenging times for Canadians, particularly when regions across Atlantic Canada are facing higher heating bills,” said Fraser in a press release. “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.”

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 $2.6B 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.

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