New $250M federal grant program will help offset costs of switching from oil to heat pumps

The federal government has announced details of a new grant to help low- to median-income Canadian households make the switch from oil to heat pumps.

Households will be eligible for up to $5K up front rather seeking reimbursement

The federal government has announced a new grant of up to $5,000 to help households convert from oil heating to a heat pump. (Laura Meader/CBC)

The federal government has announced details of a new grant aimed at helping low- to median-income Canadian households make the switch from oil to heat pumps.

The Oil to Heat Pump Affordability (OHPA) Grant will provide households with up to $5,000 — depending on the household income — to cover costs that include the purchase and installation of heat pumps, necessary electrical upgrades and safe removal of the oil tank.

Households may be eligible if they have an income at or below the median household after-tax income, if their home is heated by oil and if they are the primary resident and owner of their home.

The money will be provided up front to pay for the switch, and the new grant can be combined with existing greener-home grants from federal, provincial and territorial governments and utilities.

Sean Fraser, the minister of immigration, refugees and citizenship, made the announcement Monday morning in Stellarton, N.S.

WATCH | Ottawa announces grant program to replace oil furnances

Ottawa announces $5K grant program for replacing home oil furnaces with heat pumps

10 months ago
Duration 0:40
Minister Sean Fraser introduces a new federal grant program to help families across Canada replace home oil furnaces with heat pumps.

"It's not a secret that affordability has been front of mind for people who live in our community," he said.

"I think if you talk to anybody about what their top issues are, they'll tell you that the cost of groceries has been going up, they'll tell you that the cost of their home heating oil bill is making life more challenging and the ability to get by is not something that they can take for granted."

The government says a household that moves from heating oil to a heat pump can save between $1,500 and $4,700 a year on energy bills.

'Light at the end of the tunnel'

Kayla Muir is a homeowner who lives near Stellarton and is raising two young kids. She says her family has been struggling with rising prices of everything from food to clothes to electricity, but one of the biggest expenses in her household is home heating oil.

She said last winter, she couldn't afford to have an oil truck fill her tank, so she would fill jerry cans at the gas station with home heating oil to get by.

"It is, sadly, something that makes us forgo other necessities," she told those at the news conference. "The tough reality is that these days, like many families, the money we spend on heating our home means less bread and milk in our kitchen."

Muir said she's grateful the new grant will be available soon.

"This is a tough time and my family is getting through it, but today's news really feels like a light at the end of the tunnel."

The grant will cover costs that include the purchase and installation of heat pumps, necessary electrical upgrades and safe removal of the oil tank. (CBC)

Brian Gifford, the chair of the Affordable Energy Coalition, said he's heard from members of the group who are facing a difficult winter due to the rising cost of energy.

"The cost of a half a tank of oil in Antigonish was $900, which is more than twice as much as last year. And people just can't afford it," he said.

Gifford said a member in Halifax who lives in a mobile home and receives a disability benefit just learned her oil charge is going up by $73 a month.

"She was distraught," he said. "She doesn't know how she's going to manage."

Gifford said the new grant is important, and one of its perks is that it will provide funding up front rather than expecting recipients to pay first and get reimbursed later, which can be a challenge for those without financial wiggle room. 

WATCH | Heat pump grant 'in response to rapid rise in price of home heating oil': Minister

Heat pump grant 'in response to rapid rise in price of home heating oil': Minister

10 months ago
Duration 7:30
"We needed to respond to make sure that people understand we're here for them as the price of energy has gone up," said Minister Sean Fraser of the newly announced Oil to Heat Pump Affordability Grant.

Reducing pollution

The OHPA program will cost $250 million, and grants will be available beginning in January through the Canada Greener Homes Initiative Portal.

Fraser said the new program will help Canadians save money while also creating jobs and reducing pollution.

He said "it's particularly important that we reflect on what we've all been through this fall here in Atlantic Canada" after post-tropical storm Fiona.

"We would be remiss if we thought inaction on climate change didn't come with a cost as well," he said, noting the significant damage to farms, wharfs and personal property caused by the storm that hit the region in late September.

"We've got programs to respond in the event of these severe weather events, but today's program is going to help people save money but also make it less likely that we are impacted by severe weather events by reducing our pollution in the first place rather than simply paying for it after the damage has been done."

The OHPA grant funding is in addition to a separate, $250-million home heating program through the Low Carbon Economy Fund, announced in September. That program is aimed at making home heating more affordable for households across the country, especially in Atlantic Canada, where 30 per cent of homeowners still use furnace oil to heat their homes.


With files from Evan Dyer, David Cochrane and Michael Gorman

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