Ottawa's $2-billion heat pump rebate: what it means for costs

Ottawa has unveiled a new National Heat Pump Rebate Program, and it's big enough that homeowners weighing a furnace replacement should know it's coming — even though it isn't live yet.

What was announced

According to CBC, Prime Minister Mark Carney announced the $2-billion program on a visit to an HVAC manufacturer in Sherbrooke, Que. The federal government says the program could help up to 820,000 households over eight years, with eligible homeowners able to claim up to $10,000 if their household income is below the median, or $2,000 otherwise.

Key details from the announcement, per CBC:

• The program is expected to formally launch in early 2027, though Ottawa is looking at making it retroactive to fall 2026.
• Homeowners would apply through an online portal, with approvals confirmed within 24 hours.
• After installation, homeowners submit receipts and the rebate is approved within five days.
• The government says it will publish a list of eligible heat pumps, described as "over 100,000 options at various price points and configurations."
• The design is aimed at the roughly 80% of HVAC replacements that happen when an existing furnace or air conditioner breaks down, rather than planned upgrades.

Carney said the program should deliver homeowners "average savings of $1,400 a year" on heating costs once a heat pump is installed. Ottawa says it's still consulting with industry and installers to make sure there's enough inventory before the program opens.

What this means for your costs right now

Nothing changes for homeowners today — there's no portal, no eligible-products list, and no confirmed start date beyond "early 2027, possibly retroactive to fall 2026." If your furnace or air conditioner is still working, there's no cost reason to rush a decision before more detail arrives.

If your system is on its last legs, the calculus is different. A ducted air-source heat pump Heat pump installation typically runs $9,350 – $15,600 before GST/HST, against $4,300 – $7,200 for a new high-efficiency gas furnace. Those numbers matter because of a rule most homeowners don't know about: under federal energy efficiency regulations, new gas furnaces sold in Canada already have to hit a minimum 95% AFUE, so there's no cheaper "80% efficient" furnace option to fall back on — it's a modern condensing furnace or a heat pump either way.

We calculate these ranges from labour hours at local trade rates plus equipment and materials, then check the result against market quotes, so they reflect what installers are actually charging in your region today — not a federal estimate of future savings.

Programs that exist today

Until the new federal program opens, the incentives actually available to Canadian homeowners are narrower:

• The Oil to Heat Pump Affordability program offers up to $10,000 (or up to $25,000 where delivered jointly with a province) for homes currently heated with oil. Applications close 31 July 2026 in Alberta, Manitoba, the Northwest Territories, Quebec and Saskatchewan.
• The Canada Greener Homes Grant and Loan are closed — the deadline for grant documents was 31 December 2025.
• In Ontario, the Home Renovation Savings program offers up to $7,500 toward a cold-climate air-source heat pump for electric, oil, propane or wood-heated homes (up to $2,000 for gas-heated Enbridge customers), but it requires pre-approval and a participating contractor.

All of our heat pump figures are shown before GST/HST (13% HST in Ontario, 5% GST in Alberta), since tax treatment varies by province and isn't part of the installed-cost estimate.

What to do while you wait

If your current system is still working, there's little downside to waiting for firmer details on the federal program — eligibility, the product list and the application window are all still unconfirmed. If you're facing an emergency replacement before then, don't delay the job on the hope of a rebate that isn't open yet; price it against today's incentives and your region's typical installed cost Heat pump installation.

Whichever route you take, get more than one quote. Installers' pricing for ducted heat pumps varies more than for most renovation jobs, because sizing, ductwork condition and electrical capacity all affect the final number — our "is my quote fair" tool is a quick way to check a quote against local rates before you sign anything.