Ottawa Announces $250M Home-Heating Transition Program

Immigration, Refugees and Citizenship Minister Sean Fraser speaks during a news conference with United Nations High Commissioner for Refugees Filippo Grandi, April 6, 2022 in Ottawa. The Canadian Press/Adrian Wyld

The federal government today announced a new grant for low- and middle-income Canadians who transition their home-heating systems from oil to electric heat pumps.

Immigration, Refugees, and Citizenship Minister Sean Fraser announced the $250 million Oil to Heat Pump Affordability (OHPA) Grant during a press conference today in Stellarton, N.S., which he said will “reduce pollution” and create jobs.

“This federal grant is going to cover all aspects of the cost and installation of the heat pump—whether it’s the equipment itself and the cost of putting it in; electrical upgrades that might be needed; or even removal of the old oil tank that’s going to be replaced,” he said.

“The price of home heating oil over the past year has now more than doubled,” Fraser said while introducing the program. “This is really stretching families by making it more difficult for them to cover the cost of basics: grocery and rent or mortgage payments.”

The amount that an individual can claim, which is up to $5,000, will depend on their annual income.

Individuals who want to claim the grant must meet the “median household after-tax income” threshold, as defined by Statistics Canada, which as of 2020 was $26,570 for one person and $53,140 for a family of four.

“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,” wrote the Department of Natural Resources Canada in a news release today.

The department also said that Canadians who switch from oil to gas home heating will save between $1,500 and $4,700 per year on energy bills.

Home-Heating Taxes

Conservative leader Pierre Poilievre commented on the new grant today, saying that the federal government should cut taxes rather than introduce new spending.

“Instead of spending more inflationary money to try and solve the problem that they caused, why don’t they just get rid of the problem itself and get rid of the tax?” said Poilievre during question period in the House of Commons on Nov. 21.

Poilievre previously introduced a motion to exempt home heating fuel from the federal carbon tax, but it was defeated 116-202 in the House. The majority of Liberal, NDP, and Bloc Québécois MPs voting against it, while all the Conservative MPs taking part in the vote were in favour of the motion.

The text of Poilievre’s motion said energy analysts are predicting heating costs across Canada to rise by an average of 50 to 100 percent this winter.

Poilievre included in the text of his motion a letter from Liberal Premier of Newfoundland and Labrador Andrew Furey written to the federal government in September asking for a carbon tax exemption on certain home-heating fuels.

“A year ago today, the maximum price of furnace oil in our province was 97.91 cents per litre. Today it is 155.70, nearly 60 per cent more,” Furey wrote on Sept. 2.

Andrew Chen and The Canadian Press contributed to this report.