Canada Announces $2 Billion Investment to Retrofit One Million Homes with Heat Pumps
Prime Minister Mark Carney unveiled a $2 billion, eight-year plan on October 8, 2026, to retrofit one million Canadian homes. The initiative centers on a new National Heat Pump Rebate Program offering up to $10,000 for low-income households, alongside financing support for rental units and a renewed deep retrofit accelerator.
On October 8, 2026, Prime Minister Mark Carney announced in Sherbrooke, Quebec, that the Government of Canada will invest $2 billion over eight years to deliver one million home retrofits. The initiative is designed to lower energy costs and reduce greenhouse gas emissions by helping households transition away from oil, propane, or electric resistance heating.
At the center of the announcement is the new National Heat Pump Rebate Program, which will provide rebates to up to 820,000 homeowners installing eligible electric cold climate air source heat pumps. Households earning below the median income can receive up to $10,000 per rebate, while other eligible homeowners can receive $2,000. According to the government, switching to a heat pump system is expected to save households an average of more than $1,400 annually on energy bills if they currently heat with oil, propane, or electric resistance.
The program requires no pre- or post-energy audits and promises approval within 24 hours via an online portal. More than 80% of HVAC replacements in Canada occur when current systems break down without warning, and over seven million households still heat their homes with oil, propane, diesel, electric baseboards, or outdated furnaces.
Beyond single-family homes, the investment includes significant support for multi-unit residential buildings. The Canada Mortgage and Housing Corporation (CMHC) will support retrofits in up to 250,000 rental housing units over the next eight years through a Multi-Unit Mortgage Loan Insurance Product. Additionally, the Canada Infrastructure Bank (CIB) Building Retrofit Initiative will target up to an additional 30,000 residential units in Multi-Unit Residential Buildings (MURBs).
The government also committed nearly $110 million over three years, starting in 2027-28, to renew the Deep Retrofit Accelerator Initiative. Combined, these measures are projected to reduce Canada’s emissions by over 25 megatonnes, equivalent to taking nearly 8.5 million cars off the road for one year. The broader effort forms part of the National Electricity Strategy.