Are you considering applying for the heat pump incentive offered by Ottawa? The grant program may sooner rather than later run out of funding, according to Ottawa’s budget watchdog.
According to a report published on Thursday by the Office of the Parliamentary Budget Officer (PBO), the government would have to pay $2.7 billion if all eligible Canadians—roughly 244,000 households nationwide—applied for the program.
Although it is unlikely that all 244,000 households will apply, the PBO warns that even if only those who are anticipated to apply genuinely request funding, the program will still likely run short.
According to the report, 10,000 households had either received funding from the program or had their applications approved as of mid-October 2023. Based on that pattern, the PBO predicts that unless the government increases its budget allocation from $750 million over the next five years to $797 million, the program will run out of money before it runs out of applicants.
Parliamentary Budget Officer Yves Giroux advised “those who are on the fence… it’s probably a good idea to send in their applications sooner rather than later.” “(That’s) based on discussions we had with public servants.”
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The press secretary for Minister of Energy and Natural Resources, Jonathan Wilkinson, referred to the program as a “success to date” in a media statement, but he did not go so far as to suggest that it would receive additional funding.
“As is standard practice, [Natural Resources Canada] evaluates programs throughout their lifetime to ensure any decisions made about the program beyond its current timeline are in the best interest of Canadians, especially with regards to affordability and climate action,” stated Carolyn Svonkin.
Homeowners in every province are eligible for grants through Ottawa’s Oil to Heat Pump program to convert from oil-fired furnaces to electric heat pumps. Those who own their homes, make at least the provincial after-tax median income, and have bought at least 1,000 litres of heating oil in the previous 12 months are eligible for the program.
The federal government will give households up to $10,000 for a suitable heat pump. In areas where the provincial governments co-deliver the program, such as Newfoundland and Labrador, Prince Edward Island, and Nova Scotia, homeowners are eligible to receive additional funding, up to a maximum of $15,000 from Ottawa, a $250 one-time bonus, and additional provincial grants.
