Costs for Federal Heat Pump Grant Program Could Increase to $2.7 Billion, Quadrupling Initial Estimates
The Parliamentary Budget Office (PBO) has reported that a federal grant program aimed at assisting homeowners in converting from oil furnaces to electric heat pumps could potentially reach costs of nearly $2.7 billion, almost four times its initial budget of $750 million.
“The PBO estimates that there are up to 244,000 households nationwide that could be eligible for OHPA [Oil to Heat Pump Affordability] program funding,” said a Legislative Costing Note, as first covered by Blacklock’s Reporter.
“If all eligible households access the program, we estimate that the OHPA program could have a maximum potential cost of $2.7 billion.”
So far, around 10,000 households have reportedly qualified for these heat pump grants. This figure was determined by extrapolating historical participation trends in the program, according to the note titled “Enhancements to the Oil to Heat Pump Affordability Program.”
Initially, the program offered grants of $10,000 to eligible homeowners for conversions. However, on Oct. 26, this amount was increased to $15,000, with an additional $250 one-time bonus for those in provinces offering similar subsidies. The enhanced grants are specifically available in Nova Scotia, Prince Edward Island, and Newfoundland and Labrador, while other regions continue to offer the original amount.
In addition to the grant program, the federal government has also suspended a 17 cents per liter carbon tax on home heating oil effective Nov. 10, a move primarily benefiting homeowners in Atlantic Canada. This region predominantly relies on oil for home heating.
Prime Minister Justin Trudeau, in addressing the carbon tax relief, stated that there would be no further exceptions or suspensions of the carbon pricing.
Labour Minister Seamus O’Regan, representing St. John’s South—Mount Pearl in Newfoundland, highlighted the historical burden of home heating oil costs in the region and defended the region-specific nature of these initiatives.
“Constituents are scared to death about a source of home heating that was always astronomically expensive but only getting more expensive,” said Mr. O’Regan Oct. 31.
“We have had to suffer through home heating oil. I just find it a bit rich that everybody is just getting so excited about carve-outs and exceptions in particularities to regions. That’s how this country is built.”
Privy Council polling, conducted through focus groups in Atlantic Canada, indicated that the implementation of the carbon price was not expected to significantly change Canadians’ carbon-emitting activities like driving and heating their homes. This region is particularly relevant as it houses 24 Liberal MPs who are up for reelection.
