Canada Pledges $2 Billion to Retrofit One Million Homes in Major Climate Action Push

Canada has unveiled one of the largest home energy programmes in its history: a $2 billion investment over eight years to retrofit one million homes, cutting household heating costs and reducing the country’s emissions by more than 25 megatonnes. Prime Minister Mark Carney announced the plan on 8 October 2026 in Sherbrooke, Quebec, as a core commitment of Canada’s National Electricity Strategy.

A national heat pump rebate at the core

The centrepiece is a new National Heat Pump Rebate Programme that will help up to 820,000 homeowners switch to eligible electric cold-climate air-source heat pumps. Households below the median income can receive up to $10,000, while other eligible homeowners can receive $2,000 — and the federal rebate can be combined with existing provincial programmes to lower installation costs further.

The government says the design is deliberately simple: no pre- or post-installation energy audits are required, applications run through a quick online portal with approval within 24 hours, and payment follows within five days of submitted receipts. Homeowners can apply when an old heating system breaks down or when it is nearing the end of its life.

Lower bills and protection against extreme heat

For households currently heating with oil, propane or electric resistance systems — including electric furnaces and baseboards — switching to a heat pump could save an average of more than $1,400 a year on energy bills, according to the federal government. Heat pumps also provide air conditioning, which the government describes as vital protection during increasingly frequent extreme heat events.

According to Carney, more than one million Canadian households still heat with oil, propane or diesel — fuel sources he described as more polluting, less efficient and exposed to global market swings. Canadian media reported that the rebate programme is expected to launch in early 2027 and apply retroactively to installations made from this autumn.

Support for renters and apartment buildings

The plan also extends beyond owner-occupied homes. The Canada Mortgage and Housing Corporation will help rental housing providers access private financing on more favourable terms for energy-efficiency retrofits in existing rental buildings — expected to support up to 250,000 rental units over eight years, at no cost to taxpayers.

The Canada Infrastructure Bank’s Building Retrofit Initiative will target up to 30,000 units in multi-unit residential buildings by mobilising private-sector investment, using its existing government allocation. And the government will invest nearly $110 million over three years, starting in 2027–28, to renew the Deep Retrofit Accelerator Initiative, which guides building owners through complex retrofits from planning to implementation.

FAKTA

• $2 billion over eight years for one million home retrofits across Canada
• National Heat Pump Rebate: up to $10,000 for below-median-income households, $2,000 for other eligible homeowners
• Average energy-bill savings of more than $1,400 a year for oil, propane and electric-resistance heating households
• Up to 250,000 rental units and 30,000 multi-unit residential units included in the programme
• Emissions reduction of more than 25 megatonnes — part of Canada’s National Electricity Strategy

A building-sector climate action push

Taken together, the measures aim at one of the toughest corners of the energy transition: existing buildings. By catching homeowners at the moment a furnace dies or reaches the end of its life, the programme tries to steer replacement choices away from fossil systems toward electric heat — reducing emissions while easing the cost of living.

The announcement lands just weeks before COP31 opens in Antalya, Türkiye, where Canada’s climate record — and its ability to turn pledges into delivered programmes — will again face international scrutiny. Read more of our coverage in the climate section.