Key takeaways
- A new federal heat pump rebate pays up to $10,000 to low- to median-income households and $2,000 to others, for installations from November 1, 2026.
- Applications open in early 2027, receipts must be submitted within six months, and no payment is made until an application is approved.
- The heat pump must heat the whole home and be installed by an HVAC contractor, and rental properties can qualify.
- Ontario’s Home Renovation Savings program offers up to $7,500 for a cold-climate air-source heat pump and up to $12,000 for ground-source.
- Toronto’s Home Energy Loan Program lends up to $125,000, and its current rates are valid until December 31, 2026.
Short answer: a new federal heat pump rebate announced on October 8, 2026 pays up to $10,000 to low- and median-income households and $2,000 to everyone else, and installations from November 1, 2026 can qualify even though applications do not open until early 2027. In Ontario, the Home Renovation Savings program separately offers up to $7,500 for a cold-climate air-source heat pump, and Toronto homeowners can finance the rest through the City’s Home Energy Loan Program, whose current rates are guaranteed until December 31, 2026.
If you are planning a renovation, an addition or a basement suite this winter, the heating system is worth deciding now. This guide explains each program, who qualifies, how the timing works and what to plan for in a renovation. Every figure comes from the Government of Canada, the Prime Minister’s Office, Save on Energy and the City of Toronto, checked on November 5, 2026. Programs change, so confirm the details with each program before you buy.
The new federal heat pump rebate
The federal government announced the rebate on October 8, 2026, and Budget 2026 commits more than $2 billion to help up to 820,000 households switch to heat pumps. The key points from the Government of Canada’s program page:
- Amount: up to $10,000 for low- to median-income households, based on after-tax income and equipment cost, and $2,000 for households above median income.
- Timing: installations from November 1, 2026 may qualify. The application portal opens in early 2027, and the program is expected to close in March 2034. No payments are made until the program launches and an application is approved.
- The heat pump: it must be able to heat your entire home, and it must be bought from and installed by an HVAC contractor.
- Where it applies: the home does not need to be your primary residence, so rental properties can qualify.
- One per address: you are not eligible if federal funding has already been provided for a heat pump at the address, and only one rebate is available per household.
- Paperwork: receipts must be submitted within six months, showing your name and address, the equipment’s AHRI number and the total project cost.
The Prime Minister’s announcement says both rebate levels can be combined with existing provincial programs. Because the program page itself does not yet spell out how stacking will work, confirm the details when the portal opens.
Ontario’s Home Renovation Savings program
Ontario’s program, delivered through Save on Energy and Enbridge, offers rebates sized to the equipment you install:
- Up to $7,500 for a cold-climate air-source heat pump
- Up to $12,000 for a ground-source (geothermal) heat pump
The same program also offers rebates for insulation, windows and doors, and other upgrades, which makes it worth reviewing the whole list before a renovation rather than just the heat pump. Check the current amounts and requirements on the Save on Energy website before you buy, because eligibility depends on the exact equipment and the paperwork you submit.
Toronto’s Home Energy Loan Program
For Toronto homeowners, the City’s Home Energy Loan Program (HELP) offers loans of up to $125,000 for energy improvements, repaid through your property tax bill. Two changes matter for heat pumps:
- Projects that only install a heat pump no longer need an EnerGuide home energy assessment.
- The City says its current interest rates are valid until December 31, 2026.
If you are using HELP to fund a heat pump as part of a larger renovation, apply early enough to lock in the current rate.
How the numbers could add up
Here is how the programs relate for a typical GTA home switching to a cold-climate air-source heat pump:
| Program | What it offers | Timing |
|---|---|---|
| Federal heat pump rebate | $2,000, or up to $10,000 for low- to median-income households | Installs from Nov 1, 2026; applications open early 2027 |
| Ontario Home Renovation Savings | Up to $7,500 (air-source) or $12,000 (ground-source) | Open now; check current requirements |
| Toronto HELP | Loan of up to $125,000, repaid on the tax bill | Current rates valid to Dec 31, 2026 |
For a household above median income, the federal $2,000 plus Ontario’s up to $7,500 could cover a meaningful share of an air-source heat pump, subject to the stacking rules each program confirms. For a lower-income household, the federal rebate alone can reach $10,000.
Why a renovation is the best time to switch
Heat pumps work best when the house is ready for them, and a renovation is when that is easiest and cheapest:
- Ductwork is exposed. When walls and ceilings are open, ducts can be resized or rerouted for a ducted heat pump without opening finished rooms later.
- Insulation and air sealing go in at the same time. A tighter house needs a smaller heat pump, and the same Ontario program offers insulation and air sealing rebates.
- The electrical service can be upgraded once. Heat pumps, induction ranges and EV chargers all add load. Planning the panel during a renovation avoids a second upgrade.
- Additions and suites need heat anyway. An addition, a basement suite or a garden suite has to be heated, and sizing a heat pump for the whole house at that point is often simpler than extending an old furnace system.
For a basement suite or a backyard suite, heating is also part of the Building Code design, so it should be decided before drawings are finalized. Our guides to legal basement apartments and garden suite costs cover how heating fits into those projects.
Ducted or ductless: which fits your house?
The federal rebate supports systems that can heat the whole home, so the first design question is how the heat will get to each room:
- Ducted (central) heat pumps connect to existing ductwork, much like a furnace and air conditioner. They suit houses that already have ducts in reasonable condition, and they are the simplest choice when a renovation is already opening walls and ceilings.
- Ductless (mini-split) systems use indoor heads in individual rooms or zones. They suit older houses with hot water radiators or no ducts, additions that the existing system cannot reach, and basement or backyard suites that need their own controls.
- Hybrid set-ups pair a heat pump with an existing gas furnace that takes over in the coldest weather. Check each program’s rules before choosing one, because rebates depend on the equipment and how it is installed.
Whichever type you choose, a heat load calculation for the finished house, including any addition or suite, is what sizes the system correctly. Sizing for the house as it will be, not as it is today, avoids buying twice.
A checklist before you buy
- Use a licensed HVAC contractor. The federal rebate requires the heat pump to be bought from and installed by one.
- Choose equipment that heats the whole home. The federal rebate supports whole-home systems, and Ontario’s rebate depends on the specific cold-climate equipment.
- Check prior funding. If the address has already received federal funding for a heat pump, the new rebate is not available.
- Keep every document. Receipts with your name and address, the AHRI number and the total cost, submitted within six months.
- Time Toronto financing. If you plan to use HELP, apply before December 31, 2026 to get the current rates.
Planning a renovation with a heat pump?
We build renovations, additions and suites across Toronto and the GTA and coordinate the HVAC, electrical and insulation work so the heating system fits the finished house. Book a free consultation, or see our whole-house renovation services.
Heat pump rebate FAQs
How much is the federal heat pump rebate?
Up to $10,000 for low- to median-income households, based on after-tax income and equipment cost, and $2,000 for households above median income.
Can I install a heat pump now and still get the federal rebate?
Installations from November 1, 2026 may qualify. The application portal opens in early 2027, receipts must be submitted within six months, and no payment is made until an application is approved.
How much is Ontario’s heat pump rebate?
The Home Renovation Savings program offers up to $7,500 for a cold-climate air-source heat pump and up to $12,000 for a ground-source heat pump.
Can I combine the federal and Ontario heat pump rebates?
The federal announcement says both rebate levels can be combined with existing provincial programs. Confirm how stacking works with each program when you apply.
Does the federal heat pump rebate apply to rental properties?
Yes. The home does not need to be your primary residence. The heat pump must heat the whole home and be installed by an HVAC contractor.
Can I finance a heat pump in Toronto?
Yes. Toronto’s Home Energy Loan Program lends up to $125,000, repaid through your property tax bill, and its current rates are valid until December 31, 2026. Heat-pump-only projects no longer need an EnerGuide assessment.