Close to 200,000 Nova Scotia households that heat with oil will be eligible for a new $5,000 federal rebate if they switch from oil to an electric heat pump. This rebate, announced on Monday by federal Immigration Minister Sean Fraser on behalf of the Natural Resources Minister, is expected to be available early next year.

The grant will piggyback on top of an existing $5,000 rebate offered by the province through EfficiencyOne, the local utility that administers the Canada Greener Homes program. 

The Oil to Heat Pump Affordability (OHPA) grant will provide up to $5,000 per household and would cover costs including:  

  • the purchase and installation of an eligible heat pump; 
  • electrical upgrades required for the new heat pump; and  
  • safe removal of the oil tank. 

All Canadians households whose income is at or below the Statistics Canada low-income cut off — approximately $53,000 for a household of four — will be eligible to apply. 

The federal price on fuel, known as the carbon tax, will be introduced in Nova Scotia next year. It’s estimated to add between $400 and $1500 a year for households at a time when the price of furnace oil has nearly doubled since last year.

Nova Scotia will join Ontario and the Prairie provinces, which have been paying the tax for several years. The increase was scheduled to take effect Jan. 1, 2023. This morning, CBC reported it has learned Environment Minister Steven Guilbeault will make an announcement later today that will delay the increase — and its introduction in Nova Scotia — until July 1, after the winter heating season.

“These are challenging times for Canadians, particularly when regions across Atlantic Canada are facing higher heating bills,” Fraser said, the federal Cabinet minister for Nova Scotia from Stellarton on Monday. “To continue providing immediate relief, our federal government is reducing Canadians’ heating bills by helping homeowners cover up-front costs in federal grants up to $5,000 to replace their oil heating systems with brand new heat pumps.”  

“By transitioning away from oil heating, homeowners can save thousands of dollars in their annual heating bills, putting more money back in peoples’ pockets while also reducing pollution and creating new jobs across the country.” 

Few details about NS rebate

When compared to other sources of electric heat, heat pumps are two to three times more efficient, saving hundreds of dollars for homeowners every year and reducing the demand for electricity from Nova Scotia Power. Installing a heat pump is a practical action that can contribute to slowing climate change.  

But the up-front cost to remove an oil tank and upgrade the electrical system often makes the job unaffordable. Barry Walker, the community outreach coordinator with EfficiencyOne, estimates that for some households the sum of the two rebates combined may cut that cost by as much as 50%. 

Monday’s announcement by Ottawa follows a similar funding announcement early in September that provided $250 million to encourage Canadians to switch from oil. It was reported this assistance with home heating was a specific request from the Atlantic Canada premiers.

So far, there have been very few details provided by the Houston government about how the $60.5 million allocated to Nova Scotia through that September incentive will roll out to homeowners. And with temperatures dropping quickly, relief can’t come soon enough for many people who are increasingly forced to choose between heating or eating. 

Jennifer Henderson is a freelance journalist and retired CBC News reporter.

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  1. Provincial tax on heating oil is 0%, federal tax is 5% ( Harper dropped the rate from 7% when he reduced the GST from 7% to 5% to allow the provinces to gather higher sales tax revenue and he avoided the bickering over healthcare funding)
    How do families cope will all the cost increases when HRM wants to increase taxes by 8% and the feds want to increase the cost of living with a carbon tax ? Relatives in Britain are telling us about massive increase in the cost of electricity along with the cost of food and essentials.