This page covers what a heat pump costs to buy and install in Canada, the grants that still apply, and what it can save on heating, with worked examples. It is part of our consumer guides to household costs; for other home upgrades, see home insulation costs.
What Is a Heat Pump?
A heat pump is an electrically powered heating and cooling system that moves heat rather than generating it. In winter, it extracts heat from outdoor air (even cold air) and moves it inside. In summer, it reverses and works as an air conditioner. Because it moves heat rather than burning fuel, a heat pump delivers 2–4 units of heat per unit of electricity consumed.
This efficiency ratio (called the coefficient of performance, or COP) is why heat pumps cut energy costs most for households now heating with electric resistance heaters or oil.
Types of Heat Pumps
| Type | Best For | Cost Range (Installed) | Efficiency |
|---|---|---|---|
| Air-source (mini-split) | Smaller homes, room-by-room | $3,000–$8,000 | COP 2.5–4.0 |
| Air-source (central/ducted) | Homes with existing ducts | $7,000–$15,000 | COP 2.5–3.5 |
| Cold-climate air-source | All of Canada | $8,000–$18,000 | COP 2.0–3.5 at −15°C |
| Geothermal (ground-source) | New builds, rural properties | $18,000–$30,000 | COP 3.5–5.0 |
| Heat pump water heater | Any home | $1,800–$3,000 | COP 2.5–3.5 |
For most Canadian retrofits, a cold-climate air-source heat pump is the most practical option.
Cost Breakdown
Installation costs by province
Labour rates and installation complexity vary across Canada:
| Province | Typical Central System Installed Cost |
|---|---|
| British Columbia | $10,000–$18,000 |
| Alberta | $9,000–$16,000 |
| Ontario | $9,000–$17,000 |
| Quebec | $8,000–$14,000 |
| Nova Scotia | $8,000–$15,000 |
| New Brunswick | $8,000–$14,000 |
| Manitoba | $9,000–$16,000 |
Mini-split systems need no ductwork, so homes without ducts avoid the cost of adding or modifying them.
Grants and rebates for heat pumps
Rebates can cover a large share of a heat pump’s installed cost, but the federal programs that used to anchor most of them are closed. The Canada Greener Homes Grant and Loan no longer take applications (their status is on the Greener Homes page), and the federal Oil to Heat Pump Affordability Program, which paid up to $10,000 toward replacing an oil furnace where the federal government delivered it, had July 31, 2026 as its last day to apply in several provinces.
What remains is mostly provincial and utility programs. Most of them rebate cold-climate air-source heat pumps, often with larger amounts for homes switching away from electric baseboards, oil or propane, and many require a registered contractor and a listed model. The program in each province, with its current maximum, is in energy rebates by province. Buyers who make energy-saving renovations soon after buying with a CMHC-insured mortgage may also qualify for a partial refund of the insurance premium; the rules are in CMHC Eco Plus and Eco Improvement.
Annual savings on heating bills
The savings depend on what the heat pump replaces and on the local electricity rate. Two worked examples:
Replacing an oil furnace (Nova Scotia rates)
A home burning 2,500 litres of heating oil a year at $1.75 a litre spends $4,375 on oil. At about 38.2 MJ per litre (Natural Resources Canada’s Heating with Oil guide) and a furnace efficiency of 80%, that oil delivers 21,222 kWh of heat. A cold-climate heat pump with a seasonal COP of 2.5 needs 8,489 kWh of electricity for the same heat. At Nova Scotia Power’s residential rate of 19.128¢ per kWh, that costs $1,624 a year, a saving of $2,751. On a $12,000 system before any rebate, the simple payback is 4.4 years.
Replacing electric baseboards (Quebec rates)
A home using 15,000 kWh a year for baseboard heat would need 6,000 kWh with a heat pump at the same seasonal COP, saving 9,000 kWh. Winter heating in Quebec falls mostly in Hydro-Québec’s second price block, 11.142¢ per kWh, so the saving is about $1,003 a year. On a $10,000 system before any rebate, the simple payback is 10.0 years.
Rebates shorten both paybacks, and a heat pump also provides cooling. Where natural gas is the alternative, the result depends on both the gas and electricity rates; the province-by-province running costs are in electric vs. gas heating costs.
Choosing a Contractor
Rebate programs often require installation by a registered or certified contractor. Key steps:
- Compare several quotes, since prices vary between contractors
- Confirm HRAI (Heating, Refrigeration and Air Conditioning Institute) certification
- Check whether an EnerGuide evaluation is required: some programs require one before installation, and some rebate part of its cost
- Ask about rebate processing: many contractors submit rebates for the homeowner, so confirm who handles the paperwork
- Check equipment eligibility: not every model qualifies for every rebate, so ask for the CSA or ENERGY STAR certified model sheet
Related Articles
Sources
The figures and rules on this page come from these sources, last checked against them on September 24, 2026. How we check facts.
- Government of Canada: Canada Greener Homes Initiative - Natural Resources Canada
- Hydro-Québec: Electricity Tariffs Effective April 1, 2026.
- Nova Scotia Power: Standard Residential Service Rate| Nova Scotia Power