Could the Liberals' carbon tax troubles light a fire under the move toward heat pumps?
CBC
Even as Mark Carney publicly disagreed last week with the Liberal government's decision to exempt home heating oil from the federal carbon tax — he told a climate conference that he would have looked for "other ways" to help Canadians with the cost of heating — the former Bank of Canada governor praised the second part of the Liberals' plan.
"I very much applaud what the government did with respect to helping Canadians accelerate the transition and the measures on heat pumps," he said.
British Columbia Premier David Eby, meanwhile, showed up for a meeting of provincial and territorial leaders on Monday wearing a t-shirt under his suit jacket bearing the message "I (Heart) Heat Pumps." (In case his enthusiasm was missed, Eby later held up the shirt for the television cameras at the joint news conference.)
Whatever else the Liberal government's carbon tax contortions have done, they may have boosted the cause of energy efficiency — particularly for those low-income households who most need the help. And there are now calls for the Trudeau government to go even further.
The momentum toward heat pumps, which can provide both heating and cooling, has been growing over the past few years. Because heat pumps run on electricity, they represent a more environmentally friendly option than burning oil or gas. But switching to a heat pump can also help households save money.
In September, the Climate Institute released a study that looked at the cost effectiveness of heat pumps in buildings in five cities: Vancouver, Edmonton, Toronto, Montréal and Halifax. After running the numbers, the Institute found that heat pumps were "already the lowest-cost option in two thirds of all cases modelled" — though the exact figures understandably depended on regional energy prices and climate conditions.
(The institute also created a calculator to help individual households run their own numbers.)
Enthusiasm for heat pumps is not quite unanimous. Conservative Leader Pierre Poilievre briefly promoted Saskatchewan Premier Scott Moe's statement of concern last week regarding the fact that homes with heat pumps require a back-up energy source to handle temperatures below minus-25 degrees Celsius.
The need for a back-up system is not a closely guarded secret — Moe was citing an analysis produced by the federal government. The Climate Institute built that fact into its study. And even with a back-up system, a move from natural gas to electricity is environmentally friendly, particularly if the power comes from a provincial electricity system running on clean energy.
Having said that his climate plan will be about "technology, not taxes," Poilievre might also want to think twice before deciding he opposes both the federal carbon tax and federal support for heat pumps.
While the humble heat pump can help address both the climate crisis and cost of living concerns, the Climate Institute still identified several obstacles to their wider uptake, including a lack of familiarity with the technology, the challenge of navigating complex rebate programs and the practical and psychological barriers of high upfront costs.
As Efficiency Canada has argued, those upfront costs are a particular obstacle for low-income households (the Canada Greener Home Grants program, launched in 2021, offers up to $5,000 toward the cost of a heat pump, but that support comes through a rebate after the retrofit is finished).
In March, the Liberal government launched the "Oil to Heat Pump Affordability Program" that provided upfront support to households that use heating oil and are at or below the median income. It's that program that Prime Minister Justin Trudeau promised to boost in cooperation with provincial governments, to bring the total subsidy to $15,000.
The federal government estimates that with the subsidy at that level, the cost to a household to install an average heat pump would be covered completely.
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