Federal-Provincial Agreement Allows Newfoundlanders and Labradorians to Switch From Heating Homes With Oil to Heat Pumps and Other Electric Home Heating Systems

February 29, 2024

Governments of Canada and Newfoundland and Labrador ink latest agreement to give eligible Newfoundlanders and Labradorians up to $22,000 to support the transition of homes from oil to electric home heating systems, which would cover the full cost of an average heat pump.

Canadians know that climate change is costly—not just for the environment, but for their pocketbooks. They also know that we must prioritize affordability while fighting the worst possible impacts of climate change to ensure a strong economy and clean air for our communities.

Recently, the Honourable Gudie Hutchings, Minister of Rural Economic Development and Minister responsible for the Atlantic Canada Opportunities Agency, on behalf of the Honourable Steven Guilbeault, Minister of Environment and Climate Change; the Honourable Jonathan Wilkinson, Minister of Energy and Natural Resources; and the Honourable Bernard Davis, Minister of Environment and Climate Change for Newfoundland and Labrador, provided an update on federal-provincial investments for energy efficiency initiatives for Newfoundlanders and Labradorians.

The Government of Canada and the Government of Newfoundland and Labrador have already collaborated on several initiatives designed to help reduce greenhouse gas emissions and energy bills. Building on that momentum, today the federal and provincial governments announced a $24 million agreement through the Low Carbon Economy Fund to boost the Newfoundland and Labrador Oil to Electric Incentive program. The funding announced today will help cover the average cost of a heat pump and enable the provincial Government to transition 3,000 homes to cleaner, more affordable heating options in the coming year.

The agreement supports the recently announced strengthened Oil to Heat Pump Affordability program. This program allows eligible Newfoundlanders and Labradorians to receive up to $22,000 in support for switching to a heat pump, electric furnace, or electric boiler. The $22,000 funding includes up to $15,000 from the Government of Canada’s Oil to Heat Pump Affordability program and another up to $7,000 from the Government of Newfoundland and Labrador and other federal funds.

To date, 2,065 Newfoundland and Labrador households have applied to the Newfoundland and Labrador Oil to Electric Incentive program to make the switch from an oil tank to a new electric heat source, building on the success of the Government of Canada’s Greener Homes Grant, which has led to the installation of 4,481 heat pumps in homes across Newfoundland and Labrador.

As Canada continues its efforts to build a low-carbon future, it will continue to provide Canadians with the tools and support needed to heat their homes cleaner and more affordably. This includes supporting projects across Newfoundland and Labrador such as:

  • Enabling the switch from oil heating to electric heat pumps
  • Energy-efficiency improvements in low-income homes, schools, hospitals, and long‑term care facilities
  • Power grid projects that ensure electricity is reliable, clean, and affordable in every home


“Newfoundlanders and Labradorians are ready to make the switch from expensive and polluting oil heat to cheaper, cleaner, and more efficient electric heating systems. An electric heat pump will reduce monthly heating bills, while lowering emissions. It is a win-win for your wallet, and the environment.”

– The Honourable Gudie Hutchings, Minister of Rural Economic Development and Minister responsible for the Atlantic Canada Opportunities Agency

“Installing a heat pump in your home is simultaneously a good way to save on your monthly energy bills and reduce the pollution causing climate change. Our government is coming to the table with substantial funds to help Newfoundlanders and Labradorians make the transition off oil, in close partnership with the provincial government.”

– The Honourable Steven Guilbeault, Minister of Environment and Climate Change

“The federal government knows that Canadians want a cheaper and cleaner way to heat their homes. That’s why we are making historic investments in Newfoundland and Labrador, and across the country, to ensure that families can move from home heating oil to a heat pump. Thousands of families across the country are eligible to make this switch, which could save them thousands of dollars on their bills every year.”

– The Honourable Jonathan Wilkinson, Minister of Energy and Natural Resources

“People should be able to make the switch to electric and save on their energy bills. But the start-up costs have been getting in the way for many households. So, we’re stepping in, and helping cover the costs for even more of those who need it.”

– The Honourable Seamus O’Regan, Minister of Labour and Seniors

“We are pleased to continue to work with the Government of Canada to reduce reliance on fuel oil and enhance energy affordability for homeowners. Our provincial Oil to Electric Incentive program, supported by the federal Low Carbon Economy Fund and Oil to Heat Pump Affordability program, will help in the transition to a lower-carbon economy and reduce overall living costs. We are pleased to see the uptake and encourage more residents to avail of this program.”

– The Honourable Bernard Davis, Minister of Environment and Climate Change for Newfoundland and Labrador

Quick facts

  • Heat pumps are one of the best ways for homeowners to save money on energy bills and fight climate change. When compared with other electric home-heating sources, they are two to three times more efficient, meaning greater savings for homeowners and reduced energy intake for utilities and grids.
  • The Oil to Heat Pump Affordability program was first introduced in November 2022 as a $250 million investment in a new stream to add to the existing Canada Greener Homes Initiative. On February 22, 2023, the program was opened to pre-registration and was fully launched in late March 2023, with the first grants being issued shortly thereafter.
  • On average, homeowners who switch from oil to cold-climate heat pumps to heat their homes save between $1,500 and $4,700 per year on home energy bills.
  • The Oil to Heat Pump Affordability program has received 9,400 applications to date nationally.
  • Heat pumps are a proven and reliable technology in Canada, capable of providing year-round comfort control for a home by:
    • Heating it in the winter
    • Cooling it in the summer (heat pumps, despite their name, can also act as air conditioners)
    • And in some cases, heating water
  • Canada launched the 2030 Emissions Reduction Plan in 2022, laying out steps to reduce greenhouse gas emissions by 40 percent below 2005 levels by 2030, and reach net-zero emissions by 2050.


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