Unlocking lower-cost heating and cooling in Canada

The report finds that heat pumps are the lowest-cost heating and cooling option for most Canadian households over the system's lifetime, though adoption is hindered by high upfront costs, information gaps, and structural barriers for renters. It recommends streamlining rebates, establishing one-stop shop services, and updating building codes to include cooling requirements.

• Heat pumps are generally the most cost-effective heating and cooling solution for most households, particularly for townhouses and single-family homes across various building ages in most modelled cities.
• The cost competitiveness of heat pumps is primarily driven by regional climate conditions and energy prices. In Vancouver, Halifax, and Montreal, heat pumps often outperform gas even under worst-case assumptions due to temperate climates or low electricity prices. Conversely, in Edmonton, low gas prices and a cold climate make gas-fired systems or hybrid heat pumps more competitive.
• All-electric configurations, where heat pumps are paired with electric backup, are typically the cheapest option for households in Vancouver, Montreal, and Halifax.
• Current federal and provincial rebates and carbon pricing support the cost competitiveness of heat pumps, although some regions (like Vancouver, Montreal, and Halifax) see heat pumps as the lowest-cost option even without these supports under certain assumptions.
• Despite lifetime savings, adoption is slowed by behavioral and economic barriers, including a lack of consumer confidence due to unfamiliarity, a tendency to over-prioritize high upfront costs over long-term savings, and the administrative complexity of rebate programs.
• Structural barriers significantly limit access for renters and low-income households, as most rebate programs target owner-occupied single-detached homes and landlords have little incentive to invest in upgrades that primarily benefit tenants.
• Heat pumps provide critical resilience against extreme heat, which is essential for meeting Canada's National Adaptation Strategy target of eliminating heat-wave deaths by 2040. This is particularly vital in regions like British Columbia, where a lack of space cooling contributed to 619 deaths during the 2021 heat wave.
• To meet 2030 climate targets, the share of home heating provided by heat pumps in Canada must at least double to exceed 10%.

APA

Canadian Climate Institute (2023). Unlocking lower-cost heating and cooling in Canada. https://climateinstitute.ca/wp-content/uploads/2023/09/Heat-Pumps-Pay-Off-Unlocking-lower-cost-heating-and-cooling-in-Canada-Canadian-Climate-Institute.pdf

Chicago

Canadian Climate Institute. Unlocking lower-cost heating and cooling in Canada. 2023. https://climateinstitute.ca/wp-content/uploads/2023/09/Heat-Pumps-Pay-Off-Unlocking-lower-cost-heating-and-cooling-in-Canada-Canadian-Climate-Institute.pdf.

Wikipedia

{{cite report |author=Canadian Climate Institute |title=Unlocking lower-cost heating and cooling in Canada |date=September 2023 |url=https://climateinstitute.ca/wp-content/uploads/2023/09/Heat-Pumps-Pay-Off-Unlocking-lower-cost-heating-and-cooling-in-Canada-Canadian-Climate-Institute.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{canadianclimateinstitute2023unlocking, author = {{Canadian Climate Institute}}, title = {{Unlocking lower-cost heating and cooling in Canada}}, institution = {Canadian Climate Institute}, year = {2023}, month = sep, url = {https://climateinstitute.ca/wp-content/uploads/2023/09/Heat-Pumps-Pay-Off-Unlocking-lower-cost-heating-and-cooling-in-Canada-Canadian-Climate-Institute.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }