Canada is putting fresh money behind lower winter bills in Ontario. The federal government said it will invest nearly $37.5 million to co-deliver the Oil to Heat Pump Affordability program with the province, aiming to help income qualified households switch off heating oil and onto electric heat pumps.
The partnership will run through the Independent Electricity System Operator, which will give applicants a single portal to apply and receive support.
Ontario agreement has a total potential value of up to $59.4 million, including $21.4 million from the IESO and up to $500,000 from EnviroCentre to cover residents in Cornwall who are outside the IESO grid.
The federal share accounts for the $37.5 million figure. Applications are now available through the IESO’s Save on Energy program.
Households that qualify can receive as much as $25,000 per home, split between $15,000 in federal funds and $10,000 from Ontario, plus an upfront $250 Canada Heat Pump Bonus to help with upfront costs. The program targets oil heated homes, which tend to face volatile fuel bills and higher emissions.
Officials say heat pumps are two to three times more efficient than electric furnaces and offer year round heating and cooling.
Natural Resources Canada estimates that participants have already cut annual energy costs by more than $1,300 on average and avoided 2.78 tonnes of greenhouse gases, a reduction likened to removing 17,000 cars from the road.
Tim Hodgson, Minister of Energy and Natural Resources, said in the statement that the program is about lowering energy bills for Canadians while fighting climate change.
By embedding the grants inside Save on Energy, the province is aligning home retrofits with grid planning and peak demand management.
Lesley Gallinger, CEO of the IESO, called the program a critical addition to the agency’s efficiency offerings because it provides access to energy efficient heat pumps to help lower energy bills and keep homes comfortable throughout the year.
Julie Dabrusin, the federal environment minister, said Ontario families will see the difference on monthly bills and comfort while contributing to emissions cuts.
The IESO’s involvement should also streamline contractor participation, which matters because supply of qualified installers can become the bottleneck in retrofit programs.
More Ontario households shifting to electric heat pumps supports order books for equipment makers and distributors focused on cold climate units, and it adds to a multi year retrofit theme tied to North American electrification policy.
Utilities and grid planners will watch how the program shapes winter peaks, since widespread electrification can raise seasonal demand even as efficiency improves.
Any meaningful uptake would also influence long term fuel mix assumptions for heating, with knock-on effects for service companies linked to oil heat delivery.
The release did not include installation targets or a timeline for dispersing the full amount, which means the pace of spending will depend on eligibility screening, contractor capacity, and consumer interest.
The announcement is the latest expansion of a program launched in 2022 and enhanced in 2023, when Ottawa tripled national funding to $750 million and lifted the federal maximum grant to $15,000 for eligible households.
Ontario becomes the eighth jurisdiction to adopt a co-delivery model, following all four Atlantic provinces, Manitoba, British Columbia, and Yukon.
In provinces without such agreements, oil heated homes can still access up to $10,000 in federal support through the national stream.
