Heat pumps continue their rise as primary heating systems, with almost half of New Brunswick homes now relying on them.
Getting more homes heated with heat pumps is an important indicator of Canada’s progress to decarbonizing buildings. Heat pumps are far cheaper and cleaner than fossil fuel-based heating systems to run because they are significantly more efficient and powered by electricity. That can reduce energy bills, especially as the price of fuel oil has spiked and remains highly uncertain.
The latest data from Statistics Canada show that policy support has helped heat pump adoption take off. In 2023 the share of households that relied on heat pumps as their main source of heating grew to 9 per cent, up three percentage points from 2021 (Figure 1).
In the Maritimes, adoption has skyrocketed. In New Brunswick, for example, 48 per cent of households relied on heat pumps for their homes.
At the same time, the rapid growth of rural heat pumps outside census metropolitan areas (CMAs) across Canada shows that demand for low-cost, clean technologies cuts across the rural–urban divide. Adoption rates in non-CMAs more than tripled since 2013, sitting at 15 per cent in 2023.
Canadians are switching from heating oil to heat pumps
The higher concentration of rural heat pump adoption goes against the conventional argument that clean technologies tend to be adopted within cities.
One explanation is simply that electricity is more affordable than heating oil. In the Maritimes, an average of 20 per cent of households relied on oil for heating, far above the rest of Canada at 2 per cent.
Heating oil prices have historically stayed above electricity prices, and volatile swings have made the economics even more favourable for heat pumps (Figure 2). Many households on heating oil live in rural areas that also tend to be less connected to natural gas grids, which is typically cheaper than home heating oil. This provides a greater incentive for these parts of the country to skip gas networks and go straight to electrified clean heating.
Coupled with favourable economics, supporting policies have also helped boost adoption. These have included both provincial subsidies like Prince Edward Island’s free heat pump program and federal government’s Oil to Heat Pump Affordability program, which helped address upfront costs. Particularly for low-income households, upfront costs have been one of the top barriers slowing adoption.
Existing programs are taking a bite out of oil heating emissions, and the challenge ahead will be to design policies that will help other Canadians such as those relying on gas furnaces make the switch to heat pumps.
Ultimately, heat pumps can be the right fit for more than just Canada’s oil-heated homes. Reintroducing policy support can accelerate the momentum that heat pumps have already generated to decarbonize Canada’s buildings.
Arthur Zhang is a Senior Research Associate at the Canadian Climate Institute.