Program exhausts $2.6 billion in funds due to a surge in demand
The federal government's Canada Greener Homes Grant, aimed at subsidizing eco-friendly home renovations, has seen an overwhelming surge in demand, leading to the early closure of its application portal.
Energy minister Jonathan Wilkinson revealed that with over half a million applications already submitted and the program's $2.6-billion budget nearly maxed out, they're set to stop accepting new applications in the next few weeks.
Enbridge Gas, which has been working alongside the federal government to roll out the grants, has already ceased taking new applications.
"It has certainly been more popular perhaps than we had anticipated," Wilkinson told The Canadian Press.
The minister believes the rising cost of living and high energy prices are major factors driving the surge in applications, with the grants aimed at helping ease these financial burdens over time.
On average, families who receive the grant are expected to save around $386 per year on their energy bills, according to Natural Resources Canada. Wilkinson also hinted at a second phase of the program in the works, which aims to make these benefits more accessible to families with lower and middle incomes.
Initially launched in December 2020, the grant was expected to be available until the end of 2024. Yet, the overwhelming response has pushed the program to its financial limits sooner than anticipated.
Nearly 550,000 families had applied by the end of January, seeking financial assistance of up to $5,000 for upgrades like installing heat pumps and solar panels, along with $600 to help cover the cost of necessary home energy audits.
Read more: Home renovations are top of the mind for would-be sellers: poll
Recent months have seen a significant uptick in interest, with daily applications surging from an average of 475 over three years to 830 in November and then to 1,200 in January. So far, 165,000 grants have been distributed, with one-third of these in Ontario and one-fifth in Quebec.
The average amount awarded has also exceeded initial estimates, with recipients getting more than $4,200 on average, largely due to the high demand for heat pump installations.
Heat pumps, despite being more expensive to install than many other retrofit options, have been a key driver of the program's popularity. To date, 82,000 heat pumps have been installed through the program, with another 250,000 installations anticipated from applications still being processed.
The grant is part of a broader initiative to encourage sustainable living, distinct from another program that offers up to $15,000 for lower- and middle-income families to switch from oil furnaces to electric heat pumps.
Additionally, Canada Mortgage and Housing Corp. (CMHC) has been offering up to $40,000 in interest-free loans for eco-renovations, with a significant portion of these loans going towards heat pump installations.
Wilkinson noted the challenge for lower- and middle-income families in affording the upfront costs of these renovations, even with the promise of grant reimbursement. On average, installing a heat pump costs about $13,500.
With these considerations in mind, Wilkinson said the government is planning the next phase of the grant to be more inclusive and supportive, possibly offering some funds upfront, similar to recent adjustments in the oil-to-heat-pump conversion program.
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