Sourced from water, gas, biofuel, wind, and nuclear power, energy in Canada powers our homes, cars, and businesses 24/7. Although energy seems relatively reliable and always available, there are many considerations, both financial and environmental, that must be addressed when using and regulating the use of energy.
To encourage Canadians to be mindful of the energy they use, the federal and provincial governments offer several tax credits for sustainable energy use.
Key Points
- Making “greener” choices can help you save money in energy costs while reducing your carbon footprint.
- Federal and provincial governments offer several programs to put more money in your pocket by using more efficient energy sources.
- Tax credits can lower the amount of taxes you owe, while rebates can make it more affordable to buy or install energy-efficient products.
Federal Tax Incentives And Programs
The Federal Government of Canada offers several tax incentives to encourage citizens to save energy and live greener lives.
Hydro/Electric Car Tax Credit
Transport Canada offers tax incentives to drivers who buy and use zero-emissions vehicles (ZEVs). To be classified as a ZEV, a vehicle must have the potential to produce no tailpipe emissions. Examples of ZEVs include:
- Battery-electric
- Plug-in hybrid electric
- Hydrogen fuel cell cars
ZEVs, however, tend to be more expensive than conventional cars. Motivated by transportation being the second-largest source of greenhouse gas emissions in Canada, this program offers financial incentives for people who buy or lease ZEVs. Credit amounts are based on the specific vehicle type:
- Consumers who purchase a battery-electric, hydrogen fuel cell, long-range plug-in hybrid, can be eligible for a point-of-sale incentive of up to $5,000.
- Consumers who purchase a shorter-range plug-in hybrid vehicle can be eligible for a point-of-sale incentive of up to $2,500.
It’s important to note that only new ZEVs are eligible for this incentive. This means that even if you purchase a used ZEV vehicle, you won’t be able to receive any money back.
For more eligibility information, visit Transport Canada’s webpage.
Note: The Canada Revenue Agency (CRA) currently does not offer any tax considerations for energy-efficient products. In other words, you cannot apply for a tax deduction for expenses paid on energy-efficient products.
Canada Carbon Rebate (CCR)
The Canadian government recently began pricing carbon pollution as a way to encourage Canadians to pollute less. To offset the federal government’s carbon taxes, the Canada Carbon Rebate (CCR) was introduced.
This is a quarterly benefit available in all provinces except British Columbia, Quebec, and the territories. Quarterly payments differ from province to province and range from $190 to $450.
Canada Greener Homes Loan
The Canada Greener Homes Loan provides financing to help homeowners make energy-efficient upgrades. Funds from the loan can be used to cover the cost of qualifying retrofits recommended by an energy advisor.
This loan is an unsecured personal loan for anywhere from $5,000 to $40,000. Repayment terms can be made for up to 10 years, with no interest charged.
Oil To Heat Pump Affordability Program
Canadian homeowners may be eligible to receive a payment of up to $15,000, depending on the province, to switch from oil heating to energy-efficient heat pumps. Making this change can also help Canadian homeowners save thousands of dollars on heating bills every year.
What about the GST/HST tax credit? Are you eligible?
Provincial Green Tax Credits And Programs
In addition to federal credits offered to encourage the conservation of energy, provincial governments also offer incentives to encourage their citizens to save energy.
Quebec Green Tax Credits
Quebec offers various energy-efficiency incentive programs, often through local distribution companies, as well as through Transition énergétique Québec. The province also offers a renewable incentive program and a clean transportation incentive program.
New Electric Vehicle Rebate Program
The New Electric Vehicle Rebate Program offers up to $7,000 to drivers who purchase fully electric vehicles, dependent on factors such as the car make and model. It’s important to note that as of January 2021, the program no longer offers rebates for non-rechargeable hybrid vehicles and low-speed vehicles.
Transition énergétique Québec Programs
Éconologis Program – This program offers energy rebates and free personalized advice for low-income households. Some households may even be eligible to have thermostats installed for free. The program is offered from October to March. You can register online.
Chauffex Vert Program – This program offers financial assistance in purchasing and installing energy-efficient heat pumps and replacing propane/oil water heaters and heating systems.
Novoclimat Program – This home program helps save consumers up to 20% on electricity costs by targeting energy-efficient construction practices when a building is built. Financial support is also available to purchasers, homeowners and promoters, under certain conditions.
Rénoclimat Program – This program offers rebates to Quebec citizens to install geothermal heating systems, energy-efficient insulation, air sealing, and more.
Programs From Energy Distribution Companies
Various energy distribution companies throughout Quebec offer energy-efficiency financial incentives.
Hydro Québec
Hydro Québec’s Energy Wise Program offers various promotions and rebates for purchasing energy-efficient products. This includes:
- Rewards for using electricity use outside peak hours
- Financial support to implement energy-efficiency measures through the LogisVert Efficient Homes Program
- $100 rebate when you purchase an ECOPEAK water heater
Gazifére
Gazifére offers a few cash incentives for purchasing energy-efficient products, including the following:
- $100 incentive for smart thermostats
- $400 incentive for air exchangers with heat recovery
- $500 incentive for tankless water heaters
- $850 incentive for high-efficiency combined heating systems
Énergir
Énergir offers grants to customers who purchase or replace natural gas appliances. Customers might be eligible for more grants if they make energy-efficient upgrades to their homes.
Saskatchewan Green Tax Credits
There are 3 energy-efficiency rebate programs offered in Saskatchewan by SaskEnergy:
Residential Equipment Replacement Rebate
Created to encourage homeowners to pick energy-efficient space heating, ventilation, and water equipment heating, the Residential Equipment Replacement Rebate offers eligible applicants the following:
- Up to $2,000 for boilers
- Up to $800 for combi boilers
- $325 to $650 for various eligible furnaces
- $100 for ENERGY STAR® certified Heat Recovery Ventilators (HRV)
- $1,000 for ENERGY STAR certified Tankless Water Heaters
- $1,000 for ENERGY STAR certified Condensing Water Heater
- $250 for ENERGY STAR certified Tank Water Heaters
Commercial Boiler Rebate
This rebate encourages the use of high-efficiency heating systems in Saskatchewan. Rebate amounts vary based on the size of the total boiler plant:
- $10/MBH for the first 600 MBH
- $3/MBH above 600 MBH
Commercial Space & Water Heating Rebate
This rebate encourages commercial consumers to use energy-efficient gas furnaces, boilers, and various water heaters. To learn more about this rebate, click here.
Ontario Green Tax Credits
Ontario has a few programs to encourage energy efficiency among residential and commercial consumers.
Energy Savings Rebate Program
There are credits offered to businesses that sell energy-efficient equipment, such as lighting, appliances, and more.
The Energy Savings Rebate Program provides point-of-sale rebates to consumers, helping them save up to 25% on products up to a limit of $500, excluding water heaters and air-source heat pumps, which qualify for a rebate of up to $1,000.
Some examples of ENERGY STAR certified products eligible for this program include:
- Washers
- Dryers
- Dishwashers
- Smart thermostats
- Air conditioners
- Humidifiers
- Refrigerators
- Ceiling fans
For more information on ENERGY STAR products, visit their webpage.
Enbridge Gas’ Home Efficiency Rebate Plus Program
The Enbridge Gas’ Home Efficiency Rebate Plus Program, which offers up to $10,000 in rebates, which includes things such as the installation of the following:
- Geothermal (ground source) heat pumps
- Space heating air source heat pump system
- ENERGY STAR-certified domestic heat pump water heater
Retrofit Program
The Retrofit program offers incentives for various energy-efficient measures pertaining to lighting, HVAC, and manufacturing. Eligible applicants include commercial spaces, industrial facilities, institutional buildings, multi-family buildings, and agriculture facilities. Eligible projects provide sustainable energy savings during peak demand times.
Small Business Lighting Program
Small businesses with under 50 employees can apply to the Small Business Lighting Program, which provides up to $3,000 in funding to replace a business’s lighting with energy-efficient lighting.
Energy Affordability Program
Depending on your income, you could be eligible for financial support to assist with electricity costs through the Energy Affordability Program. Some applicants may be eligible for support with energy-efficient upgrades, and others might be eligible for a free home assessment.
Northern Ontario Energy Credit (NOEC)
The Ontario Trillium Benefit (OTB) includes 3 refundable tax credits, including the Northern Ontario Energy Credit (NOEC). This particular credit is available to Ontarians living in northern communities to help offset the higher energy costs faced by those living in the North. Single individuals with no children can qualify for up to $180, and couples and single parents may be eligible for up to $277.
Green Tax Credits In Yukon
The Yukon offers rebates to energy consumers through the Good Energy Rebates Program. Eligible applicants can get money back for costs associated with the following:
- Retrofits or upgrades to homes and buildings
- Purchase of clean transportation vehicles
- Electricity generated from renewable sources
Manitoba Green Tax Credits
Manitoba Hydro offers several loan and financing programs, mostly centred around energy-efficiency home upgrades:
- Energy Finance Plan – The Energy Finance Plan offers consumers up to $5,000 in funding for energy-efficient home upgrades.
- Home Energy Efficiency Loan – The Home Energy Efficiency Loan offers financing for up to $7,500 to cover the cost of energy-efficient upgrades which consumers can pay for with their hydro bills.
Nova Scotia Green Tax Credits
Energy Efficiency Nova Scotia offers a variety of financial supports to encourage more energy-efficient practices. Low-income citizens can qualify for free home assessments and upgrades, such as draft proofing and insulation, to help reduce electricity bills. They also offer the following rebates:
- Heating system rebates for the installation of heating systems in the past 180 days
- Heat pump rebates from $200 to $10,000 for eligible heat pumps
- Instant in-store rebates of up to $400 at checkout when purchasing energy-saving products from participating merchants in Nova Scotia
Green Tax Credits In Prince Edward Island
Most of PEI’s energy-efficiency rebates and programs are offered by Efficiency PEI.
Energy Efficient Equipment Rebates
These rebates, offered by Efficiency PEI, apply to home air and water heating upgrades and equipment, such as heat pumps, thermal storage devices, water heaters, and biomass heating systems.
Rebate amounts vary anywhere from $500 to $7,500 based on specific types of equipment upgrades and household incomes. To learn more about these rebates, click here.
Home Insulation Rebates
These Efficiency PEI rebates apply to insulation, heating, skylights, and air sealing. Rebate amounts vary significantly and are based on specific types of upgrades. Learn more here.
Solar Electric Rebate Program
This solar rebate program offers homeowners in PEI an incentive of $1,000/kilowatt for solar systems, up to a maximum of $10,000.
Winter Warming Program
Efficiency PEI offers the Winter Warming Program for low-income consumers, which allows them to receive free installation of energy-efficient light bulbs, programmable thermostats, low-flow shower heads, air sealing, and more. Such upgrades can help reduce the energy used in the home and cut back on energy costs. Average savings can range from $250 to $650 per year.
Green Tax Credits In British Columbia
British Columbia offers a variety of energy efficiency programs. Most of their rebate programs can be found by using the Clean BC Rebate Search Tool, but we’ve listed a few of them here:
PST Tax Exemption
BC offers a 7% tax exemption for people who use alternative energy generation and energy conservation equipment, including but not limited to insulation, weather stripping, and more.
Better Homes and Home Renovation Rebate Program
The rebates under the Better Homes and Home Renovation Rebate Program are offered by Clean BC, BC Hydro, and FortisBC. Eligible customers can receive up to $6,000 to purchase insulation, heating, heat pumps, appliances, and more.
BC Hydro Power Smart Rebates
BC Hydro occasionally offers rebates on a seasonal basis for energy-efficient products. The rebate is dependent on your specific location within British Columbia. There are currently no rebates available for these products, but residents are encouraged to check back regularly to see when offers come up.
BC Scrap-It Program
The BC Scrap-It Program offers several rebate options to consumers who trade in a gas-powered vehicle when purchasing an electric vehicle. Rebate options include the following:
- $300 cash
- TransLink passes
- BC Transit passes
- Car share credits
CleanBC Go Electric Passenger Vehicle Rebate Program
BC residents who meet specific income requirements may be eligible for rebates on EV passenger vehicles through the CleanBC Go Electric Passenger Vehicle Rebate Program. Rebate amounts vary by vehicle type and income and range from $500 to $4,000.
Home EV Charger Rebates
BC drivers who own electric vehicles may be eligible for rebates for the purchase and installation of EV chargers at their homes. You can get a rebate of up to 50% (or up to $350) to install Level 2 (240 volt) EV charging stations.
Neighbourhood Zero-Emission Vehicles
Individuals in BC can get rebates on low-speed vehicles and electric bikes through Go Electric Rebates under the Low-Speed Vehicle Category. Rebate amounts are based on battery capacity:
- Up to $2,000 for battery capacity up to 15.9kwh
- Up to $5,000 for battery capacity of 16kwh and above
Alberta Green Tax Credits
The Alberta Government offers a natural gas rebate program to Encor customers. The rebate amount you qualify for is determined by market prices. If you qualify, the rebate will automatically be applied to your energy bills when the province’s posted monthly default natural gas rate exceeds $6.50/gigajoule (GJ).
Customers are not required to apply for this rebate, as it will be automatically applied once the gas rate reaches its trigger threshold.
Green Tax Credits In Newfoundland and Labrador
Residents of Newfoundland and Labrador can take advantage of the following rebate programs:
takeCHARGE Residential Rebate Program
Newfoundland and Labrador’s takeCHARGE Residential Rebate Program is offered by NL Hydro and NL Power and includes multiple rebate programs, including the following:
- Insulation Rebate: Up to $2,000
- Air Sealing Rebate: Up to $500
- HRV Rebate: $175
- Oil to Electric Incentive: Up to $22,000
Home Energy Savings Program (HESP)
The Home Energy Savings Program is offered by the Newfoundland and Labrador Housing Corporation. Eligible, low-income homeowners can obtain a grant of up to $5,000 to make energy-efficient upgrades to their homes.
New Brunswick Green Tax Credits
New Brunswick offers a few different types of green tax credits, including the following:
Total Home Energy Savings Program
New Brunswick’s Total Home Energy Savings Program provides homeowners with financial incentives to make energy-efficient upgrades to their homes. A Certified Energy Advisor will evaluate your home to determine where upgrades are needed. Upgrades must be completed within 9 months, after which the financial incentives will be determined.
New Home Energy Savings Program
NB Power’s New Home Energy Savings Program offers up to $15,000 for new homes that exceed the National Building Code for energy efficiency.
Enhanced Energy Savings Program
Low-income homeowners in New Brunswick with annual household incomes at or under $70,000 can qualify for free home upgrades to make their homes more energy-efficient and reduce energy costs.
Final Thoughts
Making energy-efficient choices can sometimes be more costly and require more work upfront. However, the return on investment can be seen in positive results on the environment, as well as cost benefits from lower utility bills and various rebate programs and tax credits noted above.
