How to get the most out of the Canada Home Improvement Loan Program

Homeowners applying for interest-free loans from the federal government to make energy-efficient renovations should look to provincial and municipal incentives for additional support, recommends an energy efficiency expert.

Homeowners applying for interest-free loans from the federal government to make energy-efficient renovations should look to provincial and municipal incentives for additional support, recommends an energy efficiency expert.

The federal government launched a long-awaited program in mid-June offering interest-free loans of up to $40,000 for home renovations — things like replacing fossil-fuel heating systems, repairing windows and doors. drafts, improving wall insulation or installing solar panels.

With interest rates rising, that loan should be attractive to people, but making your home as energy efficient as possible will likely cost upwards of $40,000, said Brendan Haley, director of policy at Efficiency Canada. Depending on the building, you could be looking at costs in excess of $100,000, he said.

“I really encourage anyone looking for support for a renovation, especially a major renovation, to not only think about this program, but also to consider provincial incentives and maybe additional loans,” Haley told National Observer of Canada.

Deep renovations are needed to help reduce greenhouse gas emissions from homes. Buildings and homes accounted for 13% of Canada’s carbon emissions in 2020, and the retrofit programs are part of the federal government’s effort to reach net zero emissions by 2050. Although the initial cost of these retrofits may be daunting, homeowners who take the plunge will save money in the long run by reducing their energy costs.

How it works

The federal program is designed to help up to 175,000 households make energy-efficient renovations with interest-free loans ranging from $5,000 to $40,000 that must be repaid within 10 years. A maximum of 15% of the loan can be advanced for initial payments to entrepreneurs. The rest of the loan comes after a post-renovation assessment is completed. Natural Resources Canada advises homeowners to get up to three cost estimates for all the different renovations they want to do, because once the loan amount is determined, it won’t be increased.

Who is eligible?

Homeowners who have already applied or are applying for the $5,000 Greener Homes Grant are eligible for the first phase of the Greener Homes Loan program. All Canadian homeowners can apply, with a maximum of one loan per eligible household. Applicants must obtain an EnerGuide evaluation — an audit that examines a home’s energy efficiency — to determine which upgrades are appropriate for their home. The loan can only be used for renovations and installations recommended by an energy advisor and listed on the Natural Resources Canada website.

Canadians can complete a short online survey to see if they qualify for the grant and loan.

Provincial and municipal incentives

Federal loan and grant programs were designed to ensure homeowners could take advantage of other financial incentives, Mirabelle Ibalanky of Natural Resources Canada Media Relations said in an email.

The Department’s Home Energy Efficiency Programs Directory allows Canadians to search for programs based on location and other criteria to help them take full advantage of the various programs.

In Quebec and Nova Scotia, federal home retrofit programs are delivered through provincial partners: RénoClimat and EfficiencyOne’s Residential Energy Evaluation Program, respectively.

British Columbians looking to upgrade their homes from a fossil fuel heating system to a heat pump can apply for five-year interest-free loans of up to $40,000 through CleanBC Better Homes. Across the country, provincial utilities often offer incentives such as rebates on new equipment, such as BC Hydro rebates for appliances like refrigerators and washing machines.

Efficiency PEI offers free heat pumps to low-income islanders and discounts on heat pumps, doors, windows, and insulation.

Many municipalities also offer financing solutions for owners. Toronto’s Home Energy Loan Program offers zero or low interest loans of up to $125,000, repaid over 20 years, for home energy improvements such as insulation, heat pumps and replacement of Windows.

On Thursday, the Better Homes Ottawa loan program received $30 million from the Vancity Community Investment Bank to continue offering low-interest 20-year home improvement loans ranging from $15,000 to $125,000. A similar pilot program is set to start in Calgary this fall, offering $50,000 loans repayable over 25 years.

Many municipal programs are put in place so that the owners repay the loan to the municipality through their property taxes. If the property is sold before the loan is paid off, the new owner assumes the remaining cost, but will benefit from the home’s increased energy efficiency and savings, according to a joint press release from the City of Ottawa and Vancity.

Canada has yet to create a policy framework that makes renovations easy and turnkey, Haley said. He hopes efforts will be made to reach that gold standard, but in the meantime, he encourages Canadians to seek provincial and municipal support that complements federal programs so they can maximize their energy savings.


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