On October 8, 2026, Prime Minister Mark Carney announced the Federal Government’s plan to invest $2 billion over the next years to deliver one million home retrofits providing easy to access rebates to homeowners installing heat pumps.

Heat pumps are also one of the most common topics that come up in the free coaching calls we have with homeowners through our Home Energy Coaching Program.

Homeowners across Mississauga, Brampton and Caledon ask us some version of the same few questions:

• My air conditioner is on its last legs, what should I replace it with?

• Can I add a heat pump to my oil or propane furnace?

• Is my heat pump even running?

This post answers those questions, along with 17 other questions we've received from homeowners. We also talk about the basics of how heat pumps work and what they cost.

What is an air source heat pump?

An air source heat pump moves heat rather than making it. It works on the same principle as your fridge or air conditioner, with one important difference: it can move heat in two directions.

In winter, it pulls heat from the outdoor air (yes, even cold air holds heat) and brings it inside. In summer, it runs in reverse, pulling heat out of your home and releasing it outdoors, exactly like an air conditioner.

Since it moves heat instead of burning fuel to create it, a heat pump uses far less energy to keep you warm. For every unit of electricity it uses, an air source heat pump typically delivers two to almost four units of heat. Even the best gas furnaces top out at around 98% efficiency, meaning they deliver slightly less than one unit of heat for every unit of fuel.

Or in simpler terms, it works great and keeps you warm all year round while using less energy.

The types of heat pumps you'll hear about:

Which heat pump system makes sense for you depends mostly on how your home is heated today.

1. Ducted (central) systems use the ductwork you already have. An outdoor unit connects to an indoor air handler, which pushes air through your existing vents. This is the most common setup in forced air equipped homes.

2. Ductless mini split systems are for homes without ducts, or for rooms your ducts don't serve well (a basement suite, an addition, a bonus room over the garage). Wall or ceiling units in each zone connect to one outdoor unit, and each zone can be set to its own temperature.

3. Hybrid (dual fuel) systems pair a heat pump with your existing gas, propane or oil furnace. The heat pump does most of the work, and the system switches to the furnace when temperatures drop below a set point.

4. Air to water systems are for homes with radiators or in floor heating. They run at lower water temperatures than a boiler, so some radiators may need upgrading.

17 questions about heat pumps, answered:

These questions come straight from conversations with Peel homeowners we've had through our Home Energy Coaching Program.

1. Do heat pumps actually work in a Canadian winter?

Older models of heat pumps struggled in real cold, which is where their reputation for not working in Canada came from. Nowadays, modern cold climate air source heat pumps have changed that.

They're designed to keep producing heat efficiently down to around minus 30°C, and the refrigerant inside can be close to minus 60°C, which is why it can still find heat in air that feels frigid to us.

Ontario rarely sees those temperatures. On the handful of days that are colder than your system is designed for, a backup heat source (usually an electric element inside the air handler, or your existing furnace) will top things up. The rest of the winter, the heat pump carries the load on its own.

2. How does a heat pump feel compared with a furnace?

This is the part homeowners tend to mention first after they switch. A furnace blasts hot air, shuts off, lets the house cool, then blasts again. Whereas a heat pump delivers slow, steady heat, adjusting its output up and down instead of cycling between full on and off.

This method results in more even temperatures from room to room and fewer cold spots, which is way more comfortable.

In one international survey cited in Canada's Home Electrification Toolkit:

81% of people said they were more comfortable in their homes after installing a heat pump.

There are other everyday benefits too:

• One system for heating and cooling. A heat pump replaces both your furnace and your central air conditioner.

• Better indoor air quality and safety. There's no combustion inside your home, so there's no carbon monoxide risk.

• Quieter than you'd expect. Modern units are much quieter than older air conditioners.

3. My air conditioner is on its last legs. Should I replace it with a heat pump?

If your central air conditioner is nearing the end of its life, this is one of the best moments to consider a heat pump. From the outside, a heat pump looks and works almost exactly like an air conditioner. The difference is that it also heats.

That means for a modest step up from a like for like AC replacement, you get summer cooling plus efficient heating for most of the winter. Keep your existing furnace as backup, and you've created a hybrid system without replacing anything that still works.

Your quotes will vary, depending on whether you are swapping an AC for a cold climate heat pump while keeping the existing furnace, air handler and ducts, or doing a full replacement of the furnace with a cold climate heat pump and electric backup, but the AC replacement is typically the lowest cost way in.

If your furnace or AC is over 15 years old, it's worth planning now.

4. I have an aging oil furnace and central air. Can I replace both with a heat pump?

Yes, and this is one of the strongest cases for a heat pump. Oil is among the most expensive ways to heat a home, and a cold climate heat pump connected to your existing ductwork (with an electric air handler for backup) can replace both the oil furnace and the air conditioner in one project.

A few things to sort out first:

1. Get a proper heat loss calculation. Your installer should size the system for your specific home, not your old furnace as your oil furnace might be oversized.

2. Check your ducts. The installer should confirm your ductwork can move enough air for the new system. Undersized ducts can cause noise and reduce efficiency.

3. Plan for the oil tank. Removing it is part of the project budget and timeline.

If your household income qualifies, Save on Energy's Energy Affordability Program currently offers cold climate heat pumps at no cost to eligible homeowners with oil heating. (The federal Oil to Heat Pump Affordability Program closed to new applications on July 31, 2026.)

5. Can I add a heat pump alongside my oil furnace instead of replacing it?

You can. If your oil furnace still has some life left, adding a heat pump and keeping the furnace as backup creates a hybrid system. The heat pump handles spring, fall and most of winter, and the furnace takes over on the coldest days. For a household spending a few thousand dollars a year on oil, shifting most of the heating load to the heat pump can make a noticeable difference to that bill.

One recommendation to consider, even in a hybrid setup, is a cold climate model over a standard one. A standard heat pump hands off to the furnace at much milder temperatures, which means you burn more oil. A cold climate model keeps working deeper into winter, and it leaves you ready to retire the oil furnace entirely when it eventually fails.

Only cold climate models qualify for Ontario's Home Renovation Savings rebate, so the price gap often narrows once incentives are factored in.

6. I heat with propane and have no air conditioning. Where do I start?

This is a common situation in rural Caledon, and a heat pump solves two problems at once. Adding a heat pump to a propane furnace gives you central air conditioning for the first time, and it takes over most of your heating so you buy far less propane.

If your furnace is in good shape, a hybrid setup is a good first step. If you're mainly after comfort in a few specific rooms, a ductless unit is another option. Either way, the conversation starts with what you want to fix (hot upstairs bedrooms, cold floors, high propane bills) rather than the equipment.

Book a free call with an Energy Coach to discuss the best approach.

7. I have a heat pump and a propane furnace. How do I know the heat pump is actually running?

This happens more often than you'd think. In a hybrid system, the thermostat or control board decides when to switch from the heat pump to the furnace. If that switchover temperature is set too high, your furnace may be doing most of the work while the heat pump sits idle.

Start by checking your thermostat's settings for the switchover (sometimes called the balance point or lockout temperature). If you're not sure what you're looking at, have your installer or a qualified technician inspect the system and walk you through it. When you get quotes for any hybrid system, ask

At what temperature will it switch to the furnace, and will you program it to use the heat pump as much as possible?

If you've already upgraded your electrical service, you have options. You could go fully electric when the furnace ages out, or add a modest cold climate ductless unit now to take more load off the propane furnace.

8. My HVAC is aging. Should I look at a hybrid heat pump system?

A hybrid system is a sensible middle path for many homes, especially if you're not ready to go fully electric or your home is draftier than you'd like. It's also worth thinking about your water heater at the same time. If it's near the end of its life too, planning both replacements together can save on installation and help you take advantage of time of use electricity rates, for example by using a timer to heat water overnight when rates are lowest. This is exactly the kind of sequencing we help with in coaching calls.

Book a free call with an Energy Coach to discuss your options.

9. What happens to my electrical panel when I install a heat pump?

Some contractors will tell you that you need a 200 amp service before installing a heat pump. That's not always true. Many homes with 100 amp service have enough capacity, especially after switching to LED lighting.

Before spending thousands on an upgrade, ask your electrician to review your home's historical electricity use (your utility can provide this data) to find your actual peak demand. Load sharing devices and smart panels can also help avoid an upgrade. Homes with 60 amp service or old knob and tube wiring are a different story: upgrading is likely needed, and it's a worthwhile investment in your home's safety and resale value.

10. Will it work in my older, drafty house?

Yes, it will just work harder. So does your furnace, which is often oversized to compensate. In a drafty home, a cold climate heat pump can still keep you warm, though some backup heat or a hybrid setup will help on the coldest days.

The better news is that air sealing and strategic insulation go a long way. Improving your home's envelope first means you can install a smaller, less expensive heat pump that runs more efficiently. If you're planning both, do the envelope work first or at the same time.

11. Are heat pumps noisy?

Modern units are far quieter than older air conditioners. It still makes sense to place the outdoor unit away from bedroom windows and patios, and ground mounted units tend to transmit less vibration than wall mounted ones.

12. What maintenance do heat pumps need?

Similar to a furnace and AC, we recommend changing or cleaning the filters regularly. You should also keep the outdoor unit clear of snow, leaves and debris, and book regular inspections. Plan where defrost water will drain so it doesn't refreeze on a walkway.

Air source heat pumps typically last 15 to 20 years with good upkeep.

13. What happens to my heat pump in a power outage?

Your gas furnace also stops working in an outage, because its fan and controls need electricity. A heat pump needs a larger battery or generator to run during an outage, but for most households the day to day experience is the same.

14. Will my home insurance change if I install a heat pump?

It's good practice to tell your insurer about any change to your heating system. If they push back or raise your rates, it may be worth shopping around.

15. What does a heat pump cost to run?

This depends on what you're replacing.

Compared with oil, propane or electric baseboards, a heat pump will usually lower your heating costs significantly. Compared with natural gas, running costs can be similar or somewhat higher depending on rates, your home and the system you choose.

Many households find the numbers work out once they factor in replacing an AC and furnace with one system, and dropping the monthly gas connection fee if they go fully electric.

Your electricity bill will go up and your fuel bill will go down. What matters is the combined total, and that's worth modelling for your own home before you decide.

Book a free call with an Energy Coach to talk through how it'll impact your bills.

16. What are the rebates and incentives for heat pumps in Ontario?

Ontario's Home Renovation Savings Program currently offers up to $12,000 for a heat pump but it depends on your current primary heating source.

Heat pumps are available as a single upgrade, so you don't need to bundle other work, and the program is open to homes heated with electricity, natural gas, oil, propane or wood.

For income qualified households heating with oil, the Energy Affordability Program may cover a cold climate heat pump at no cost.

Program rules change, so confirm what's current before you sign anything. Many installers can also offer short term financing to bridge the gap until rebates arrive.

17. Is an energy assessment required to get a heat pump rebate?

A home energy assessment isn't required for a heat pump rebate under the current program, but it's still one of the most useful things you can do first. Your Energy Advisor's report shows how much heat your home loses, which is exactly the number an installer needs to size a heat pump properly. It will also flag whether air sealing or insulation should come first.

Switching to a heat pump is also one of the upgrades most likely to improve your EnerGuide rating significantly, especially if you're coming from oil, propane or electric baseboards.

18. Will I need a back up heat source?

All-electric heat pumps can efficiently heat most Canadian homes throughout the winter. Many cold-climate models continue to operate efficiently with high output down to -25ºC!

Many models include a built-in backup heater for extra warmth on the coldest days. You can pair a smaller heat pump with a furnace, boiler, or other system that takes over heating below a set temperature.

This may be a good option if:

• You own a newer furnace or boiler

• Your existing ductwork is undersized

• An all-electric cold-climate heat pump is outside your budget

Is a heat pump right for your home?

For many Peel homes, the answer is yes. The right system depends on your current heating fuel, the age of your equipment, your ductwork, your electrical service and how well your home holds heat. There's no one size fits all answer, which is why it helps to talk it through with someone who isn't selling anything.

Questions to ask before you hire an installer

Get at least two or three quotes, and look for a contractor who installs heat pumps regularly (not one who grudgingly fits them in between furnace jobs).

Ask the following questions if they don’t provide the information:

• How did you calculate the size of the heat pump? Did you use my energy assessment or a load calculation?

• Will you assess my ductwork and airflow?

• What electrical upgrades are needed, and can any be avoided?

• Where will the indoor and outdoor units go?

• For a hybrid system, at what temperature will it switch to backup heat?

• Will you show me how to program and use the thermostat?

• What is the total cost, what deposit do you need, and which rebates apply?

• What do the warranties cover, for how long, and who handles them if your company closes?

• Have you received manufacturer training, and can you share references from similar homes?

Talk it through with an Energy Coach

CCET's Energy Coaches are independent. We don't sell equipment, we don't take referral fees, and we have no stake in what you choose. In a free coaching call, we'll look at your home and what you want to improve, help you figure out whether a heat pump makes sense, which type fits, which programs you qualify for, and how to find a qualified installer.

Book a free call with an Energy Coach