The Ultimate Guide to Heat Pump Types in Canada (Pros, Cons & Costs)

Heat pumps are rapidly becoming the preferred solution for efficient home heating and cooling across Canada. With rising energy costs, a national push for electrification, and generous government incentives, 2025 is the perfect time to consider switching to a heat pump system. In this comprehensive guide, we’ll explore the different types of heat pumps available in Canada, their pros and cons, typical costs, and which system is best suited for your home and climate.

What Is a Heat Pump and How Does It Work?

A heat pump is an energy-efficient system that transfers heat rather than generating it. It works much like a refrigerator in reverse: in winter, it extracts heat from the outside air or ground and moves it indoors; in summer, it does the opposite, cooling your home by expelling indoor heat outside.

Key components include:

• Compressor – circulates refrigerant and increases its temperature.
• Evaporator coil – absorbs heat.
• Condenser coil – releases heat.

Because heat pumps move heat rather than generate it, they can deliver 2 to 4 times more heating energy than the electricity they consume, making them significantly more efficient than electric baseboards or furnaces.

Why Heat Pumps Are Perfect for Canadian Homes

Modern heat pumps, especially those designed for cold climates, are engineered to operate efficiently even at temperatures as low as -25°C. They offer an all-in-one heating and cooling solution, which is especially attractive in provinces with hot summers and cold winters.

Benefits:

• Lower energy bills
• Reduced carbon footprint
• Eligibility for rebates (e.g., Canada Greener Homes Grant)
• No on-site fuel storage
• Quiet operation and zoned comfort (in ductless systems)

Government incentives and long-term savings make heat pumps an excellent investment for most Canadian homeowners.

Main Types of Heat Pumps in Canada

1. Air-Source Heat Pumps (ASHP)

Air-source heat pumps are the most common type in Canadian homes. They extract heat from the outside air and transfer it inside in winter (or reverse the process in summer). They’re affordable, easy to install, and well-suited for moderate to cold climates.

1.1 Air-to-Air Heat Pumps

Distribute heated or cooled air through ducts or ductless indoor units.

• Pros:
  • Lower upfront cost
  • Fast installation
  • Effective for heating and cooling
• Cons:
  • Doesn’t provide hot water
  • Less efficient in extreme cold without backup
• Cost:
  • $4,000–$7,000 (installed)

1.2 Air-to-Water Heat Pumps

Heats water for radiant floor heating, radiators, or domestic hot water use.

• Pros:
  • Suitable for hydronic systems
  • Can handle space and water heating
  • Stable indoor comfort
• Cons:
  • Higher installation costs
  • Requires water-based distribution
• Cost: $6,000–$10,000 (installed)

2. Cold-Climate Air-Source Heat Pumps (ccASHP)

Specially engineered for Canadian winters, these systems operate efficiently in sub-zero temperatures and are ENERGY STAR certified for cold climates.

• Pros:
  • Reliable down to -25°C or lower
  • Great for most of Canada, including the Prairies and Atlantic provinces
• Cons:
  • More expensive than standard ASHP
• Cost: $6,000–$12,000

3. Ground-Source (Geothermal) Heat Pumps

These systems extract heat from the stable temperatures underground. They offer unmatched efficiency and longevity.

• Pros:
  • High efficiency year-round
  • Long lifespan (25+ years for indoor unit, 50+ years for ground loop)
• Cons:
  • High upfront cost
  • Requires land for installation (horizontal or vertical loops)
• Cost: $20,000–$35,000

4. Ductless Mini-Split Systems

Ideal for homes without ductwork or for zone-based heating and cooling.

• Pros:
  • Easy retrofit for older homes
  • Individual room control
  • Quiet and efficient
• Cons:
  • Less effective for whole-home heating in large homes
• Cost: $3,000–$7,000 per unit

5. Hybrid (Dual Fuel) Heat Pumps

These systems pair a heat pump with a gas furnace, switching between them depending on outdoor temperature and energy cost.

• Pros:
  • High flexibility and efficiency
  • Lower operating costs in very cold regions
• Cons:
  • More complex to install and maintain
• Cost: $6,000–$10,000

Comparing Pros and Cons of Each Heat Pump Type

Summary based on the comparison table:

There are several types of heat pumps suited to different needs and climates in Canada. Air-to-air systems are moderately efficient and best suited for most homes in southern and central regions, with a cost of around $4,000–$7,000. Air-to-water systems offer higher efficiency, supply hot water, and are ideal for new builds or radiant heating setups, with costs from $6,000–$10,000. Cold-climate air-source heat pumps perform well across all of Canada, with strong heating efficiency even in extreme cold, priced between $6,000–$12,000. Ground-source systems offer the highest efficiency and year-round performance, also supplying hot water, but are the most expensive ($20,000–$35,000), making them suitable for large properties. Ductless heat pumps are a good retrofit option for mild to cold areas, at $3,000–$7,000 per zone. Finally, hybrid systems, which work with existing gas furnaces, are efficient in very cold climates and cost between $6,000–$10,000.

How to Choose the Right Heat Pump for Your Climate

Canada’s diverse climate means not all heat pumps work equally well in every region. Here’s how to pick the best system for your location:

1. Mild Winters (BC Lower Mainland, Vancouver Island, Southern Ontario)

• Best Option: Standard air-source heat pump (ASHPs)
• Why? Temperatures rarely drop below -10°C, making ASHPs highly efficient.
• Consider: A cold-climate ASHP for occasional cold snaps.

2. Moderate Winters (Quebec, Atlantic Canada, Ottawa, Toronto)

• Best Option: Cold-climate air-source heat pump or hybrid system
• Why? Temperatures can reach -20°C, so a cold-weather model ensures reliability.
• Consider: A dual-fuel (hybrid) system where natural gas is available for backup.

3. Extreme Cold (Alberta, Saskatchewan, Manitoba, Northern Ontario)

• Best Option:Ground-source (geothermal) heat pump or hybrid system
• Why? Geothermal units maintain efficiency below -30°C, unlike air-source models.
• Alternative: A cold-climate ASHP with electric backup if geothermal is too expensive.

Other Factors to Consider When Choosing a Heat Pump

1. Do You Have Existing Ductwork?

• Yes? A ducted air-source heat pump may be the easiest and most cost-effective choice.
• No? Consider a ductless mini-split system or an air-to-water heat pump with radiators.

2. Is Your Home New or Being Renovated?

• New Builds: A great opportunity to install geothermal heat pumps or air-to-water systems with radiant flooring.
• Retrofits: Ductless mini-splits or hybrid systems are often easier to install with minimal disruption.

3. Do You Want to Heat Water Too?

• Air-to-water heat pumps can provide both space heating and domestic hot water, making them ideal for hydronic systems.
• Standard ASHPs only heat/cool air—you’ll still need a separate water heater.

4. Available Space, Soil Conditions & Installation Requirements (Especially for Geothermal)

Geothermal systems require underground loops—either long horizontal trenches or deep vertical boreholes—so available yard space matters.
Soil composition also plays a crucial role: moist, clay-rich soils provide better heat transfer and easier excavation, while dry, sandy, or rocky soils can reduce efficiency and increase installation costs.
Installation requires heavy equipment: trenchers for horizontal loops, and drilling rigs for vertical ones—this can impact landscaping.
Air-source heat pumps are more compact and easier to install, needing only a small outdoor unit.

5. Budget & Long-Term Savings

• Upfront Cost: Geothermal > Air-to-Water > Hybrid > Cold-Climate ASHP > Standard ASHP
• Operating Cost: Geothermal is cheapest long-term, while standard ASHPs save less in extreme cold.

6. Government Rebates & Incentives

Through the Canada Greener Homes Grant, homeowners can receive up to $5,600:

• Up to $5,000 toward eligible heat pump systems
• Up to $600 to cover a pre- and post-installation energy audit (required for eligibility)

Contact our certified specialist today to learn more about available rebates and requirements in your region!

7. Permits & Local Regulations

Permits may be required, especially for geothermal systems involving vertical drilling. Homeowners should check local and provincial regulations before installation, particularly for:

• Drilling approvals and groundwater protection zones
• Municipal zoning or property boundary rules
• Noise and placement restrictions for air-source units in urban areas

Working with a certified HVAC contractor ensures compliance with these requirements and increases your chances of qualifying for all available incentives.

The Right Heat Pump for Your Home: Making an Informed Choice

With lower emissions, lower operating costs, and increasing government support, heat pumps are a smart, future-proof choice for Canadian homes in 2025 and beyond. Whether you’re in a mild coastal city or facing harsh prairie winters, there’s a heat pump system that fits your needs and budget.
The best heat pump depends on your climate, home setup, and budget. If unsure, consult an HVAC specialist to assess your needs.

Author:
Garry Jameson