As an Albertan who writes a column for an Ontario-based newspaper, I’m often reminded of the many differences between our two provinces. Health care premiums, HST, and land transfer taxes aren’t part of the Alberta landscape. Another difference I’ve observed is that many Ontario residents rent a water heater for their home, but in Alberta everyone owns. I was curious, so I looked into why.
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Ontario residents can rent a water heater from Direct Energy or Reliance Home Comfort for somewhere between $13 and $26 per month, depending on the size of the tank. Buying a water heater up-front can set you back about $800 to $1,200, plus an additional $300 to $400 if you pay to have it installed.
Owning trumps renting at about the six or seven year mark, and over its typical 15-20 year lifespan the total cost of renting might pay for the water heater three or four times. So why is renting so common in Ontario?
Neil Simpson of Port Perry, Ontario emailed me and said that renting a water heater really isn’t so much an Ontario habit as a requirement.
“How many houses have been built in the past 50 years where there wasn’t a rental water heater in place?
Once there, the cost of buying out the contract is exorbitant…the last thing one needs when buying a house is to add yet another bill.
So, saddled with the rental from day one, most stick with it.”
With renting you don’t have to worry about maintenance or replacement costs, since that’s part of the service agreement, but when you own a water heater you’re on the hook for any issues that arise after the warranty expires.
Jamie and Angela Larsen, aged 38 and 35, moved from Ontario to Alberta three years ago. While living in Ontario, the couple rented a water heater in their Mississauga condo, taking over a rental contract from the previous owner.
They looked into buying a water heater, but due to the high cost they decided to keep renting. They liked that if something went wrong with the heater, the company would be on the hook to fix or replace it.
“We didn’t plan on staying at the place for that long, so owning would have never paid off,” said Mr. Larsen.
An $18 flat fee per month included the water heater and 24-hour service, if required.
Direct Energy and Reliance each list numerous reasons why renting a water heater is the better option: An affordable monthly rate, convenient billing, same-day service if you have any problems, no charge for parts and labour, and the peace of mind that you’re protected from costly repairs.
It reads a bit like an extended warranty sales pitch, and home owners should be wary of aggressive sales tactics designed to steer you toward renting, especially when these companies go door-to-door to try and sign you up.
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Back in 2012, the Competition Bureau, an independent law enforcement agency, took action against both Direct Energy and Reliance for water heater return policies that were nearly impossible to break without aggressive retention tactics and stiff penalties.
Direct Energy operates in both Ontario and Alberta, but despite more than one million water heater rental customers in Ontario, the company doesn’t rent water heaters in Alberta.
One reason why Albertans don’t rent is simply due to habit – it’s never been done before. Ontario residents have been renting water heaters for close to 50 years and are comfortable doing so.
Now living in Lethbridge, Alta with their three children, the Larsen’s own the water heater that came with the house they bought in 2011. If a rental option became available in Alberta, Mr. Larsen said he’d probably stick with ownership because he doesn’t like to be tied into a contract.
Do Ontario residents get hosed by the water heater rental business?