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Climate stabilization requires greenhouse gas reductions (GHG) in excess of 60 percent. Ground source heat pumps (GSHPs) hold the promise of meeting heating and cooling loads much more efficiently than conventional technologies. The economic viability of their widespread adoption depends on the costs of energy. Their impact on GHG reduction depends on fuel choices both in electricity generation and on customers’ premises. In this paper, we provide a systematic assessment of the GHG reduction potential across Canada of GSHPs and the economic cost of achieving this reduction. Using province-level data on household fuel choices and energy use, we find that GSHP systems offer significant GHG reductions, as well as savings in operation and maintenance costs. However, high capital costs continue to limit market diffusion. We conclude with a review of the geological suitability of the five largest urban centers in Canada for GSHP installation. This analysis shows GSHPs to hold significant potential for substantial GHG reductions in Canada at a cost savings relative to conventional alternatives, with time horizons as short as seven years.