The federal government sweetened its home-energy retrofit incentives yesterday by 25 per cent to spur more economic activity during the downturn, a move Ontario said it plans to match.

Lisa Raitt, federal minister of natural resources, said the increased incentive under the EcoEnergy home-retrofit program will only be in effect for at most two years.

“I do encourage homeowners to act quickly,” she said.

An official with Ontario’s Ministry of Infrastructure and Energy told Torstar News Service that the provincial government “will match” the new federal rebates. Ministry spokesperson Amy Tang said details are being finalized on a new provincial program that will further expand on initiatives.

Efforts to boost residential energy efficiency come as electricity and heating-fuel prices in Ontario are set to rise, the result of the McGuinty government’s plan to harmonize the province’s retail-sales tax with the federal goods-and-services tax.

Electricity, natural gas and heating oil consumers are currently exempt from the provincial tax, but once the blended tax rate goes into effect on July 1, 2010, home-energy costs will jump eight per cent.

The new program means, for example, that a home being retrofitted with a high-efficiency natural gas furnace will qualify for a rebate of $625 from Ottawa and $625 from the province — up $250 compared to the original program.