Heat Pump vs Furnace in Canada [2026]: Cost, Comfort and Running Costs

A heat pump costs more to install than a gas furnace and, against gas, saves little on running costs: Efficiency Canada puts the saving at $50–$150 a year in most regions. A new gas furnace installs for $5,000–$8,000 CAD, while two Ontario installers publish $5,500–$14,000 for a ducted heat pump, which also cools (prices checked October 2026). The saving is larger against electric heat or oil, so what you heat with today, and whether your air conditioner also needs replacing, decides your answer.

Researched and edited by Gabriel Reyes. Last reviewed: October 2026.

We don’t sell or install furnaces or heat pumps and we earn no commission on either. This guide compares the two on installed price, running cost, cold-weather heat and daily use, and shows the arithmetic so you can repeat it with your own bills. For how each system works, see our home heating and cooling guides.

Heat pump or furnace: which one fits your home?

Start with what you heat with today, because that sets how much a heat pump can save.

You heat with	Running-cost difference	What to compare	Source
A gas furnace and an air conditioner that both work	$50–$150 a year in most regions. One Ottawa dual fuel owner reports about $100 a winter	Nothing forces the decision. Price a heat pump when the first of the two fails, and ask for a dual fuel quote if the air conditioner is close to the end	Efficiency Canada; r/heatpumps (user-reported)
A gas furnace and an air conditioner that are both near the end	The same gap, with one system to buy instead of two. In a Canadian Climate Institute model, a heat pump with gas backup is the cheapest option for almost every Toronto home, and for Edmonton homes built in 1940 and 1980; the other Edmonton homes do better with gas heat and central air	A furnace plus air conditioner (two quotes) against one ducted heat pump quote with the same scope	Canadian Climate Institute
Electric baseboards or an electric furnace	Up to twice the heat per unit of electricity (NRCan) and a saving of $700–$1,900 a year (Efficiency Canada). One owner reports a heating bill 83% lower in the first month	A ducted heat pump if you have ducts, a ductless one if you don’t	NRCan; Efficiency Canada; r/heatpumps (user-reported)
An oil furnace	Up to 2.5x the heat per unit of energy for a standard heat pump and up to 3x for a cold-climate one (NRCan); a saving of $1,000–$3,500 a year (Efficiency Canada)	Ask each installer to estimate the saving from your own oil bills; we have no oil prices	NRCan; Efficiency Canada
A propane furnace	We have no propane data	Ask each installer to run the comparison with your propane bills	None

Sources: NRCan, Heat pump basics (page modified July 2025; the multiples are “up to” seasonal averages); Efficiency Canada (updated March 2026), which cites no source for its figures and states no currency, so we read them as Canadian dollars; the Canadian Climate Institute (2023, correction note March 2024), a model of the lifetime annual cost of heating and cooling a 1,770 sq ft house; owner reports from r/heatpumps threads (2024 and 2026). Checked October 2026.

Answer three questions from papers you already have: what you heat with, whether the air conditioner still works, and what you pay per kWh and per m³ on your last bills. The table answers the first. The next two sections help with the other two.

If you heat with electricity or oil, read are heat pumps worth it in Canada for the full savings case.

What a heat pump and a furnace cost to install

A ducted heat pump heats and cools, so when your air conditioner is also ending, compare it with a furnace plus an air conditioner.

System	What it does	Published installed price (CAD)	Basis
Gas furnace, 95% AFUE or more	Heats	$5,000–$8,000	Our furnace cost in Canada ranges: four companies and 16 Ottawa homeowners
Central air conditioner	Cools	$3,500–$8,500	Our central air conditioner cost ranges: seven installers and a retailer
Furnace and air conditioner bought together	Heats and cools	$8,500–$16,500	The two ranges above added together (our arithmetic)
Ducted heat pump	Heats and cools	Shown source by source below	Not enough sources for one range
Heat pump added to a furnace (dual fuel)	Heats and cools; the furnace stays	Shown source by source in the dual fuel section	Not enough sources for one range

Sources: the two pages linked in the table, checked October 2026. The $8,500–$16,500 adds the low ends ($5,000 + $3,500) and the high ends ($8,000 + $8,500) of the two ranges.

Where two Ontario installers’ cold-climate ducted ranges overlap, at $7,500–$13,000, that band overlaps the $8,500–$16,500 for a furnace and air conditioner together between $8,500 and $13,000. Ask for both quotes with the same scope before you compare totals.

Ducted heat pump prices, source by source

Source	Who they are	Price (CAD)	Note
EcoFrost Heating	Installer, Greater Toronto Area	$5,500–$11,000 standard; $6,500–$14,000 cold-climate	2026 guide. The page says its prices include labour, permits and removal of the old equipment, for all of its work
IKAD	Installer, Ontario	$7,500–$13,000 cold-climate	Article dated July 2026; assumes existing ducts
Clean Energy Canada survey	Owners, mostly in Ontario	Cold-climate ducted: 3% paid under $5,000, 26% $5,000–$10,000, 29% $10,000–$15,000, 22% $15,000–$20,000, 14% over $20,000	Cost before incentives; a convenience sample, unweighted
r/heatpumps owner	User-reported quote, southwestern Ontario	About $18,500, plus about $2,000 for a 200 A panel	3,000 sq ft home, bought around 2023; the owner doesn’t say whether the price is before or after a grant
Green Building Canada	British Columbia; averages of quotes buyers shared on Reddit	$17,796–$22,693	Ducted systems of 1.5 to 4 tons; the page gives no collection period
FortisBC	Gas utility, British Columbia	$7,000–$12,000 to change a gas furnace for a central heat pump	“Equipment and basic installation” in a 2,400 sq ft Surrey house; calculations from 2023
Action Furnace	Installer, Alberta	$8,000–$18,000	Published May 2026; no breakdown by system type

Sources: EcoFrost Heating, IKAD, Clean Energy Canada, Heat Pump Owners Have Their Say (March 2026; installation cost chart), the 2024 r/heatpumps thread, Green Building Canada (published December 2024, updated July 2025), FortisBC (published March 2023, updated March 2026) and Action Furnace. Checked October 2026. None of these sources says whether GST/HST is included.

We don’t publish one ducted price. Only Ontario has installer prices from two companies, and the survey describes what owners paid and says nothing about what installers list. In the survey, 55% of owners with cold-climate ducted systems paid $5,000–$15,000 and 36% paid more than $15,000. The $18,500 owner sits above both installers’ ranges, in the survey’s $15,000–$20,000 band, which 22% of those owners reported.

Two British Columbia sources sit far apart. FortisBC’s range tops out at $12,000, which is $5,796 below the lowest Green Building Canada average ($17,796). FortisBC sells gas and electricity, so its figure comes from a seller with an interest in the comparison, and it says nothing about the panel or ducts. When a quote lands outside these ranges, ask which of the items below it includes.

Green Building Canada lists work that often sits outside a heat pump quote:

• Electrical panel. One Ontario owner paid about $2,000 to upgrade to 200 A; Green Building Canada lists $1,000–$10,000. FortisBC gives an average of about $5,000 and up to $12,000 for a 100 A to 200 A upgrade in its area.
• Ducts. Green Building Canada lists $1,000–$5,000 for repairs or changes.
• Insulation and air sealing. The same page lists $1,000–$15,000.

Ask whether each quote is before or after GST/HST. Federal and provincial incentive programs have changed since 2024, so we leave their amounts out of every figure here and suggest you check each program’s official page before you budget.

What each one costs to run

Compare the cost of a gigajoule (GJ) of heat from each system. One number settles the comparison: the COP, or units of heat per unit of electricity over a season, that a heat pump needs to match gas. You can work it out from your own bills:

• Electricity: rate in cents per kWh × 277.8 kWh per GJ ÷ 100 = dollars per GJ of electricity. A heat pump delivers COP times that much heat.
• Gas: rate in cents per m³ ÷ 100 ÷ 0.03908 GJ per m³ = dollars per GJ; divide by the furnace’s AFUE (95% is the federal minimum for new gas furnaces) to get dollars per GJ of heat.
• Break-even COP: electricity dollars per GJ ÷ gas dollars per GJ of heat.

Open your last two bills, take the price per kWh and the price per m³ (or per GJ), and do the division.

Province	Gas furnace, $ per GJ of heat	Electricity, $ per GJ	COP needed to match gas
Ontario	$7.4–$8.0	$33.3–$39.4	4.2–5.3
British Columbia	$11.6–$11.7	$33.0–$39.1	2.8–3.4
Manitoba	$6.0	$27.7	4.6

Rates captured October 2026. Ontario: OEB tiered electricity at 12.0–14.2 c/kWh (changes November 1, 2026) and Enbridge Gas at 27.8–29.8 c/m³ for delivery, transport and gas, before HST and the $27.69 monthly fixed charge (fixed charges are left out of every figure in the table). British Columbia: BC Hydro at 11.87 and 14.08 c/kWh, and FortisBC gas at $11.10 per GJ (delivery, transport and gas). Manitoba: Manitoba Hydro electricity at 9.97 c/kWh and gas at 22.43 c/m³ (commodity plus delivery). Gas converted at 39.08 GJ per 1,000 m³ (Enbridge, southern Ontario); we applied the same value in Manitoba because we haven’t captured Manitoba Hydro’s own. Furnace efficiency 95–96% AFUE.

What the table tells you:

• Ontario and Manitoba: a heat pump needs a seasonal COP above 4 to match gas. At a COP of 3 (an illustration), it costs more than gas per GJ of heat in both provinces.
• British Columbia: the two come out close, and a COP between 2.8 and 3.4 is enough.
• The rates favour the heat pump. The electricity rates cover energy only, without delivery or regulatory charges, while the gas figures include delivery. Adding the electricity charges raises the COP you would need.

NRCan publishes only “up to” multiples and no seasonal COP. Its ENERGY STAR page lists a COP at −8 °C between 1.1 and 3.7 for air-to-air models. Ask each installer for the seasonal COP of the model it quotes, and where that number comes from. Our guide to heat pump running costs by province shows the same arithmetic at COP 2, 2.5 and 3.

We don’t give a monthly or yearly heating cost for a typical home, because we found no sourced heating consumption by province. Use the last 12 months of your own bills.

What others measured

Source	Home	What they found	Type
Efficiency Canada	Most regions	A saving of $50–$150 a year against gas, plus $150–$300 in gas fixed charges if you cancel the gas service	An organization; the page cites no source
STEP (Toronto and Region Conservation Authority), July 2021	A 2,100 sq ft semi-detached house in Toronto with a dual fuel system	January to May 2021 against 2020: gas down 41% and electricity up 27%, and the bill came out level ($79 lower, $76 of it from an unplugged fridge). The modelled full season saves $26	One measured house; the full season is modelled
NRCan, April 2019	Three new homes east of Ottawa	Operating cost “similar” to a gas furnace, with “modest utility bill savings” in mild weather and off-peak rates	A programme test
An owner north of Highway 7, Ontario	Heat pump with a gas furnace as backup	Against the year before, November and December electricity bills rose $19.98 and $54.36 while gas bills fell $81.94 and $98.31	User-reported
Four Ontario owners	Ontario homes, three with gas backup and one with electric backup	The change in energy cost is “a wash”, about $100 a winter, $150–$200 a year, or “negligible” after 18 months	User-reported

Sources: Efficiency Canada; STEP dual fuel case study; NRCan, The future of home heating (modified April 2026); owners from the r/ontario thread (2024) and the two r/heatpumps threads linked above. Posts are anonymous and unverified. STEP used 2020–21 rates, so don’t use its dollar figures to price today’s bills.

The Highway 7 owner’s net saving was $61.96 in November and $43.95 in December. He calls the year-to-year comparison unfair because the winter had not been very cold. Both months line up with STEP: gas falls by more than electricity rises, and the net is small.

One owner reached the opposite result with his own arithmetic. He calculates that a heat pump would cost him $200–$300 a year more to run than his gas furnace, and plans to cancel the gas meter and save about $600 a year in connection fees. He doesn’t give his province, and the $600 is his own estimate. Enbridge’s Rate 1 fixed charge is $27.69 a month, or $332 a year, so ask your gas utility what you stop paying if you disconnect, and what you keep paying if you don’t.

Ask every installer to estimate your running cost from your own bills, with the COP they assumed written down. If all you get is “up to” and a percentage, ask for the assumption behind it. Our page on how we build our price ranges explains how we date each figure.

Ontario: the gas fixed charge and time-of-use rates

Two Ontario details change the result:

• Fixed charges. Enbridge charges $27.69 a month on Rate 1. A dual fuel home keeps paying it, and two commenters object to the minimum monthly gas charge in summer, when they use no gas. Check your electricity bill for its own fixed charges.
• Time-of-use rates. The OEB’s time-of-use prices, in force since November 1, 2025 and changing on November 1, 2026, are 9.8 c/kWh off-peak, 15.7 mid-peak and 20.3 on-peak, for energy only. A dual fuel owner reports that in his first winter the heat pump kept running after deep overnight setbacks, “especially when my TOU rates were at their highest”. In the second winter he limited the setbacks and set the thermostat to bring in the gas furnace when the gap to the target is large. Check your electricity bill for your plan, and set the thermostat for it.

HST is 13% in Ontario (Canada Revenue Agency), so a quote before tax adds that on top.

How each one performs in cold weather

A furnace delivers the capacity you bought. A heat pump’s capacity falls as the outdoor temperature drops, so sizing and backup heat are the whole discussion.

NRCan’s two pages give different limits, and we show both. Its Heat pump basics page says cold-climate models operate “well below freezing down to −30 °C”. Its ENERGY STAR page lists a minimum operating temperature of −15 to −25 °C for recent models, and a COP at −8 °C of 1.1 to 3.7 for air-to-air models. Ask for the model’s heating output at your area’s design temperature, in writing.

The STEP study shows what an undersized unit does. Its 2-ton heat pump was planned to heat the house above −5 °C. In practice it could not cover the house’s heat loss at temperatures much below 0 °C, and the furnace ran more than expected, so the carbon savings came in below the estimate. Ask each installer for a whole-house heat-loss calculation before you accept a size. The City of Edmonton asks for one with a furnace replacement permit and wants the equipment to cover 100% to 130% of the loss (a document dated August 2020, written for furnaces).

Owners describe the range in practice:

• Southern Alberta. A southern Alberta owner (design temperature −25.5 °C, 1,400 sq ft, an 18,000 BTU load) says his cold-climate heat pump supplied all the heat down to −24 °C, that 10 kW of electric backup added heat below that, and that the unit shut off at −32 °C during a −38 °C cold snap.
• The r/ontario thread. An owner of a cold-climate unit says it never needed its backup during about 8 hours at −17 °C, and that below that, in his words, “most (not all!)” heat pumps start needing the auxiliary heat. Another Ontario owner puts the point where his furnace takes over at around −7 to −10 °C.
• Backup priorities. A Hamilton owner says his manufacturer’s thermostat prioritizes comfort so much that the electric backup comes on “more than I like”.

These are user reports and we haven’t verified them. Backup heat is also why a heat pump bill can jump in a cold snap: electric resistance backup delivers less heat per unit of electricity than the heat pump does.

Dual fuel: keeping the furnace and adding a heat pump

Dual fuel pairs a heat pump with a gas furnace, and a thermostat or controller decides which one runs. Our home heating and cooling guides explain the setup in a sentence; here is the evidence.

• NRCan’s test. In its test homes the heat pump ran above −8 °C during off-peak hours and the furnace took over in the cold and at peak hours, using controls that watch gas prices, electricity prices, time-of-use rates and outdoor temperature.
• STEP. The planned switchover was −5 °C, and the undersized heat pump left the furnace working harder.
• How much each ran. The Highway 7 owner reports that in November his heat pump ran 159 hours and the gas furnace 3 hours 15 minutes, and in December 201 hours and 10 hours 35 minutes. In January, partway through the month, the furnace had run 57 hours against 131 for the heat pump.
• What it costs to add. A Toronto owner was quoted $3,000 more for a heat pump plus furnace than for a furnace plus air conditioner.
• What FortisBC says. FortisBC, a gas seller, calls a heat pump with a new high-efficiency gas furnace a good option for someone replacing an old furnace and wanting heating and cooling. Weigh that with its interest in mind.

Installed price, source by source:

Source	Where	Price (CAD)	Note
IKAD	Ontario	$11,500–$18,000	Article dated July 2026
BC Wide Home Services	Burnaby, British Columbia	$10,000–$18,000	Before GST; the page calls its figures a guide and not quotes
Green Building Canada	No region given	$12,000–$20,000	From a 10-year cost table; no source or inclusions stated
An owner north of Highway 7	User-reported quote, Ontario	$12,600 with tax, before a rebate	Heat pump with a gas furnace, replacing a furnace and air conditioner; the owner says another company quoted the same make and model “over 10k more”

Sources: IKAD, BC Wide (updated September 2026), Green Building Canada (April 2026) and the r/ontario thread (2024). Checked October 2026.

The three published ranges overlap between $12,000 and $18,000, and the owner’s price falls inside that band. One of the three, Green Building Canada, does not say where its figures come from, and its text and its table disagree for other equipment. Because of that we don’t publish a dual fuel price, and we show the three side by side. The owner’s quote shows how far two companies can sit apart for the same equipment: get at least two.

Ask each dual fuel installer:

1. At what outdoor temperature does the furnace take over, and who sets it?
2. What heat load did you calculate, and what capacity does the heat pump have against it?
3. How does the system keep the heat pump from running nonstop during expensive hours?
4. What changes on my gas bill when the furnace runs less?

Each question comes from a case above. FortisBC’s early adopter pilot for dual fuel systems has closed (applications ran from April 3, 2023 to December 1, 2024), and incentive programs keep changing, so check each program’s official page before you count on one.

How each one feels to live with

Warm air. A furnace and a heat pump deliver air at different temperatures, and we found no independent source for the supply-air temperature of either. One owner measured the air from his ductless unit at about 43 °C with −18 °C outside, and above 50 °C in milder weather. The Highway 7 owner says his heat pump air is “not that hot” next to the gas furnace. Ask each installer for the model’s discharge air temperature at your design temperature.

Comfort in the survey. In the Clean Energy Canada survey, 50% of owners reported better comfort and more even heating, 56% better cooling, and 8% a less comfortable home.

Noise and upkeep. Noise is the largest of the problems the survey lists: 16% of owners said their system makes more noise than they would like, and 9% said it needs more maintenance than they would like.

Thermostat. Two Ontario owners say a heat pump works best with small changes. A Toronto owner with gas backup says “you can’t have big swings in temperature”, and holds 21 °C instead of raising it from 19 °C: “Trying to dramatically raise the temp will take forever and you’ll be running the heat pump all day.” We found no NRCan guidance on setbacks, so ask your installer which settings suit your model.

Cooling. A ducted heat pump replaces the air conditioner as well, which is why the install comparison pairs it with a furnace plus an air conditioner.

Service. NRCan recommends servicing a gas furnace at least every two years and changing or cleaning its filter every three months; see our furnace maintenance cost page for prices. We found no published prices for heat pump service, so ask each installer what an annual visit costs.

What to ask when you compare quotes

1. Same scope. Get a furnace plus air conditioner quote and a heat pump quote that heats and cools, so the totals can be compared.
2. Running cost. Ask for an estimate from your gas and electricity bills, with the COP they assumed.
3. Heat loss and capacity. Ask for the whole-house heat-loss calculation and the unit’s heating output at your design temperature.
4. Backup. Ask what backup heat the quote includes and at what temperature it starts.
5. Panel and ducts. Ask whether the price covers an electrical panel upgrade and any duct changes.
6. Incentive paperwork. Ask what you must file or complete before you sign to qualify for an incentive.

Our guide explains what HSPF2 and SEER2 mean when a quote lists them.