Heat Pump vs. Gas Furnace Cost in Ontario (2026 Comparison)
A no-spin 15-year cost comparison for Ontario homeowners weighing a cold-climate heat pump against a high-efficiency gas furnace — install cost, current Enbridge gas rates, ULO electricity pricing, and rebates applied.
Updated June 2026 · 8 min read · Ontario, Canada
Installed cost (Ontario, 2026)
| System | Typical installed cost | After HRS rebate |
|---|---|---|
| High-efficiency gas furnace (96% AFUE) | $5,500 – $8,500 | n/a |
| Central AC (16 SEER2) | $5,000 – $7,500 | n/a |
| Furnace + AC combo | $10,500 – $16,000 | n/a |
| Cold-climate ducted heat pump | $14,000 – $22,000 | $6,500 – $14,500 |
| Hybrid (CCHP + gas furnace) | $17,000 – $25,000 | $9,500 – $17,500 |
Annual operating cost for a typical 2,000 sq ft Ontario home
| System | Estimated annual cost |
|---|---|
| Gas furnace + AC (Enbridge rates) | $1,650 – $2,000 |
| Cold-climate heat pump (Tiered electricity) | $1,500 – $1,850 |
| Cold-climate heat pump (ULO electricity) | $1,150 – $1,400 |
| Hybrid CCHP + gas furnace (smart switchover) | $1,050 – $1,350 |
Numbers assume ~85 GJ heating load, Enbridge Gas rate ~$0.18/m³ delivered, and Ontario electricity at ULO pricing where applicable. Your actual bill depends on home envelope and thermostat setpoints.
15-year total cost of ownership
- Gas furnace + AC: ~$13,000 install + ~$28,000 fuel = ~$41,000
- Cold-climate heat pump (ULO): ~$10,000 net install + ~$19,000 electricity = ~$29,000
- Hybrid CCHP + furnace: ~$13,500 net install + ~$18,000 fuel = ~$31,500
When a gas furnace still wins
Homes without existing electrical service capacity, rural properties on propane, or homes that need same-day emergency replacement sometimes still favour a straight furnace replacement. Otherwise, a heat pump or hybrid almost always wins on 15-year math in Ontario.
Frequently asked questions
Is a heat pump really cheaper to run than a gas furnace in Ontario?
On Ontario's ultra-low overnight (ULO) electricity plan, a COP-3 cold-climate heat pump runs roughly 10–30% cheaper per year than a 96% AFUE gas furnace heated by Enbridge gas — though the gap narrows during the coldest weeks.
What's the total installed cost in Ontario?
A ducted cold-climate heat pump in Ontario typically runs $14,000–$22,000 installed before rebates. After the HRS $7,500 rebate, most homeowners pay $6,500–$14,500 out of pocket.
Are gas furnaces being banned in Ontario?
No. There's no province-wide ban on gas furnaces in 2026. New-build incentives lean electric, but existing homes can still install or replace high-efficiency gas furnaces.
When does a hybrid system pay off fastest?
Hybrid (CCHP + gas furnace) pays back fastest in Ottawa, Kingston, and the GTA — areas with cold winters, healthy electricity ULO pricing, and existing gas service.
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