Furnace Replacement in Ontario: When, What and How Much

A furnace is one of the few home systems you cannot do without for even a day in an Ontario January. That makes furnace decisions prone to rushed choices and high-pressure sales. The best time to plan a replacement is before your furnace fails, while you still have time to compare options.

This guide covers how to tell when replacement makes sense, what a new furnace should cost in 2026, and how to weigh it against a heat pump or hybrid system.

Repair or replace?

Most gas furnaces last about 15–20 years with regular maintenance. Age alone is not a reason to replace a furnace that is safe and efficient enough. Look at the combination of age, condition and repair cost.

Situation	Usually repair	Consider replacing
Age	Under ~12 years	Over ~15 years
Repair cost	Under ~25% of a new furnace	Over ~40–50% of a new furnace, especially on an older unit
Heat exchanger	Intact	Cracked or failing (a safety issue)
Efficiency	High-efficiency (90%+) condensing unit	Mid-efficiency (~80%) or older
Comfort	Even temperatures	Cold rooms, short cycling, loud operation
Parts	Available	Discontinued or long waits

Caution: A cracked heat exchanger can allow carbon monoxide into your home. If a technician reports one, ask to see photos or a combustion analysis reading, and consider a second opinion before a rushed replacement. Every Ontario home with fuel-burning appliances should have working carbon monoxide alarms near sleeping areas.

Warning signs

• Yellow or flickering burner flame instead of steady blue.
• Frequent ignition failures or short cycling.
• Rising gas use without a change in weather or habits.
• Rust, water leaks or corrosion around the furnace.
• Unusual banging, squealing or rumbling.
• Repeated repairs in the past two winters.

What a new furnace costs in 2026

New gas furnaces sold in Canada must be at least 95% AFUE (annual fuel utilization efficiency), which means condensing furnaces that vent through plastic pipe and produce condensate that needs a drain.

Item	Typical range (estimate)
Standard 95–96% AFUE, single-stage or two-stage	$5,000–$7,000 installed
Modulating, variable-speed 97–98% AFUE	$7,000–$9,000+ installed
Upgrading from an older mid-efficiency furnace (new venting, condensate drain, possible chimney liner for water heater)	Can add $500–$2,000
Central AC replaced at the same time	$5,000–$9,000

Prices vary with brand, home size, access and how much ductwork or venting needs changing. These are typical ranges, not quotes.

Choosing the features

• Single-stage burners run at full output only. Lowest cost, less even comfort.
• Two-stage burners run at low fire most of the time. A good balance of price and comfort.
• Modulating burners adjust in small steps. Quietest and most even, at the highest price.
• Variable-speed (ECM) blower uses much less electricity than older PSC motors, especially if you run the fan continuously, and is important if you might add a heat pump later.

An AFUE upgrade from 95% to 98% saves only about 3% of gas, roughly $30 a year on 2,200 m³ at 45¢/m³ (estimate). Choose the higher model for comfort or features, not for payback.

Size it correctly

Many Ontario furnaces are oversized, sometimes by 50% or more, because they were sized by rule of thumb or matched to the old unit. Oversized furnaces short-cycle, create uneven temperatures and wear out faster. If you have added insulation or new windows since your furnace was installed, your heat loss has dropped.

Ask for a heat loss calculation (CSA F280 or equivalent). See our HVAC sizing guide for what a proper calculation includes.

Furnace, heat pump or hybrid?

Before you sign for a straight furnace replacement, compare these three paths:

Option	Upfront (estimate)	Running cost vs gas	Cooling included	HRS rebate (gas-heated home)
New 95%+ gas furnace	$5,000–$9,000	Baseline	No	None
Hybrid: new furnace + heat pump	$15,000–$30,000	Similar	Yes	Heat pump: $500/ton, up to $2,000
Ducted cold-climate heat pump with electric backup	$12,000–$25,000	Roughly similar to somewhat higher; lower if you drop gas entirely	Yes	$500/ton, up to $2,000

Rebate figures are according to Save on Energy's Home Renovation Savings Program as published in mid-2026; confirm on https://saveonenergy.ca (opens in a new tab) before committing. Since the federal carbon charge on natural gas was removed on 1 April 2025, gas has been cheaper to run, so a straight furnace replacement is a reasonable choice in many homes. If your AC is also old, a heat pump or hybrid deserves a serious look. See our heat pump vs gas cost comparison and run your own numbers with the heat pump vs furnace calculator.

Buy, rent or finance?

Furnace and AC rentals are common in Ontario. They spread the cost, but often cost much more over time.

Question to ask	Why it matters
Total of all monthly payments over the full term?	Rentals often total two to three times the purchase price
Buyout cost at each year?	Some contracts have steep early buyout schedules
Annual price increases?	Small yearly increases compound
Is anything registered against your property?	Notices of Security Interest (NOSIs) on title were a major problem; recent legislation banned them for consumer goods, with protections taking effect in phases. Verify current rules on https://www.ontario.ca (opens in a new tab)
Who owns the equipment for rebate purposes?	HRS rebates are for owned equipment

Caution: Since 1 March 2018, Ontario's Consumer Protection Act bans unsolicited door-to-door contracts for furnaces, air conditioners, water heaters and several other products. A contract signed at your home must be initiated by you, and a 10-day cooling-off period applies. See our door-to-door scams guide.

Installation and safety checklist

• Installer holds a valid TSSA-registered contractor status and the technician has a G2 (or G1) gas licence.
• Gas permit or notification handled as required.
• New PVC venting sized and terminated per manufacturer instructions and code, away from windows and air intakes.
• Condensate drain to a floor drain or pump, protected from freezing.
• If the old furnace shared a chimney with a gas water heater, the water heater venting is checked; it may need a liner.
• Combustion analysis performed and recorded at start-up.
• Thermostat compatible with the new furnace (and a future heat pump).
• Warranty registered in your name; ask for a copy.
• Old furnace removed and disposed of properly.

Our contractor guide has questions to ask before you hire.

Frequently asked questions

How long does a furnace replacement take?

A straightforward like-for-like replacement usually takes one day. Switching from mid-efficiency to high-efficiency, adding a heat pump or changing ducts may take two days.

Can I get a rebate for a new gas furnace?

Under the Home Renovation Savings Program as published in mid-2026, gas furnaces are not listed as eligible equipment. Heat pumps, insulation, smart thermostats and several other upgrades are. Check our rebates directory for current offers.

Should I replace my furnace and air conditioner at the same time?

If both are over about 12–15 years old, replacing together often saves on labour and ensures matched equipment. It is also the ideal moment to consider a heat pump in place of the AC.

What if my furnace fails in mid-winter?

Ask for a temporary repair or rental heaters while you get at least two quotes. If replacement is urgent, prioritize a licensed contractor who will do a proper sizing check, and avoid signing long rental contracts under pressure.