Heat pump vs gas furnace in Ontario: cost, rebates and running costs

Upfront cost

These are typical installed prices before rebates and tax. No neutral source publishes a province-by-province range, so these are Canada-wide figures; installer estimates are labelled.

Typical ranges before rebates and tax, not quotes. Your price depends on the home, the ductwork and the equipment. Ask for at least two written quotes.

A heat pump replaces both the furnace and the air conditioner, so compare it with the price of both if you would replace your AC too. Put your own quote into the rebate finder to see what you'd pay after rebates.

Rebates in Ontario: heat pump vs furnace

In Ontario only the heat pump gets a rebate. Home Renovation Savings pays $500 per ton, up to $2,000 if your home is heated by Enbridge gas, or $1,250 per ton, up to $7,500 if it's heated by electricity, oil, propane or wood. The federal National Heat Pump Rebate ($2,000, or up to $10,000 for households below the median income) was announced on October 8, 2026 but isn't open yet.

We have no current rebate for a new gas furnace in Ontario on file. See every furnace and boiler program in Ontario.

Running costs

Running costs swing with gas and electricity prices, your home's insulation and how cold your winters get. Air sealing and insulation lower both bills: see insulation rebates.

Which one should you choose?

• Choose a heat pump if you also want cooling, your AC is old too, or your home is heated by electricity, oil or propane. Those homes usually get the biggest rebates.
• Choose a furnace if your ducts and gas line are in place, you need the lowest upfront price this week, and no heat pump rebate applies to you.
• Choose both (dual fuel) if you want a backup for the coldest days. See dual fuel vs all electric.

Can you use both?

Yes. A heat pump can be added to an existing gas furnace, which then runs only when it's very cold. Rules on keeping a furnace differ by program, so read the rules on the program page before you book. If your furnace has failed, the furnace-died guide covers the order to do things in so you don't lose a rebate.

Honest downsides of each

Heat pump: costs more upfront, its output falls as the temperature drops (most rebate programs require a cold-climate model for that reason), and an older electrical panel may need an upgrade. Rebates often require a registered or participating installer and, for some programs, approval before installation.

Gas furnace: heats only, so you still need an air conditioner for summer. Almost no program pays for one, and you keep paying the fixed monthly charges on a gas bill as well as an electricity bill.