How Much Does a New Furnace Cost in Ontario?

Buying a new furnace in Ontario won’t be cheap, but knowing where your money goes can help you make better, more informed decisions. Choosing the right size, model, and efficiency level for your household matters as much as the final price.

Let’s plan ahead and get the best value for your money. Here’s what you should know when choosing a furnace to avoid surprise fees without compromising indoor air quality.

What Affects the Cost of a Furnace in Ontario?

The upfront costs of installing furnaces typically depend on your preferred model, heating needs, and the current size of your living space. Here are the key factors to consider when setting your budget:

Furnace Type and Energy Efficiency Rating

Furnaces come in two options: gas and electric furnaces.

• Natural gas furnaces are more cost-effective in the long run, as they don’t waste energy; however, the installation costs are higher. They typically need venting and gas line modifications.
• Electric furnaces tend to be cheaper upfront but cost more to operate in Ontario due to rising electricity rates.

Also, check your preferred model’s annual fuel utilization efficiency (AFUE), which measures how much of the furnace’s fuel is converted into usable heat.

For example, a 90% AFUE rating means 90% of the energy source becomes usable heat, while the remaining 10% is lost. A higher AFUE rating means better energy efficiency and lower long-term operating costs, but it often comes with a higher upfront price.

Home Size and Heating Load

Larger homes typically require 80,000 BTUs or more. As you might expect, models with a higher heating capacity are often more expensive.

However, don’t just opt for a smaller model to save money. Undersized furnaces that run constantly will wear out more quickly, while oversized models tend to short-cycle and waste energy. To determine the correct size, your installer should perform a Manual J load calculation based on the square footage and insulation type.

Ductwork and Venting Modifications

Your HVAC technicians will have to assess your living space before installation. Old or leaky ducts may need sealing or replacement to work with modern high-efficiency furnaces.

Likewise, expect to pay for new venting requirements, such as sidewall venting or chimney liners, if you’re switching from one fuel type to another.

Brand, Model, and Features

The price of a furnace also depends on the brand you get. Premium brands like Lennox or Carrier often cost more, although they offer better warranties and higher efficiency ratings. On the other hand, basic models with single-stage heating are cheaper but less energy-efficient and noisier.

Furnace Only vs Furnace + AC Combo Upgrade: Cost Breakdown

For homes in Ontario, heating and cooling systems are equally essential. Winters are cold, but summers can be just as harsh. That’s why many homeowners consider replacing both their furnace and air conditioner at the same time. It’s cost-effective but not always necessary.

Here’s how a furnace-only upgrade compares to the efficiency, long-term value, and cost for furnace and AC replacement combos.

Is It Time to Replace Your Furnace?

Even if a new furnace costs more upfront, certain situations require its complete replacement. Using an ageing or malfunctioning furnace system is extremely dangerous. In addition to wasting energy, you’re exposing your household to potential carbon monoxide leaks, electrical failures, and fire hazards.

If you notice any of the following warning signs, call our 24-hour furnace maintenance and repair team at LG Home Comfort for immediate repair:

• You smell gas or see yellow flames. A yellow burner flame (instead of blue) or a persistent gas smell can indicate a combustion or ventilation issue. Both are serious safety risks.
• Heating bills keep rising. Older units lose efficiency over time, so they work harder to generate the same amount of heat. If your energy bills continue to increase, your furnace may be the culprit.
• Your unit is noisy or short-cycling. Strange banging, rattling, or humming noises often point to internal issues. Short-cycling (frequent starts and stops) can wear down components faster and lead to early failure.
• Your home has hot and cold spots. Inconsistent heating means your furnace can’t handle your current heating load.
• You’re spending more on repairs than it’s worth. If you’ve called for service more than twice in the past year, and each visit adds up, it’s likely time to invest in a more reliable system.

Learn more: The Ultimate Guide To Buying A New Furnace

Available Incentives for New Furnace Installations in Ontario

Some Ontario residents have access to a few incentive programs for upgrading to energy-efficient heating systems. While these incentives won’t cover your entire furnace or installation cost, they can help offset part of the investment.

Below are two current offers Ontario homeowners may be eligible for:

City of Toronto Energy Efficiency Incentives

The City of Toronto offers furnace rebates to Enbridge Gas customers as part of its energy efficiency incentives. Qualified households receive $750 for purchasing high-efficiency furnaces, i.e., those with an AFUE rating of 90% or higher for natural gas or propane.

Here’s what you need to qualify as an Enbridge customer in Toronto.

• The furnace must meet “high-efficiency” criteria, i.e., higher AFUE ratings.
• To receive an additional $250 bonus, your furnace must include an electronically commutated motor (ECM).
• The replacement or purchase must align with the program’s rules for replacing furnaces in existing homes.

Since this is a municipal incentive for Toronto specifically, it does not apply province‑wide. Ontario residents outside Toronto cannot apply for this program.

Enbridge Home Winterproofing Program (HWP)

The Enbridge Home Winterproofing Program offers free home energy upgrades for eligible Ontario homeowners. Enbridge Gas delivers it in partnership with Save on Energy.

The program focuses on reducing heat loss to improve energy efficiency. Qualified households can receive free insulation, draft-proofing, and smart thermostats, all of which are installed at no cost.

To apply, you’ll need to meet all of the following criteria:

• You must have a natural gas furnace or boiler.
• You need an active Enbridge Gas account in your name.
• Your household income must be below the program’s thresholds, or you must receive government assistance (e.g., OAS, ODSP, or OW).

Note: This program is not a direct rebate for new furnace purchases. Instead, it helps reduce heating demand, which complements furnace efficiency.

FAQs About the Cost of New Furnace in Ontario

How much does a furnace cost to install in Ontario?

Furnace prices typically range from $3,000 to $8,000, with high-capacity gas furnaces on the higher end, excluding installation costs. With labour, retrofitting, and heating load requirements factored in, the total cost of a new furnace installation often falls between $4,000 and $9,500 or more.

Should you replace your furnace system and AC at once?

It’s often cheaper to replace both the furnace and air conditioner. You’ll save money on labour and shared components, plus you can shop for manufacturer bundle discounts. More importantly, it helps avoid compatibility issues between old and new units.

How long does a professional furnace installation take?

Average furnace installations where you’re replacing a similar unit with no major changes typically take four to eight hours. However, depending on job complexity, the process can take one to two business days. Delays may occur if the unit is in a hard-to-reach area, the weather is severe, permits are required, or your preferred unit is out of stock.