Heat Pump vs Furnace in Ontario: Which Should You Choose?

Short answer: In Ontario, most homeowners don't have to choose. A cold-climate heat pump paired with your gas furnace heats your home most of the year, cools it all summer and lets the furnace take over on the coldest days. Choose a furnace alone if you only need to replace a failed furnace at the lowest cost: high-efficiency gas furnaces start at $3,795 installed. Ducted heat pumps start at $5,795 installed, and many homes qualify for a rebate.

Side by side

Prices in CAD, before HST, with standard installation.

When a furnace makes the most sense

• Your furnace has failed and you need heat back quickly at the lowest upfront cost.
• Your air conditioner is fairly new and doesn't need replacing.
• Your electrical panel would need a costly upgrade for a heat pump.

When a heat pump makes the most sense

• Your air conditioner is old or failing, so you'd be replacing it anyway.
• Your home is heated by electricity, where the Home Renovation Savings rebate is largest (up to $7,500).
• You want to use less natural gas and qualify for a Home Renovation Savings rebate.

The hybrid option: heat pump plus furnace

In most gas-heated GTA homes, a ducted heat pump is installed alongside the existing furnace. The heat pump handles cooling and most of the heating; when it gets very cold, the furnace takes over. You get year-round comfort, a rebate and a backup heat source. If both your furnace and air conditioner are old, ask us to quote a new furnace and heat pump together.

Frequently asked questions

Is a heat pump better than a furnace in Ontario?

For many homes, a heat pump paired with a furnace is the best of both: it heats most of the year, cools all summer and uses the furnace on the coldest days. A furnace alone costs less upfront if you only need heat.

Do heat pumps work in Ontario winters?

Cold-climate heat pumps are designed to keep heating well below freezing. In gas-heated homes, the existing furnace usually backs them up on the coldest days.

How much does a furnace cost compared with a heat pump?

With Mr. Heating & Home, high-efficiency gas furnaces are $3,795 to $7,695 installed and ducted cold-climate heat pumps are $5,795 to $9,195 installed, before HST and rebates.

Is there a rebate for replacing a furnace in Ontario?

The Home Renovation Savings program does not list a rebate for replacing a gas furnace alone. Heat pumps, heat pump water heaters, smart thermostats and insulation can qualify.

Shop heat pumps · Shop furnaces · Help me choose · Call 1-866-810-6649

Prices current as of October 2026, in CAD before HST with standard installation. Rebate amounts as listed by the Home Renovation Savings program; confirm current terms with the program.