Furnace Replacement Cost in Ontario (2026): Prices, Add-Ons and Alternatives

Furnace replacement in Ontario typically costs about $5,000–$9,000 installed in 2026 for a new 95%+ AFUE gas furnace in a detached or semi-detached home. Replacing the furnace and central air conditioner together usually runs about $10,000–$18,000, while complicated installs with venting changes, chimney work or ductwork repairs can land above those ranges.

These are estimated ranges based on typical Ontario installations. Your price depends on the furnace's capacity and features, the condition of your venting and ducts, and local labour rates.

How much does furnace replacement cost in Ontario in 2026?

Furnace type	What you get	Typical installed cost (estimate)
Single-stage, 95–96% AFUE	Burner is either fully on or off	Lower end, about $5,000–$6,500
Two-stage, 96% AFUE	Low and high fire; quieter, more even	Middle, about $6,000–$7,500
Modulating, 97–98% AFUE	Burner adjusts in small steps; best comfort	Upper end, about $7,500–$9,000+
Furnace plus new central AC	Matched system	About $10,000–$18,000

The efficiency difference between these tiers is small, since all are condensing furnaces. Most of the extra cost for two-stage and modulating models buys comfort and quieter operation, usually paired with a variable-speed (ECM) blower that also cuts fan electricity.

What pushes the price up?

Add-on or complication	Why it happens	Rough added cost (estimate)
Conversion from mid-efficiency (chimney-vented) furnace	New PVC intake and exhaust pipes through an exterior wall, plus a condensate drain	Often a few hundred to $1,500
Orphaned water heater	Removing the furnace from a shared chimney can leave a gas water heater needing a chimney liner or replacement	Several hundred to $2,000+
Condensate pump	No floor drain near the furnace	$150–$400
Ductwork repairs or return air upgrades	Undersized or leaky ducts in older homes	Highly variable
Difficult access	Attic, crawlspace or tight utility rooms	Varies
New thermostat	Especially for two-stage or modulating equipment	$100–$500

Ask each contractor to spell these out. A quote that looks $1,500 cheaper may simply leave out the venting or the water heater issue.

Worked example: total cost of ownership

The upfront price is not the whole story. Here is a simple 15-year comparison for a home using about 2,000 m³ of gas a year for space heating at 45¢/m³, replacing a 25-year-old 80% AFUE furnace:

Item	Keep old 80% furnace	New 96% AFUE furnace
Gas for heating per year	2,000 m³	2,000 × 80 ÷ 96 = 1,667 m³
Annual heating gas cost (with HST)	2,000 × 45¢ × 1.13 = $1,017	1,667 × 45¢ × 1.13 = $848
Annual saving		about $170
15-year gas saving (flat prices)		about $2,500

On gas savings alone, a new furnace rarely pays for itself. The real reasons to replace are age, reliability, safety and comfort. If an old furnace is working and passes its annual inspection, there is no urgency to replace it purely for efficiency.

Caution: A cracked heat exchanger or a failed safety test is a different situation. If a TSSA-registered technician red-tags your furnace, follow their direction. Get a second opinion if a "cracked heat exchanger" diagnosis arrives with high-pressure sales tactics.

Is a heat pump worth pricing instead?

In a gas-heated home, a cold-climate air-source heat pump typically costs about $12,000–$25,000 installed for a ducted system. If your central AC is also near the end of its life, a heat pump replaces it, so the fairer comparison is heat pump versus "furnace plus AC" at $10,000–$18,000.

A hybrid (dual-fuel) setup keeps a gas furnace for the coldest weather and uses the heat pump the rest of the time. The Home Renovation Savings Program lists rebates of $500 per ton up to $2,000 for cold-climate heat pumps in gas-heated homes, with pre-installation approval required. Confirm current details at saveonenergy.ca (opens in a new tab). We are not aware of a broad Ontario rebate for a standard gas furnace replacement on its own.

See heat pump cost in Ontario, our hybrid heating guide, and run your own numbers with the heat pump vs furnace calculator.

Buy, finance or rent?

Furnace rentals and rent-to-own contracts are common in Ontario. They lower the upfront cost but often cost far more over a 10–15 year term, and buyouts can be expensive. Before signing:

• Ask for the total of all payments over the full term and the buyout schedule.
• Confirm whether the contract allows price increases.
• Remember that Ontario bans unsolicited door-to-door contracts for furnaces and air conditioners; the visit must be initiated by you. See our guide to door-to-door energy scams.

How to get a fair price

1. Get at least three written quotes, each with model numbers, capacity, AFUE and a full scope.
2. Ask how the contractor sized the furnace. Many existing furnaces are oversized; a heat loss calculation often supports a smaller unit.
3. Confirm the contractor is TSSA-registered and who will do the gas work (G2 or G1 licensed technician).
4. Compare warranties: parts, labour and heat exchanger, and whether registration is required.
5. Avoid emergency-day pricing if you can: replace an old furnace in late summer or early fall rather than during a January breakdown.

For a step-by-step comparison method, see how to compare contractor quotes and our furnace replacement guide.

All prices in this post are estimates and will vary by contractor, region and home.