Guide · Updated June 2026
Heat Pump vs Furnace in Ontario
Both are good systems — the right one depends on your current fuel, whether you need cooling, and your budget. Here is the honest side-by-side, plus why so many Ontario homes land on a hybrid.
| Metric | Heat pump | Gas furnace |
|---|---|---|
| Upfront (installed) | $10,000–$18,000 | $2,800–$7,500 (+ AC if needed) |
| Rebates | Up to $7,500 (non-gas) / $2,000 (gas) | Small / limited |
| Running cost (moderate) | 30–50% cheaper | Higher |
| Running cost (extreme cold) | Higher per hour | Cheaper per hour |
| Cooling | Included | Needs separate AC |
| Cold-weather floor | Rated to −25 to −30°C | Unaffected by temp |
| Lifespan | 15–20 yrs | 15–20 yrs |
The honest verdict
A gas furnace is cheaper upfront and unbeatable for raw heat on the coldest nights. A heat pump costs more to buy but runs cheaper most of the year, includes air conditioning, and qualifies for far larger rebates — up to $7,500 for a non-gas home. After rebates, the net cost of a heat pump often matches a furnace plus a separate AC.
Why hybrid (dual-fuel) wins for many
A dual-fuel system pairs a heat pump with a gas furnace. A smart thermostat runs the heat pump in mild and moderate weather, then switches to the furnace when it gets cold enough that gas is cheaper. You cut gas use and gain cooling, while keeping the furnace as guaranteed backup for the deep-freeze nights.
Quick decision guide
- •On oil, propane, wood or electric? A heat pump is usually the clear winner — high running savings and the $7,500 rebate.
- •Need a new AC too? A heat pump replaces both — strong case.
- •Have an efficient gas furnace and cheap gas? Consider a hybrid, or a heat pump if cooling/comfort/emissions matter to you.
- •Worried about the coldest nights? Hybrid removes that worry entirely.
Find your rebate
See your heat pump rebate and net cost
Answer 5 quick questions and see your personalized estimate in 30 seconds. Free, no signup.
Start the free calculator →Independent homeowner tool. Not affiliated with the Government of Ontario.
Related guides
Common questions
Which is cheaper to run in Ontario?
In moderate weather the heat pump usually wins by a meaningful margin. In extreme cold (below about ‑15°C) a gas furnace can be cheaper per hour. Across a full Ontario winter, a hybrid often gives the lowest overall bill.
Which is cheaper to buy?
A new furnace is cheaper upfront ($2,800–$7,500) than a heat pump system ($8,000–$20,000). But after rebates — up to $7,500 on a non-gas home — a heat pump’s net cost often matches a furnace plus a separate air conditioner.
Do I have to give up my furnace?
No. A dual-fuel (hybrid) setup keeps the furnace as backup: the heat pump handles most of the season, and the furnace takes over on the coldest nights. Many Ontario homes choose this.
Which lasts longer?
Both typically last 15–20 years. A heat pump runs year-round (heating and cooling), so usage is higher, but it replaces two appliances with one.
Cost and running-cost figures are typical 2026 Ontario ranges and vary by home, rates and usage; rebate figures reflect the Home Renovation Savings Program, verified June 2026. ClaimRebate.ca is independent and not affiliated with any government.