Replacing a furnace in the GTA involves more paperwork than most contractors mention upfront – and a decision most homeowners aren’t expecting to make.
When you need a permit
Ontario requires a permit any time a furnace replacement involves a new appliance install or work on the gas line, flue, or ductwork. The contractor pulls it, not you, but confirm it’s happening before work starts and ask for the inspection tag when they’re done.
Costs run $150 to $300 across most GTA municipalities. After installation, a building official confirms the venting, combustion air, and gas connection meet code. Skip the permit and you void the manufacturer’s warranty – that comes up fast when you go to sell.
The 95% AFUE floor
Ontario’s Building Code requires a minimum 95% AFUE rating on any new residential gas furnace install. Mid-efficiency 80% units aren’t legally installable in a replacement scenario, even if a supplier offers one.
Most GTA furnaces sold in 2026 run 96 to 98% AFUE. The honest answer about that two-point spread: it mostly doesn’t matter. Combustion air setup, heat exchanger quality, and whether the unit operates at two stages or one will have more impact on how long it lasts and how efficiently it runs than the AFUE difference.
Gas furnace vs. heat pump
This is where things get complicated. A standalone gas furnace runs $3,500 to $6,500 installed in the GTA. No Ontario rebate exists for a straight gas furnace right now – Canada Greener Homes Grant closed in early 2024, Enbridge HER+ closed February 2024.
A cold climate air source heat pump runs $7,000 to $14,000 installed and qualifies for Ontario’s Home Renovation Savings Program (HRSP): up to $7,500, active through November 2026.
A dual-fuel system – heat pump with a gas furnace as backup – is the only way to take the HRSP rebate while keeping gas for the GTA’s coldest stretches. If you have existing forced-air ductwork already, it’s worth getting both quotes. The hybrid often lands within $2,000 to $3,000 of gas-only after the rebate. Models like the Mitsubishi Hyper-Heat, Bosch IDS, and Carrier Greenspeed are rated to -25 degrees C, which handles what the GTA actually throws at you.
If your furnace has already died and you’re under time pressure, gas is simpler. If you have a week or two, run both quotes.
What should be in the quote
A single number isn’t a quote. The line items to look for: permit and inspection fees (if they’re absent, ask why), old unit removal and disposal, venting modification from B-vent to PVC if the new unit is 95%+, combustion air provision if the mechanical room is sealed, first-year filter, and warranty registration labor.
Contractors who won’t break out a quote usually have gaps in scope they’d rather you didn’t notice until after.
TSSA licensing
In Ontario, installing or modifying a gas appliance requires a valid TSSA Gas Technician G2 licence. Get the technician’s licence number before work starts. You can verify it at tssa.org. This is a licensed trade – not something homeowners handle themselves.
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