Furnace replacement in Ontario has gotten more complex with energy efficiency regulations and the growing heat pump market. Key facts for 2026:
AFUE minimum in Ontario: 90% AFUE required for all new/replacement furnace installations (Canada Energy Efficiency Regulations, effective 2019). Installing an 80% furnace is no longer code-compliant.
Gas furnace vs heat pump cost comparison (GTA 2026):
| System | Installed Cost | Notes |
|---|---|---|
| High-efficiency gas furnace (96% AFUE) | $4,500-$7,500 | Includes PVC venting, thermostat |
| Ducted cold-climate heat pump (replace furnace + AC) | $12,000-$22,000 | Dual function: heat + cool |
| Dual-fuel hybrid (heat pump + gas backup below -15C) | $16,000-$28,000 | Optimal for Ontario climate |
Venting change: Condensing furnaces (90%+) require PVC plastic flue (horizontal through wall) – can’t use existing metal chimney. Decommission or reline old chimney: $500-$1,500.
Incentives for heat pumps:
- Canada Greener Homes Grant: up to $5,000
- Enbridge Gas rebate: up to $2,500 for switching from gas
- Canada Oil to Heat Pump Affordability: up to $10,000 (oil-heat homes)
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