Furnace Installation Cost in Ontario: A Homeowner's Guide

If your furnace is aging, unreliable, or costing too much to run, replacement may be the smart move. But before you commit, you want a realistic sense of the cost. Here is what a new furnace installation runs in the GTA, what drives the price, and which rebates actually apply in 2026.

Average Furnace Installation Cost

For homeowners in the GTA and across Canada, a new furnace installation typically runs $4,000 to $7,500 (CAD). That includes:

• The furnace unit
• Professional installation
• Basic ductwork adjustments and setup

Prices vary with your home, the model, and any extra work required.

What Affects the Cost

1. Type of furnace

Type	Typical cost	Notes
Natural gas (most common in Ontario)	$4,000 – $7,000	Efficient and affordable to run with existing gas lines
Electric	$3,500 – $6,000	Lower upfront, higher monthly bills
Oil (less common)	$5,000 – $8,000	Pricier to install and fuel

Most GTA homeowners choose high-efficiency natural gas furnaces.

2. Efficiency rating (AFUE)

Furnaces are rated by AFUE (Annual Fuel Utilization Efficiency) — the higher the number, the more fuel becomes usable heat:

• 80–89% AFUE: standard efficiency
• 90–97% AFUE: high efficiency

High-efficiency models cost more upfront but pay back in lower bills and may qualify for rebates. Our guide on whether 96% AFUE is worth it runs the numbers.

3. Size and capacity

Furnaces are sized to your home’s heating load, not just square footage:

• Smaller homes (under 1,200 sq. ft.): ~$4,000 – $5,000
• Average homes (1,500–2,500 sq. ft.): ~$5,000 – $6,500
• Larger homes (2,500+ sq. ft.): ~$6,000 – $7,500+

A proper load calculation gets the size right — too small won’t heat, too large cycles inefficiently. See why sizing matters.

4. Installation complexity

A straight swap is quicker and cheaper than changing fuel types, modifying ductwork, adding ventilation, or updating electrical. Complexity can add $500 to $2,000+.

5. Brand and features

Premium models with variable-speed blowers, smart thermostat compatibility, or zoning cost more but offer better comfort and control.

Rebates and Incentives (Updated for 2026)

High-efficiency furnace upgrades may qualify for current Ontario incentives through the Home Renovation Savings Program (Enbridge Gas and Save on Energy). Important update: the federal Canada Greener Homes Grant has closed to new applications, so the provincial program is the live channel. Our rebate guide keeps the current details. If you are also weighing a heat pump, those carry the largest incentives — up to about $12,000.

What a Professional Install Includes

• Removal and disposal of the old unit
• New furnace installation and testing
• Gas line hookup (where applicable)
• Basic ductwork connection
• Thermostat integration
• Safety inspections and warranty registration

The takeaway: budget $4,000 to $7,500 for a new furnace, factor in complexity, and ask about current Home Renovation Savings Program rebates — the old federal grant no longer applies.

A new high-efficiency furnace is usually worth it if your old one is 15+ years old, breaking down, or running up your bills. Request a free, no-obligation estimate or explore our furnace installation service. We will help you choose the right system and install it right the first time.