The Average Price of a Furnace in Ontario

What is the average price of a furnace in Ontario?

To answer what the average price for a new furnace in Ontario, you would have to make a bunch of assumptions. I know that a lot of heating contractors try to dodge that question when they are asked by homeowners. The real answer is that the furnace itself may not vary that much in price, however, like buying a car, it’s the ‘bells and whistles’ that can make a huge difference! On top of that, very few installations are exactly alike, so what you can end up with is something as low as $2700 or as high as $7000. For those that still just need a price, I would say that the average furnace (installed) would be somewhere between $3500 and $4500.

As I mentioned, the bells and whistles can have a large impact on cost. Obviously, size – how much heat the furnace can produce per hour – can make a difference. Although like air conditioners, efficiency can make them more expensive, the efficiency level of furnaces ((called AFUE – for Annual Fuel Utilization Efficiency) ) is now so high that the improvements are minimal. In 2017, the furnace with the lowest efficiency that we sell is 95% and the highest is 97%. As you can appreciate, once you get to 95% efficiency, the improvements are so small, and at current gas prices so are the savings. The option that can affect furnace prices the most is fan speed.


It will come as no surprise to anyone that the bigger the house, the bigger the furnace. Most people also realize, the tighter the house the smaller the furnace – which includes insulation. Furnaces are measured in b.t.u.’s (British Thermal Units ) that typically sell in increments of 20,000 btu’s. Each additional 20,000 btu’s costs somewhere in the $200 – $300 range. This tends to increase as the furnace gets larger but 90% of homes can be heated by less than 80,000 btu / hr.

I should also add that heating contractors are famous for oversizing equipment. Why they do it is not that difficult to understand. One, they’re passing the cost on to the homeowner. Second, the only time the contractor gets in trouble is when the furnace can’t keep up with the cold – so they put in bigger furnaces. Third, – and this is a tricky one – the more oversized the furnace, the quicker it will fail! The hardest function on the life of a furnace is starting and stopping. The more the capacity of the furnace exceeds the requirements of the house, the shorter the heating cycle. The shorter the cycle, the more the stops and starts!

Here’s where buying a smaller furnace (provided it is just big enough to heat your house on an hourly basis – on the coldest day in January) can really benefit the homeowner. Longer runs not only equal longer life, it also provides better efficiency (less gas usage). So you get 3 benefits:

  • Furnace less expensive (smaller size).
  • Furnace has longer life (less starts and stops).
  • Lower gas bills (better efficiency).


As we discussed, the difference in efficiencies between the most (97% AFUE)and the least efficient furnace (95% AFUE) is around 2% but can be stretched to as high as 4 ½% if you can find a mid efficiency natural gas furnace. The cost will increase only around $200 for the same furnace with 2% more efficiency. As most homeowners realize, $200 in additional cost for lower gas bills over the life of your furnace (12 – 18 years) is an excellent investment. Quick math says if your gas bill shrinks by $2 / month you’re way ahead of the game.

This is even more important when energy gets more expensive! Since 2015, Natural Gas prices have been very low, so the savings tend to be small (but worthwhile). If NG prices increase (and household rates have gone up almost 25% in the last 8 months) these savings multiply. So if a homeowner wants to protect themselves from increases in energy prices, one of the best ways to do it is to buy the most efficient furnace. The argument is not that different from what people went through during the OPEC crisis of the late 1970’s. When the price of oil went through the roof overnight, people started buying cars that used much less fuel!


This is where improvements can cost quite a bit more – although most people think the comfort trade off is great value. The most simple furnaces are called single stage furnaces. When the thermostat calls for heat from the furnace, the furnace starts up and gives the house 100% of its capacity. It continues to do this until the thermostat is satisfied – when it shuts off. As you can imagine, the length of time that the furnace runs is quite a bit shorter in the spring and the fall than it is in the middle of winter. As we said in the size section, shorter runs equal lower efficiency and shorter life. What’s even worse is that the thermostat can only read the temperature in front of it, it has no idea how warm it is in other parts of the house.

The furnace manufacturers recognized this and started playing around with different speeds and firing rates so when the furnace got the call for heat, it only produced a fraction of the heat for the first little while. If the thermostat was not satisfied after a short period of time, then the furnace would ramp up to full fan speed and firing rate to satisfy the thermostat. Although this feature can cost over $900, the gas savings are big in the fall and spring months and the home is much more comfortable all year round.

This feature was so popular that the furnace manufacturers decided to even go one better – and developed what we call a modulating furnace. The furnace has the ability to modulate (adjust) the speed of the fan and the firing rate (based on the outside temperature) to produce just enough heat to keep the thermostat satisfied. What the homeowner gets then is a furnace that is running constantly but only using the energy it needs to keep the house constant. Living in this kind of environment is so comfortable (the house is a constant temperature during heating season) that once people live with a mod they are extremely reluctant to go to any reduced speed models. As you can appreciate, this kind of sophisticated technology costs something – around $600 for a similar sized furnace.


Although homeowners can buy furnaces with varying sizes and efficiencies, there is only one proper size for a house. A bigger furnace will lead to more cost in the long term – and the difference between efficiencies is almost non existent. The real decision for the homeowner is how much variation in comfort are they willing to live with. Variation in fan speed and firing rate will allow your furnace to adjust to the outside weather – and provide you with an environment that is constant over the heating season. Costs for this kind of functionality is generally an additional $900 above the cost of the regular furnace.

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