Heat pump vs. furnace: what Canadians actually pay

People still type Canada Greener Homes Grant into Google and then call a contractor. The grant is closed, and Natural Resources Canada says 31 December 2025 was the last day to submit documents. The interest-free Greener Homes Loan stopped taking applications on 1 October 2025, once its funding was fully committed. If you did not already have an approval, that money is not sitting in your budget. The new federal money is the National Heat Pump Rebate, which is covered below and is not open yet.

A furnace replacement and a heat pump are also not the same invoice with a different logo. One is a gas appliance swap. The other is a heating-and-cooling system that often wants more electrical capacity than the house has. This is planning information, not engineering or rebate advice. Confirm the current program on the administering site before anyone orders equipment.

What the equipment actually costs

Our furnace calculator is built to land near $5,500 all-in for a mid-range high-efficiency gas swap in the anchor region, against published 2026 Canadian figures of about $4,000 to $7,000 installed. Greater Vancouver runs higher. That is a straight replacement in the existing location, with a permit, not a rebuild of the ductwork.

A cold-climate air-source heat pump is the same trade as a central air conditioner, which is why it lives on our AC calculator as a system option rather than as a second furnace. That increment is a few thousand dollars over a plain air conditioner, not a few thousand over a furnace. A full heating conversion, new outdoor unit, indoor coil or heads, and electrical, commonly plans in the low-to-mid five figures before a panel upgrade. Dual-fuel systems that keep the gas furnace for the coldest weeks sit in between.

What replaced Greener Homes

Federally, the replacement is the National Heat Pump Rebate, announced in October 2026 and open for retroactive applications from November 1, 2026. It pays $2,000 to above-median-income households, or up to $10,000 to below-median-income households, and it needs no energy audit. Heat pumps installed from November 1, 2026 qualify for a retroactive rebate once the online portal opens in early 2027. You must own the home (it can be a rental property you own), the heat pump must be on the AHRI eligible list, and it must be purchased from and installed by an HVAC contractor. Keep your receipts: you'll need the contractor's name, the AHRI number(s), and the total installation cost including ductwork and electrical work. Income verification is through CRA when you apply. The program closes in March 2034. Scam warning: Environment and Climate Change Canada never goes door-to-door or makes marketing calls about this program. If someone shows up claiming to represent it, report them to local police and ECCC.

Ontario's live program is Home Renovation Savings, run by Enbridge and Save on Energy. As of the program's published heat-pump stream, a home already on Enbridge gas gets $500 per ton for an eligible cold-climate air-source heat pump, capped at $2,000, or a flat $3,000 for ground source. A home heated by electricity, oil, propane, or wood gets $1,250 per ton up to $7,500 for air source, or $2,000 per ton up to $12,000 for ground source. Those figures move. Read the current page, use a participating contractor, and get written pre-approval before installation.

If you heat with oil, the federal Oil to Heat Pump Affordability program is a different door, and it is now closed in part of the country. Federal intake for Alberta, Manitoba, the Northwest Territories, Quebec, and Saskatchewan ended on 31 July 2026. Elsewhere it runs through provincial partners. The federal stream paid up to $10,000 upfront to income-tested households, which is a cap, not a promise that the whole retrofit is covered. Check your province's partner before you plan around it.

In B.C., the income-tested Energy Savings Program still pays heat-pump rebates of up to $13,000, and the assessed value of the property counts toward eligibility. The separate Home Renovation Rebate covers other energy upgrades at any income level. Low- to median-income owners and tenants in B.C., Manitoba, Quebec, Nova Scotia, P.E.I., and Newfoundland and Labrador can also check the Canada Greener Homes Affordability Program, which installs upgrades at no cost through provincial partners. Pre-register, use a registered contractor, and do not treat a neighbour's 2023 rebate as yours.

The two numbers that blow a heat-pump quote

Electrical capacity. A 100-amp panel that already feeds a dryer, a range, and a future EV charger may not take a heat pump without a service upgrade. Our AC calculator's panel toggle is $2,600, which is a planning allowance for the electrician's panel work, not the Hydro invoice. If the utility has to trench or replace a transformer, that line is a different job.

Ducts and backup heat. A heat pump that cannot keep up at minus twenty without a plan is not a failed product. It is a house that needed dual-fuel, more heads, or insulation first. Envelope work is where some of the remaining rebates still are, and it has to be applied for before you start.

When a furnace is still the right call

The existing furnace is dead, winter is next week, and you do not have time for a rebate file. A licensed gas technician can often swap a like-for-like condensing furnace in a day or two, with a TSSA permit in Ontario and the equivalent elsewhere. That is a comfort decision, not an energy-policy decision.

It is also the right call when the rebate on a gas-heated home is $2,000 and the heat pump quote is $18,000 more than the furnace, with a panel upgrade behind it. Run both calculators, then look at the rebate page. Do not subtract a closed federal grant from a live quote.