It’s the middle of October, and I get the same calls: “My furnace makes a weird clunking sound, then goes quiet.” You grab your phone with no idea of the new furnace installation cost or replacing it with natural gas furnace.
The same thing happened with one of my customers. He got different quotes ranging from $3,500 to $12,000 (CAD) and got confused. Because the total furnace installation cost includes installation, labour, home size, fuel type, furnace brand, air ducts and the region you are locating in.
Disclaimer: Prices shown include 13% HST and are estimates based on 2026 market data. Costs, tax rates, and permit fees vary by region; contact RB Heating for an accurate quote specific to your location.
Source: https://www.furnaceprices.ca/furnaces/furnace-prices-canada/
What Does Furnace Installation Actually Cost in 2026?
Most homeowners pay between $5,650 and $9,605 (CAD) for a complete furnace installation in 2026. The cost depends heavily on three things:
1. What type of furnace you’re installing
- Gas furnace installation cost: $4,520 – $8,475 (most common choice, best long-term value)
- Electric furnace installation cost: $3,390 – $8,475 (lower upfront, higher monthly bills)
- Oil furnace installation cost: $5,650 – $11,300 (less common, higher fuel costs)
Reference:
2. The efficiency rating (AFUE)
High-efficiency 96%+ AFUE unit costs more due to complex installation. The high-efficiency furnace can cut your heating bills by 20–30% every winter.
3. Your home’s size and existing setup
A 1,500 sq ft home needs roughly 60,000–75,000 BTUs. Bigger furnace = bigger cost.
The Hidden Costs Nobody Talks About
These may surprise many homeowners:
- Permit fees: Required in most areas, running $150–$500 CAD
- Old furnace removal: Typically $85 – $283 CAD
- Ductwork repairs or modifications: $339 – $1,695 CAD if needed
- Labour: Most HVAC technicians charge total of $565 – $1,695 CAD
Ontario homeowners can currently access rebates through the Home Renovation Savings Program, which can put thousands of dollars back in your pocket for qualifying high-efficiency installations. RB Heating experts clearly guide every client about these rebates.
Should I Repair or Replace?
If your furnace is under 10 years old and the repair is under $800, fix it and follow the essential furnace maintenance tips. If it’s 15+ years old and repairs are piling up, replacing it almost always saves you money within 3–5 years, especially with a high-efficiency model.
Quick Reference: 2026 Furnace Installation Cost Summary
| Furnace Type | Unit Cost (after HST) | Installed Total (after HST) |
| Gas (Two-stage, 96–97% AFUE) | $2,825 – $5,085 | $6,215 – $8,475 |
| Gas (Modulating, 98%+ AFUE) | $5,085 – $7,345 | $8,475 – $10,735 |
| Electric | $904 – $2,825 | $3,390 – $8,475 |
| Oil | $2,825 – $5,650 | $5,650 – $13,560 |
What type of furnace should I get?
A single-stage gas furnace is most affordable and runs at full power until your home hits the set temperature, then shuts off. Reliable, straightforward, lower upfront cost.
A two-stage furnace runs at a lower setting most of the time and only cranks up on the coldest days. It’s quieter, more efficient, and the most popular choice for Canadian homes.
A modulating furnace is the premium heating solution that I personally recommend to homeowners. It adjusts heat output constantly in tiny increments, giving you the most even comfort and the lowest gas bills, but at the highest price.
