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Furnace Replacement Cost In Canada: A Detailed Guide

Furnace Replacement Cost In Canada: A Detailed Guide

With more and more people spending time at home, keeping up with home repairs and improvements has risen on the list of priorities among Canadians. A furnace replacement is one of those home improvement projects that can significantly improve your comfort level at home, especially during the harsh winter months. Use this definitive guide on furnace replacement costs in Canada to help you appropriately budget for this project.

What Is The Average Furnace Replacement Cost In Canada?

The average cost for a furnace replacement in Canada is $3,500 to $5,000. This cost estimate includes the replacement unit and the labor costs.

  • Typical Cost: $3,500: The average cost of a high-efficiency furnace unit in Canada is $3,500. This cost factors in the installation by an insured HVAC company.
  • Higher than Average Cost: $5,500: This cost is higher than your average furnace replacement in Canada, and typically refers to higher-end units. It also applies to units that require the complex installation of premium furnace brands.
  • Lower than Average Cost: 2,500: This refers to the below-market price. While buying furnace replacement at a low-cost might seem attractive, you must be cautious as the low-cost models might consist of low-end components. The initial low cost could come with higher maintenance costs or require frequent replacement, which could add to the overall cost over time.

As you will discover later, several factors influence the cost of replacing a furnace in Canada. Therefore, you should look at this guide as a general guideline only, and the actual price you get could be higher or lower. Furnace replacement companies also use various factors when estimating a quote, depending on the company you hire.

Factors Affecting Furnace Replacement Cost In Canada

Buying a replacement furnace in Canada can be overwhelming. Aside from the potential costs involved, there are many other factors to consider. These factors will help determine how much you should pay for your replacement unit:

Brand Or Manufacturer

You have several options for brands and manufacturers of furnaces in Canada. The top brands are Goodman, York, Armstrong, KeepRite, Heil, Daikin, Bryant, Luxaire, and Coleman. The brand selection might vary from one HVAC contractor to another. If you have any specific preference for the brand, you can talk to your contractor about it.

Depending on which brand you choose, the price range starts at $3,000 to $7,500+ for the premium brands.

Efficiency AFUE

The Annual Fuel Utilization Efficiency rating is one of the most important considerations when buying a new furnace in Canada. Choose high-efficiency models because they perform better in the long run. While the initial cost of the higher-efficiency models is higher, it will translate to more savings in the long run.

A higher-efficiency furnace model uses less energy to run, lowering your energy bill. Experts estimate up to 5% energy savings per year. Spending $2,000 per year on energy costs could equate to $100 annual savings.

Size And BTU Output

The unit’s size is also essential when pricing the furnace replacement unit. Before you can decide on what size of the unit to install, you need to consider other factors such as the size of your home, the layout of your home, the insulation in your home, and the climate where you live.

A small house with no more than 2,000 square feet in size requires a unit with a BTU Output of 40,000 to 60,000. The average cost of a furnace replacement of this size is $3,250 to $3,500. A larger home with more than 3,500 square feet requires a BTU output of 80,000-10,000. The average cost for this unit size is $3,750 to $4,000.


Your location in Canada can also impact the cost of furnace replacement. For example, a high-efficiency furnace model in Canada has an average cost of $3,500 to $5,500. This gap in the furnace cost is due to the price differences per region.

The furnace replacement cost in Canada is higher in rural areas. Fewer HVAC companies are offering furnace replacement and installation in rural areas, so there is less competition. The rural regions of Canada are also scarcely populated, so companies are less invested in setting up a service in these areas.

The added cost of shipping furnace materials to the rural areas could also add to the total cost of replacement. The same also applies to the labor costs; installation and servicing in rural areas are more labor and time-intensive.

On the other hand, the cost of a furnace replacement in urban areas like Toronto and Vancouver is more competitive. The higher number of HVAC contractors means that companies will be more willing to offer competitive prices to their customers. However, do not compare prices based on the face value of the furnace replacement but rather on how the prices differ. Several factors can add to the furnace replacement cost, such as warranties, labor, and after-sales support.

Safety Codes And Regulations

There are existing codes and regulations in Canada that HVAC contractors must adhere to. Therefore, contractors that install the furnace need to meet these regulations. Some installations will require a more complex process than others, which could influence the cost estimate for the job.

When To Replace Your Furnace?

A furnace replacement is a complex process that entails considerable cost. Consult with an HVAC expert before replacing your furnace to determine if you need a new one.

You know when it’s time for a new furnace if any of the following applies to your unit:

  • If your unit is more than a decade old
  • If your furnace needs frequent repairs
  • If your energy bill is high
  • If your furnace is making unusual noises
  • If your furnace is ineffective at regulating indoor temperature

Do not delay furnace replacement. You might think you are saving money by delaying, but it could cost you more in the long run.

In addition, beware of deals that sound too good to be true. The pricing guideline above can be used when shopping around for a new furnace replacement. If you want to save, look for deals and promotions from qualified contractors. Do not settle for lower-end models that are not as efficient and will cost you more.