How Heat Pumps Stack Up Against Gas Furnaces in Ontario’s Climate

Across Ontario, homeowners are rethinking how they heat their homes. What used to be a simple choice between brands of gas furnaces has evolved into a bigger question, how do we balance comfort, cost, and carbon in a changing world? With government incentives now encouraging low-carbon technologies and natural gas prices climbing year over year, more Ontarians are exploring alternatives that make sense not just today, but for the future.

The rise of high-efficiency, cold-climate heat pumps marks a turning point. Once considered suitable only for milder regions, these systems are now proven to perform reliably even through Ontario's deep freezes. Meanwhile, the province's electricity grid continues to draw most of its power from clean, renewable, and nuclear sources, making electric heating more sustainable than ever.

This isn't a debate about "new vs. old technology" anymore. It's about how well each system, heat pump or gas furnace, adapts to Ontario's weather patterns.

Choosing the Right Heat Source for Ontario Homes

Heating isn't one-size-fits-all, especially in Ontario. The province's long, unpredictable winters and wide temperature swings make it one of the most challenging regions in Canada for choosing the right heating system. From Toronto's damp chill to Northern Ontario's deep freezes, homeowners face conditions that test both the efficiency and reliability of any heating technology.

At the same time, energy economics are shifting. Ontario's natural gas prices have steadily increased over the past decade, and hydro rates continue to evolve with time-of-use pricing. For many households, that means heating costs aren't just about efficiency anymore, they're about when and how energy is used. Heat pumps, which draw power from the electrical grid and can operate at variable speeds, often take better advantage of lower off-peak rates than gas furnaces can.

Government policy is also accelerating the transition. Federal and provincial programs are rewarding homeowners who choose lower-carbon systems, while new building codes and emission targets are reshaping how future homes will be heated. These incentives can offset the higher upfront cost of a heat pump installation and shorten the payback period significantly.

How Heat Pumps Work vs. Gas Furnaces

Before diving into performance and cost, it helps to understand how each system works, and why that difference matters for Ontario homeowners.

A gas furnace is a combustion-based system. It burns natural gas to create heat, which is distributed through ducts by a blower fan. The process is simple, familiar, and effective, but it also means the furnace produces carbon emissions and requires ongoing fuel delivery through your gas line. Efficiency varies by model, typically ranging from 80% for older systems to around 95% for newer high-efficiency units. That means even the best furnaces lose a portion of energy as exhaust heat through the vent.

A heat pump, on the other hand, doesn't create heat, it transfers it. Using electricity, it extracts heat energy from the outside air (even in freezing conditions) and moves it indoors. In summer, the process reverses to provide cooling, much like an air conditioner. Because heat pumps move heat rather than generate it, they can achieve efficiency ratings far beyond combustion systems, delivering two to four times more energy in heat than they consume in electricity.

A simple way to picture it:

A heat pump works like a refrigerator in reverse, instead of pulling heat out of a box to keep food cold, it pulls heat into your home to keep you warm.

The advantage lies in how modern cold-climate heat pumps (ccASHP) have evolved. These newer systems use advanced compressors and refrigerants that allow them to extract usable heat even when outdoor temperatures dip below -20°C, something that older models couldn't manage.

By contrast, gas furnaces deliver steady heat regardless of the weather, but at the cost of fuel volatility and emissions. As Ontario's grid becomes cleaner and more efficient, electricity-powered heating systems like heat pumps are gaining traction, not as experimental alternatives, but as a realistic, proven replacement for traditional gas heating in most homes.

Performance in Ontario Winters

One of the most common questions homeowners ask is, "Do heat pumps really work in Ontario's cold?" A decade ago, the honest answer might have been "not very well." But modern cold-climate air-source heat pumps (ccASHPs) have been engineered specifically to perform efficiently even during the harshest Canadian winters.

Unlike older systems that struggled once temperatures dropped below freezing, today's advanced units use inverter-driven compressors and variable-speed fans to adapt in real time to outdoor conditions. Many models maintain 80–90% of their rated heating capacity even at –20°C, and can continue operating down to –25°C or lower. That means for much of Ontario, especially in the Greater Toronto Area, a properly sized heat pump can comfortably handle the majority of the heating season on its own.

For the coldest snaps, most homeowners choose to pair their system with a backup heat source, typically electric resistance coils or their existing gas furnace, creating what's called a dual-fuel or hybrid system. The heat pump runs the majority of the time, while the furnace or electric backup only activates when outdoor temperatures reach extreme lows. This hybrid setup offers the best of both worlds: high efficiency for most of the year and guaranteed reliability when winter hits its peak.

It's also worth noting that Ontario's average winter temperatures have been gradually rising over the past few decades. This trend, combined with ongoing improvements in heat pump technology, makes all-electric systems increasingly viable even in regions that once depended exclusively on gas.

Homeowners across southern Ontario are already seeing results, lower monthly heating bills, more consistent indoor comfort, and the satisfaction of knowing their system is both efficient and environmentally responsible.

Energy Efficiency and Hydro Costs

When it comes to home heating in Ontario, efficiency and operating cost often make or break the decision. Both gas furnaces and heat pumps can keep your home warm, but how they use energy, and how much you pay for it, are very different stories.

A gas furnace burns natural gas to generate heat. Even high-efficiency models (rated 90–96% AFUE) lose a small amount of energy through exhaust gases. That means for every dollar spent on natural gas, only about 90–95 cents' worth of heat actually reaches your home. The rest escapes through the vent. While natural gas has historically been cheaper than electricity, rising carbon charges and delivery fees are starting to close that gap.

A heat pump, in contrast, doesn't create heat at all, it transfers it. By moving existing heat from the outdoor air into your home, it can deliver two to four units of heat energy for every unit of electricity consumed. This performance is measured as the Coefficient of Performance (COP), and even in freezing temperatures, many cold-climate models maintain a COP of 2.0 or higher. Put simply, that means you could be getting 200%–300% efficiency compared to the fuel-to-heat ratio of a gas furnace.

However, efficiency isn't the only factor, Ontario's time-of-use (TOU) hydro pricing adds another layer of complexity. Heat pumps can often take advantage of off-peak rates by running more during lower-cost hours or by using smart thermostats that preheat efficiently. Meanwhile, natural gas pricing remains more static but subject to unpredictable market shifts and federal carbon surcharges.

To illustrate, consider this simplified example for a typical 1,800 sq. ft. Toronto home:

Estimates based on average 2025 Ontario energy rates (Enbridge Gas & Hydro One), assuming moderate insulation and usage.

Although upfront costs for a heat pump system are typically higher, the operating savings over time, coupled with lower maintenance, dual-season use (heating and cooling), and available rebates, often tip the balance. For many Ontario homeowners, especially those in urban and suburban areas with stable electricity access, a heat pump is becoming the more cost-efficient long-term investment.

Comfort and Indoor Air Quality

Beyond energy bills and efficiency charts, comfort is what homeowners feel every day, and it's where heat pumps and gas furnaces deliver noticeably different experiences.

A gas furnace works in cycles: it turns on, blasts a surge of hot air, and then shuts off once the thermostat is satisfied. This on-and-off pattern creates temperature swings, warm bursts followed by cooler intervals, that many homeowners accept as "normal." Because the system burns natural gas, it also tends to dry out indoor air, often requiring a separate humidifier to maintain a comfortable balance during winter.

A heat pump, by contrast, provides consistent, even warmth. Instead of blasting heat in short bursts, its variable-speed compressor gently adjusts output to maintain steady temperatures. The result is a quieter, more stable indoor climate without hot and cold spots. Since heat pumps don't rely on combustion, they don't release by-products like carbon monoxide or nitrogen dioxide into the air, contributing to healthier indoor air quality, a growing concern for families with allergies or respiratory sensitivities.

Humidity control is another advantage. Because a heat pump circulates air more continuously, it helps maintain natural moisture levels, avoiding the extreme dryness many homeowners experience with forced-air furnaces. And during the summer, the same system seamlessly transitions to efficient air conditioning, dehumidifying and cooling the home without the need for separate equipment.

Noise and airflow differences are worth noting too. Modern outdoor heat pump units operate at low decibel levels, often quieter than traditional AC condensers, while their indoor components run smoothly thanks to variable fan speeds. Furnaces, especially older models, tend to produce more noticeable whooshing or clicking sounds during startup and shutdown.

For homeowners upgrading from an older gas furnace, the comfort difference can be striking. With a heat pump, the air feels naturally warm rather than hot, the temperature remains consistent from room to room, and the overall environment is fresher and more balanced. It's a small but meaningful quality-of-life improvement that adds up over every long Ontario winter.

Environmental Impact and Carbon Footprint

As Ontario pushes toward a cleaner energy future, the environmental impact of home heating systems has become impossible to ignore. For many homeowners, switching from a gas furnace to a heat pump isn't just about comfort or savings, it's about making a conscious choice to reduce emissions without sacrificing performance.

A gas furnace relies on burning natural gas, which directly releases carbon dioxide (CO₂) and other greenhouse gases into the atmosphere. For an average Ontario home, that can add up to 4–5 tonnes of CO₂ emissions per year, depending on usage and efficiency. While newer furnaces burn cleaner than older ones, they can never be emission-free because combustion is at the heart of their operation.

A heat pump, on the other hand, runs entirely on electricity, and that's where Ontario has a major advantage. Thanks to its mix of nuclear, hydroelectric, and renewable power sources, Ontario's electrical grid is one of the cleanest in North America. This means that even though a heat pump uses electricity, the indirect emissions associated with running it are minimal. The result is a dramatic reduction in household carbon footprint, often by up to 60–70% compared to gas heating.

For homeowners looking to make an even bigger impact, pairing a heat pump with solar panels or a green energy plan can push emissions close to zero. Add to that the elimination of combustion-related by-products like nitrogen oxides and carbon monoxide, and you get cleaner air inside and out.

Governments are encouraging this shift with a growing list of rebates and incentives, such as the Canada Greener Homes Grant and various utility-backed programs. These initiatives help offset installation costs and accelerate adoption, making sustainable heating more financially accessible.

Long-Term Savings and Home Value

When deciding between a heat pump and a gas furnace, it's easy to focus on the upfront price tag, but long-term value tells a very different story. In Ontario's evolving energy market, the real savings often come over years of consistent, efficient performance and lower maintenance demands.

A gas furnace generally has a lower initial cost, especially when replacing an existing unit that already uses natural gas lines and venting. However, ongoing expenses add up: rising gas prices, annual tune-ups, and the eventual need to replace both the furnace and a separate air conditioner. Most gas furnaces last about 15–20 years, and when paired with a standalone AC, that means maintaining two systems with different lifespans and service requirements.

A heat pump, though typically more expensive to install upfront, offers a two-in-one solution, heating in winter and cooling in summer. This eliminates the need for a separate air conditioner and can cut annual maintenance costs in half. Because heat pumps run more efficiently year-round and operate under less thermal stress, many systems last 20 years or more with proper care. And unlike gas systems, they don't rely on fossil fuel delivery or combustion components that wear down over time.

Over a 10- to 15-year period, Ontario homeowners often find that the total cost of ownership, factoring in energy bills, service, and equipment replacement, favours a modern heat pump. Those savings grow even further with available government rebates and low-interest energy efficiency financing programs.

Beyond dollars and cents, homebuyers are becoming increasingly aware of energy efficiency ratings and sustainability features. Homes equipped with modern heat pumps often see improved resale appeal, especially among younger buyers looking for lower operating costs and greener technology. In an increasingly competitive real estate market, that can translate into higher property value and faster sales.

When a Gas Furnace Still Makes Sense

While heat pumps are quickly becoming the go-to choice for many Ontario homeowners, there are still scenarios where a gas furnace remains the practical option, at least for now. Every home is different, and the best heating system depends on factors like building age, insulation quality, ductwork, and regional energy availability.

For example, in older or poorly insulated homes, the heat loss rate can be too high for a heat pump to operate efficiently without significant upgrades. In these cases, a high-efficiency gas furnace may deliver more consistent warmth until insulation and air sealing improvements are made. Similarly, homes in regions with limited electrical capacity or outdated electrical panels may face expensive upgrades before a heat pump can be installed safely.

For homeowners in rural or off-grid areas, natural gas (or even propane) can still offer the most reliable and accessible heat source, especially during extreme cold snaps or power outages. A furnace can operate independently of hydro availability when paired with a backup generator, an advantage electric systems can't always match.

There's also a middle ground. Many Ontario households are now opting for hybrid or dual-fuel systems, which combine the strengths of both technologies. The heat pump handles most of the heating season efficiently, while the gas furnace automatically takes over when outdoor temperatures drop below a set threshold. This approach delivers the best efficiency possible without sacrificing performance on the coldest days.

What Makes Sense for Most Ontario Homes

For most Ontario homeowners, the balance is shifting decisively toward heat pumps, not just as an alternative, but as the new standard for efficient, year-round comfort. Modern cold-climate systems have proven their ability to perform in sub-zero temperatures, while offering lower operating costs, cleaner energy use, and quieter, more consistent warmth compared to gas furnaces.

That doesn't mean the gas furnace is obsolete, it's still a dependable choice for homes with older insulation, limited electrical infrastructure, or rural energy constraints. But for the majority of households connected to Ontario's clean, reliable power grid, a high-efficiency heat pump or hybrid system delivers the best blend of comfort, cost control, and environmental responsibility.

In a province where both energy markets and weather patterns are changing, choosing the right heating system is about more than staying warm. It's about preparing your home for the future, one where electricity continues to get cleaner, incentives make sustainable upgrades more affordable, and homeowners expect smarter, more efficient technology.

If you’re considering an upgrade, the best first step is to schedule a professional home assessment. A certified HVAC specialist can evaluate your home’s insulation, ductwork, and energy usage to recommend the most cost-effective setup.

HeatPumps.ca is a fully certified Ontario HVAC contractor specializing in energy-efficient heat pump systems. Request your free quote to explore upgrade and installation options for your home and start saving through every season.