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Heating, ventilation, and air conditioning (HVAC) systems are essential in Canada's climate. Whether your furnace is failing, your central air is aging, or you want to switch to a more energy-efficient heat pump, understanding replacement costs helps you plan and budget — and take advantage of significant government incentives available in 2025.
The gas furnace remains the most common heating system in Canada. A mid-efficiency furnace (800% AFUE) costs $2,000–$4,000 for equipment; a high-efficiency model (96–98% AFUE) costs $3,000–$5,500. Installation adds $1,000–$2,000 typically, bringing total installed cost to $3,000–$7,500.
High-efficiency furnaces cost more upfront but reduce your heating bill by 15–25% compared to an 800% furnace. In cold Canadian climates where heating costs are significant, the payback period is typically 3–6 years.
A central AC unit (paired with an existing forced-air furnace) typically costs $3,000–$6,000 installed. Size is measured in tons of cooling capacity — a typical Canadian home needs 2–3.5 tons. Look for a SEER2 rating of 14.3 or higher for good efficiency. Higher SEER2 (18–22) costs more upfront but reduces cooling bills.
Heat pumps have become increasingly popular due to their high efficiency and significant government rebates. A heat pump moves heat rather than generating it — making it 2–4x more energy-efficient than electric resistance heating and competitive with gas in mild climates.
Modern cold-climate ASHPs (e.g., Mitsubishi Zuba-Central, Bosch IDS) operate effectively down to -25°C to -300°C, making them viable across most of Canada. Installed cost: $5,000–$14,000 depending on capacity and brand. They provide both heating and cooling from a single unit.
Geothermal systems are the most efficient HVAC option available but require significant upfront investment for drilling or trenching. Total installed cost: $20,000–$40,000+. The Canada Greener Homes Grant provides up to $5,000 for ground-source heat pumps, and provincial programs may add further rebates.
Mini-splits are ideal for homes without ductwork, for additions, or for zone-specific heating/cooling. Each indoor unit (zone) costs $2,500–$5,000 installed. A whole-home multi-zone system (4–6 zones) can cost $12,000–$25,000.
The federal Canada Greener Homes Grant offers significant rebates for heat pump installations:
To access these grants, you must complete a pre-retrofit EnerGuide evaluation before installation and a post-retrofit evaluation after. Provincial programs stack on top — in BC, the CleanBC Better Homes program offers an additional $1,000–$6,000 for heat pumps.
| System | Equipment Cost | Installation | Total Installed |
|---|---|---|---|
| Gas furnace (800% AFUE) | $1,800–$3,500 | $800–$1,500 | $2,600–$5,000 |
| Gas furnace (96% AFUE) | $2,800–$5,000 | $1,000–$2,000 | $3,800–$7,000 |
| Central AC (standard) | $1,800–$3,500 | $800–$1,500 | $2,600–$5,000 |
| Air-source heat pump | $3,000–$8,000 | $1,500–$3,000 | $4,500–$11,000 |
| Geothermal heat pump | $10,000–$20,000 | $10,000–$20,000 | $20,000–$40,000+ |
| Mini-split (per zone) | $1,200–$2,500 | $800–$1,500 | $2,000–$4,000 |
Several options exist for Canadians who need to replace HVAC systems:
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