Should you switch?

Heat pump vs gas furnace in Canada: an honest comparison

Last checked 2026-11-01 · Sources linked below · Live rebate tracker

Short answer: A heat pump moves heat instead of burning fuel and also cools in summer, but for gas-heated homes the government warns bills may not go down. The answer depends on your local gas and electricity prices. Many Canadians keep the furnace as backup (a hybrid setup), which the National Heat Pump Rebate allows because you don't have to remove your existing system.

Side by side

Heat pump Gas furnace
How it heats Moves heat from outdoor air Burns natural gas
Cooling Yes, replaces AC No, needs a separate AC
Supply air About 25–45°C (NRCan) About 55–60°C (NRCan)
Federal rebate $2,000 to $10,000 if eligible None
Running cost Depends on electricity price Depends on your local gas price

The honest bit

Canada.ca says outright that gas-heated homes may not see lower bills. Savings are likelier where you're replacing oil, propane or electric baseboards. See Will a heat pump lower my bill if I heat with gas?.

The hybrid option

Keep the furnace and add a ducted heat pump. The heat pump does most of the heating and all of the cooling, and the furnace takes over in deep cold. Ask your installer how the switch-over is controlled.

When replacing your AC anyway

If your central air conditioner is near the end of its life, a heat pump costs more than a like-for-like AC replacement, but the rebate can close much of that gap. Get both quotes.

Frequently asked questions

Is a heat pump cheaper to run than gas?

It depends on local gas and electricity prices and your system. Canada.ca states that for natural gas homes, switching may not decrease heating bills.

Do I have to remove my furnace to get the rebate?

No. The National Heat Pump Rebate rules say removing your existing heating system is not required.

Is a heat pump more efficient than a furnace?

Yes, in energy terms. A heat pump moves heat instead of making it. NRCan says heat pumps can be up to about 2.5 times (standard) to 3 times (cold-climate) as efficient as oil heating. Efficiency doesn't automatically mean lower bills, though.

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Sources