The True Cost of Replacing Furnace and Air Conditioner in Canada

So, you're thinking about replacing your entire HVAC system, and the first question that pops into your head is probably: "What's this actually going to cost me?" It's the big one, and for most homeowners across Canada, a complete furnace and air conditioner replacement lands somewhere between $8,000 and $15,000 CAD.

That price tag covers everything—the shiny new equipment and the professional installation needed to get it humming along safely and efficiently.

Your Quick Guide to Canadian HVAC Replacement Costs

Shopping for a new HVAC system is a lot like buying a car. You can go for a reliable, no-frills model that gets you from A to B, or you can opt for a high-performance hybrid that costs more upfront but saves you a bundle on fuel down the road. Both are great options, but they come with very different price points—and that's why the cost range is so wide.

Think of that initial $8,000 to $15,000 figure as your starting point. From there, a few key factors will push your final bill toward either the lower or higher end of that spectrum. Getting a handle on these variables is the first step to setting a realistic budget and making a decision you feel good about.

What Goes Into the Price Tag?

The total cost is much more than just the price of the furnace and AC units themselves. A huge chunk of it is the skilled labour required for a proper installation.

For a standard 1,500 to 2,500 square foot home in Canada, here’s a rough breakdown of that $8,000 to $15,000 CAD total:

• A high-efficiency gas furnace typically costs $4,000 to $7,000.
• A matching central air conditioner runs from $4,500 to $8,000.
• Installation labour makes up a significant 40-50% of the final invoice.

Of course, several things can make these numbers shift. The main drivers behind the final price are:

• System Efficiency: Units with higher efficiency ratings (AFUE for furnaces, SEER for air conditioners) cost more initially but lead to lower monthly energy bills.
• Home Size: A bigger house needs a more powerful—and more expensive—system to keep every room comfortable.
• Brand and Model: Just like in any industry, some brands are known for their premium features and warranties, while others offer solid, budget-friendly performance.
• Installation Complexity: If your current ductwork needs to be modified, your home needs new wiring, or the new units are in a tricky spot, the extra labour will add to the cost.

To give you a clearer picture, we've put together a quick-reference table outlining what you can expect to pay based on different system tiers.

Estimated Canadian HVAC Replacement Costs (Furnace and AC)

This table helps translate those efficiency ratings into real-world dollars, so you can see how an investment in a better system pays off over time.

This guide is built to give you the essential numbers first, setting the stage for the more detailed breakdowns ahead. By the time you're done reading, you’ll have a solid understanding of what to expect. And if you’re just looking to tackle the heating side for now, you might want to check out our detailed guide on how much a new furnace costs.

Decoding the Factors That Shape Your Final Quote

Ever wonder why your HVAC replacement quote came in at $8,000 while your neighbour’s was closer to $14,000? It’s a common question, and the answer is simple: there’s no one-size-fits-all price. Replacing a furnace and air conditioner is more like getting a custom suit than buying something off the rack—every single detail affects the final cost.

Several key variables come together to build your final quote. Getting a handle on these factors is the first step to making a smart investment in your home’s comfort. Let's peel back the layers and see exactly what goes into the price tag.

System Efficiency and Size: The Foundation of Your Cost

The two biggest drivers of your quote are the efficiency ratings and the physical size of the new units. These elements don't just set the upfront price; they also dictate how much you'll spend on energy bills for years to come.

• Efficiency Ratings (AFUE & SEER2): Think of these like the fuel efficiency rating on a car. A furnace’s performance is measured in Annual Fuel Utilization Efficiency (AFUE), while an AC's is rated by its Seasonal Energy Efficiency Ratio 2 (SEER2). The higher the rating, the more of your energy dollar is converted directly into comfort. That means lower utility bills, but the cutting-edge technology behind it comes with a higher initial investment.

• Unit Size (Tonnage/BTUs): When it comes to HVAC, bigger is definitely not better. The "size" of a system refers to its heating capacity (measured in British Thermal Units, or BTUs) or its cooling capacity (measured in tonnage). A system that's too small will run constantly and never quite keep up. One that's too big will switch on and off erratically, wasting a ton of energy and putting extra strain on the components. A pro will always perform a proper calculation to determine the perfect size for your home.

The Impact of Brand and Model Tiers

Just like with cars or home appliances, the brand you choose matters. Well-known, top-tier brands often cost more because they’ve built a reputation for rock-solid reliability, innovative features, and stronger warranties.

That said, many mid-range and entry-level brands deliver fantastic performance and great value. The trick is to find the right balance between brand reputation, your budget, and the features you really want, like a variable-speed blower or smart thermostat integration. A good HVAC contractor will walk you through options at different price points.

Labour and Installation Complexity: The Canadian X-Factor

This is where the price can really swing, especially given Canada's diverse housing stock and regional labour costs. The equipment itself is only part of the story. The skill, time, and complexity of the actual installation are just as important—this is the "custom tailoring" part of the job.

An off-the-rack suit might fit okay, but a tailored suit is perfect. Similarly, a professional HVAC installation ensures every component, from the ductwork connections to the electrical wiring, is perfectly configured for your home, maximizing both efficiency and safety.

The specifics of the job can add serious labour hours. For example, recent data shows a median cost of $12,500 CAD for a combined system. That number is influenced by a 7.2% rise in skilled labour costs and a 15% jump in equipment prices from tariffs. For property managers, the costs scale quickly; a duplex can average $22,000 if ductwork modifications are needed to meet current building codes. You can see more insights on how HVAC replacement costs are trending on Piggi.io.

Several on-site issues can drive up the installation time and cost:

• Ductwork Modifications: If your existing ductwork is old, leaky, or the wrong size for your new high-efficiency system, it’ll need to be repaired or replaced. A brand-new system can't do its job if the "highway" for the air is full of potholes. To understand this better, learn about the crucial role of ducts for your new air conditioner.
• Accessibility: Is your furnace tucked away in a cramped crawlspace or a hard-to-reach attic? The tougher it is for technicians to get to the equipment and work safely, the more labour will be involved.
• Code Compliance: Many older homes across Canada need electrical or ventilation upgrades to meet today’s building codes, which adds to the project’s scope and cost.

This is exactly why a thorough, in-person assessment is an absolute must. No reputable contractor will ever give you a final price over the phone. They need to see your home’s unique layout and existing setup to give you a quote that's both accurate and transparent.

Uncovering the Hidden Costs of HVAC Replacement

When you get a quote for a new furnace and air conditioner, it’s easy to fixate on that one big number. But that initial price for the units and a standard installation doesn't always tell the whole story. Several "hidden" costs can pop up, turning what you thought was a straightforward project into something a bit more involved—and expensive.

Think of it like this: dropping a powerful new engine into a car with a rusty frame and bald tires would be a total waste. To get real performance, the whole system needs to be solid. The same goes for your home's HVAC. The furnace and AC are just two parts of a much larger comfort system.

Beyond the Box Price: Systemic Upgrades

The existing infrastructure in your home plays a massive role in the final cost of replacing your furnace and air conditioner. An older home, for example, was likely built to standards that just can't handle today's high-efficiency equipment without some key updates.

These aren't just upsells—they are critical upgrades for the safety, efficiency, and longevity of your new system. Getting them done during the initial installation is by far the smartest and most cost-effective way to go, saving you from the headache of expensive emergency fixes and poor performance down the line.

Here’s a look at some common additional expenses you might run into:

• Ductwork Modifications: If your current ducts are too small, leaky, or just poorly laid out, your new high-efficiency system won't be able to push air through your home properly. The fix could be as simple as sealing a few leaks or as involved as re-routing or replacing entire sections of ductwork.
• Electrical Panel Upgrades: Modern air conditioners and furnaces often need more juice than the units made 15 or 20 years ago. If your home's electrical panel is already maxed out or outdated, you'll need a licensed electrician to upgrade it to safely power your new equipment.
• Smart Thermostat Installation: A basic thermostat will get the job done, but a smart thermostat (usually $150 – $400+) is what truly unlocks the efficiency and comfort potential of a new variable-speed furnace or multi-stage AC.

The infographic below does a great job of showing how the final quote is built from both the equipment itself and these crucial supporting factors.

As you can see, the efficiency of the system, the size of the units, and the complexity of the labour are the three main pillars that determine your final cost.

Common Additional Costs During HVAC Replacement

To give you a clearer picture, we've put together a table of potential extra expenses you might encounter. These are the items that often go beyond the base price of the furnace and AC units themselves.

Remember, a good contractor will identify these needs during the in-home assessment and include them in your quote, so there are no surprises on installation day.

The R-22 Refrigerant Challenge

One of the biggest potential costs for anyone with an older system is the move away from R-22 refrigerant. This coolant was the standard for decades, but it was phased out and officially banned for use in new systems in Canada as of 2020 because of its damage to the ozone layer.

The cost of replacing a furnace and air conditioner has been climbing, with a projected cumulative increase of 22% between 2020 and 2026. A huge driver of this trend is the fact that an estimated 72% of systems installed before 2005 still run on R-22. If you have one of these units, upgrading isn't optional, and it can add $1,500 to $3,000 to the job for safe removal and replacement of the refrigerant lines.

Permits and Other Considerations

Lastly, any proper HVAC installation in Canada requires official permits and inspections. This is to make sure all the work is done according to local building and safety codes. Your contractor will typically handle all the paperwork, but the cost gets factored into your final bill.

You should also think about how your new system will work with other components in your home, like a heat recovery ventilator. To learn more about that, check out our guide on HRV system installation.

Beyond the planned expenses, you might also face the premium pricing that comes with an emergency breakdown. To avoid this, it helps to partner with companies that are set up to handle urgent calls efficiently, often by using reliable HVAC answering services to ensure they never miss a critical call when a customer's system goes down.

How to Save on Your New Furnace and AC System

Shelling out for a full HVAC replacement is a big deal, but it doesn't have to drain your savings. With a bit of smart planning, homeowners across Canada can seriously cut down the final bill for a new furnace and air conditioner.

These aren't just about chasing the lowest sticker price. They're about getting the best long-term value for your money. Let's dig into some practical ways you can keep costs down without skimping on quality or comfort.

Tap Into Government Rebates and Incentives

One of the best ways to knock a chunk off the upfront cost is to take advantage of government programs. Both the federal government and many provincial/utility providers have incentives designed to reward homeowners for choosing energy-efficient systems.

Keep an eye on the Canada Greener Homes Initiative and provincial programs like CleanBC (British Columbia) or Efficiency Manitoba. In Ontario, the Home Efficiency Rebate Plus (HER+) program is a major one. These programs can put thousands of dollars back in your pocket when you install qualifying high-efficiency furnaces, air conditioners, or heat pumps.

A heads-up: to get your hands on these rebates, you'll almost always need a home energy assessment done before and after the installation. It’s how they verify that the new equipment is actually hitting the energy-saving targets.

A good HVAC contractor will know these programs inside and out. They can help you pick equipment that qualifies and walk you through the paperwork. It’s basically free money, so you don't want to miss out.

The Long-Term Savings of High-Efficiency Units

It might sound strange, but spending a bit more now can save you a pile of cash later. High-efficiency furnaces and ACs have a higher purchase price, but they sip energy, which means lower hydro and gas bills every single month.

Think of it this way. A standard furnace might have a 92% AFUE rating, which means 8 cents of every dollar you spend on heat literally goes up the chimney. A high-efficiency unit with a 97% AFUE rating only wastes 3 cents. That difference alone can add up to hundreds of dollars a year.

It’s the same story with your air conditioner. Swapping an old 10 SEER unit for a modern 18 SEER2 model can slash your cooling costs by nearly 45% each summer. Over the 15-year life of the system, those savings will easily outweigh the higher initial investment.

Smart Scheduling and Service Bundles

Believe it or not, when you book your installation can make a difference. HVAC companies are swamped during the first real heatwave of summer and the first deep freeze of winter. Prices are firm because everyone is desperate for service.

If you have the flexibility, aim for the “shoulder seasons”—that’s spring and fall. Technicians are less rushed, and companies are often more willing to offer competitive pricing or run promotions to keep their crews busy.

It’s also a great time to bundle services. If your ducts are due for a cleaning, doing it at the same time as your installation is a no-brainer. A brand-new system works best with clean, clear airways. Many companies will give you a discount for bundling a full duct cleaning with the HVAC install, making sure your system runs perfectly from day one. And to really dial in those savings, you'll want to pair it with the right controls; check out our guide on the best smart thermostats in Canada.

Getting Accurate Quotes from Canadian HVAC Companies

Getting a solid, transparent quote is probably the most important step in managing what you'll spend on a new furnace and air conditioner. Think of it as your roadmap—it's the best tool you have for making a smart investment. Let's walk through how to take control of the process and get clear, comparable estimates from reputable HVAC companies in your area.

Your first move is to do a little homework. Hop on trusted sites like HomeStars or check out Google reviews to find local contractors. You're looking for companies with a solid history of happy customers, proper licensing, and full insurance coverage.

It also helps to understand the SEO basics for home service websites, as this is how good companies make sure you can find them. A strong, professional online presence is often a good sign of a well-run business.

The In-Home Assessment is Non-Negotiable

Here’s a hard and fast rule: never, ever accept a quote over the phone or through a quick email. A true professional needs to be in your home to see what they’re working with. They need to inspect the layout, check the condition of your existing ductwork, and see your electrical panel and ventilation firsthand to give you a real price.

During this visit, the technician should perform what's called a "Manual J load calculation." This isn't just jargon; it's the industry-standard method for figuring out the exact size of the furnace and AC your home actually needs. A system that's too big or too small will constantly struggle, driving up your energy bills and burning itself out way too soon.

A quote without an in-home assessment is just a guess. Insisting on a site visit ensures the contractor understands the full scope of the job, preventing surprise costs and ensuring your new system is perfectly matched to your home.

Key Questions to Ask Every Contractor

When the technician is at your house, it's your time to interview them. The way they answer these questions will tell you everything you need to know about their experience and the quality of their work.

Here’s a quick checklist of what to ask:

• Are you licensed and insured? Don't be shy—ask to see their provincial trade certification (e.g., TSSA in Ontario) and proof of liability insurance.
• What specific equipment models are you quoting? You need the exact brand and model numbers for the furnace, AC, and thermostat. This is the only way to compare apples to apples.
• Is a new thermostat included? Find out if a smart thermostat is part of the deal or if it’s an extra charge.
• What are the warranty details? You need to know about two warranties: the manufacturer's warranty on parts and the contractor's own warranty on their labour.
• What is the project timeline? Get a clear idea of when they can start and how long the full installation will take.
• Does the quote include all permits and removal of old equipment? Make sure there are no hidden fees for things like municipal permits or hauling away your old units. You can learn more about what goes into the price in our guide on furnace installation cost in Ontario.

Comparing Quotes Like an Expert

Once you have at least three detailed, written quotes in hand, it's time to sit down and compare. And remember, this isn’t just about finding the lowest number. The cheapest quote is almost never the best value.

Create a simple chart to lay everything out side-by-side: total cost, the equipment models they’ve proposed, the efficiency ratings (AFUE for the furnace, SEER2 for the AC), and the warranty terms.

You might find that a slightly higher quote includes a much better system, a longer labour warranty, or a more thorough installation process. That’s where the real long-term value is. This approach helps you spot the difference between a cheap price and a great investment.

Common Questions About Furnace and AC Replacement

When you're looking at a big home investment like replacing your furnace and air conditioner, it’s completely normal to have questions. Getting clear, no-nonsense answers is the best way to feel confident about your decision. We've put together the questions we hear most often from Canadian homeowners to help you get started.

How Long Does a Typical Installation Take?

A full furnace and AC replacement is a lot faster than most people think, especially when you have an experienced crew on the job. For the majority of homes, a licensed crew can get the entire project done in a single day.

You can plan on the installation taking somewhere between eight to twelve hours. This gives technicians enough time to carefully remove your old equipment, properly install the new furnace and outdoor AC unit, connect all the lines, and run a full suite of safety checks and system tests to make sure everything is perfect.

What Are the Signs I Need to Replace Instead of Repair?

This is the big one: do you sink more money into a repair or is it time to replace the whole system? While a single issue doesn't automatically mean your HVAC system is finished, a pattern of problems is a huge red flag that a full replacement is the smarter long-term financial move.

Keep an eye out for these clear signs that it’s time to replace:

• Age: If your furnace or AC is over 15 years old, it's running on borrowed time. Its efficiency has likely plummeted, and the risk of a major part failing (usually on the coldest or hottest day of the year) goes way up.
• Frequent and Costly Repairs: Are you calling your HVAC technician every season? If you find yourself spending a few hundred dollars on repairs every year, that money is much better spent on a new, reliable system that won't break down.
• Skyrocketing Energy Bills: Have you noticed your hydro or gas bills creeping up for no obvious reason? That's often the first sign your system is losing efficiency and has to work much harder just to keep you comfortable.

Can I Replace Only the Furnace or Air Conditioner?

You technically can replace just one of them, but we almost never recommend it, especially if both units are around the same age. Your furnace and air conditioner are designed to work together as a perfectly matched team.

Installing a new, high-efficiency air conditioner with an old, inefficient furnace is like putting a brand-new engine in a car with a rusted-out transmission. You’ll never get the performance or the efficiency you paid for because the weaker component is holding the new one back.

When you only replace one half of the system, you end up with a "mismatched system." This almost always leads to lower efficiency, extra strain on both units, and can even shorten the lifespan of your brand-new equipment. Replacing both at the same time guarantees they are perfectly compatible, maximizes your energy savings, and gives you one solid warranty that covers the entire system.

At Can Do Duct Cleaning, our certified technicians give you clear, detailed quotes that explain every part of your HVAC replacement. Contact us today for a no-obligation in-home assessment and take the first step toward a more comfortable and efficient home.