| Parameter | Heat Pump | Gas Furnace |
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Comparing heat pump and furnace operating cost across Canadian winters
The cost comparison between a heat pump and a gas furnace isn't fixed — it changes with outdoor temperature because heat pump coefficient of performance (COP) drops as it gets colder, while furnace AFUE stays essentially constant regardless of outdoor temperature. This means a heat pump that's clearly cheaper to run on a mild 5°C day might become more expensive than the furnace on a -25°C day, even though both systems are heating the exact same home to the exact same indoor temperature.
The cost per unit of heat from a heat pump equals electricity price divided by COP. The cost per unit of heat from a furnace equals gas price (in equivalent energy units) divided by AFUE. Setting these equal and solving for outdoor temperature (using your heat pump's COP curve between its rated and cold-temperature performance points) gives the dual-fuel switchover temperature: the specific outdoor condition where the cheaper choice flips from one system to the other.
Why provincial energy prices drive completely different answers
Quebec's hydroelectric-dominated grid offers some of the lowest electricity rates in North America, often making heat pumps cheaper to run than gas even in fairly cold conditions. Ontario's electricity rates run considerably higher, shifting the switchover temperature warmer, meaning the furnace becomes the economical choice at a less extreme cold temperature than it would in Quebec. Alberta and Saskatchewan, with relatively low gas prices from local production, see the furnace remain competitive across a wider temperature range. There is no universal answer to "is a heat pump cheaper than a furnace in Canada" — it depends entirely on your specific local electricity and gas rates, which is exactly why this calculator requires your actual local pricing rather than providing a generic national answer.
Dual-fuel systems: getting the best of both
A dual-fuel (hybrid) system installs both a heat pump and a furnace, with controls that automatically switch between them based on outdoor temperature, always running whichever is currently cheaper. This captures the heat pump's efficiency advantage during the many mild and moderately cold days that make up most of a Canadian winter, while falling back to the furnace only during the relatively fewer extreme cold days when the heat pump's COP has dropped enough that gas becomes the better deal. For homes considering this approach, use the switchover temperature calculated above as the thermostat's programmed changeover setpoint, then verify the economics with the payback period calculator against a heat-pump-only or furnace-only alternative.
Frequently Asked Questions
It depends heavily on local electricity and gas prices, and the heat pump's COP at your typical winter temperature. In Quebec and BC with low electricity rates, heat pumps are often cheaper even at moderately cold temperatures. In higher-electricity-rate areas like parts of Ontario, the heat pump may be cheaper in mild weather but more expensive than a high-efficiency furnace during the coldest periods. This calculator computes your specific breakeven outdoor temperature using your actual local rates and equipment performance.
A dual-fuel system pairs a heat pump with a gas furnace, automatically switching based on outdoor temperature to always use the cheaper option. The heat pump handles mild and moderately cold weather; below the calculated switchover temperature, the system transitions to the furnace. This is increasingly common in Canadian climates with significant temperature swings like Ontario and the Prairies, capturing heat pump efficiency in milder conditions while avoiding its cost penalty in extreme cold. Use the switchover temperature from this calculator as your thermostat's changeover setpoint.