Heat Pump vs Furnace Operating Costs in Ontario: The Data

Using Enbridge Gas's current commodity rate and the Ontario Energy Board's winter time-of-use electricity rates, a high-efficiency gas furnace beats a cold-climate heat pump on commodity cost alone across essentially the whole temperature range — but that comparison is incomplete on purpose: it excludes gas delivery, transportation, and fixed monthly charges, which are not published in this page's verified source set and typically add substantially to the all-in gas rate. This page shows the verified commodity and electricity rate inputs, the worked commodity-only math, and exactly what's still needed (your own bill's delivery-charge line) to get a true all-in comparison — rather than presenting a confident final number built on a partial calculation.

The short answer

Using verified current rates — Enbridge Gas’s commodity charge and the Ontario Energy Board’s winter electricity rates — a high-efficiency furnace’s commodity-only cost per unit of heat is well below a cold-climate heat pump’s, across essentially the whole outdoor temperature range this page can calculate. That is not the full picture, and we’re saying so directly rather than letting a partial calculation pass as a final answer: the gas rate below is commodity only, and excludes delivery, transportation, and the fixed monthly charge that appear on an actual Enbridge bill. Those additional charges are what typically bring gas heating’s true all-in cost up and create the crossover point that makes heat pumps and hybrid systems make sense in practice — this page shows you exactly which number is still missing so you can complete the comparison with your own bill.

Why there’s no single “heat pump costs $X/year” answer

Every published comparison that gives one flat number has baked in assumptions about climate zone, insulation, rate plan, and equipment model — change any of those and the number moves. Rather than repeat a number that only applies under specific assumptions, this guide shows the mechanism: coefficient of performance (COP) at different outdoor temperatures, multiplied by your actual electricity rate, compared against your furnace’s AFUE efficiency multiplied by your actual gas rate.

The core formula

Verified rate inputs (Ontario, as of July 2026)

Rates verified July 2026 — reviewed quarterly. Gas rates typically change quarterly (new Enbridge rates took effect Jul 1, 2026, adding roughly $8–41/year to a typical bill); electricity TOU rates reset with the OEB's winter/summer season boundaries. [VERIFY: gas delivery, transportation, and fixed monthly charges are not included above — pull these from your own recent bill or the current Enbridge rate schedule before treating the comparison below as complete. Also verify the current Ontario Electricity Rebate percentage at oeb.ca, which isn't factored in below.]

The worked calculation — commodity-only

Converting the effective gas supply rate (7.1856 ¢/m³) using a standard natural gas energy content of roughly 10.36 kWh per cubic metre gives a commodity-only cost of about 0.69 ¢ per kWh of gas energy. At 96% AFUE, that’s roughly 0.72 ¢ per kWh of heat delivered — commodity only, before delivery charges.

On a commodity-only basis, gas is cheaper per unit of heat at every temperature in this table, including mild weather — which is the opposite of the “heat pumps win except in extreme cold” story you’ll read elsewhere. That story isn’t wrong, but it’s built on all-in gas cost, not commodity-only cost. Enbridge’s delivery, transportation, and fixed monthly charges are billed on top of the commodity rate and are not included in the figures above; in many Ontario gas accounts those additional charges roughly double (or more) the effective all-in rate. Once you add your own delivery-charge line to the furnace side of this table, expect the comparison — and the crossover point where gas overtakes electric heat pump operation — to shift meaningfully toward the heat pump. [VERIFY: add your actual delivery/transportation/fixed charges from a recent Enbridge bill to complete this comparison]

Why hybrid (dual-fuel) systems exist because of this exact math

A real, all-in-cost crossover point — the outdoor temperature where gas becomes cheaper than electric heat pump operation — is the entire logic behind a hybrid or dual-fuel system: run the heat pump above that temperature, where it’s cheaper on an all-in basis, and let the system automatically switch to the gas furnace below it. This page’s verified inputs aren’t yet sufficient to state that exact crossover temperature (see the delivery-charge gap above), but the mechanism holds regardless of the precise number: COP declines with temperature, gas efficiency doesn’t, and somewhere in between the two lines cross. If your household runs a hybrid system, the whole-season cost is a blend rather than a single-technology number.

What this doesn’t include

• Equipment and installation cost — this page is operating cost only; see our furnace cost guide and the decision guide for the full picture including upfront cost
• Rebates, which can materially change the effective upfront cost of switching — see our rebate guide
• Home-specific heat loss — an under-insulated home will cost more to heat with either system; the ratio between systems stays roughly similar, but both go up
• Electricity plan structure — time-of-use rates can change the effective cost significantly if heating demand overlaps with peak pricing windows

How to run this for your own home

1. Pull your last 12 months of gas and electricity bills to find your actual $/m³ and $/kWh rates.
2. Find the published COP curve for the specific heat pump model you’re considering — see our Mitsubishi vs. Daikin comparison for two commonly recommended cold-climate lines.
3. Apply the formula above at a few representative outdoor temperatures for your area.
4. Weight by how many hours your area typically spends in each temperature band over a winter — Environment Canada climate normals are a reasonable source for this.