Electric vs. Gas Heating Costs in Canada (2026)

Whether electric or natural gas heat costs less comes down to two things: the price of each energy source where you live, and how efficiently the system turns it into heat. This page works out the running cost of gas furnaces, electric baseboards and heat pumps from the utilities’ published rates, province by province. It is one of our consumer guides to everyday household costs. What households actually pay across all their utilities is covered in average utility bills in Canada, and ways to bring those bills down are in how to save on utilities.

Cost per unit of heat

Gas is sold by the cubic metre or gigajoule, oil and propane by the litre, and electricity by the kilowatt-hour, so the fair comparison is the cost of one gigajoule (GJ) of heat delivered into the home: the price, divided by the energy in each unit, divided by the system’s efficiency.

All figures are before tax and leave out fixed monthly customer or basic charges, which a household pays whichever way it heats as long as it keeps the service. Ontario’s electricity figure is the commodity price only; local delivery and regulatory charges come on top, so the Ontario electric figures understate the full cost. Quebec’s heating use falls mostly in the second block, since winter use runs above the daily first-block allowance.

A heat pump’s cost per unit of heat is the baseboard cost divided by its COP, so on the same rate it costs less to run than baseboards whenever its COP is above 1. Against a gas furnace, the answer depends on both local prices. At these rates, a heat pump costs more than a gas furnace per unit of heat in Ontario, more than one in Manitoba, and less than one in British Columbia. On Nova Scotia’s rate, it costs less than an oil furnace at the example oil price.

Annual heating cost by province

Using the same rates, here is what one home needing 75 GJ of delivered heat a year would pay for heating energy alone. Real homes in colder provinces need more heat than homes on the coast, and a poorly insulated home needs more than a tight one, so the useful comparison is across a row rather than down the columns.

Natural gas isn’t widely available across much of Atlantic Canada and the North, where heating oil, propane and electricity are the usual choices. Alberta is left out because its regulated gas rate covers the commodity only, with delivery billed separately, and Saskatchewan’s gas rates aren’t included here.

Gas heating: costs and considerations

Natural gas furnace

A high-efficiency gas furnace (about 95% efficient or more) is the usual heating system in much of Ontario, Alberta and the Prairies, and common in parts of BC.

• Equipment cost: $3,000 to $6,000 installed
• Lifespan: 20 to 25 years
• Annual maintenance: $100 to $200

Advantage: a low fuel cost per unit of heat where gas rates are competitive. Disadvantage: gas prices move with commodity markets, a furnace provides no cooling, and some municipalities are limiting fossil-fuel heating in new buildings.

Electric heating: types and costs

Electric baseboard heaters

Baseboard heaters turn every kilowatt-hour into a kilowatt-hour of heat. That makes them 100% efficient, but it also means their running cost tracks the electricity rate exactly, with no multiplier.

Electric furnace

An electric furnace has the same running cost as baseboards (a COP of 1.0) but distributes the heat through ducts. It is common in older homes in BC and Ontario.

Cold-climate heat pump

A heat pump moves heat rather than making it, so it delivers more than one unit of heat per unit of electricity. Its COP falls as the outdoor temperature drops, so the seasonal average is what matters for the bill. What a heat pump costs to buy and install, and the grants that apply, are on the heat pump costs page.

Furnace or heat pump?

For most homes the real comparison isn’t gas against baseboards but a gas furnace against a heat pump. The running-cost tables above show how the two compare at each province’s rates. Three other things decide it:

• Up-front cost. A heat pump usually costs more to buy and install than a furnace. Rebates for heat pumps vary a lot by province and by the fuel being replaced; the current programs are in energy rebates by province.
• Cooling. A heat pump also does the job of a central air conditioner, which a furnace doesn’t.
• Backup heat. Many cold-climate installations keep a furnace or electric backup for the coldest days, which changes both the cost and the savings.

For a home that heats with oil or propane, compare the oil and propane rows with the heat pump column for the province.

Factors that affect the decision

Age of the current system

A furnace or boiler near the end of its life is the cheapest moment to switch, because the household is paying for new equipment either way and only the difference in price matters.

Home insulation

A well-insulated home needs less heat whatever the fuel, which shrinks both the bill and the size of system it needs. See home insulation costs for what upgrades cost.

Electricity rate

Against baseboards, a heat pump saves the share of each kilowatt-hour of heat it doesn’t need to buy, so the dollar saving grows with the electricity rate. Against gas, what matters is the ratio of the two prices, as in the first table. Homes with solar panels change the picture again.

Carbon pricing and future gas prices

The federal fuel charge on natural gas, propane and heating oil was set to zero from April 1, 2025, so it no longer adds to fossil-fuel heating bills; what changed and what stayed is explained in the end of the consumer carbon tax. Gas prices still move with commodity markets, and Enbridge Gas and FortisBC reset their rates quarterly.

Related articles

• Heat pump costs and grants in Canada
• Energy rebates by province
• Home insulation costs in Canada
• How to save on utilities
• Average utility bills in Canada