Gas vs Electric Heating in Ontario: Real Costs

Gas vs electric heating in Ontario is really three comparisons, not one, because electric heat comes in two completely different forms. Resistance heat — baseboards, an electric furnace, a wall heater — produces exactly one unit of heat per unit of electricity and loses to natural gas on running cost in essentially every Ontario house with a gas line at the street. A heat pump is also electric, produces two to three units of heat per unit of electricity, and is genuinely competitive with gas. Everything below sorts out which of those three belongs in your house.

Why Resistance Electric Loses to Gas on Running Cost

Here is a test you can run tonight with two bills and no assumptions. A cubic metre of natural gas carries about 10.3 kilowatt-hours of energy, so a modern condensing furnace turns each cubic metre into roughly ten kilowatt-hours of delivered heat. Resistance electric heat delivers one kilowatt-hour of heat per kilowatt-hour bought.

For baseboards to be cheaper, a kilowatt-hour of electricity would have to cost less than a tenth of what you pay for a cubic metre of gas, all charges included. Pull up your Enbridge Gas and hydro bills and check. It will not be close, and that gap is why almost no detached house on a gas main in Burlington, Oakville or Hamilton heats with resistance electric by choice.

One nuance worth checking rather than dismissing: on the ultra-low overnight rate plan, the overnight window is priced low enough that electric heat used only in those hours can compete. That only helps if the heat can be stored — a heated slab, or a well-insulated house coasting until morning — because the same plan makes weekday evenings expensive.

Where Resistance Electric Still Makes Sense

• A single room that the ductwork never reached — a converted attic in a Kerr Village semi, or a three-season room added to a Millcroft two-storey — where running a gas line or extending ducts costs more than the electricity ever will.
• A rarely used space: a workshop, a guest room over a garage, a basement bathroom that needs a floor warmed for twenty minutes a day.
• Condo units and stacked townhouses with fan coils and no gas service, where electric supplementary heat is the only practical option.
• A backup for a heat pump, in the form of strip heat in the air handler — sized to cover the coldest nights, not to run all winter.

For a room-sized problem, a ductless mini-split heat pump is usually the better electric answer than a baseboard, because it heats and cools the room and does both at two to three times the efficiency of resistance heat. The decision rule is use: a room lived in daily earns the mini-split, while a workshop opened an hour a week is better served by the cheapest box to install.

The Panel Is the Constraint Nobody Checks First

This is where whole-house electric heat quietly dies in older neighbourhoods. A 20 kW electric furnace — a normal size for a modest detached house — draws roughly 83 amps at 240 volts on its own. Add a range, dryer, water heater and everything else and a 100-amp service, which is what plenty of 1950s and 1960s bungalows in Aldershot, Tyandaga and around the Hamilton Mountain still have, is out of room.

A heat pump is far gentler on the service than an electric furnace, which is one of its practical advantages, but it is not free of this problem either — especially with electric backup heat added in. Check the service size before you fall in love with an all-electric plan; our guide to panel upgrades for a heat pump walks through when an upgrade is actually required and when it is not.

Installed Costs, Side by Side

• High-efficiency gas furnace, standard replacement: $4,500–$7,500 installed, and the venting and gas connection already exist in most houses.
• Cold-climate air-source heat pump, whole home and ducted: roughly $6,000–$16,000 installed before rebates, depending on capacity and electrical work.
• A 3-ton cold-climate heat pump in a typical GTA house: $9,500–$15,000, with current Ontario programs returning up to $7,500.
• Rebates across current Ontario programs run $500–$7,500 depending on the system — see the rebate programs we file for.
• Electric furnaces and baseboards are the cheapest equipment to buy and install of anything on this list, which is exactly how they end up in houses that then pay for them every winter for twenty years.

What Changes When There Is No Gas Line

North of Dundas Street the gas main does not reach everywhere. Parts of rural Flamborough, the escarpment properties above Waterdown and pockets of north Burlington have no natural gas service at all, and for those addresses the comparison is between propane, oil, resistance electric and a heat pump — not gas.

In that situation the heat pump usually wins on running cost by a wide margin, with propane or an electric backup covering the coldest stretch. Our guide to propane furnaces in rural Flamborough and Halton covers the delivery and tank side of that decision, which is a real part of the cost that never shows up on an equipment quote.

Comfort, Safety and the Things That Are Not Money

• Gas furnaces deliver hotter supply air, which feels different at the register. Heat pumps supply cooler air over longer cycles — more even, but it surprises people the first winter.
• An all-electric house has no combustion appliance for heat, so no venting to block and no combustion products to worry about. Carbon monoxide alarms are still required by law in Ontario if any fuel-burning appliance, fireplace or attached garage remains.
• Electric heat is silent at the equipment. A heat pump has an outdoor unit that runs in winter, which matters on a narrow lot with a bedroom window near the pad.
• Gas keeps working in a power outage only if the furnace has power — no electricity, no blower, no heat, whichever fuel you burn.

Verdict: Who Should Choose Which

If you have a gas line and a furnace that is worn out, the honest short answer is gas or a heat pump, not resistance electric. Between those two, gas wins on simplicity and cold-weather certainty, the heat pump wins on carbon, on including cooling in the same equipment, and on rebates that cut the installed price hard. Where there is no gas at the street, the heat pump wins outright.

• Choose a gas furnace if you have gas service, want the lowest installed cost, value simple cold-weather performance, and are not chasing rebate dollars.
• Choose a heat pump if you also need air conditioning, if you are heating with electricity, oil or propane today, or if you want the incentives — and consider dual-fuel to keep the furnace as backup.
• Choose resistance electric only for a single room, an addition, a rarely used space, or as sized backup for a heat pump.
• Choose dual-fuel if you have both gas and a cooling need, and want the system to pick whichever fuel is cheaper on a given night.

The running-cost half of this decision deserves your own numbers rather than an average, and our page on what a heat pump costs to run in Ontario gives you the calculation. To have it worked through on your house, look at our heating services or request a free written quote.

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