If your furnace is showing its age — or has stopped working altogether in the middle of a Markham winter — replacement is often the most practical and cost-effective path forward. But before you call the first HVAC contractor you find, it pays to understand what a furnace replacement actually costs in 2026, what drives those costs up or down, and what Ontario's rules require. This guide gives Markham homeowners a clear, honest picture of the whole process.
Typical Furnace Replacement Costs in Markham (2026)
For most Markham homes, a complete furnace replacement — including the unit, labour, and standard installation materials — falls between $3,500 and $8,500 plus HST (13%). That range is wide because several variables pull costs in different directions. Here is a general breakdown by equipment tier:
- Entry-level single-stage furnace (80% AFUE): $3,500 – $4,800 installed
- Mid-efficiency two-stage furnace (96% AFUE): $4,800 – $6,500 installed
- High-efficiency modulating furnace (97–98% AFUE): $6,500 – $8,500+ installed
AFUE (Annual Fuel Utilization Efficiency) tells you how much of every dollar of natural gas becomes usable heat. Higher AFUE units cost more upfront but reduce monthly Enbridge bills — a meaningful consideration given Markham's cold winters and rising energy prices.
Labour typically accounts for $800 to $1,800 of the total, depending on how straightforward the swap is. If you are doing a straight replacement with no ductwork changes, labour sits toward the lower end.
What Affects the Price of a Furnace Replacement?
1. Furnace Size (BTU Output)
A properly sized furnace is critical. Markham homes range from compact townhouses in Cornell to large detached homes in Unionville, and a furnace that is too small or too large creates comfort and efficiency problems. A licensed HVAC technician should perform a Manual J heat load calculation before recommending a unit. Larger homes requiring 100,000 BTU or more will naturally pay more for equipment.
2. Fuel Type and Venting
Most Markham homes use natural gas, which is regulated in Ontario by the Technical Standards and Safety Authority (TSSA). High-efficiency furnaces use PVC flue pipes rather than traditional metal chimneys, so if you are upgrading from a mid-efficiency unit, new venting may need to be run through a side wall. This adds $200 – $600 to the project.
3. Ductwork Condition
If your existing ductwork is undersized, leaky, or improperly configured, repairs or modifications will add cost. Duct sealing typically runs $300 – $800, while partial duct replacement can add $1,000 or more depending on scope.
4. Removal and Disposal
Most contractors include old-furnace disposal in their quote, but confirm this upfront. If a refrigerant-containing coil is attached to the system, special disposal rules apply under federal regulations.
5. Permits and Inspections
In Markham, a building permit is required for furnace replacement. Your licensed HVAC contractor should pull the permit on your behalf — if they suggest skipping it, treat that as a red flag. A TSSA-licensed gas technician must install and commission any natural gas appliance, and the work is subject to inspection. Permit fees in Markham typically run $100 – $250 and are sometimes included in the contractor's quote; always ask.
Ontario Rebates That Can Reduce Your Cost
The Canada Greener Homes Grant program has wound down its grant stream, but Ontario homeowners may still access low-interest financing through the Canada Greener Homes Loan for eligible high-efficiency equipment. Enbridge Gas also periodically offers rebates on ENERGY STAR–certified furnaces. Always check current program availability before purchasing, as these programs change. Your HVAC contractor should be aware of active incentives — ask them directly.
Permit Requirements and Licensed Trades in Ontario
Ontario homeowners should understand who is legally allowed to do this work. Natural gas line work and appliance connections must be performed by a TSSA-licensed gas technician. If any electrical work is involved — such as wiring a new thermostat or upgrading a circuit for the furnace — it must be done by a licensed electrician registered with the Electrical Safety Authority (ESA). Contractors operating in the trades should also carry WSIB (Workplace Safety and Insurance Board) coverage and general liability insurance.
On VerifiedPros, every HVAC contractor is verified against these bodies before they can accept work — so you do not have to chase down credentials yourself.
Practical Tips Before Hiring an HVAC Contractor in Markham
- Get at least two or three written quotes. Quotes should specify the equipment brand, model number, AFUE rating, warranty terms, and whether the permit is included.
- Ask who pulls the permit. A reputable contractor handles this without hesitation.
- Confirm TSSA licensing. Ask for the technician's gas licence number, or use a platform that has already verified it.
- Check WSIB clearance. Request a WSIB clearance certificate dated within the past 90 days so you are not liable for on-site injuries.
- Review the warranty carefully. Equipment warranties (typically 10 years on heat exchangers) are often conditional on professional installation and permit sign-off — another reason not to cut corners.
- Ask about a Manual J calculation. If a contractor recommends a size without assessing your home's heat load, their quote may not be trustworthy.
How Long Does a Furnace Replacement Take?
A straightforward swap typically takes four to eight hours for an experienced technician. If venting modifications or ductwork adjustments are needed, plan for a full day. Most Markham HVAC contractors can schedule non-emergency replacements within one to two weeks; emergency replacements in winter may happen faster.
Is It Worth Repairing Instead of Replacing?
As a general rule, if your furnace is over 15 years old and facing a repair costing more than 30–40% of a new unit's price, replacement usually makes more financial sense. Modern high-efficiency furnaces also significantly outperform older equipment in both comfort and operating cost, which matters in a climate like Markham's where the furnace runs hard from November through April.