Oil to Gas Furnace Conversion Guide: How to Switch to Natural Gas or Propane in Canada

An oil to gas furnace conversion is one of the most effective ways for Canadian homeowners to lower heating costs, reduce emissions, and upgrade to a more efficient heating system. Whether you currently use oil or electricity, switching to natural gas or propane can significantly improve comfort, reliability, and long-term savings. This guide explains the benefits, costs, steps, safety considerations, and everything else you need to know before starting an oil to gas furnace conversion in Canada.

Benefits of an Oil to Gas Furnace Conversion

Higher Efficiency & Lower Environmental Impact

Modern natural gas and propane furnaces offer 90%–98% AFUE efficiency, which is much higher than older oil-based systems. An oil to gas furnace conversion not only reduces wasted fuel but also lowers greenhouse gas emissions and improves indoor air quality.

More Predictable Heating Costs

Oil deliveries require large, costly tank refills. Natural gas and propane systems allow for predictable billing, monthly budgeting, and often lower operating costs. Many utilities also offer equalized billing plans, making expenses easier to manage year-round.

Increased Home Value

Homes that complete an oil to gas furnace conversion typically see higher resale value. Buyers prefer clean, efficient, low-maintenance heating systems—making this upgrade an attractive investment.

More Reasons Homeowners Switch

Free Up Valuable Space

Oil tanks and older oil furnaces take up significant room. A new gas furnace is compact and frees up storage space in the utility area.

Lower Operating Costs

Natural gas is often the cheapest heating fuel in Canada. Propane costs more per litre but burns hotter and is available in rural areas. Both options generally outperform oil and electric furnaces in long-term efficiency.

Eligibility for Rebates

Many provinces periodically offer rebates for replacing older oil systems with high-efficiency alternatives. These incentives can make an oil to gas furnace conversion more affordable.

Natural Gas vs Propane: Which Should You Choose?

Choosing between natural gas and propane depends mostly on your location.

Urban & Suburban Areas: Natural Gas

✔ Lowest cost per BTU
✔ No storage tank required
✔ Continuous supply through gas lines

Rural Areas: Propane

✔ Available anywhere
✔ Burns hotter than natural gas
✔ Great option when gas lines aren’t available

Key Differences:

• Propane requires a storage tank and regular deliveries.
• Natural gas is generally cheaper and more stable in price.
• Both burn cleaner than oil and offer excellent efficiency.

Oil to Gas Furnace Conversion Process: Step-by-Step

An oil to gas furnace conversion varies depending on your current heating system.

1. Identify Your Current System

If You Have a Forced-Air Furnace

This is the simplest conversion. Existing ductwork and ventilation may already be compatible.

Typical costs: $3,500–$8,000, including:

• New gas furnace
• Labour
• Minor duct adjustments

If You Have Electric Baseboards or a Boiler

This is more complex since ductwork must be installed from scratch.

The process may include:

• Heat-loss calculations
• Full duct installation
• Electrical updates
• Venting modifications

Costs can exceed $10,000.
In some cases, a ductless heat pump may be a better fit.

2. Choose Your Fuel Type

Converting to Natural Gas

If your neighbourhood has natural gas lines, utilities often extend them to your property at little or no charge.

The gas provider typically:

• Assesses distance from the main
• Installs the gas line
• Ensures code compliance

Converting to Propane

Ideal for rural areas with no gas infrastructure.

You will need:

• Propane tank (above or underground)
• Regular fuel delivery service

Fuel cost: approx. $0.60–$1.20 per litre
Propane burns extremely efficiently and is a reliable heating option across Canada.

Why Professional Installation Is Essential

An oil to gas furnace conversion involves mechanical, electrical, and safety components. A licensed HVAC technician ensures:

 ✔ Safe removal of old oil tanks
✔ Proper venting and gas line installation
✔ Compliance with local building codes
✔ Correct furnace sizing
✔ Maximized efficiency
✔ Full manufacturer warranty protection

A DIY oil to gas furnace conversion is unsafe and voids warranties—always hire a pro.

Cost Breakdown: Oil to Gas Furnace Conversion in Canada

Most homeowners spend $5,000–$15,000 depending on:

• Home layout
• Furnace model
• Ductwork needs
• Gas line or propane tank installation
• Venting modifications
• Permits
• Old furnace removal

Although the upfront cost is significant, an oil to gas furnace conversion often saves $1,000–$1,500 per year in heating costs.

Where to Start Your Conversion

1. Check natural gas availability with your local utility.
2. Schedule an in-home assessment from an HVAC technician.
3. Review furnace sizing based on BTU requirements.
4. Compare quotes from certified contractors.
5. Install the gas line or propane tank.
6. Proceed with furnace installation and testing.

Safety Considerations During an Oil to Gas Furnace Conversion

Key hazards include:

• Carbon monoxide leaks
• Incorrect venting
• Faulty gas line installation

Professionals ensure:
✔ CO-safe venting
✔ Gas pressure testing
✔ Compliance with CSA and local regulations
✔ Safe removal of old oil equipment

Homeowners should always maintain working carbon monoxide detectors.

Environmental Benefits

An oil to gas furnace conversion results in:

• Lower greenhouse gas emissions
• No risk of oil spills
• Cleaner indoor air
• Higher fuel efficiency

While natural gas and propane are still fossil fuels, they burn significantly cleaner than oil.

Maintenance After Conversion

To keep your new system efficient:

• Replace filters every 1–3 months
• Schedule annual HVAC inspections
• Clean burners, blower motor, and heat exchanger
• Check vents and exhaust pipes regularly

Routine care extends furnace life and reduces energy waste.

Conclusion: Is an Oil to Gas Furnace Conversion Worth It?

Yes—most homeowners find it a valuable upgrade. An oil to gas furnace conversion provides:

✔ Lower heating bills
✔ Cleaner, more efficient heating
✔ Improved home value
✔ Predictable energy costs
✔ Safer, quieter operation

If you’re ready to explore your options, start by getting multiple quotes from certified HVAC contractors to find the best solution for your home.

FAQ

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💰 What Affects Furnace & AC Installation Pricing in Ontario?

Installation costs vary depending on:

• Home size & heating/cooling load –Larger homes require higher-BTU furnaces or higher-tonnage AC units.
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• Brand & efficiency level – High-efficiency systems cost more upfront but save energy long-term.
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• Repairs vs. full system replacement – Full replacements are more costly but often more efficient.

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