HVAC Prices Are Going Up in Canada—Here’s Why

If you’ve been shopping for a new furnace, air conditioner, or heat pump, you’ve probably noticed costs are higher than they were a year or two ago.

What’s behind the price hikes? It’s not just one thing. Rising material costs, stubborn inflation, new refrigerant regulations, and even potential tariffs are all playing a role.

The good news is that there are ways to cut costs. Let’s break down what’s causing the increases and how you can avoid overpaying.

Why Are HVAC Prices Going Up?

HVAC costs aren’t rising just for the sake of it. Manufacturers, suppliers, and installers are all dealing with higher expenses, and those increases are getting passed down to homeowners.

Let’s take a closer look at what’s driving these increases.

Rising Material Costs

Core materials like steel, copper, and aluminum have all gone up in price. During the pandemic, demand for these metals surged, and manufacturing costs for HVAC equipment spiked along with it. Even though raw material prices have somewhat stabilized, manufacturers haven’t rolled back prices to pre-pandemic levels.

Then there’s the global semiconductor shortage. Modern HVAC systems rely on electronic components like control boards and sensors, which became harder to source. This pushed costs up, and supply chain issues haven’t fully recovered.

Canadian tariffs have also played a role. Retaliatory trade measures have made some imported materials more expensive, and a weaker Canadian dollar (over 10% weaker than in 2022) makes anything imported—like certain HVAC components—costlier to buy.

Inflation Keeping Prices High

Inflation has been a big factor in HVAC price increases over the last few years. The chart shows how inflation surged between 2021 and mid-2023, peaking above 8%. 

Since then, inflation has been cooling down but is still hovering around 2%—and that’s what experts predict for the next couple of years.

Source: Statista

A 2% inflation rate might not seem like much, but it still adds pressure on wages, transportation, and manufacturing costs. 

It may not have the same impact as after the pandemic, but they will likely keep creeping up year after year.

Regulations on Refrigerants

Canada is phasing out older refrigerants with high global warming potential, following the same path as the U.S. This means R-410A, a common refrigerant in air conditioners and heat pumps, is being replaced by lower-impact alternatives like R-32 and R-454B. 

Carrier has already stated that units with R-454B will cost about 10% more than their R-410A counterparts because of the added expenses of new parts and updated controls.

While better for the environment, this transition is making HVAC equipment more expensive. Here’s why:

• Manufacturers have to retool their factories and redesign systems to work with the new refrigerants. 
• New efficiency standards, like SEER2, require more R&D and production changes, further increasing costs.

Potential Tariffs and Trade Issues

Global trade tensions are pushing HVAC costs higher. Many units and parts come from the U.S., Mexico, or overseas, so tariffs on steel, aluminum, and electronics directly impact prices.

A 25% tariff on U.S. metal imports has been proposed, which could drive up manufacturing costs. Even without full implementation, uncertainty makes pricing volatile. Many suppliers raise prices preemptively to offset future risks.

How Much More Are Homeowners Paying?

The exact increase depends on the type of system you’re buying. Some products, like heat pumps, have seen double-digit price hikes due to high demand and regulatory changes. Others, like furnaces and central air conditioners, have gone up more gradually.

Average price increases by product type

Here’s how much more Canadians and Americans are paying for different HVAC systems compared to a few years ago:

• Central air conditioners: Up 5–10% from a year or two ago. Most manufacturers have announced mid-single to low-double-digit price increases for 2024.
• Heat pumps: 10-20% increase (due to high demand and new regulations)
• Furnaces: Up 8–10%, with higher-efficiency models seeing the biggest price jumps.
• Ductless mini-splits: Up 8–15%, partly due to the cost of new refrigerants and electronics.

Price increases by manufacturer

HVAC price hikes vary by brand, but no manufacturer has been immune. Here’s how some of the biggest manufacturers have adjusted pricing:

• Carrier: Announced an ~8% increase on North American commercial HVAC products in Nov 2023. While this mainly impacted commercial systems, it set the tone for residential pricing too.
• Lennox: Raised prices up to 10% on residential HVAC units, effective Feb 2024. The company cited inflation, rising R-410A refrigerant costs, and higher freight expenses.
• Trane: Implemented modest increases (~5%) on many residential systems in Jan 2024. Some models saw no change or slight decreases, but many popular units went up.
• Goodman/Daikin: Announced a 7% price increase on equipment and ~3% on parts for early 2024. Even as a “value” brand, Goodman’s increases matched industry trends.

Higher-end brands like Carrier, Trane, and Lennox didn’t necessarily raise prices more than budget brands like Goodman. Lennox and Goodman both landed around a 7–10% increase in early 2024. 

However, A 10% increase on a $5,000 premium unit adds more actual dollars than the same increase on a lower-cost system.

Should You Replace Your HVAC System Now?

If your HVAC system is old, inefficient, or nearing the end of its lifespan, replacing it sooner rather than later could save you money. Prices have already climbed in recent years due to a lot of factors, and they’re expected to keep rising.

Here’s why upgrading now might be a smart move:

• Prices aren’t coming down: Inflation has cooled, but costs for materials, labour, and refrigerants are still increasing. Manufacturers continue raising prices, with many implementing 5-10% hikes for 2024.
• New refrigerant rules make future systems pricier: The transition from R-410A to R-454B and R-32 means manufacturers are redesigning HVAC units, adding R&D and production costs. 
• Avoid emergency replacement costs: If your system fails in the middle of summer or winter, you’ll have fewer options and might pay more for an urgent replacement. Upgrading on your own schedule lets you shop for better deals.

How to Save Money on HVAC Costs

A little planning and research can help you cut costs while still getting a quality system. Here’s how:

Get Multiple Quotes

Prices can vary between contractors, even for the same equipment. Compare at least 3 quotes to ensure you’re getting the best deal on both the unit and installation. 

A great way to do this is through FurnacePrices.ca, which connects you with multiple local contractors from Canada’s top 1% vetted HVAC companies.

Take Advantage of Rebates & Incentives

Government programs, utility companies, and manufacturers offer rebates on energy-efficient systems, especially heat pumps and high-SEER units. Check federal and provincial programs to see what’s available in your area

Some manufacturers and installers offer 0% financing. If you can spread the cost out without high interest, it can be better than waiting and paying more later.

Consider Off-Season Installation

HVAC companies are busiest in summer (June–August) and winter (December–February) when extreme temperatures drive up demand for new systems and emergency repairs. This often leads to higher prices and longer wait times.

If possible, schedule your replacement in spring (March–May) or fall (September–November) when demand is lower.

Get Reasonable HVAC Quotes From Local Contractors

HVAC prices in Canada are rising, and they’re not likely to drop anytime soon. However, you can still find a great deal by being proactive. Take advantage of rebates, off-season pricing, and financing options to lower your costs.

To make the process easier, FurnacePrices.ca connects you with trusted, vetted HVAC contractors in your area so you can compare fair, competitive quotes from Canada’s top 1% HVAC companies.

Get in touch today and lock in your best HVAC deal today!

FAQs

Furnace Brand Price Comparisons

​In light of the rising HVAC prices in Canada, it’s beneficial to understand the cost variations among different furnace brands.

Check the following articles on various furnace brands’ pricing:

• Amana Furnace Prices
• Trane Furnace Prices
• KeepRite Furnace Prices
• Napolean Furnace Prices
• York Furnace Prices
• Goodman Furnace Prices
• Carrier Furnace Prices
• Lennox Furnace Prices

Understanding these price ranges can aid homeowners in making informed decisions when selecting a furnace that aligns with their budget and heating requirements.​