Natural gas vs electric heat cost in Canada: how to compare for your home

Households compare a gas “¢/m³” screenshot to an electricity “¢/kWh” screenshot and pick a fuel. Those units are not the same thing, and neither line is the bill. Delivery, carbon, equipment efficiency, and whether the heat is burned or moved decide January.

This is a Canadian conversion worksheet: GJ vs kWh, furnace AFUE vs heat-pump COP, and provincial adders at a high level. It is not a U.S. Henry Hub chart. Renters comparing listings should use heat included vs hydro first. Owners picking equipment should continue to heat pump vs furnace.

Convert apples to apples: GJ vs kWh and equipment efficiency

Natural gas is billed in cubic metres (or GJ in some provinces). Electricity is billed in kWh. The physical bridge:

• 1 m³ of natural gas ≈ 0.0373 GJ ≈ 10.36 kWh of energy content (standard conversion; your utility’s heat value is on the bill or tariff).
• 1 GJ = 277.8 kWh.
• Furnace AFUE is how much of that energy becomes house heat. A 95% condensing furnace: 10.36 × 0.95 ≈ 9.8 kWh useful per m³. An 80% mid-efficiency unit: ≈ 8.3 kWh.
• Electric resistance (baseboard, furnace coil, plenum heater): COP ≈ 1. One kWh in, one kWh of heat.
• Heat pump: COP is heat moved per kWh. At COP 2.5 you buy 0.40 kWh of electricity per useful kWh. At −20°C that COP may be 1.5 or the unit may hand off to backup.

The comparison number you want is cents per useful kWh:

• Gas: (all-in ¢ per m³) ÷ useful kWh per m³.
• Resistance electric: your all-in ¢/kWh (commodity + delivery + regulators − any rebate, from a real bill).
• Heat pump: all-in ¢/kWh ÷ seasonal COP you actually believe, not the brochure COP at +8°C.

Provincial price patterns and carbon/delivery adders at high level

Commodity is the line people screenshot. Delivery is the line that pays the pipes.

Labelled Ontario sketch (not a quote): if a winter month’s all-in gas is 40 ¢/m³ after delivery and carbon, a 95% furnace is 40 ÷ 9.8 ≈ 4.1 ¢ per useful kWh. If your hydro all-in after OER is 16 ¢/kWh, resistance heat is 16 ¢ useful and a COP 2.5 heat pump is 6.4 ¢ useful. Change any of those inputs and the winner flips. Do not use the 9.05 ¢ EGD supply line as if it were the bill.

StatsCan’s Daily of 14 Sep 2026 (August 2026 CPI) is inflation mood music. It is not your GJ.

Heat pumps change the electric side of the comparison

A heat pump is not “electric heat” in the baseboard sense. It moves outdoor heat indoors. That is why a Québec or Manitoba kWh can beat gas even when an Ontario baseboard cannot. It is also why a cheap mini-split that locks out at −15°C and throws a resistance coil is just a fancy baseboard on the worst days.

Walk through COP, backup, and hybrid changeover in heat pump vs furnace. Put those COP assumptions back into this worksheet. Do not paste a manufacturer’s “up to 18 HSPF” into a Winnipeg January.

Existing ductwork, panel capacity, and cold-climate performance

The fuel comparison assumes you can actually run the equipment.

• Ducts. A furnace already has them. A central heat pump wants enough airflow. Undersized 1970s ducts make noise and short-cycle. Ductless heads skip ducts and add wall holes and a snow line for the outdoor unit.
• Panel. Resistance backup and some cold-climate compressors want 200 A and spare breakers. A 100 A service can make the “cheap electric” option a $3,000–$8,000 panel project before the first useful kWh.
• Cold climate. Ask for capacity and COP at −15°C and −25°C, not “operates to.” Hybrid dual-fuel is how many Ontario and Prairie houses keep gas for the deep freeze.

If the house is a sieve, neither fuel wins. Seal and insulate first — attic R-values and EnerGuide are the decision tools, not a new burner.

Operating cost vs retrofit capital — simple payback framing

Write four numbers on one page:

1. Annual useful-heat cost on the current system (12 months of bills, converted).
2. Modelled annual cost on the alternative (same useful heat, new ¢/useful kWh).
3. Net capital after live rebates only. Federal Greener Homes Grant: closed; last document day for existing files was 31 Dec 2025. Loan: applications closed, funding committed (NRCan page dated 17 Apr 2026). OHPA: last application day 31 Jul 2026; existing applicants have document deadlines into 2027. Provincial and utility stacks still move — verify the week you sign.
4. Simple payback = net capital ÷ annual operating delta. If you will sell in three years, a 12-year payback is a gift to the next owner.

A $12,000 heat-pump increment that saves $600/year is 20 years before comfort, cooling, and carbon — which you may still want, but that is not a “gas is expensive” slogan.

When staying on gas still wins for a near-term budget

• The furnace is mid-life, the heat exchanger is sound, and this winter’s emergency is a $400 repair, not a new plant.
• The panel cannot take a compressor plus backup without a service upgrade you cannot fund this year.
• You are on cheap gas commodity and modest delivery, in a tight house, in a cold climate where a heat pump would run backup all January.
• You are a tenant. You do not buy the furnace. You buy the lease — see Housing.

Staying on gas is not a moral failure. It is a cash-flow choice. Revisit when the furnace dies, when a live provincial stack appears, or when an EnerGuide report shows the envelope is ready. For the Ontario clock on the electric side, use TOU vs ULO vs Tiered. For Québec’s Rate D math, use Hydro-Québec Rate D.