| Fuel | Cost per kWh-th | Cost per Million BTU | Relative Cost |
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How to Use the Fuel Cost Comparison Calculator
All 5 fuels pre-load with typical Canadian defaults: natural gas $0.35/m3, propane $0.95/L, heating oil $1.30/L, electricity $0.14/kWh. Replace these with your actual local rates from a recent utility bill, since regional variation is large enough to reverse the ranking between provinces.
AFUE for combustion equipment (defaults: 96% gas furnace, 92% propane, 85% oil), or COP x 100 for a heat pump (default 300% = COP 3.0). Use your actual equipment's rated efficiency from the nameplate, spec sheet, or a prior NRCan EnerGuide evaluation for an accurate comparison rather than the defaults.
Results rank all 5 fuels by $/kWh-thermal or $/million BTU delivered, accounting for both price and efficiency together. Since heat pump COP varies with outdoor temperature, use the heat pump vs furnace calculator for a temperature-specific comparison rather than relying on a single average COP here.
Comparing apples to apples: cost per unit of delivered heat
Natural gas is priced per cubic metre, propane and heating oil per litre, and electricity per kilowatt-hour, making direct price comparison across these units meaningless without conversion. The fair comparison method converts every fuel's price into cost per unit of useful delivered heat, dollars per kWh-thermal or dollars per million BTU, accounting for both the fuel's energy content and the equipment's efficiency in converting that fuel into usable heat in your home. The HVAC unit converter handles the underlying BTU, kWh, and GJ conversions directly if you need one in isolation.
This calculation requires two pieces of information for each fuel: its raw energy content per unit (a fixed physical property: natural gas contains about 10.3 kWh of thermal energy per cubic metre, propane about 7.4 kWh per litre, heating oil about 10.35 kWh per litre) and the equipment's efficiency rating (AFUE for combustion equipment, COP for heat pumps). Dividing price by (energy content × efficiency) gives the true cost per unit of delivered heat, the only number that allows genuine comparison.
Why heat pumps complicate the comparison
Heat pump "efficiency" works differently from combustion equipment: rather than converting a fraction of fuel energy to heat (always under 100%), a heat pump moves existing heat using a compressor, achieving an effective efficiency (COP) well above 100%, often 200-350% depending on outdoor temperature. This is why heat pumps can sometimes beat even efficient gas heating on a pure cost-per-unit-heat basis despite electricity often costing more per kWh than gas costs per equivalent kWh-thermal: the heat pump's COP multiplier more than compensates. Because COP varies with outdoor temperature, use the heat pump vs furnace calculator for a temperature-specific comparison, or the refrigeration COP calculator for the underlying cycle math, rather than relying solely on a single average COP value in this tool.
Regional price variation makes this calculation essential
There is no fixed national ranking of cheapest-to-most-expensive heating fuel in Canada, because both electricity and natural gas prices vary dramatically by province and even by specific utility territory. A ranking that holds true in Quebec can be completely reversed in Alberta or Nova Scotia. This is exactly why this calculator requires you to enter your own local prices rather than providing a generic national answer: only your actual local rates produce a meaningful comparison for your specific situation.
Frequently Asked Questions
There's no single universal answer because it depends on local fuel prices and equipment efficiency. In most of Canada with natural gas access, gas with a high-efficiency furnace is often among the cheapest options. In low-electricity-rate provinces like Quebec, an efficient heat pump can be equally or more economical. Propane and heating oil are typically the most expensive per unit of delivered heat. Use this calculator with your specific local prices for an accurate ranking, rather than relying on a generic national answer.
Convert every fuel's price into cost per unit of useful delivered heat (dollars per million BTU or per kWh of heat delivered), accounting for energy content per unit and equipment efficiency. Natural gas is priced per m³, propane and oil per litre, electricity per kWh; direct comparison without conversion is meaningless. Dividing price by (energy content × efficiency) produces the standardized figure needed for genuine apples-to-apples comparison, which this calculator does automatically for all 5 fuel types.
A heat pump doesn't convert electrical energy directly into heat the way a furnace burns fuel. It moves existing heat from outdoors using a compressor, achieving an effective efficiency (COP) well above 100 percent, often 200-350 percent depending on outdoor temperature. A COP of 3.0 means 3 kWh of heat delivered for every 1 kWh of electricity consumed. That multiplier can more than offset electricity's higher per-kWh price compared to gas, especially in provinces with moderate electricity rates and mild winters.
Natural gas contains about 10.3 kWh of thermal energy per cubic metre, propane about 7.4 kWh per litre, and heating oil about 10.35 kWh per litre. These are fixed physical properties of the fuels, not something that changes by region or supplier; the Canada Energy Regulator's energy conversion tables publish the underlying GJ and BTU figures behind these numbers. The actual usable heat delivered to your home also depends on equipment efficiency (AFUE), since combustion equipment always loses some energy as exhaust heat.