How to Quote an HVAC Job in Ontario (2026)
HVAC has the widest pricing variance of any residential trade. The same furnace replacement quoted at $4,500 by one contractor will be quoted at $9,500 by another. Both are still working. The difference is not the equipment. It is whether the contractor knows how to quote an HVAC job properly or guesses.
This guide covers the formula, the Ontario rates that actually apply in 2026, the rebates you should mention in every quote, and the gas certification rules that decide what you can legally bid.
The HVAC quoting formula
The pricing structure for HVAC is the same as any trade, but the weights are different:
Price = (Equipment + Labour + Materials + Overhead + Permit) ÷ (1 - Profit Margin)
In most residential HVAC jobs, equipment is 50-65% of the total cost. That changes how you quote. A 10% mistake on a $7,000 furnace is $700 out of your pocket. A 10% mistake on plumbing fittings is $20.
Get the equipment line right first. Everything else follows.
Step 1: Equipment cost (the biggest line)
Ontario equipment ranges in 2026, installed:
| System | Range | Typical Mid-Range |
|---|---|---|
| Mid-efficiency furnace | $3,500-$10,000 | $4,500-$6,500 |
| Central AC | $3,500-$9,500 | $4,500-$6,000 |
| Air-source heat pump (central ducted) | $5,000-$20,000 | $8,000-$12,000 |
| Ductless mini-split (single zone) | $3,500-$6,000 | $4,500 |
| Geothermal heat pump | $25,000-$45,000 | $30,000+ |
| Furnace + AC combo | $8,000-$14,000 | $10,000 |
Source: aggregated from 2026 Ontario contractor pricing guides (Custom Contracting, Furnace King).
Mark up equipment 20-40% over your supplier cost. Anything less and you are not covering the truck, the warranty risk, the supplier account, or the inevitable callbacks. Anything more and your competitor wins the bid.
Step 2: Load calculation (skip this and you lose money)
Do a Manual J load calculation for any new system install. Not a guess. Not "the old one was 80,000 BTU so we will go with that". An actual calculation.
Why:
- Oversized systems short-cycle, fail early, and trigger warranty claims that come out of your margin.
- Undersized systems get blamed on you, even if the duct work is the issue.
- Rebate programs (Greener Homes, Enbridge) require proper sizing documentation.
Build the load calc into your assessment fee. Charge $150-$250 for a proper home assessment, then credit it back if they sign.
Step 3: True hourly labour cost
HVAC technician wages in Ontario run $21 to $58 per hour, with a Toronto average around $29.48 (PayScale 2026). G2 certified techs sit at the high end. Apprentices and helpers at the low end.
The loaded cost is higher. Add:
- CPP and EI employer contributions (about 7.5% combined)
- WSIB premiums (rate group 723 for HVAC mechanical)
- Vacation pay (4% minimum in Ontario)
- Truck, fuel, tools, phone
- Non-billable time (usually 45% of the workday)
A fair rule: take the wage and add 30-40% to get true hourly cost. A $40/hour tech actually costs you $52 to $56 per billable hour.
Most Ontario HVAC contractors bill residential labour at $95 to $150 per hour, with service calls starting at $120-$200 plus the hourly rate.
Step 4: Materials and consumables
Beyond the main equipment, list everything: line sets, refrigerant, condensate pumps, smart thermostats, electrical disconnects, vent pipe, fittings, sealant, drain pans.
Mark these up 40-60%. They add up faster than contractors expect, and they are where margin gets eaten alive on tight bids.
Step 5: Overhead per billable hour
Add up monthly overhead: insurance, truck payments, fuel, software, advertising, licence renewals, accountant, your own admin time.
Divide by billable hours (not total hours worked). A solo Ontario HVAC contractor typically lands at $30-$60 per billable hour in overhead. Two-tech shops climb to $60-$100.
If you do not know your number, you do not know your price.
Step 6: Apply margin (not mark-up)
Same trap as every trade. Adding 25% on top of cost gives you a 20% margin, not 25%.
Use:
Price = Cost ÷ (1 - Margin)
Residential HVAC target margins in Ontario:
| Margin Type | Healthy Range |
|---|---|
| Gross margin | 35-50% |
| Net profit margin | 10-25% |
Replacement and install jobs cluster at the higher end. Service and repair work at the lower end (more callbacks, more diagnostics, less predictable).
Worked example: full furnace and AC replacement
Customer wants both replaced. Standard 2-stage 96% AFUE furnace, 16 SEER central AC, no ductwork changes.
Equipment:
- Furnace at supplier: $2,400 + 30% = $3,120
- AC condenser + coil: $2,200 + 30% = $2,860
- Equipment subtotal: $5,980
Materials and consumables: Line set, refrigerant, disconnect, thermostat, venting, sealant: $400 + 50% = $600
Labour: 2 techs × 8 hours × $54 true cost = $864
Overhead: 16 hours × $40 = $640
Permit: $230 (Toronto mechanical permit, varies by municipality)
Subtotal cost: $5,980 + $600 + $864 + $640 + $230 = $8,314
Apply 20% margin: $8,314 ÷ 0.80 = $10,393 + HST
Quote rounded to $10,395 + HST, or itemised on the proposal so the customer sees the breakdown.
Under-quote this at $9,000 and you walk away with $686 of profit on a 16-hour 2-tech job. You will hate this job by hour 12.
Mention the rebates in every quote
Ontario HVAC customers can stack significant rebates. As of 2026:
- Canada Greener Homes Grant: up to $5,000 for eligible air-source heat pumps
- Enbridge Home Efficiency Rebate Plus: rebates for furnaces, heat pumps, and combo systems
- Local utility programs: vary by region
Ontario homeowners can stack up to $10,000+ in HVAC rebates depending on the install (Northwind HVAC Pro).
Put a rebate line on every quote, even if zero. It signals you know the program. It also lets you quote a higher equipment tier (heat pump vs furnace) by showing the customer the net cost after rebates.
Ontario-specific compliance to bake into your quote
TSSA gas certification
No TSSA G2 or G1 certification means you cannot legally install, service, or alter gas equipment over 400,000 BTUH. Period. G3 holders work under a G2 or G1 supervisor.
Starting January 1, 2026, G3 certificate holders who took the challenge route need 450 hours of documented G3 work experience before they can enrol in a G2 program (TSSA).
Do not quote work you are not certified to do.
ESA inspection
Electrical work tied to your install (disconnect, panel upgrade, condensate pump wiring) often requires an ESA permit. Quote it as a line item.
Mechanical permit
Most Ontario municipalities require a mechanical permit for furnace and AC installs. Toronto fees start around $200-$250 for residential. Other municipalities vary. Always check before you quote.
WSIB
General contractors and homeowners increasingly want a WSIB clearance certificate before final payment. Read our WSIB clearance certificate guide if you do not have one yet.
Three HVAC quoting mistakes that quietly kill margin
1. Quoting before the assessment. Phone quotes for replacements without seeing the duct work, the electrical, or the venting are how scope creep eats your profit. Charge a small assessment fee and apply it to the job if they accept.
2. Forgetting the rebate paperwork time. Filing rebate forms for the customer takes 30-60 minutes. Bake it into your overhead or charge for it. Do not eat it.
3. Quoting just equipment, not the install package. Customers compare quotes line by line. If you quote $5,500 "furnace" and your competitor quotes $5,500 "furnace + permit + venting + thermostat + 10-year warranty", you lose every time. Itemise the value.
Always quote in writing
Minimum every HVAC quote should include:
- Equipment make, model, AFUE/SEER rating, capacity
- Scope of work (what gets removed, what gets installed)
- Labour hours and rate
- Materials and consumables
- Permit and inspection fees
- Warranty terms (manufacturer + your labour warranty)
- Rebate eligibility note
- HST shown separately
- Payment terms (deposit, balance due on completion)
- Validity period (30 days standard)
- TSSA registration number, ESA contractor number, WSIB number, business address
Use the same line-item discipline on the contractor invoice template when you bill the final.
The HVAC contractors who price properly are the ones still in business in five years. The ones who eyeball it are the ones working 70-hour weeks and still broke.
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