As a service contractor, we are often asked our opinion whether the furnace should be repaired or replaced. The short answer if the furnace is older than 10 years is replace.

WHY?

If the furnace is more than 10 years old it is probably not a high efficiency type (90%+) Many older furnaces fall into the 60-70% range with new furnaces at 95-96% you could save 30% off of your heating bill.

Many have a standing pilot. A pilot light on your furnace can use $1/day (that's $365/year!) New furnaces have a intermittant (or interupted pilot) which means the pilot comes only on a call for heat, or direct ignition (no pilot).

Warranties on new furnaces are great. Goodman has set the standard of 10 years on all parts and has recently offered (for a limited time) 5 years labour warranty thru Goodcare dealers for free. An additional 5 years for $79. That's a full 10 years parts and labour for $79.00. If you are presently signed up to a comprehensive plan with one of the large service comanies, you are likely spending a few hundred dollars a year that you won't have to with a warranty like the GoodCare warranty.

Rebates:

Ontario Fed/Provincial Home Audit program allows for rebates of $600 for a energy star high efficiency furnace and $1000 for a furnace equiped with a ECM (variable speed) furnace motor. http://www.homeenergyontario.ca/green/back.asp?lang=en&sec=green

The Ontario Power Authority (OPA) provides $125 for an ECM equiped furnace and $25 for a programmable stat.  www.coolsavingsrebate.com

Enbridge (local gas utility) offers $100 for upgrade to high efficiency and $15 for a programmable stat.

https://portal-plumprod.cgc.enbridge.com/portal/server.pt?open=512&objID=285&PageID=0&cached=true&mode=2&userID=2

The recent Federal buget (Jan. 29/2009) provides a 15% credit on eligible expenditures (includes furnace and HWT replacement) exceeding $1000 up to a max. of $10,000.   www.cra.gc.ca