Hot water tanks in Ontario: rentals, gas rules, rebates and costs

01 /What kind of water heater does a typical Ontario home have?

A gas storage tank. Natural Resources Canada's Comprehensive Energy Use Database models about 6.2 million residential water heaters in Ontario for 2023, of which 73.6% burned natural gas and 25.5% used electricity. Oil, wood and other fuels together made up less than 1%. Measured by energy rather than by units, gas supplied about 88% of the energy Ontario households used to heat water that year, because a gas tank uses more energy than an electric one for the same hot water: part of its heat leaves through the flue.

The practical upshot is that most Ontario replacement decisions are gas decisions: keep an atmospheric tank on the existing chimney, move to a power-vent or direct-vent tank, step up to a condensing tank or tankless unit, or leave gas for a heat pump water heater. Where a street has no gas main, an electric tank is the usual fallback, since propane and oil have almost disappeared from the provincial count. The gas vs electric comparison walks through that choice, and the types of water heaters guide explains each option.

02 /How do water heater rentals work in Ontario?

Ontario is the province where renting a hot water tank is an everyday arrangement, and owners in Toronto, Ottawa, Hamilton or London meet the same basic contract. A rental company owns the tank, installs it, bills a monthly fee that usually steps up over time, and handles repairs and replacement of the unit under its agreement. Many owners never chose the rental at all: they inherited it when they bought the house.

To find out whether your tank is rented, check three places. The tank jacket usually carries the owner's label or sticker. Your bank or card statements will show a recurring charge. Your purchase documents from when you bought the house may list the tank as a rental and name the provider. If none of those settle it, call the company named on the label and ask whether the serial number is on their books.

How much is a hot water tank rental in Ontario? We do not publish an average, because we could not verify a current province-wide figure from an official source, and fees depend on the tank type, the provider, the year the agreement started and every increase since. Read your own number from your latest invoice or bank statement, note whether it includes HST, and find the date of the last increase. The same tank can carry different fees under agreements signed in different years.

With your fee in hand, the Rent or Buy Calculator compares years of rent against buying a tank outright, and the rental vs buy guide explains the trade-offs in plain terms.

03 /What should you do before cancelling or buying out a rented tank?

Get the exit terms in writing before anyone disconnects the tank, because the rental company still owns it. The detailed mechanics of buyout schedules, return logistics and transferring a rental on a home sale are covered in cancel or buy out a rented water heater. The short version for Ontario owners:

1. Ask for the agreement

   Request a copy if you inherited the rental. Note the start date, any minimum term and how increases are applied.

2. Ask for a buyout figure

   Many agreements price the buyout on a schedule tied to the tank's age. Ask for the amount as of your planned replacement date.

3. Ask about removal and return

   Find out whether the company collects the old tank, whether you must return it, and what either costs.

4. Price the replacement

   Get installed quotes for a purchased tank, then add the exit cost to the purchase side in the calculator.

5. Confirm the billing stops

   Get written confirmation of the final bill and the end of the pre-authorized withdrawal.

Selling a house with a rented tank is routine in Ontario, but the agreement of purchase and sale should say whether the buyer takes over the rental or the seller pays it out before closing.

04 /Which Ontario consumer rules cover water heater sales and rentals?

Ontario has rules aimed squarely at water heaters. The Government of Ontario's page on door-to-door sales and home service contracts, checked in September 2026, sets out the following:

• Door-to-door offers are restricted. A water heater cannot be offered or sold at your home unless you started the transaction by contacting the business and asking it to come and discuss one.
• Improper contracts are void. A contract signed because of restricted door-to-door marketing is considered void, and you can keep the goods or services without obligation.
• Ten days to cancel. Once you receive a written copy of an in-home contract, you can cancel it within 10 days without giving a reason. If you asked the business to come and asked for installation within those 10 days, you may still owe rental payments that are due and the company's cost of removing the equipment.
• Costs up front. Contracts need a mandatory cover page and must clearly identify overall costs and any cancellation fees.

Title registrations changed too. Under the Homeowner Protection Act, in force since June 6, 2024, businesses can no longer register notices of security interest (NOSIs) on land title for consumer goods such as water heaters, and every consumer NOSI already registered is deemed expired. An old NOSI may still show on a title search, but it no longer affects the property. The province notes that a business keeps its rights under the contract and can still go to court if a customer does not pay, and it warns about companies offering to remove expired NOSIs for a fee. Questions or complaints go to Consumer Protection Ontario at 1-800-889-9768.

05 /Who can install a water heater in Ontario, and is a permit needed?

For gas, only a registered fuels contractor. TSSA, Ontario's fuels safety regulator, states that registered fuels contractors are the only businesses legally authorized to do fuels work in the province, and that contractors must make sure the technicians they send are trained and certified. TSSA has prosecuted this: in 2023 it published a case in which a contractor was fined after sending an uncertified worker to install a natural gas water heater in a home. Ask for the contractor's TSSA registration and the technician's certificate, and check the contractor in TSSA's online registry.

Plumbing permits are a municipal matter under the Ontario Building Code; the province says building permits are generally issued by municipal building departments. Rules differ by city. The City of Toronto's building permit guidance, for example, lists installing hot water tanks in a house among work that does not need a building permit, while installing or modifying heating or plumbing systems does, and Toronto separately licenses plumbing contractors. If you live in Ottawa, Hamilton, London or anywhere else, ask your building department before the work starts. New circuits for a heat pump water heater are electrical work; confirm permit requirements with the Electrical Safety Authority.

Carbon monoxide alarms are part of any fuel-burning installation. The Government of Ontario's CO safety page says homes with a fuel-burning appliance, a fireplace or an attached garage need alarms next to each sleeping area and, from January 1, 2026, on every storey, and it recommends pressing the test button monthly. See carbon monoxide and water heaters and, for how inspections work, permits and code.

06 /What water heater rebates are available in Ontario?

When checked in September 2026, the main offer was the Home Renovation Savings program, which Save on Energy (a brand of the Independent Electricity System Operator) delivers with Enbridge Gas and which is supported by the Government of Ontario. Its page listed $500 back on qualified heat pump water heaters, which must be ENERGY STAR certified. That rebate sat in the program's bundle path, which starts with a home energy assessment and requires two or more upgrades; the single-upgrade path, which skips the assessment, listed other measures such as heat pumps, thermostats and attic insulation, not heat pump water heaters.

• Confirm the model is on the ENERGY STAR certified list before you buy, not after.
• Book the assessment first if you want the bundle; the order matters.
• No rebate for a standard gas tank appeared on that page when checked.
• If the tank is rented, ask the program whether a rented unit qualifies before counting on the money.

Programs change often. The rebates in Canada page tracks federal and provincial offers, and the heat pump water heaters guide explains whether one suits an Ontario basement.

07 /How do Ontario winters affect hot water?

In two ways: the water arriving at the tank is colder, and wall vents can be buried. Colder incoming water means every litre needs more heat, so a tank recovers fewer litres per hour in February than in August, and a tankless unit delivers a lower flow at the same temperature. The table uses the representative values from this site's Hot Water Morning Simulator, heating to 55 °C.

That gap of roughly a sixth is why the last shower of a busy winter morning can run cool on a tank that seemed fine in summer. Why hot water runs out in winter goes through the causes and fixes. To see your own inlet effect, fill a glass from the cold tap after a few minutes of running in late winter and measure it.

Power-vent and direct-vent terminals on semis and townhouses can end up in narrow side yards where snow collects. Keep them clear after every storm; the power vent in winter guide covers the lockout pattern. In older houses where a high-efficiency furnace has replaced an old one, the gas water heater may now be alone in a chimney sized for two appliances. That orphaned chimney needs checking, and it is a common reason a quote includes a liner or a switch to power vent. The venting and backdraft guide explains why.

08 /What does replacing a water heater cost in Ontario?

What moves Ontario quotes most is the work around the tank: a chimney liner or vent connector ($300–$1,500), a new plastic vent run ($300–$1,200), gas line upsizing for tankless ($300–$1,200) and an expansion tank where the system is closed ($250–$500). Add any rental exit cost from your agreement. Access matters in older houses with narrow basement stairs, and in a condominium or townhouse complex, ask the corporation whether it has rules about vent terminals before you commit. The full list of add-ons is in the replacement cost guide.

09 /What should you ask an Ontario installer?

• Is your business a TSSA-registered fuels contractor, and does the technician doing the work hold a current TSSA certificate?
• Does my municipality require a permit for this job, who applies for it, and is the fee in the price?
• If my current tank is rented, who arranges its return, and will you wait until I have the buyout or removal terms in writing?
• Will you reuse the existing vent? If the furnace has been upgraded, have you checked for an orphaned chimney?
• For a power-vent or direct-vent tank, where exactly will the terminal go, and will it sit clear of drifting snow?
• Is there a check valve or pressure-reducing valve on my supply, and is an expansion tank included?
• For a heat pump water heater, is the model ENERGY STAR certified, and does my plan fit the rebate's bundle path?
• Are carbon monoxide alarms in place on every storey, as Ontario now requires?
• What does the labour warranty cover, and is disposal of the old tank included?

HotWaterTank.ca does not install, rent or sell water heaters. When you have your answers, you can request quotes from local trades and compare them line by line. Other provinces work differently; see Quebec and Atlantic Canada.

FAQQuestions people ask