Canada HVAC Systems Market Size & Outlook, 2025-2033

Canada Hvac Systems Market Size

The Canada HVAC (Heating, Ventilation, and Air Conditioning) systems market was valued at USD 1,319.8 million in 2024 and is expected to grow from USD 1,383.7 million in 2025 to USD 2129.1 million by 2033, exhibiting a CAGR of 5.7% during the forecast period (2025–2033).

This growth is primarily driven by Canada’s focus on energy-efficient technologies, stringent environmental regulations, and increasing demand for HVAC systems in commercial spaces. In addition, with the country experiencing diverse climatic conditions, adopting HVAC systems to ensure thermal comfort and energy optimization is becoming necessary.

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Canada Hvac Systems Market Growth Factors

Energy Efficiency and Sustainability Initiatives

Canada has actively adopted measures to promote energy efficiency and sustainability in various sectors, including HVAC systems. The Canadian government’s "Pan-Canadian Framework on Clean Growth and Climate Change" emphasizes reducing greenhouse gas emissions and improving energy efficiency. HVAC systems compliant with Energy Star standards are increasingly in demand, with government rebates and incentives driving their adoption.

According to the Canada Green Building Council (2024), approximately 40% of new commercial buildings have incorporated energy-efficient HVAC systems. The adoption of smart HVAC technologies, such as those integrated with IoT, further supports energy monitoring and optimization, significantly reducing operating costs. This strong emphasis on sustainable building practices is a key growth driver for the HVAC market.

Market Restraint

High Installation and Maintenance Costs

Despite its promising growth, the Canadian HVAC systems market faces challenges due to high installation and maintenance costs. Advanced HVAC systems with energy-efficient and IoT-enabled features often incur significant upfront costs. According to a 2024 report by the Canadian Institute for Climate Choices, retrofitting older buildings with modern HVAC systems can cost between USD 50,000 and USD 100,000 per commercial building.

Additionally, maintaining these systems, especially in harsh climatic conditions, requires skilled technicians, which further increases operational costs. The cost factor may deter small businesses and residential users from adopting advanced HVAC systems, slowing market penetration.

Market Opportunity

Growing Urbanization and Smart Cities Development

Canada’s growing urbanization and smart city initiatives present significant opportunities for the HVAC systems market. With cities like Toronto, Vancouver, and Montreal spearheading smart city projects, the demand for integrated and automated HVAC systems is rising. Smart HVAC systems equipped with advanced sensors and AI-based controls are gaining traction for their ability to enhance indoor air quality and reduce energy consumption.

For instance, Toronto’s Waterfront Innovation Centre, a state-of-the-art smart building project, has integrated advanced HVAC solutions to optimize energy use and ensure occupant comfort. The increasing adoption of these technologies, supported by government funding, positions Canada as a lucrative market for HVAC innovations.

Country Analysis

The market is characterized by strong regional hubs of innovation and adoption, with cities such as Toronto, Vancouver, Montreal, Calgary, and Ottawa leading the charge.

Toronto is a leading HVAC system market driven by its extensive commercial construction activities and smart city initiatives. The city’s Downtown Relief Line project has incorporated energy-efficient HVAC systems in transit hubs to enhance passenger comfort. Furthermore, Toronto’s commitment to achieving net-zero emissions by 2050 ensures sustained demand for energy-efficient HVAC solutions.

Vancouver’s emphasis on green building standards positions it as a key market for sustainable HVAC systems. With the city’s Greenest City Action Plan targeting carbon-neutral buildings by 2030, developers are integrating advanced HVAC systems into residential and commercial projects. Local companies like Sterling HVAC leverage this opportunity by providing tailored solutions for eco-friendly developments.

Montreal’s HVAC market is bolstered by its robust commercial real estate sector and government-led energy efficiency programs. The city’s downtown revitalization projects, including mixed-use skyscrapers, drive demand for high-performance HVAC systems. Companies like Lennox International are introducing advanced heating and cooling solutions to accommodate Montreal’s climate needs.

Calgary’s oil and gas industry significantly influences its HVAC market. With the rise of energy-efficient retrofitting projects in industrial facilities, HVAC systems designed to handle extreme temperature variations are in high demand. Government grants for energy efficiency upgrades are further propelling market growth in the region.

Ottawa’s government buildings and research facilities are major consumers of HVAC systems. The city’s ongoing federal infrastructure projects prioritize energy efficiency, leading to increased adoption of advanced HVAC solutions. Local HVAC providers are partnering with government bodies to meet stringent regulatory standards.

Market Segmentation

Type Insights

Among HVAC components, air diffusers remain the dominant segment due to their critical role in maintaining indoor air quality and evenly distributing airflow in commercial, industrial, and residential buildings. Their demand continues to rise as building codes increasingly emphasize energy efficiency and occupant comfort. Control units and advanced digital controls are the fastest-growing segment, supported by the growing adoption of smart HVAC solutions integrated with IoT, AI, and predictive maintenance capabilities. Fire protection and smoke extraction systems are also seeing notable demand as safety regulations tighten in urban centers, while sound absorption and insulation products are gaining relevance in modern office and residential projects where noise reduction is valued. Overall, the market is transitioning from conventional ventilation and cooling hardware toward digitally enabled, energy-efficient, and safety-compliant HVAC components.

End Use Insights

The commercial sector leads the market in Canada, accounting for the largest share. This is driven by the rapid expansion of office complexes, hospitals, retail outlets, and educational institutions that require advanced HVAC systems for both energy optimization and compliance with green building standards. The residential segment is witnessing faster growth, particularly in urban areas where new housing projects and retrofits are adopting smart thermostats, heat pumps, and air quality management systems. Rising consumer awareness about energy savings and government rebate programs are key enablers here. Meanwhile, the industrial segment continues to expand steadily, with demand centered on HVAC systems that can withstand harsh conditions in manufacturing facilities, data centers, and warehouses. Energy-efficient retrofits in industrial hubs such as Alberta and Ontario are expected to further drive this segment.

Implementation Type Insights

New construction projects account for a significant portion of HVAC system adoption in 2025, as Canada’s urbanization drives demand for modern, integrated, and sustainable building solutions. However, the retrofit and replacement segment is gaining momentum as existing buildings upgrade older units with smart, energy-efficient alternatives. Retrofit demand is particularly strong in the commercial and industrial sectors, where organizations are pressured to cut operational costs and meet emissions targets. Over the forecast period, retrofits are expected to outpace new installations in growth rate, supported by government incentives and tightening energy codes.

Equipment Insights

Within equipment categories, cooling systems such as unitary air conditioners, VRF systems, and chillers continue to dominate given Canada’s rising demand for comfort cooling during hotter summers. Heating systems like furnaces, boilers, and especially heat pumps are gaining traction as sustainable alternatives that reduce carbon emissions. Heat pumps, in particular, are growing rapidly in residential and commercial applications thanks to federal and provincial subsidies. Ventilation and air movement systems, including air handling units and energy recovery ventilators, are also expanding due to their role in improving indoor air quality and reducing energy waste. Additionally, indoor air quality and filtration systems covering purifiers, humidifiers, and dehumidifiers are experiencing a surge in adoption as Canadians prioritize healthier living and working environments post-pandemic.

List of key players in Canada HVAC Systems Market

1. Carrier Corporation
2. Emerson Electric Co.
3. Hitachi Ltd.
4. Daikin Industries, Ltd.
5. Johnson Controls International plc
6. Trane Technologies
7. Lennox International, Inc.
8. Samsung Electronics Co. Ltd.
9. Rheem Manufacturing Company
10. LG Electronics
11. Havells India Ltd.
12. Mitsubishi Electric
13. Haier Group
14. Hitachi Ltd.

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Analyst's Perspective

As per our analyst, the Canada HVAC systems market is poised for rapid expansion in the coming years. This growth is primarily driven by Canada’s commitment to energy efficiency and sustainability and the increasing adoption of smart HVAC technologies. The rising urbanization and smart city projects further contribute to the market’s evolution. While high installation and maintenance costs remain a challenge, technological advancements and government support are expected to mitigate these barriers. Canada’s diverse climatic conditions and robust construction activities ensure sustained demand for HVAC systems, making it a promising market for both global and local players.