Press release
Canada Gas Water Heater Market Set to Surge at a 5.3% CAGR to 2032 - Top 5 Industry Players Position for Growth
Canada Gas Water Heater Market
Market Size & Insights
The Canada gas water heater market was valued at USD 291.78 million in 2024 and is anticipated to reach USD 437.35 million by 2032, growing at a CAGR of 5.3% from 2025 to 2032. In terms of volume, the Canada gas water heater market recorded total sales of 177,025 units in 2024.
The Canada gas water heater market forms a key segment of the broader Canadian water heater market, with gas-fired units continuing to dominate due to the country's well-developed natural-gas infrastructure and long-standing reliance on gas for residential and commercial water-heating.
Within the gas water heater segment, growth is being fuelled by the replacement of older, inefficient tanks, stricter building-code requirements for energy efficiency and the increasing adoption of tankless and condensing gas models which offer lower standby loss and higher operational efficiency. As Canadians become more conscious of energy bills and carbon-emissions targets, manufacturers and installers are leveraging these trends. The commercial sector (hotels, institutions, multi-unit housing) likewise is adopting larger-capacity, high-efficiency gas water heaters to meet both usage and regulatory demands.
Market fragmentation means there is both replacement demand (existing units being upgraded) and incremental demand (new housing starts, commercial expansions). Key challenges remain - such as competition from electric and heat‐pump based water-heating technologies, and regional variations in gas-versus-electric infrastructure - yet the outlook remains positive for the gas segment through to 2032.
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Segment Analysis
By Product Type: Tank gas water heaters generated USD 236.95 million in revenue with 152,873 units of volume in 2024, supported by their reliability and widespread adoption in Canadian households; meanwhile, tankless gas water heaters are anticipated to grow at a CAGR of 6.37%, driven by rising demand for energy efficiency, instant heating, and reduced space requirements.
By Power Output: Medium Power Units (30,000-100,000 BTU/h) contributed USD 178.31 million in 2024, benefiting from suitability for standard residential needs, while High Power Units (Above 100,000 BTU/h) are projected to grow at a CAGR of 5.08% due to their application in heavy-duty commercial environments and larger housing infrastructures. The segment was estimated to have 115,878 Units sales in 2024.
By Application: The residential segment dominated the market with USD 237.27 million in 2024, owing to continuous replacement demand and new home installations; commercial applications are expected to expand at a CAGR of 4.87%, supported by growth in hospitality, healthcare, and food service establishments.
By Distribution Channel: The online segment is anticipated to grow at a CAGR of 6.19%, fueled by increasing digital adoption, competitive pricing, wider product availability, and preference for comparison-based purchasing decisions.
Important Points
• Emerging demand for high-efficiency condensing gas water heaters continues to reshape the gas segment.
• Regulatory push for ENERGY STAR® certified appliances supports market expansion in Canada.
• Replacement of aging units installed in the 1990s/2000s presents a significant growth opportunity.
• Commercial projects (multi-unit housing, hospitality, institutional) are increasingly specifying gas water-heating systems due to high heat-load demands.
• Geographic expansion into less-densely-populated provinces is leading vendors to strengthen service/distribution networks.
• Competing technologies (electric, heat pump) are gaining ground, compelling gas‐water-heater vendors to innovate and differentiate.
Key Factors Driving the Future Growth of the Canada Gas Water Heater Market
• Energy efficiency regulations - As Canadian authorities tighten minimum efficiency standards, older gas water heaters are being phased out, creating replacement demand.
• Infrastructure maturity - Canada's extensive natural-gas pipeline network supports widespread adoption of gas-fired water heaters, particularly in colder regions where high hot-water loads persist.
• Technological innovation - Manufacturers offering tankless or condensing gas models, smart controls and remote monitoring are capturing premium segments.
• Population and housing growth - New housing starts, multi-family residential developments and commercial building expansion are driving incremental demand for gas water-heating.
• Cost competitiveness vs alternatives - In many Canadian regions, gas water-heating remains cost-effective relative to some electric or geothermal alternatives, particularly where heating loads are high.
• Service and retrofit market expansion - The need to replace aging units combined with rising maintenance/installation service demand supports growth of full-service business models.
Top 10 Market Companies
• O. Smith Corporation
• Rheem Canada
• Rinnai Canada
• Bosch Thermotechnology
• Bradford White Corporation
• Noritz Corporation
• Ariston Group
• Haier
• Navien, Inc.
• Whirlpool Canada
Market Segments
By Product Type:
• Tank Gas Water Heaters
• Tankless Gas Water Heaters
By Power Output:
• Low Power Units (Below 30,000 BTU/h)
• Medium Power Units (30,000-100,000 BTU/h)
• High Power Units (Above 100,000 BTU/h)
By Application:
• Residential
• Commercial
• Industrial
By Distribution Channel:
• Online
• Offline
Recent Developments
• Major manufacturers have launched new high-efficiency condensing gas water heater models with lower NOx emissions and improved performance, targeted at Canadian cold-climate markets.
• Strategic partnerships formed between water-heater suppliers and large plumbing/installation service providers in key Canadian provinces to expand retrofit service capacity.
• Some vendors began offering "water-heater-as-a-service" subscription models in multi-unit housing developments, enabling building owners to outsource maintenance and upgrades.
• Regional provinces updating building codes to require higher minimum efficiency for gas water heaters and better venting/combustion safety - driving equipment replacement.
• Increased marketing focus on smart connectivity (remote monitoring of water heater performance, leaking alerts) to appeal to eco-conscious Canadian homeowners.
• Distribution networks strengthened in remote/less-populated Canadian provinces (Atlantic Canada, Northern Canada) to tap under-penetrated zones for gas water-heater adoption.
Regional Insights
In Canada, regional adoption patterns of gas water heaters vary significantly. Provinces with extensive natural-gas distribution infrastructure such as Ontario, Alberta and British Columbia account for a major share of demand. Meanwhile, provinces in Atlantic Canada and the prairie territories, though historically less dense, are seeing increasing retrofit activity and new-build demand as developers re-examine energy options. Weather extremes in Canadian winters also drive higher hot-water requirements, making gas water-heating systems more attractive in colder zones. Regional policies and utility-incentive programmes further influence uptake across provinces.
Market Outlook
Looking ahead to 2033, the Canada gas water heater market is poised for consistent, moderate growth backed by a strong replacement cycle and evolving equipment efficiency standards. The projected CAGR of around 5 % reflects a stable market rather than explosive growth - enough to provide good opportunities for manufacturers, but also one where competitive differentiation will matter. Suppliers who can deliver higher-efficiency models, retrofit-friendly installation solutions and smart service capabilities will likely outperform.
The interplay between gas-based systems and competing technologies (such as electric heat pumps) will shape market dynamics. While heat pumps may gain in some segments, especially in milder climates or for space-heating synergy, gas water heaters will retain a strong role in Canadian regions where high-demand, cold-climate performance is required and infrastructure exists. Building-code upgrades and sustainability initiatives will push older, inefficient gas water heaters out of service, creating recurring retrofit opportunities.
Distribution and service ecosystems will be increasingly important - given Canada's geography and climate, after-sales maintenance, installer networks and service reliability will influence buying decisions as much as equipment specs. From a commercial standpoint, large institutional and multi-unit residential projects will continue to drive incremental demand, especially where volume and heating-load considerations favour gas.
In summary, the Canada gas water heater market offers a sound growth trajectory to 2033, with opportunities tied to efficiency-driven replacement, technology upgrades, and regional penetration. Companies that align with these trends and offer value-added service propositions will be best positioned to capture the upside in this evolving market environment.
Contact:
Ajay N
Ph: +1-970-633-3460
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DataHorizzon is a market research and advisory company that assists organizations across the globe in formulating growth strategies for changing business dynamics. Its offerings include consulting services across enterprises and business insights to make actionable decisions. DHR's comprehensive research methodology for predicting long-term and sustainable trends in the market facilitates complex decisions for organizations.
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