Even Canadians who live in areas favoured by mild winter weather will benefit from asking whether their furnace is friend or foe in today's climate of soaring energy costs.

The twenty-first century opened to wildly fluctuating prices for electricity, oil and natural gas and there's no sign of relief in sight. Not even experts find it easy to decide on the most economical long-term heating solutions, but all would agree an inefficient furnace is an unnecessary expense.

When your furnace dies suddenly, a detailed investigation of alternatives may not be practical. If your furnace is more than 15 years old, clarify your specific heating needs before an emergency pushes you into what might be the wrong furnace. Even if your furnace seems fine, today's energy prices can make a close look at the efficiency of your heating system worthwhile. For ideas on where to start, two federal government sites may prove useful:

• Canada Mortgage and Housing Corporation (CMHC)

• Natural Resources Canada (NRC)

Historically, heating systems based on electricity or propane cost the most to operate, heating oil was somewhat more economical and natural gas was the least expensive choice. Now, predicting the price of these commodities a year into the future is a challenge, but deciding on the best fuel for the next two decades (the common life span of a furnace) seems nearly impossible.

Based on fuel choices and availability in your area, all you can aim for is the best guess. Often that may be the one that offers the most tolerable worst-case scenario if you're wrong. Which would be the least difficult financial consequence to recover from? CMHC, the federal housing agency, suggests starting with calculations based on the current prices quoted in your area.

One mistake to avoid is buying more furnace than you need. Since most furnaces in Canadian houses can provide far more heat than the house requires, you may not need to match the output of your current furnace. A significantly-oversized furnace will run only for a short period, never coming up to peak efficiency. Install a furnace of the correct size to achieve efficient operation during the whole heating season. Note, however, that sizing may not be an issue with high-efficiency, condensing gas furnaces since their design makes them efficient even when oversized.

There are a few approaches to "size your furnace":

• Hire a contractor, at a charge of between C$150 and C$300, who will use a home heat loss calculation available from Canadian Standards Association (CAN/CSA F280) or a sizing procedure from the Heating, Refrigeration and Air Conditioning Institute of Canada.

• Use a subsidized house testing service from a government or utility program such as the NRCan Energuide for Houses.

• For the mathematically inclined, CMHC offers a method based on calculating heat loss from utility bills that assumes estimating the size of the furnace necessary on the coldest day of the year will ensure a capacity which can handle local temperature variations. The goal is to find a relationship between the gas consumed and the heating degree days (HDD), where an HDD is essentially the number of degrees of heating required over 24 hours, compared to a reference temperature. For more on the CMHC calculation, click here .

• Rely on the calculation of furnace size provided by the furnace dealer's salesperson and ask a lot of questions.

Through the 1990's, lower gas prices meant that the extra C$300 to more than C$1,000 paid for a high efficiency gas furnace could take 5 or more years to pay back based on lower operating costs. As natural gas prices increased, high efficiency furnaces made more sense. As well as faster payback, high efficiency appliances carry other advantages, including their ability to operate safely in newer, airtight homes (where chimney performance can be affected by negative pressures) and the apparent longevity of their plastic venting systems.

"Consumers say they want to pay less to heat and cool their homes," said Victor Fiume, President of the Ontario Home Builders Association , explaining that the construction industry continually searches for practical solutions to consumer concerns. "Big trends in housing are redefining and bringing together technologies to make new technologies that consumers may not see, but that make huge differences in living conditions. A new furnace is not one of the exciting technologies, but the new technology is a [furnace] fan driven by direct current [instead of AC] so it uses 70 percent less [electricity with] the fan running 24 hours a day for C$60 to$C70 per year."

Couple a DC fan with a heat recovery ventilator (HRV) and you'll enjoy a more comfortable, healthier home and considerable savings. An HRV exchanges warm moist inside air for fresh, warmed exterior air to reduce interior moisture and mold problems while conserving energy.

Which furnace is the best? With lifetimes of 25 years and continual improvements in design, predicting which furnace will provide the best service is challenging. Starting off on the right foot is the best strategy:

1. Select a furnace with a heat-exchanger warranty that runs 20 years or more. Read the warranty carefully before you sign. Is the manufacturer confident enough to make a long-term commitment to fully back the most expensive part of their appliance?

2. Select a furnace manufacturer and a dealer that have been in business for a significant period of time. Look for contractors with professional qualifications that include memberships in trade organizations such as the Heating, Refrigeration, and Air Conditioning Institute of Canada. Ask for references that demonstrate the property owner's continued satisfaction after at least five years after installation.

3. Investigate all options, including heat pumps and integrated systems, which heat the house while providing hot water and ventilation. Low-income Canadians may qualify for programs offered by governments and utilities that assist with replacement costs.

If you feel overwhelmed during your search, don't be surprised. CMHC provides this practical advice that puts the perfect furnace in perspective: "There is little or no available data to show that one manufacturer's furnace will operate longer and with less trouble than a furnace from another manufacturer. This is frustrating for consumers. We are used to being able to read ratings of one product versus another product and to make a choice based on those ratings. However, a good furnace will last 25 years. A poor one may break down prematurely at 15 years."