I run into the same thing telling people baseboard and even space heaters are cheaper than oil.
In NS you can get Time of day rates, in a similar structure to Ontario only if you have an Electric Thermal Storage heating system. There's a couple of other time of day pilot programs they have that I don't see saving money.
NS won't pay a carbon tax until this July.
If the furnace doesn't have a separately ducted burner intake (most don't) it will draw it out of the room, but air will have to make its way in from outside into the furnace room to make up the air that went up the chimney.