Since day one, we’ve been focused on ensuring that we have a reliable, affordable, clean energy system in this province. It’s remarkable for me, Mr. Speaker, to hear the energy critic from the NDP now standing up and championing gas in our province when at every opportunity he has slammed the use of natural gas—not just slammed the use of natural gas, but he’s also slammed our nuclear sector.

What we have done by introducing the bill last week—and we’ll debate it at second reading today, Mr. Speaker—is ensure that there’s at least one party in this Legislature that’s standing up for homeowners and new homeowners and energy customers, and that is Premier Ford and the Progressive Conservative Party of Ontario. They can be beholden to the environmental groups; they can be beholden to those who are ideological. We are not going to do that. We’re going to stand up for the people of Ontario.

Interjections.

Mr. Speaker, there’s one party in this Legislature that is standing up for those who want to enter the home market. They want to buy a home in this province. That’s this party. The Ontario Energy Board’s decision from just before Christmas would have driven up the price of a home by, at minimum, $4,400. Our party won’t stand for that. But in parts of rural Ontario, it was going to drive up the cost by tens of thousands of dollars a year.

We are in a housing crisis in this province. Every time our party brings forward plans, like the housing supply action plan, it’s the NDP that stands up against it, Mr. Speaker, and this is the latest example of the NDP and the Liberals and the Greens standing up against the ability for people to buy a home in our province. We are going to stand with those who want to get into housing, Mr. Speaker, and make sure we’re keeping shovels in the ground in Ontario.

It’s interesting listening to the energy minister talk about the past and the history. I will say that when the Liberals were in power, the PCs used to criticize their politicization of the electricity planning and their disregard for evidence and professional independent analysis. And yet here we are, 2024, the first time ever overruling an Ontario Energy Board decision designed to protect homeowners and ratepayers in order to benefit a fossil fuel giant.

Kent Elson, a lawyer from Environmental Defence says that this legislation, and the choice of the title of this bill, is “Orwellian.

“It should be called the keeping Enbridge profits and energy bills high act....

“The OEB decision would have cut capital costs covered by gas customers by approximately $600 per customer.... Reversing the decision will certainly raise energy bills.”

Why did you not title this bill the pushing energy costs up act in Ontario?

My question for the energy minister is—and first of all, I want to say that I’m glad that he’s living in a rural area and doing fine without natural gas at his residence, and that he’s not going to have to pay for any stranded infrastructure. But I want to ask him a really particular question, because he quoted one of the commissioners—one of the three, if that’s the right term—who wrote a dissenting opinion at the end of the OEB decision and order.

My question to the minister is, would he support the position of that commissioner to reduce the revenue of horizon to 20 years, leaving approximately a third of the cost of the new connections to pay up front and not on the backs of existing households? Would the minister support that?

We would tag-team going after them, yes. We used to go after them. We would go after them in committees, we’d go after them in the House, because we knew they politicized the process. And you guys are following that road—sorry; this government, Speaker, is following that road of politicized energy decisions. The outcome is not good.

So not only does the current government want you to immediately be stuck with a bill for a massive subsidy to Enbridge Gas—and I’m talking $300 per customer over the next four years—it also wants you to be stuck with the cost of future projects that the OEB, the regulator, might dismiss because they hurt the interests of gas consumers. The process of hearing evidence in public by a board of people with experience and a mandate to protect the public interest is replaced by a process where the best lobbyist, as I said before, brings home the bacon—your bacon—to whatever company wants access to a subsidy from you. This is not well received in many quarters and, frankly, is contrary to advice that the government has received. I’ll go to the advice first, and then I’ll go to comments from other quarters.

In its recent report, Ontario’s energy transition panel, appointed by this government to look at the transition—frankly, again, to the minister’s comment, a transition away from gas home heating to electrification of home heating; the minister made that clear—made a recommendation that is inconsistent with Bill 165. They recommended the OEB “should conduct reviews of cost allocation and recovery policies for natural gas and electricity connections, as well as natural gas infrastructure investment evaluations to protect customers and facilitate development of the clean energy economy.”

Well, this isn’t protecting customers. I didn’t hear the minister say once that when we change this, it will mean that the rate reduction that the OEB mandated will be maintained. No, no. The rate reduction the OEB maintained is out the window. Customers will not be protected. You can go all around the mulberry bush, you can do the ring-around-the-rosie, you can be the jack in the jack-in-the-box—whatever. It ain’t protecting customers. It means higher bills. That’s what this legislation delivers. Their own electrification panel recommended the OEB make the kind of decision that the OEB made, and that’s the one that this government is working hard to reverse.

Other organizations in the energy field had comments like this: Adam Fremeth and Brandon Schaufele from the Ivey Energy Policy and Management Centre wrote—again, Ivey school is not your left-wing hotbed, right? It ain’t. They wrote, “Overriding an independent economic regulator is a big deal. It is not something that should be done lightly. The government’s decision explicitly undermines the OEB and threatens credibility of future energy investment in the province.”

Note that: “future energy investment.”

When you have a government that operates in a way that is capricious, that is not open, that is not rules-based but is influence-based, then—it’s not true with all investors; maybe some think they can get that influence and get what they want, but a lot will say, “Ehh.” You put money into that province, you don’t know if you’re going to get it back. You don’t know if actually you’re going to get a return on your investment. You could be side-swiped by someone else who’s got more powerful lobbyists. I think their comment is a good one.

“Moreover, it’s not obvious that this move is in Enbridge’s long-term interests. Once a precedent to effectively overrule a regulator is established, there’s little to stop future governments from using the same tactic to different ends, perhaps against natural gas infrastructure.”

Interesting comment, very interesting comment.

Do you have rules-based, law-based regulation in Ontario, or do you set it up so it’s influence- and lobbyist-based? I think that’s the choice before us. We know what the government has proposed. Not only do they want you to pay more on your gas bill—320 bucks over the next four years—they are also setting up a situation where you don’t know what the rules are. The rules are whatever the lobbyists and the influencers can make happen.

I’m going to quote Mr. Mondrow again, energy regulation policy expert at Gowling: “Minister Smith would be well advised to consider the wisdom of the energy panel’s recommendation and leave the matter of further consideration of new energy connection cost recovery policies with” the Ontario Energy Board. I don’t know; he seems to know regulation. He seems to know energy policy. “Leaving this in the hands of the independent regulator would maintain transparency, consistency, public accountability and a thoughtful and reasoned balancing of interests. That, after all, is the reason for an independent energy regulator.”

I think that’s a pretty good summary. Why do you have a regulator?

The logical last step in this bill, really, is dissolving the Ontario Energy Board, because frankly, you realize they’re of no use to you. They’re an impediment to you, actually, just dictating what energy policy will be, based on what lobbyists and other influencers want to do. Those lobbyists—Enbridge—want to take money out of your pocket. They want to raise your gas bill.

Adam Fremeth and Brandon Schaufele from the Ivey Energy Policy and Management Centre also noted “the government’s decision to override the OEB should have virtually no effect on affordable housing in the province.” In other words, they fundamentally disagree with the Minister of Energy in his arguments that he made earlier today.

Now I’ll quote an environmental organization. Environmental Defence wrote, “This legislation would be bad for new homeowners”—true enough—“bad for existing gas customers”—yes, because they’re going to pay more—“and bad for the environment. The only one that benefits is Enbridge Gas.”

Richard Carlson, energy director at Pollution Probe, said, “The OEB was clear, correctly in my opinion, that the energy transition is under way and there’s uncertainty about the future of natural gas use in the province.”

Also, “As far as I know, the government has never intervened this directly in trying to alter an OEB regulatory decision, and that should be incredibly concerning to everyone.”

I think those are all fair comments. You have a government that, in order to look after its friends at Enbridge, is going to rewrite the law to make the regulator irrelevant and make sure that you pay a higher bill. No wonder people are concerned.

I want to take just a few minutes, because I don’t have a lot of time left, to comment a bit on the other items that came up in the minister’s speech earlier today. The minister said he wants to protect consumer choice. Well, frankly, consumer choice hasn’t changed. People can put in gas furnaces if they want. Developers can put in gas furnaces if they want. There are two options. One is that the investors, who receive billions of dollars from their investment in Enbridge, can put in a little more money to pay for those hookups and pay themselves back over 20 or 40 years. If they think that Enbridge Gas will still be in the home heating business in 40 years, they could do that. They could charge money to a new homeowner, if the new homeowner actually wanted that, but I would say if the new homeowner actually looked at the economics of a heat pump versus a gas furnace, they would go with a heat pump because it’s a better deal—no getting around it.

To say that he’s protecting consumer choice—not the case. Consumer choice isn’t being removed. What’s being removed is the subsidy paid for by all the other gas customers—just to be clear, $300 per customer over the next four years. Not a good deal for those who are customers.

This OEB decision would increase costs: I’ve already gone through the evidence—not the case. In terms of homeowners, the OEB determined it would be a wash, a very minor change one way or the other, and frankly, other commentators have said it wouldn’t be of great consequence.

Predictable energy environment: Well, I have to say, I noted earlier about the fact that increasingly we will be integrated into the world market for natural gas. To the extent that we stay with gas, our costs become more and more unpredictable. We don’t know what’s going to happen. Frankly, to say that it would be predictable doesn’t make sense. I think you’re far better off setting up a situation in Ontario where people depend on energy generated in Ontario—electricity—rather than depending on gas imported from the United States. Again, about 60% of our gas is from the States, and we are competing with others around the world who might want to buy that gas at a much higher price. If you’re talking about predictability, a predictable energy environment, you want to move away from fossil fuels and you want to move away from natural gas.

He talked about a common-sense approach. Well, I think a common-sense approach is that existing gas customers don’t get stiffed with a bill—$300 over the next four years—to make Enbridge richer. Frankly, the common-sense thing to do would be to look at the OEB decision, which was a very reasonable decision based on an awful lot of evidence, and say, “Yep, that makes sense.” The best deal for new homeowners is to direct them towards an electric heat pump. The best deal for existing gas consumers is not to charge them more money, not to raise their bills. That would be the common-sense approach.

Let me see. There were some—oh, yes, I just have to note the minister’s satisfaction with his own home heat pump: that he didn’t freeze in the dark, that it kept him warm through the winter. Hey, that’s great.

Interjection.

As the parliamentary assistant to the Minister of Energy as well as the MPP for Glengarry–Prescott–Russell, it’s my privilege to echo Minister Smith’s remarks on the importance of the Keeping Energy Costs Down Act and what it means for Ontario families and businesses across the province.

In particular, I’d like to start with the changes to the leave-to-construct process that are proposed in today’s legislation, which are critical for Ontario’s municipalities—and this is especially true for rural communities like the one I represent.

As it currently stands, anyone looking to build a new home or business and connect it to a reliable, affordable natural gas supply in Ontario must get a leave-to-construct approval from the Ontario Energy Board if the expected costs of the pipeline project will be $2 million or above. However, this existing exemption, which has been in place for more than 20 years, is causing major delays for cities and towns all over the province.

Minister Smith and I have heard many concerns from municipal leaders in every corner of the province who want to make sure that new housing is built and who want to get their constituents off more expensive and emitting forms of energy like home heating oil. And they put forward a clear ask. It was pretty clear, specifically in support of raising the current leave-to-construct cost threshold.

I had the pleasure of attending the Rural Ontario Municipal Association—ROMA—conference last month, where I was able to hear the frustration first-hand from many municipal leaders. During this conference, I met with the South Central Ontario Region Economic Development Corp. They are a non-profit corporation owned by the counties of Brant, Elgin, Middlesex, Norfolk and Oxford and represent just under one million residents in the southwestern region of Ontario. This group of municipalities’ message was clear: that they support our government’s direction in modernizing the leave-to-construct process and recognize that the $2-million cost threshold established in regulation in 2003 is outdated and does not reflect the current costs associated with infrastructure projects today. The steps we’re proposing here today will update this threshold and support our government’s objective of building 1.5 million homes across Ontario, helping to expand transit, cutting red tape, and lowering the cost of access to our affordable, reliable and resilient natural gas system.

I also had the pleasure of meeting with the Eastern Ontario Wardens’ Caucus during last month’s ROMA conference. The Eastern Ontario Wardens’ Caucus is the voice for 103 rural municipalities representing approximately 800,000 constituents. The Eastern Ontario Wardens’ Caucus region spans over 50,000 square kilometres; for a reference point, that’s about the size of the province of Nova Scotia. They continue to see significant growth throughout this region, which brings with it increased pressure to develop the gas pipeline network.

Under the current leave-to-construct threshold, municipalities represented by the Eastern Ontario Wardens’ Caucus are seeing significant delays in getting natural gas to development sites. It’s just a fact that gas pipeline project costs in Ontario have significantly increased due to higher labour and material costs over the past 20 years, just like they have across Canada, and $2 million is no longer a meaningful threshold. Ontario is constantly growing and we need to ensure that every sector in this great province stays modern to ensure that we continue to keep shovels in the ground and create jobs.

Meredith Staveley-Watson, who is the manager of government relations and policy of the Eastern Ontario Wardens’ Caucus, reached out to the Minister of Energy’s office directly to highlight the importance of modernizing the leave-to-construct threshold. Madam Staveley-Watson states, “Modernizing these outdated regulations would reduce delays and costs for economic development initiatives including new industries seeking to locate in Ontario and create jobs ... transit projects, community expansion projects, housing developments, connections for low carbon fuel blending (e.g. renewable natural gas, hydrogen) as well as residential and business customer connections.”

While the opposition may wish to ignore the fact that Ontario’s economy is growing, our government understands how important this modernization is to Ontario families and businesses. To help modernize Ontario even further, if passed, the Keeping Energy Costs Down Act would allow for the development of regulations to exempt small pipeline projects that cost between $2 million and $10 million from leave-to-construct.

The Eastern Ontario Wardens’ Caucus also highlights this point of increasing the cost threshold to $10 million as it would closer align Ontario with other Canadian jurisdictions, like British Columbia, where the thresholds are $15 million for electricity and $20 million for natural gas. Ontario cannot stay in the past and we need to modernize so we don’t get left in the dust.

I was also honoured to meet with the Western Ontario Wardens’ Caucus, who also expressed their support for this threshold increase. The Western Ontario Wardens’ Caucus is a non-profit organization representing 15 municipalities, 300 communities, 250,000 businesses and 1.5 million constituents across rural western Ontario. The Western Ontario Wardens’ Caucus aims to enhance the prosperity and overall well-being of rural and small urban communities across the region, which have seen significant growth in the past decade, once again bringing additional pressure to build out the gas pipeline network.

Much like the previous organizations I mentioned, the Western Ontario Wardens’ Caucus recognizes that Ontario’s outdated regulations are causing the current leave-to-construct threshold to apply far more broadly than intended when it was established more than two decades ago. In fact, the Western Ontario Wardens’ Caucus have told us that rural western Ontario could lose out on significant opportunities for economic development in their region due in part to the current threshold which was never updated by the previous government.

While the opposition may wish to lose jobs and economic opportunities, our government understands that these lost economic opportunities are simply unacceptable. This is why Ontario needs to act now to modernize the Ontario Energy Board’s leave-to-construct process in order to bring reliable and affordable energy options to communities, homes and businesses in a more cost-effective and timely manner. We simply cannot lose any more jobs and economic opportunities in Ontario. These leave-to-construct changes proposed in today’s act will help to promote and protect economic development and job creation opportunities, especially in rural municipalities across the province.

When meeting with the united counties of Leeds and Grenville, Mr. Speaker, they discussed how their municipalities are facing delays and problems in ensuring natural gas expansion into commercial and industrial parks, as well as some residential areas. There are significant economic development implications to these delays and, of course, we know the only real solution is to improve the necessary infrastructure.

Like many rural communities, economic development in eastern Ontario and the united counties of Leeds and Grenville has been historically driven by a competitive tax structure, the availability of serviced land and an educated workforce. We know that today’s economic development efforts, however, require a more comprehensive and collaborative strategy, particularly in our post-pandemic era. That’s why our government is focused on supporting a broader regional network of infrastructure to reflect and support the reality of business, industry supply chains and trade. This is true in all rural communities across Ontario, like the united counties of Leeds and Grenville, who are constantly in competition with larger urban markets for commercial and industrial business.

Mr. Speaker, I hope it is well known that natural gas in Ontario is more affordable than any other sources of energy, such as oil and propane. Expanding natural gas makes the cost of living more affordable for all constituents but significantly for rural residents, especially those in northern Ontario where even high-efficiency heat pumps may not be an option on the coldest days of the year.

Not only is natural gas more affordable, expanding natural gas will also increase economic development and job opportunities within communities. Currently, natural gas plays an important role in meeting Ontario’s energy needs in that it’s currently the primary heating source for 70% of homes in the province.

The legislation our government is introducing today will make it easier to develop and connect to natural gas pipeline projects, which is not only essential for heating, but also contributes to overall energy efficiency and improving the quality of life for residents.

Ontario’s natural gas expansion initiative has made it more affordable to bring natural gas to underserviced rural communities. Specifically, the township of Huron-Kinloss expressed that the expansion has provided residential and commercial ratepayers in that municipality with a choice in how they meet their energy needs in an affordable manner. The clerk from Huron-Kinloss states, “The township has benefitted from natural gas expansion initiatives of the province, making it affordable to bring natural gas to underserviced rural areas. This has provided residential and commercial ratepayers with choices in how they meet their energy needs in an affordable manner, and helps to provide heat sources during even the worst winter storms.”

I would like to thank the township of Huron-Kinloss for their support for these types of initiatives to continue in a sustainable manner that makes it affordable to all citizens. This is why I urge all members to vote for the Keeping Energy Costs Down Act as natural gas is needed across Ontario, specifically for our rural constituents who rely on this affordable energy. Our government understands that it’s more challenging for rural customers to transition to natural gas, as it currently stands. That’s why Ontario is focused on bringing regulations forward that allow equal opportunity to natural gas supply that is built in a sustainable manner.

And it truly spans across the map. Another community that expressed natural gas as their top concern is the township of Warwick. As a municipality that currently has only some portions serviced, their local government often hears from residents and businesses expressing their interest in having access to both natural gas and three-phase hydro. Like many small rural communities, power and service availability are key drivers of economic development. Without these services, they simply can’t compete with other communities who offer these amenities.

I also met with the municipality of Red Lake, which is a northwestern Ontario municipality, not far from the Manitoba-Ontario border. This small community is poised for significant economic growth over the next decade as a result of several nearby mining projects. However, they do not currently have the capacity to provide the needed natural gas and electrical power service to support these projects or support the additional housing and services that will be required for the influx of workers and new residents that will be coming to their community.

Similar natural gas concerns were brought forward in my meeting with the township of Conmee, where natural gas is unavailable, as well as in the municipality of Oliver Paipoonge, where other energy sources like wood, electricity and propane are very expensive for heating and where residents are experiencing issues with insurance companies becoming increasingly reluctant to insure properties that use wood for heating.

Finally, I wish to talk about my riding, Glengarry–Prescott–Russell. My constituency office hears every day from my constituents how important affordability is, specifically how important affordability and reliability are when it comes to energy.

I was so honoured to hear from the township of East Hawkesbury, which, for those who don’t know, is one of the last communities before you hit the province of Quebec. Mayor Kirby expressed the need for the threshold change. He states:

“That these outdated regulations are causing the leave-to-construct to apply far more broadly than intended when it was established over 20 years ago. Due to increased regulatory and cost pressures, as well as inflation, virtually all gas pipeline projects are now greater than $2 million, rendering the threshold meaningless. That roughly 0.5 kilometres of pipe in urban settings now often exceeds the $2-million threshold. That modernizing these outdated regulations would reduce delays and costs for economic development initiatives including community expansion projects, housing developments, connections for low-carbon fuel blending (e.g. renewable natural gas, hydrogen) as well as residential and business customer connections. That based on OEB’s performance standards, this proposal would save approximately 507 months of regulatory process in addition to the time needed to undertake Indigenous consultation and environmental review and prepare an application to the OEB.”

I have barely touched on every community that has expressed the need for keeping energy costs down. Similar concerns were also shared during meetings Minister Smith and I had with municipal leaders during last year’s Association of Municipalities of Ontario, AMO, conference.

Our government knows that the Keeping Energy Costs Down Act is a step in the right direction to preserve customer energy choices, by ensuring that natural gas remains an available and affordable option for customers. Our government understands that supporting new projects in municipalities is critical to helping not just communities to grow, succeed, and thrive, but Ontario’s economy will prosper as well.

As we plan for a prosperous future, we must ensure we have an energy system that can deliver reliable and affordable power to all Ontarians, including those in small rural communities such as the ones I have talked about today. I urge the members of the House to think of every Ontarian across this great province and support the Keeping Energy Costs Down Act.

I listened intently to the member from Davenport, the opposition critic. I have to say, I’m not sure what kind of dream world the members opposite are living in, but to try to say that in rural communities like mine in Niagara West, it’s going to cost $300 to pay upfront for the cost of bearing the natural gas infrastructure, and to say they can simply all get heat pumps—again, we’ve gone through this. We’ve heard from the Minister of Energy about those days when he’s at a lower temperature, he needs his natural gas to kick in, he needs to see the assistance from other areas. And I know in my riding, that’s the exact same thing.

So the member opposite, does he genuinely not understand the meaning of cost avoidance? He kept going on about this $300 and how little it’s going to cost the people of Ontario to do this. So we understand he’s in favour of forcing this on the hard-working, first-time homebuyers of Ontario. How much is it going to cost communities in my riding if the NDP had their way and they forced this down their throats?

Keeping Energy Costs Down Act.

I would be interested on hearing the member’s take on why he believes the government is so forceful on this when they blame the Liberals for doing the exact same thing.

I’d like to start by echoing the energy minister, who paid homage and thanked the late Richard Dicerni, the past chair of the Ontario Energy Board, whom I first encountered as a federal deputy minister for industry.

Mr. Dicerni worked under Premiers Bob Rae, Mike Harris, Dalton McGuinty, and then he got recruited by Alberta Premier Jim Prentice and was asked to stay on by Alberta Premier Rachel Notley to serve as the head of the Alberta public service.

Former Premier Rae remembered him as someone who “served all parties with equal integrity and thoughtfulness, and believed strongly in the need for a strong, non-partisan public service.” I want to emphasize this because the OEB’s mandate includes protecting consumers and making decisions independently of the government of the day.

From the OEB website: “The chair of the board of directors is accountable ... for ensuring the independence of decision-making by commissioners and others that carry out the OEB’s adjudication work.”

The energy minister has promised to appoint a replacement for Mr. Dicerni this spring—someone who he says will implement the changes in Bill 165 and who will make sure that the OEB will “reinforce the government’s priority,” which the government will outline in a new natural gas policy statement. I trust that the honourable energy minister will choose an independent OEB chair, differently from some of the things that we’ve heard the Attorney General and the Premier say about how they want to appoint Conservative-friendly judges.

That gets to my first concern about this bill, Madam Speaker: Regulating our energy system and deciding what eventually gets charged to consumers can get pretty technical. The OEB decision and order on December 21 which triggered Bill 165 was 147 pages long. That’s a really good reason for separating all of this from politics. In politics, partisan decisions get made based on whatever the average voter has time to listen to, and if the devil is in the details, partisan politics isn’t the best tool for sorting it all out.

Now, an important part of the mandate of the OEB is to protect consumers and do it through independent adjudication. With this bill, the government of the day can intervene; the bill creates another path, a political path, to try to get decisions to go your way. Donations and access to ministers will now matter. And we all know that when things get out of control—our honourable colleagues from the government side know well that when things get out of control, you end up with things like the RCMP criminal investigation, like this government is dealing with now.

I want to talk now about regulated utilities. Just by way of introduction, a regulated utility is allowed to make a fair return on their investments, and they can do it off of what they charge their customers for gas. Because they can do that, we have to protect consumers not only from unfair gas charges, but from unnecessary investments, which they will have to pay for because the utility gets to make a return on it. Making thoughtful judgments about things like what a utility is allowed to spend money on and recover the cost from consumers, and what’s a fair profit, are why the OEB was created in the first place.

As I said earlier, this bill allows the government of the day to intervene, to call new hearings on any matter and to specify through regulation which persons of interest may provide submissions to such hearings. This is how the minister is going to be able to influence individual decisions of the OEB, and lobbying the minister will now become part of the process of deciding what we do or don’t do to protect consumers.

The government of the day is also going to be deciding, according to this bill and the regulations, what’s called the revenue horizon. So if some developer wants to put in a new subdivision and maybe wants to put in gas, the utility—whether it’s my own Utilities Kingston or Enbridge—has to calculate what it’s all going to cost and what the number of years of revenue is going to be, to be able to cover that cost. The developer is going to promise a certain number of natural gas customers, and if that calculation is all going to work out, we have to make sure that the new consumers are going to actually stay with natural gas.

We know that that is not going to be the case. The OEB is saying we should be expecting that people over the next 10, 20 or 30 years—potentially very quickly—are going to get off natural gas, because technology is constantly improving, because there’s climate change pushing us to try to do something to help our kids and grandkids, whom we love dearly.

The problem that the OEB is anticipating—they’re trying to protect consumers, because if infrastructure is not being paid for, doesn’t get paid for by gas consumers because there are less and less of them, the costs go to all the other existing customers; all the other households have to pay more. Currently, what happens is the cost of the new gas connection is spread out over 40 years of gas bills of existing customers. Probably most people in this chamber right now will pay for new gas infrastructure, and because we’re expected to pay for it over 40 years, it turns out that there’s no need for an upfront payment to make up the difference between what gas customers will pay for and what it actually costs. And remember, it’s Enbridge, or the utility, who will always have the right to recover the cost of natural gas infrastructure, plus interest and plus a fair profit.

What this government is risking by overturning the OEB decision is not protecting homeowners, because all of us have to pay if there’s infrastructure left over that’s not being used. This is why it’s not just a pay-it-forward system. That’s why something different is happening here. Because our economy has to switch from using fossil fuels to using electricity over the coming decades, we’re going to have to do that, and that’s what’s different about now.

The whole trigger of Bill 165 was a decision of the OEB to say that because more and more people are going to switch to heat pumps, and I’m really happy to know—if somebody is worried about whether heat pumps work, just ask the energy minister himself, who told us today that he has got a great heat pump system with an electric backup. He has no natural gas connection, and he’s fine, so he’s a great poster boy for heat pumps. That is why I think the OEB is justified in thinking that the transition could happen very fast to heat pumps.

The OEB also said there’s what they call a split incentive program, so if the developer doesn’t have to pay any money up front for a natural gas connection, which is what’s happening right now, they end up installing natural gas every time. What that means is that one technology for energy is favoured over all others. One technology is getting a subsidy, a subsidy which all of us pay for—except for the Minister of Energy, who doesn’t have to pay for that subsidy, because he’s not on natural gas. So the Ontario Energy Board is trying to protect consumers.

Now, the government has said—when the OEB thought about this for about a year, they had thousands of pages of testimony. They thought about it for a year. They had a lot of people providing input. They argued over should this, what they call, revenue horizon, the time over which we spread out the cost of new natural gas infrastructure on our gas bills—there was a discussion over whether it should be something shorter than 40 years. But the government, if you go look at the Environmental Registry of Ontario, has said that it wants to “initially restore the revenue horizon at 40 years,” which only makes sense if you think that in 30 or 40 years—let’s see, that’s 2055 or 2060—everybody is still going to be on natural gas. That just doesn’t make sense.

There were some discussions that maybe the time horizon should be shorter. Maybe it should be 20 years or 15 years, in which case one third or one half of the cost of a new natural gas installation would have to be paid up front. These are all different compromises that the OEB was looking at, but the government doesn’t seem to be interested. It wants to put the revenue horizon right back at 40 years.

Now, to be fair, the government does admit that the OEB in the future may change this time horizon when the government lets it. So what happens if the OEB changes that time horizon from 40 years down to something more reasonable like 20 or 15, assuming Bill 165 goes through? Well, then everybody will have to pay back the costs of gas infrastructure faster, and all the household monthly bills are going to go up. And so, what the OEB is saying is that we’d better give the option to pay up front so that the burden of paying for this infrastructure doesn’t go on all the other ratepayers.

Let me end by saying that there are things that the government could do to avoid subverting the independence of the OEB and to do something positive, rather than just kind of going backwards, driving backwards, as we often see them do.

Did the government look at supporting what they call a negative rate rider? That’s where, if somebody pays for their natural gas connection up front, they get a discount on their gas bill, because they already paid for the connection infrastructure and they shouldn’t have to pay for other people’s connections.

Did the government look at allowing the cost of cold-weather heat pumps or a borehole for ground-source heat pumps, something which is inexpensive when you’re building new? Did they look at putting that cost spread over many decades on a property tax bill or an electricity bill? Did they look at ensuring that consumers don’t have to pay an exit fee if they decide to stop using natural gas? These are all alternatives that this government could have been considering instead of just going backwards to what we had before, because backwards is not working.

Here’s my final point. It’s a bit of advice for this government. The last time the government of Ontario had a long-term energy plan was in 2017, the previous Liberal government. Now, the government has siloed initiatives going this way on electricity, that way on natural gas, another way on housing and environmental policy, and nowhere on climate change. Through Bill 165, the government wants to be able to give directives to the OEB to hold what are called generic hearings and to bring in all sorts of stakeholders, really different stakeholders that the government wants to bring in.

Why is the government backed into this corner? It’s because the Conservatives ditched the idea of a whole-of-government long-term energy plan where housing policy and industrial policy and transportation policy and electricity policy and climate change policy are all considered together and planned together. The government has not updated the long-term energy plan that our province had in 2017. It has not had a whole-of-government energy plan. It hasn’t done the hard work of putting the pieces of the puzzle together and planning for the future. Madam Speaker, this is at the core of why this government will fail the kids and grandkids we love.

I’m speaking today on the second reading of Bill 165, the Keeping Energy Costs Down Act, 2024. I believe the changes proposed by this act will aid in both protecting the interests of Ontario energy consumers and getting housing and energy infrastructure built faster. It will also play a role in ensuring that Ontarians and Ontario businesses will be able to access reliable and affordable energy now and into the future.

I am one of the two parliamentary assistants to the Minister of Energy. Over the past year and a half, I’ve been quite proud of what I consider our pragmatic and particularly technology-agnostic approach to energy policy. This government has built an electricity system in Ontario that I think gives customers choice and the opportunity to manage their energy use. We also, as has been stated multiple times, have one of the cleanest grids in the world.

We’ve shown our commitment to growing our clean energy advantage through early planning measures like requesting a Pathways to Decarbonization report from Ontario’s Independent Electricity System Operator. This report resulted in the government’s Powering Ontario’s Growth plan, which was released in July 2022. We also created the Electrification and Energy Transition Panel in 2021, which has provided critical recommendations to support the province’s first integrated energy plan.

Ultimately, our clean grid has become a clear competitive advantage in world markets. Countries and industries around the world are seeing the need to reduce emissions. Many consumers appreciate seeing a focus on clean energy. As Minister Smith described, Ontario is quickly becoming a leader in electric vehicle and battery manufacturing as well as green steelmaking, as demonstrated by the major investments made in our province by companies like Stellantis and Volkswagen.

I remember being particularly struck by an anecdote that I think Minister Fedeli gave us about the Volkswagen decision to relocate to St. Thomas. At the time, they had been looking at several other American jurisdictions which, from a price perspective, may have made more sense than St. Thomas. However, those jurisdictions were operating on coal, and Volkswagen felt that it would be somewhat hypocritical to produce electric vehicle batteries on a coal-based system, which ultimately led to St. Thomas in Ontario being chosen.

In Ontario, we’re doing what we can to support electrification through the province. To go briefly into an anecdote before I get into it more, lowering emissions is very important to many people in Waterloo region. Just last month, I was at an announcement regarding a sort of tripartite, federal-provincial-municipal funding grant to Grand River Transit. Thanks in part to that funding, about $5 million of which came from the province, Grand River Transit is getting 11 fully electric 40-foot buses and new charging units.

I was there for the unveiling of the first new hybrid bus in its new vinyl wrap design, which introduced me to several amateur transit enthusiasts, which I had heard rumour of, but I’d never had the pleasure of meeting any in person. I ended up sitting next to a young man who I believe was named Gordon, who regaled me for a solid 10 minutes with stats about the efficiency and benefits of the new electric buses, which I was very grateful for because, as is usual—with the exception, frankly, of this—I hadn’t actually prepared any notes on what I was going to say at this announcement. I more or less got up and just parroted what Gordon had told me, which worked out wonderfully. So there is no doubt that there are a lot of people who are excited by these new electrified transit options, and that Grand River announcement was a great example of three levels of government coming together in support of something.

Ontario’s population is, as we have commented on regularly, growing at an incredible rate, with us expecting to see millions more people just by the end of this decade. With growth comes demand. Now, for the first time since 2005, Ontario’s electricity demand is rising. The IESO’s most recent analysis indicates that electricity demand in the province could more than double by 2050. If demand doubles, as we expect it to, then of course, so must supply.

It’s absolutely imperative that we start now if we’re going to build the homes and the infrastructure to support the Ontario of the near future and provide the power that we’ll need to thrive. That said, Speaker, this rapidly expanding growth and associated calls on energy bring forth many thoughts and opinions from Ontarians. We need to make sure that all voices are heard, which brings me to my main point.

Last December, the Ontario Energy Board made a decision to bring the 40-year revenue horizon, which had been set back in 1998, down to a zero-revenue horizon, to take effect, by this point, in less than a year. This is a decision that, regardless of what one feels about it, will have a huge impact on families and businesses.

It appears that the OEB made the decision in the absence of some vital evidence from a number of major players and stakeholders that have a significant and important understanding of this sector. The decision was also made without consulting with IESO about a significant point, which is the impact that this decision would have on the province’s electricity grid, particularly the impact it would have given that this decision would essentially require a massive and sudden increase in electrification demands, which would have a huge impact on the province’s grid. That was not covered.

Herein lies the central purpose of the Keeping Energy Costs Down Act. It’s making some changes to the Ontario Energy Board’s regulatory processes to make sure that this kind of oversight doesn’t happen again.

I am a lawyer, but I was a criminal prosecutor and therefore I have, at best, only a nodding acquaintance with the complex law surrounding regulatory bodies such as the OEB. Although, that said, having sat here this afternoon, I was initially feeling somewhat hesitant about getting up and speaking on something that I have so little authority on, but I now feel completely comfortable, after having listened to several of the past speakers, to speak loudly and proudly about something that I don’t necessarily have any specific expertise on, because it appears to not be a prerequisite. Essentially, I don’t require any special knowledge to look at this decision and see what I would call a very concerning dissenting opinion.

So, Speaker, please bear with me as I, again, read out this quote from the dissent—it’s authored by Commissioner Allison Duff—as it’s lengthy but relevant. Commissioner Duff wrote, “I do not support a zero-year revenue horizon for assessing the economics of small volume gas expansion customers. I do not find the evidentiary record supports this conclusion. The CIAC comparison table filed by Enbridge Gas did not even consider zero within the range of revenue horizon options. Zero is not a horizon. It is fundamentally inconsistent with the intent of E.B.O. 188 by requiring 100% of connection costs upfront as a payment, rather than a contribution in aid of construction. There was no mention of zero in E.B.O. 188—yet a 20 to 30 year revenue horizon was considered. To me, the risk of unintended consequences to Enbridge Gas, its customers and other stakeholders increases given the magnitude of this ... change.”

Commissioner Duff continues: “The rationale provided in the majority decision to support zero is predicated on understanding the considerations and circumstances facing developers.” However, “this rationale is conjecture as no developers intervened or filed evidence in this proceeding. In contrast, a recent OEB proceeding regarding a proposed housing development in Whitby included intervenor evidence, oral testimony and submission by the affected developer group, enabling the OEB to render a decision based on the evidence.

“A zero-year revenue horizon implies an indifference as to whether these developers decide to connect, or not connect, any gas expansion customers. Is the scenario of no-new-gas-connections, replaced by construction of all-electric developments, feasible? For example, would electricity generators, transmitters, distributors and the IESO be able to meet Ontario’s energy demands in 2025?” She concludes that by writing, “I don’t know.”

Speaker, regardless of where one stands in the discussion around energy, every person in this chamber should be worried when one of the three presiding commissioners says that she was not presented with the necessary evidence to reach any decision, let alone such a drastic change as this, going from a 40-year revenue horizon down to a zero-year revenue horizon in less than a year.

Frankly, it’s not just me reading a dissenting decision and commenting as an armchair expert. Other experts themselves are concerned. I’ll point here to a column written by Aleck Dadson, the former chief operating officer of OEB, and Ed Waitzer, the former chair of the Ontario Securities Commission, who described their frustration with the Ontario Energy Board’s decision.

Mr. Dadson and Mr. Waitzer stated as follows: “In our view, adjudicators should focus on deciding specific matters in a transparent, fair and non-partisan manner. They should do so by applying a legal and regulatory framework to findings based on evidence and arguments presented in an adversarial process. And they should avoid trying to resolve complex policy issues, in which any decision will affect unrepresented stakeholders and other areas of concern. In short, adjudicative panels shouldn’t stray.”

The Keeping Energy Costs Down Act is proposing legislative changes that will ensure major OEB decisions with far-reaching applications, like this one, don’t happen again without adequate stakeholder consultation.

I’m going to change course for a minute here to talk briefly about regulatory agencies such as the OEB and to have a bit of background. Again, I go back to my feeling of inferiority about speaking about this, because it’s not my area of competence. However, what I have heard this afternoon has indicated that there’s a terrifying dearth of understanding about what regulatory agencies actually are present in this House.

Regulatory agencies are critical to the operation of modern society. Because of their importance, it’s essential that they be subject to effective governance. Essentially, regulatory agencies take very, very specific areas of practice that the courts, the government, the Legislature don’t have the time or expertise to delve into in order to establish their individual application in individual cases. So it becomes delegated. Essentially, every regulatory agency is exercising powers that were delegated to them by Legislatures, which is necessary in the complex specialized economy that we operate on. Ultimately, when you are delegating power from a Legislature to a regulatory body, the delegation entails carrying out the objectives of the legislation that was enacted, but frankly that also entails carrying out the government policies that inform the legislation. That’s what makes a regulatory body, particularly a government regulatory body, significantly different than, say, a court. A court is a judicial decision-maker, whereas a regulatory agency is a quasi-judicial decision-maker, but only in limited circumstances.

So given that regulatory agencies are tasked to some extent with carrying out government policies informing their enacting legislation, they’re not independent of the government, and they never will be. At the same time, however, I will say that being able to properly exercise that type of delegated authority does require a certain amount of independence, because you need to have that in order to operate as a quasi-judicial decision-maker, which requires them to have, as I said, that measure of independence. However, the truth is regulatory agencies are not courts. They are subject to oversight to varying degrees and in different ways, by the Legislature, by the government and by the courts. In other words, they’re subject to three sources of external governance already.

The OEB itself, specifically, was created by a statute, the Ontario Energy Board Act, 1998. It’s an independent regulator. If you go into the act, you will see that the stated purpose of the OEB is to serve the public interest. What’s interesting is we don’t have a very clear definition of the public interest, but frankly, that’s not uncommon in this type of legislation. At the same time, however, the OEB is required both in its governing legislation and also by the accepted practices of governance to be responsive to provincial government policy. That’s not an oversight or a problem; that’s literally how it was created and how it functions.

In doing what its primary purpose is, which—let’s be clear: The objective of the OEB is predominantly related to determining the prices to be paid for the transmission and distribution of gas and electricity in the public interest. So when the OEB is exercising this primary goal, which is approving these rates, it’s ultimately required to balance competing interests: residential consumers, large and small business, the government and utility shareholders. The key here that, again, this discussion so far has missed is that the OEB does not serve the interests of just one group, and to understand the OEB as some sort of consumer protection agency is a completely incorrect understanding of how it functions as a regulatory agency.

The OEB’s role and their purpose, as I said, is to balance interests, and those interests often compete, which is how we end up in the public interest, which is a grand final assessment of what is best for the general public, understanding that the general public, once you divide it, in itself has a number of competing interests. The thing is there’s no way that the OEB can appropriately balance competing interests in a situation such as the one we heard, where a decision was made without appropriate input or information from a number of industry experts and stakeholders in this area. So it was this nature of the decision, which, frankly—what it shows is not necessarily some sort of over-dominance on one position by the OEB but perhaps a failure of policy to make it clearer that the OEB as an institution needs to focus more on that type of public consultation and stakeholder recipient opinions than it currently does.

What we are proposing is that the OEB would have to conduct more public engagement to ensure that any impacted individuals and organizations have the opportunity to participate, because, as happened here, it’s clear that OEB hearings, while discrete events apply to individual cases, have the potential to tread into matters that have a significant public interest for a number of people. But the thing here as well is that you have to understand what is happening with this decision. When you’re looking at judicial review of a regulatory agency, what happens is that a court would take issue with how it essentially exercised its power, as versus the nature of the decision, which is why it requires government involvement in this case. So what the government is doing is not inserting its own decision in place of the OEB’s decision but remitting the decision that the OEB made back to the OEB with additional policy considerations that the government wishes the OEB to consider, which is entirely within the rights and power of the government—any government, regardless of political stripe—based on how the OEB functions, how any regulatory agency functions. So this is a completely appropriate way of doing it in order to hand that back.

But ultimately, we’ve talked about the OEB decision’s impact on a number of areas, and I think the one that I want to focus on more remains the housing, because the practical impact of this is to make the cost of gas connection something that has to be paid up front, as versus amortized over the current 40-year time period. So in the world of this decision, builders would be required to pay the entire cost at the time of the gas application and then bear that cost up until the point that the house sells, which substantially increases the total costs. We’re looking at between $4,500 to $6,000 per residential unit. So for a large subdivision, we’re driving that, theoretically, up into the millions. And that burden then transfers quickly to homebuyers as they pay up in the form of those higher prices for new houses.

What I have not heard here today is that home builders and residential construction professionals in Ontario have a long and, I would say, well-illustrated track record of supporting and incorporating climate change initiatives. Homes are ever more energy-efficient and the industry itself has followed and employed hybrid heating technologies. The key here, though, is this: Realistic timelines must be respected because we have seen what happens when ideology overrules reality. In fact, we’ve lived it. Ontario suffered under it. We won the 2018 election because of it, and we won’t be subjecting Ontarians to that again.

In the circumstances we face currently, which is an affordability crisis and a housing supply shortage, we simply must still support the pipeline infrastructure required to deliver low-carbon fuels such as natural gas, which is a readily available, reliable and competitively priced energy source. Doing so is absolutely crucial to maintaining affordability in the immediate and near future.

I also note there are a number of other spinoff issues that I haven’t heard mentioned. If we’re talking about natural gas hookups, we’re not just talking about heating, we’re talking about water heaters. We’re talking about gas dryers. Essentially, what the opposition would have us do—or, rather, have the OEB do—is immediately cut off the access to natural gas hookups. Because, yes, we can’t possibly put that type of financial burden on builders right now when we’re already struggling to make housing affordable.

You then also force your consumer into suddenly having to make a million different decisions about how they’re going to heat their home, how they’re going to heat their water, how they’re going to do their laundry—all, again, to support a purely ideological narrative.

Ultimately, I feel very strongly that this is the right course of action. It puts us in the realm of realism versus ideology, and I certainly will be voting in favour.

To the member across, thank you very much for your presentation. The OEB ruling could, in fact, make building new homes more affordable because it means you would have to build only one type of energy infrastructure—the electricity—and not require a very expensive and obsolete second one. And it will be obsolete at some point as we move towards a climate-neutral economy.

Reversing the OEB ruling could result in building methane gas infrastructure that will take about 40 years to pay for—infrastructure that will be delivering fossil fuels into the year 2064, Speaker, 14 years beyond the time when the world has agreed to achieve net-zero fossil fuel consumption; infrastructure that will be made obsolete by the ongoing energy transition.

To the member across: What in this bill will actually meet the needs of the citizens of Ontario tomorrow, because this bill is being passed and pushed forward today, but we need to plan for the climate emergency?