On February 22, the Ontario government introduced legislation that, if passed, would reverse a December 2023 decision by the Ontario Energy Board (OEB) that would have significantly increased the costs of building new homes across the province. Reversing this decision will prevent an average of $4,400 being added to the price of new homes, or tens of thousands of dollars being added to the price of a home in rural Ontario.
"Since day one our government has taken action to lower energy costs, including by cancelling the previous government's cap-and-trade carbon tax and cutting the gas tax," said Todd Smith, Minister of Energy. "While previous governments implemented schemes that led to skyrocketing energy prices, we're using every tool in our toolbox to keep costs down for people and businesses. The Keeping Energy Costs Down Act will protect future homebuyers from increased costs and keep shovels in the ground on critical infrastructure projects."
The Keeping Energy Costs Down Act, 2024 would, if passed, give the province authority to reverse the OEB decision to require residential customers and small businesses to pay 100 per cent of the cost of new natural gas connections upfront. These costs would have previously been paid over forty years. Once the government introduces a Natural Gas Policy Statement, a recommendation of the Electrification and Energy Transition Panel's final report, it will require the OEB to consider this issue again.
The government will also appoint a new chair of the OEB this spring with the expectation that the board and commissioners conducts appropriate consultation - in line with the proposed legislative requirements - before reaching decisions that support the objective of an affordable, reliable, and clean energy system.
"Natural gas will continue to be an important part of Ontario's energy mix as we implement our pragmatic plan to invest in and bring online more clean nuclear energy," added Minister Smith. "Unlike the previous government, which saddled families with sky-high hydro bills, our government is taking a thoughtful approach that keeps costs down for people and businesses and delivers energy security."
To ensure that future decisions reflect and support the priorities of the people of Ontario, the Keeping Energy Costs Down Act would require the OEB to conduct broader engagement to ensure impacted organizations and sectors have an opportunity to participate in proceedings. It would also enable the government to require the OEB to conduct a separate hearing on any matter of public interest.
The proposed legislation would also maintain the existing treatment of gas transmission projects that are critical to the province's economic growth by ensuring new customers do not have to incur upfront financial contributions and update the OEB's Leave to Construct process to respond to concerns raised by municipalities around supporting critical housing projects and local economic development initiatives.
Quick Facts
- The Ontario's Electrification and Energy Transition Panel's (EETP) final report, Ontario's Clean Energy Opportunity was released on January 19, 2024.
- The EETP's final report stated that natural gas is an important resource, fulfilling three essential and distinct functions in Ontario's energy system today as a fuel for electrical power generation, space and water heating, and industrial and agricultural industries.
- 3.8 million households in Ontario currently use natural gas for home heating, representing about 70 per cent of Ontario households.
- Currently natural gas meets 39 per cent of Ontario's energy demands, while electricity meets 21 per cent.
- Through the Clean Home Heating Initiative Ontario is deploying hybrid heating solutions which pair electrically powered air source heat pumps with a conventional natural gas furnace to reduce energy costs and emissions by leveraging Ontario's world-class clean electricity grid. Maintaining access to natural gas ensures reliable access to heat on the coldest days of the year.
- To help Ontario families and businesses keep costs down, the government extended the gas and fuel tax rate cuts through to June 30, 2024. Along with the rate cuts previously in place, this extension is expected to save households $260 on average since the cuts were first implemented in July 2022.
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