Good morning, everyone. I’m going to be splitting my time today with my very energetic parliamentary assistant, the member from Renfrew–Nipissing–Pembroke, otherwise known as the Yak.

I rise today to begin third reading of Bill 165, the Keeping Energy Costs Down Act, 2024. To start, I think we need to talk about why this bill is so timely. We know that families across Ontario, right across our province, are dealing with some tough challenges these days. My colleagues and I talk about it every day in question period, with question after question about the punitive carbon tax. All families, not just those here in Ontario, but across Canada, are being hit every day by the terrible Liberal carbon tax, which is driving up the price of everything—but not just that; they’re also dealing with the impacts of high inflation, and they’re dealing with high interest rates right now. That means higher costs at the grocery store, and it means higher costs at the gasoline pump. As you’re fuelling up your vehicle, it means less money to put away for a rainy day, and it means higher mortgage costs.

Let me tell you, Speaker, the last point is really a sore spot for so many families, including those who don’t even own a home yet. So many people are striving for that dream of home ownership. They’ve saved up for a down payment in many cases, they’ve had their eye on a new house, and they’ve done everything right. But they’re dealing with a government in Ottawa that just continues to raise the price of living, which makes it all feel out of reach—and they’re doing it every April 1. That’s no April Fool’s joke. It’s causing a lot of pain for families right across our country.

That’s why we’re doing things differently here in Ontario than the way the federal government is operating in Ottawa. What we’re doing here includes things like Bill 165, which, if passed, will help keep housing and energy costs down and provide some real relief for Ontario families.

Speaker, as you probably know, one of the biggest drivers of Ontario’s increasing demand for energy is our government’s plan to build 1.5 million new homes by 2031. It’s critical that new homeowners have options available to them, including for affordable home heating. For some families, that will be electric or hybrid heating, where you pair your natural gas furnace with an electric heat pump, just like our Clean Home Heating Initiative has done in communities across the province. But for many others, they’re looking for the reliability and affordability of natural gas. I don’t think that should come as any surprise, because natural gas is already the primary heating source for about 70% of households in Ontario. Seven out of 10 homes are heated by natural gas in our province. With affordability already a top concern for the people of Ontario, we can’t make a family who’s accessing their preferred home heating option pay even more.

That’s why I was extremely disappointed in the Ontario Energy Board’s decision from December of last year that would have effectively increased the cost of new homes. Under this decision, they—and apparently the NDP and the Liberals, based on their votes at second reading in the Legislature, anyway—would like to see families pay 100% of the cost to connect to the natural gas grid upfront. That would lead to thousands of dollars being added to the cost of new homes. Those are costs that, today, are currently spread out over 40 years—just like a mortgage, amortizing it over 40 years, making it much more manageable for families buying their first home or moving to a bigger place as their kids grow up. In fact, according to the OEB’s own decision, the cost of a new home would increase by about $4,400, on average, across the province, and it would cost significantly more than that—in the tens of thousands of dollars—for those in rural Ontario, on farms and residences in more rural and remote parts of northern Ontario, in particular. That type of change wouldn’t just be a huge departure from the realities of our energy system, but it’s also a huge departure from the historical practice which has been in place since 1998.

This bill, Bill 165, would keep costs down by allowing these costs to be paid over 40 years instead of all up front. Going from 40 to zero was the decision of the OEB, which is far from rational and pragmatic. What we’re doing is, for the time being, going back to the 40-year amortization period. That’s a win for the taxpayer. It’s a win for the business owner. It’s a win for the farmer. It’s a win for the homebuyer. It’s a win for everyone in Ontario.

Ontario, like the rest of Canada, is already grappling with high interest rates and inflationary pressures, along with the impact of this terrible federal carbon tax. So how can we, in good conscience, take any action that would raise prices on the backs of first-time homebuyers and moms and dads who are looking for a bigger space for their growing families? As a government elected with a mandate to rebuild Ontario’s economy, keep costs down for people and businesses and build the homes our growing province needs, we simply can’t and won’t stand for this. We definitely can’t stand for it when we’ve had well over 200 requests from Ontario municipalities to expand access to natural gas in their communities. I want to say that again, because that’s almost half of the municipalities in Ontario that are actively calling for more natural gas in their communities.

Bill 165 would allow us to reverse this decision, to protect future homebuyers and keep shovels in the ground. But reversing the decision alone isn’t enough if we don’t address the issues that got us here in the first place.

While the Ontario Energy Board makes hundreds of decisions every year, this particular decision raised concerns instantly about public engagement in the decision-making process. In fact, in the decision, one commissioner noted that the decision on natural gas connection costs was reached without input from a number of key stakeholders. Home builders, contractors, farmers—the people and businesses who actually build the homes and feed our province—weren’t able to provide input on a decision that affects their industry drastically. That same commissioner also noted that this split decision, despite having a significant impact on electricity demand, was reached—this is really important—without input from the province’s Independent Electricity System Operator, the system manager for our electricity grid in the entire province. To quote that dissenting commissioner: “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? I don’t know,” was the answer.

As Ontario’s Minister of Energy, I find it extremely concerning to read that quote, especially when our government is focused on a pragmatic approach to supporting the electrification of home heating, transportation and manufacturing, with a focus on keeping costs down and our energy reliable so we can keep the lights on in our province and continue to see the record investment that we’ve seen in our province.

Part of our pragmatic approach—and we started this a number of years ago—was the establishment of an Electrification and Energy Transition Panel. This panel was put together to advise our government, our ministry, on the highest-value short-, medium- and long-term opportunities for the energy sector to help Ontario’s economy prepare for electrification and the energy transition. While the OEB was aware that the panel’s report was to be released around the same time of their decision, they decided to go beyond their role as an energy regulator and make a major energy policy decision without waiting for the government’s response stemming from that panel’s report. The final report, as I say, was due around the same time as the decision was made, just before Christmas. It’s unfortunate, because the panel’s recommendations and our government’s response will have a significant impact on the sector and Ontario’s planning decisions going forward.

Ultimately, more than 200 stakeholders, Indigenous partners and communities, government departments and agencies, and members of the public provided input to that panel. So all of the stakeholders that you would want participated in that panel’s discussions and deliberations. In the end, all that work resulted in serious and some very well-thought-out recommendations for the ministry and our government to consider.

For example, one of the key recommendations of the Electrification and Energy Transition Panel’s report, Ontario’s Clean Energy Opportunity, was for the government to issue a natural gas policy statement, providing clear direction for the long-term role of natural gas in Ontario. As laid out in the report, natural gas will continue to play a critical role as a source of energy in the province for a number of years to come. That recognizes the fact that any major shift away from this fuel source would require a significant build-out of our grid that could not be accomplished quickly.

We’re in the process of building new nuclear facilities at Bruce Power; small modular reactors at Darlington and other new non-emitting generation through competitive processes through the Independent Electricity System Operator; and battery storage facilities procured competitively through the IESO to ensure that those renewables that we have on the grid now and those that we will add in the future are able to provide electricity to the grid in an efficient manner and provide stability for electricity customers around the province.

No one would think that going from a 40-year period to zero years and adding thousands of dollars to the price of a home during a housing crisis is a pragmatic or responsible approach, which is the way that we’ve taken on the energy file. Even one of the OEB commissioners recommended only reducing the horizon to 20 years. When talking about the horizon, they mean the revenue horizon for paying for these pipelines.

Given these concerns, our government saw an opportunity to continue our work, originally started back in our first mandate, to modernize the Ontario Energy Board. In 2019, my predecessor, the member for Kenora–Rainy River and the Minister of Northern Development, took steps to enhance trust and transparency in Ontario’s energy sector by restructuring the OEB’s governance and operational framework. That was part of our work under the Fixing the Hydro Mess Act.

As you will recall, this government was largely elected in 2018 to a massive majority government because of the failed energy policies of the previous Liberal government. Everyone remembers the tripling price of electricity during their 10 years in power.

Today, we’re continuing to fix the hydro mess that was left to us. We’re continuing that work. And we’re responding to the concerns raised in the December 2023 decision by proposing legislative changes that would ensure major OEB decisions with far-reaching implications on our constituents, like on natural gas connection costs, don’t happen again without adequate stakeholder consultation and without all the facts about government policy priorities.

Specifically, the Keeping Energy Costs Down Act requires the Ontario Energy Board to conduct broader engagements when conducting both natural gas and electricity hearings.

If passed, Bill 165 also gives the government the authority to introduce regulations that require the OEB to notify and invite participation of testimony from specific stakeholders or economic sectors. For example, if we know a decision is going to have a major impact on a particular sector, like transit operators, low-income service providers, the construction industry or a particular government agency like the Independent Electricity System Operator, we would require, or could require, the OEB to notify them and invite their participation in the hearing.

These changes would also provide the government, through the Minister of Energy, with the authority to require a separate hearing, more formally known as a generic hearing, on any matter of public interest that could arise during an OEB proceeding. This would further ensure that Ontarians’ voices are heard on matters that will affect their families, businesses and communities. That was a change that was very much welcomed during the committee hearings that were held here at the Legislature last month.

Just take the comments of the president of the Ontario Greenhouse Alliance, Jan VanderHout—he was here last night; I saw him with TOGA. He presented on behalf of Flowers Canada. It’s amazing—my goodness—the success that Flowers Canada is having, with something like $325 million worth of flowers exported to the US last year. It’s a growing industry. Maybe my parliamentary assistant should buy some for his wife. He probably hasn’t done that in a while.

Jan VanderHout from Flowers Canada said, “This legislation will ensure that Ontario’s energy transition is practical and inclusive of a broader range of economic and social impact considerations. The consideration was poorly given to many of the rural areas, and like my colleague at OFA,” the Ontario Federation of Agriculture, “we were also not consulted—not to my knowledge, certainly—before this OEB decision was made.” He went on to say, “It really becomes important that they understand the nuances of the various aspects of industry and agriculture in the province and, certainly, I think that was entirely missed, because the dynamics of the high-rise buildings here in downtown Toronto are significantly different than the challenges that we face in rural Ontario, which is a large area.”

Jan, as usual, is absolutely right. If the OEB is making a decision that’s going to have an outsized impact on families and businesses in rural Ontario, then they need to make the effort to hear from those stakeholders in rural parts of Ontario.

But it’s not just rural versus urban—representatives from the OFA, the Ontario Home Builders’ Association, the Association of Power Producers of Ontario and more also highlighted the importance of broad consultation to ensure decisions don’t have unintended consequences, especially on government priorities, including getting more affordable homes built. It’s also important to keep other priorities in mind, including making Ontario an attractive place to do business, and access to affordable and reliable energy is also a critical part of our sales pitch.

That’s why to further protect consumers, we’re also proposing to make regulatory changes that would prohibit customers from being required to financially contribute to the construction of certain gas transmission projects. These proposed changes would preserve the historical treatment of natural gas transmission projects under OEB jurisdiction when those projects are specified by government direction. Maintaining the current approach, where customers are not required to make upfront payments, will ensure Ontario continues to attract critical investments in sectors like the greenhouse and automotive industries in southwestern Ontario.

Bill 165, the Keeping Energy Costs Down Act, doesn’t stop there. It also proposes to streamline the leave-to-construct process for small energy projects, making reliable and affordable energy options available to communities, homes and businesses in a more cost-effective and timely manner. Today, anyone looking to connect a new home or business to Ontario’s natural gas system with a pipeline must obtain leave-to-construct approval from the OEB if the expected cost of the project will be $2 million or greater. The OEB reviews the application and grants leave to carry out the project if it’s deemed to be in the public interest to do so.

Over the past couple of years, we’ve heard concerns from mayors and councils and agricultural organizations at places like the Rural Ontario Municipal Association and AMO conferences from all across the province on this leave-to-construct issue, and they’re frustrated that the $2-million threshold for small pipeline projects that was first set back in 2003 hasn’t been updated to reflect inflation and increased construction costs, like the ones we talked about earlier. They’re concerned that even the smallest projects to connect something like a new housing development would no longer receive the exemption, as was the original intent. The changes we’re proposing would allow the government to prescribe conditions in regulation to exempt small projects from leave to construct, while also maintaining the crown’s obligations related to rights-based consultation with Indigenous communities, ensuring opportunities remain for their input into proposed new projects.

Through Bill 165, if passed, the government intends to introduce regulations to streamline the leave-to-construct process by exempting small pipeline projects that cost between $2 million and $10 million, provided the crown’s duty-to-consult obligations with Indigenous communities have been met.

I want to stress that both the government of Ontario and the OEB are ensuring that Indigenous communities have a continued opportunity to bring their views forward and to inform any decisions that may impact their rights or their interests. These changes would improve the timelines for pipeline construction and expansion by cutting red tape and expediting the installation of natural gas to rural, remote and underserved communities while also helping to support a reliable and cost-effective provincial energy supply. Project applicants would continue to contact the Ministry of Energy early in the planning process and provide the ministry with a description of the proposed project, including the need for the project, its terminal points, characteristics such as the length and diameter of the pipeline, and the proposed route. Along with any additional information requested, the Ministry of Energy will assess whether the proposed project triggers the duty to consult. Where it is triggered, the OEB would then determine whether the crown has adequately discharged its duty to consult prior to granting such applications.

I also want to be clear that for all projects, whether there is a leave-to-construct proceeding or not, proponents will continue to require authorizations from Ontario ministries and municipalities. This will include permits and other approvals relating to technical, safety and environmental requirements needed to support the construction of the pipeline.

All of this work is going to build on the important action that we have taken to move Ontario forward as a leader in economic growth and clean energy, including:

—cutting the gas tax through December of this year;

—saving families an additional $312 a year through our Ontario Electricity Rebate;

—investing an additional $50 million in the Ontario Electricity Support Program, which is delivered by the OEB, to help those who need help the most;

—launching the Clean Home Heating Initiative, with incentives of up to $4,500 per household to roll out electric air-source heat pumps paired with existing natural gas furnaces;

—scrapping the previous Liberal government’s cap-and-trade carbon tax that punished people and businesses; and

—introducing legislation to protect the people of Ontario from any future carbon tax, and a whole lot more.

All of this has made us increasingly attractive to business and industry, with companies and investment surging into our province at a record rate. It brings us so many benefits.

Just take the Honda announcement from two weeks ago that was landed following a lot of work by Minister Fedeli and Premier Ford and other members of our team: This $15-billion investment will create the country’s first comprehensive electric vehicle supply chain, and it’s all going to be located right here within our provincial boundaries. That includes four new manufacturing plants—not one, but four: a new stand-alone battery plant at Alliston, a new EV vehicle assembly plant, a new cathode active material and processing plant, and a new separator plant, as well. This investment, which was a number of years in the making, represents a vote of confidence in Ontario’s status as a leading jurisdiction in the global production and development of electric vehicles, batteries and battery materials.

It’s just one example of the growth that we’re experiencing in Ontario. In addition to Honda, Ontario is already working, as you know, with Stellantis in Windsor, Volkswagen in St. Thomas, Umicore in Loyalist township, all of whom are making great progress on their multi-billion dollar investments.

We’re also seeing major investments in green steelmaking in places like Hamilton and Sault Ste. Marie, with Dofasco and Algoma Steel. While the traditional steelmaking process uses coal, one of the largest sources of emissions in the province, our government is working with the federal government and the steel industry to end coal use and electrify their operations to support the production of green steel, fuelling our growing automotive sector.

As a result of these investments and our housing goal that I mentioned earlier, for the very first time since 2005, almost 20 years ago, Ontario’s electricity demand is on the rise. For almost 20 years, we’ve either seen electricity demand stay the same or even diminish as manufacturing jobs fled the province for other jurisdictions. In fact, an expert analysis from the IESO, our system operator, shows that electricity demand could more than double by 2050 if we stay on the rate that we’re on right now. That’s why we’re taking action now—actually, it’s why we took action a couple of years ago to ensure that we have the energy that we know we’re going to need down the road.

Last summer, I released the comprehensive Powering Ontario’s Growth plan. This plan lays out our road map to provide families and industries with the reliable, low-cost and clean power that we need to power Ontario’s future. Powering Ontario’s Growth builds on the key strengths of our system, including our diverse supply mix made up of nuclear, hydro, natural gas, other non-emitting resources like renewables and, soon, batteries that are currently being built across the province. It also builds on the significant action our government has already taken to meet demand through the end of the decade with major projects and procurements, including a $342-million expansion of our energy efficiency programs that are offered through IESO and, as I mentioned, energy storage procurement, which is actually the largest such procurement in Canada’s history and one of the largest in North America.

This plan also builds on Ontario’s international leadership on nuclear power and small modular reactor development. It builds on our legacy as the birthplace of the Candu reactor—which is still among the safest, most reliable reactors in the world today—and our reputation as a world-leading source of life-saving, cancer-fighting medical isotopes, which are harvested from our Candu reactors at the same time that they’re producing almost 60% of the province’s electricity every day. It’s an amazing success story—part of our nuclear advantage.

Nuclear power, as I mentioned, makes up more than half of our current electricity supply in Ontario. It’s a source of affordable and clean power. Nuclear energy is why Ontario is able to maintain one of the cleanest electricity grids in the entire world. That’s why expanding our province’s nuclear fleet is a key component of our plan to meet future demand. That includes innovative new solutions like the SMR, as I mentioned, that’s currently under construction at the Darlington OPG site. In fact, we’re making progress on developing the country’s first commercial-grid-scale SMR at that Darlington nuclear site. It’s not just Canada’s first; it’s not just North America’s first; this will be the first SMR producing electricity on the grid in the entire G7 or the Western world.

As a result, we’re attracting incredible interest from around the world, helping us open new export opportunities for our province.

I had the opportunity yesterday morning, down at the Invest Ontario offices at the Eaton Centre, working alongside our former colleague Bill Walker, who’s now the head of the OCNI, the Ontario coalition of nuclear industries—I was thinking “Canada” was in there. They had a group in from Brazil. They’re looking at our SMR and our expertise in nuclear to deploy in their jurisdiction.

But we didn’t stop there. Through Powering Ontario’s Growth, we’ve also begun the planning and licensing for three additional SMRs at the Darlington site, to bring that total to four. Speaker, 1.2 gigs of clean, reliable, affordable electricity is on its way, supporting the 65,000 people who work in our nuclear sector in Ontario.

In addition to our SMR expansion, we’re working with Bruce Power to begin pre-development work for the province’s first large-scale nuclear station build in more than 30 years. This new supply will complement the extensive work that’s already going on in the sector, including the significant progress that’s being made on the refurbishments and major component replacements that are happening right now, ahead of schedule and on budget, at Darlington and also at Bruce Power. The refurbishment of Candu reactors at Darlington and Bruce represent the largest clean energy projects in Ontario, securing a steady supply of clean baseload power through our province.

Our government is supporting OPG’s plan to proceed with the next steps toward refurbishing Pickering nuclear station’s B units. That plant is operating at an incredible rate right now. It’s because of the expertise from the skilled trades, our power workers, and those who work in our nuclear sector.

I’m not exaggerating when I say that Canada, and Ontario in particular, is an international leader, a powerhouse, when it comes to nuclear power. Nations around the world are looking to our province to leverage our expertise as they make decisions on their own SMR deployment to help them achieve energy independence and meet their climate goals. That was apparent during my recent nuclear trade mission to Dubai. I attended COP28. I attended the World Nuclear Exhibition in Paris, France, as well and met with folks in the United Kingdom, in London, who are also looking to our expertise on the SMR as they build out their plans for small modular reactor deployment in the UK.

Beyond nuclear energy, Powering Ontario’s Growth is also continuing our competitive approach to procuring a diverse set of resources to meet our growing capacity and energy needs. Just like with home heating, natural gas generation is part of our pragmatic approach to keeping the lights on. It’s our insurance policy, an approach that has been reinforced by the Independent Electricity System Operator, whose natural gas phase-out study stated that natural gas generation plays a crucial role in the reliability of the electricity grid and provides a range of services that no other resource today can provide on its own.

In short, while most of the time Ontario can meet its electricity generation with nuclear and hydroelectric—which we’re also investing in refurbishing—and bioenergy and renewables, we need to face the reality. We need a pragmatic approach, one that keeps energy affordable, keeps the heat on and helps families afford their first home.

Interjection.

I remember your yak story—protect the yak.