The Ontario board made the right decision, based on evidence, to lower our energy bills. The Ontario government has made the decision, based on maybe backroom lobbying, to raise our energy bills in order to give Enbridge Gas a continued subsidy. Four million customers are going to see their energy bills go up so that Enbridge can continue to have their infrastructure investment subsidized. I think that is the wrong direction that we should be going in Ontario, and I urge this government to rethink this bill.

We also know that it really doesn’t work when we have politicians coming in and meddling with decisions that should be made by experts and independent electricity regulators. They have made the decision. It was a wise one. We support it. And instead, this government is heading down the path of listening to the Minister of Energy’s chief of staff, a former lobbyist for Enbridge, a staff person for Enbridge, and they are giving Enbridge what looks like a sweetheart deal. I have a lot of concerns with that.

Just before Christmas, the Ontario Energy Board issued an important decision affecting the gas bills of nearly four million Ontarians. The Ontario Energy Board ordered natural gas distributor Enbridge Gas to bear the costs of expanding its gas infrastructure, rather than imposing the costs on you and me. This is at a time when Ontario is moving away from fossil fuels. Any plan to expand natural gas infrastructure carries enormous risks, not just to the environment but also to our bills. So the OEB, the Ontario Energy Board, did the right thing and decided that Enbridge’s proposal was not in the interests of consumers.

How did the Conservatives respond? Well, the Conservatives responded with this bill, which is called the Keeping Energy Costs Down Act but really should be called the “hike your energy bills act.” That is what it really should be called. That’s the bill that we’re debating today. This bill reverses the OEB’s decision and will continue to permit Enbridge to hike energy bills and make life more expensive for everybody. In essence, this energy bill is bad for new home owners, it is bad for existing gas customers and it is bad for the environment. The only people who benefit from this bill are Enbridge Gas. They are the only people who benefit from this bill.

Right now, your gas bill includes a charge worth hundreds of millions of dollars each year to cover Enbridge’s cost of expanding gas pipelines into new developments. On December 21, the Ontario independent energy regulator decided to put a stop to this subsidy, because it raises energy bills for existing gas customers and new home buyers, while also increasing financial risks for the whole gas system.

Ending this subsidy would save gas customers more than $1 billion over four years in avoided pipeline subsidy costs, which comes to more than $300 per customer. Ending this subsidy would also encourage developers to install heat pumps in new homes, which provide much cheaper heating and cooling, instead of gas. Ending this subsidy, in essence, would be win-win-win: It would lower energy bills for existing customers, it would lower energy bills for new home buyers, it would lower carbon emissions and it would avoid even more costs down the road when homes heated with natural gas inevitably convert to heat pumps.

There is, however, one loser: Enbridge Gas. Enbridge Gas stands to lose millions of dollars in profits. It is lobbying hard against the energy board decision and it has clearly been successful in doing that. Investing in gas pipelines in 2024 for heating is financially foolish, because they will become obsolete and a massive cost to all current and future customers as we move away from gas heating.

The Ontario Energy Board has made the right decision, based on evidence, to lower your energy bills. This government is choosing to take us on a terrible course. It’s making the wrong decision, based on backroom lobbying, in order to raise your energy bills to benefit Enbridge and nobody else.

We have seen this government bend under public pressure and reverse decisions like opening parts of the greenbelt for development. I believe it is time to do that again. I encourage you to contact your local MPP, and urge them to do the right thing for affordability and vote against this bill.

I’m now going to go and explain a little bit more about the bill in detail. In essence, this bill amends the Ontario Energy Board Act to allow the government to prescribe a revenue horizon, i.e., the number of years of presumed revenue used when assessing a natural gas rate application. The prescribed revenue horizon is used for determining (a) the economic feasibility of a proposed capital investment—for example, whether the costs can be reasonably recovered within the revenue horizon; or (b) a contribution in aid of construction.

The government says it will set a revenue horizon of 40 years, extending well past 2050, which is Canada’s target date for achieving net-zero carbon emissions. I don’t know why this government would want to give a subsidy to Enbridge to invest in infrastructure when, based on what the Canadian government is doing, this infrastructure is going to be a stranded asset because we’re moving to different energy sources. It doesn’t make any sense at all.

There are other things that people have raised, that stakeholders have raised about this bill and I’m going to read them now. Let’s start with what the Ontario Energy Board had to say about this. In its recent report, Ontario’s energy transition panel made recommendations that seem inconsistent with Bill 165. It says:

“The Ontario Energy Board should employ all tools within its existing mandate to implement activities consistent with Ontario’s goals for a clean energy economy and the requirements of the energy transition for Ontario....

“The Ontario Energy Board 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.”

That’s the Ontario Energy Board saying that we need to transition to clean energy, and this government is doing the exact opposite of this by asking customers to subsidize Enbridge’s gas expansion activities in infrastructure.

This is what ResCon had to say. This is Richard Lyall. He argues that the Ontario Energy Board decision will drive up home prices. He also failed to acknowledge the stark reality that Ontario is not yet prepared for electrification and must remain dependent on natural gas for some time longer. That’s the home building industry.

Then we have Ian Mondrow, an energy and policy expert at Gowling. He wrote, “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.”

In essence, what he’s saying is why is the government meddling in independent decisions that are made by electricity experts to the benefit of customers and to the benefit of the entire electricity grid?

“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”—makes sense.

This is what Adam Fremeth and Brandon Schaufele from the Ivey Energy Policy and Management Centre had to say: “Overriding an independent economic regulator is a big deal”—it’s a big deal. “It is not something to be done lightly. The government’s decision explicitly undermines the Ontario Energy Board and threatens credibility of future energy investment in the province. Moreover, it’s not obvious that this move is in Enbridge’s long-term interests. Once a precedent to effectively overrule the regulator is established, there’s little to stop future governments from using the tactic to different ends, perhaps against natural gas infrastructure.”

This is what Environmental Defence had to say: “This legislation would be bad for new home owners, bad for existing gas customers, and bad for the environment. The only one that benefits is Enbridge gas.”

This is what Richard Carlson, the energy director at Pollution Probe had to say: “The Ontario Energy Board 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 concerning to everyone.”

There’s a lot of people in Ontario who work in the electricity industry who are pretty concerned about what this government is doing. They’re concerned about the meddling in an independent decision. They’re also concerned about this government’s move to side with Enbridge over the costs of gas prices and energy prices in Ontario. It’s pretty concerning.

Now, I’m going to go a little bit into the details of the bill and provide some further analysis. As I mentioned, this bill is in response to a December 21, 2023, decision and order by the Ontario Energy Board with respect to Enbridge Gas’s ongoing 2024-28 rate-setting proceedings. The Ontario Energy Board set some of the principles governing who should pay what during the transition from fossil fuel heating to net-zero sources. Currently, existing gas consumers absorb the capital costs of new natural gas connections based on the premise that these costs will be recovered from the new customer over the subsequent 40 years. Since Canada has mandated a phase-down of natural gas heating to reach carbon net zero by 2050, the Ontario Energy Board determined that it was too risky for existing consumers to front the costs of new gas connections that might become stranded assets. It ordered Enbridge to reduce its revenue horizon from 40 years to zero, meaning that new gas customers or developers making the choice on behalf of a future new home buyer would need to pay for their own gas connection up front if they chose to install gas. It almost gives you less choice instead of more choice.

The Ontario Energy Board noted that reducing the revenue horizon would not only reduce costs and risks for existing gas consumers; it would make the cost of natural gas connections visible to developers and new home buyers who might be better served by choosing an electric heat pump, whose lifetime operational costs are lower than that of a gas furnace. We have been proposing to the Ontario government that they move forward with bringing in the heat pump option for a low cost or no cost to consumers so that we can transition away from fossil fuel use into a cleaner energy system. It is what other provinces are doing, and it is what we should be doing here in Ontario as well.

Either way, the Ontario Energy Board decision ensures that the cost of installing a new gas connection would be paid by those who benefit from that choice and not by other consumers who don’t benefit. That makes a lot of sense to me.

The next day, the Minister of Energy, probably under some heavy lobbying by Enbridge, announced that he would overturn the Ontario Energy Board decision, arguing that it would drive up cost of new homes by an average of $4,400 per gas connection where the developer has chosen natural gas heating.

Let’s also point out the Minister of Energy’s chief of staff is a former lobbyist for Enbridge. It’s useful to point that out. Nothing weird happening there, no backroom deals happening there—

Interjection: Nothing to see here.