Ontario’s Bill 165 Explained: How the Bill Overruling the Provincial Independent Energy Board Influences Gas Industries
Author
Nadine Ivanov
Hello! My name is Nadine Ivanov (She/Her) and I am the researcher behind this post. I currently reside in Toronto, Ontario, Canada, which is the traditional territory of many nations including the Mississaugas of the Credit, the Anishnabeg, the Chippewa, the Haudenosaunee and the Wendat peoples. I am extremely grateful that my family was able to immigrate to these lands, which is still home to many diverse First Nations, Inuit and Métis peoples, and that I can live and learn on these lands. As a first-generation Canadian with my family immigrating from Russia, Kazakhstan, and Korea, I recognize the strength and sacrifice my family endured to move overseas and create a life for myself filled with opportunity. My family instilled values of being aware of the political and social issues that surround your local community and this value led me to develop my passion for local climate justice. Through this post, I hope to emphasize the potential injustices residents of what is currently Ontario may face with the newly proposed Bill 165 by the Ontario Provincial Government.
What is Bill 165?
In December 2023 (1), the Ontario Energy Board (OEB), Ontario’s independent energy regulator, ruled in the public interest to end massive ratepayer-funded fossil fuel subsidies to Enbridge Gas, the distribution company that serves over 75 percent of homes in what is currently Ontario (1). Ratepayer-funded fossil fuel subsidies are the energy subsidies that homeowners pay to Enbridge Gas to install gas connections to their homes. Ontario homeowners have historically paid off gas connections running to their homes for over 40 years, but with this ruling, starting in January 2025, the onus would be on developers to pay these fees, in full and upfront (2). This ruling was made in hopes of developers having to transition to more sustainable and economical alternatives, such as heat pumps. However, one day after this ruling, the Government of Ontario promised to overturn the Ontario Energy Board’s decision, and has now tabled Bill 165, The Keeping Energy Costs Down Act.
This Act will amend the Ontario Energy Board Act, 1998 which outlines the price, quality, and reliability of electricity services provided to homeowners in Ontario (2). These amendments include reversing the OEB’s decision by allowing Enbridge Gas to go back to charging homeowners for gas connections over the next 40 years, and stripping away some of the OEB’s independence by enforcing that the Board holds additional public hearings for any forthcoming decision made by the OEB (2). The provincial government claims that the amendments proposed in Bill 165 will make life more affordable for Ontario residents, in hand with building 1.5 million homes in the next seven years, and powering Ontario’s economic growth (3).
What Bill 165 also means for Ontarians
Higher costs for new homeowners in the future:
A point of contention is the issue of cost, as Ontario’s provincial government has historically advocated for the use of natural gas, arguing that fuel is more affordable than electric heat (4). However, the government fails to recognize or mention the high retrofitting costs of a future shift away from fossil fuels and the costs of addressing pollution (2). Instead, the Ontario government is using claims that natural gas is the most affordable option as a means of continuing their investments into the development of natural gas facilities and connections. As gas is becoming less competitive with the increased popularity of the electrification of homes, homeowners with gas hookups may switch to other cost-effective and sustainable energy sources, leaving gas infrastructure as a costly asset burdening Ontario homeowners (5).
Less transparent decision-making processes from the government:
Although the government justifies their amendment of leaning towards the government setting energy policy, and not the Ontario Energy Board as ensuring fair and informed hearings are taking place, many believe that this is not fully true. The ruling made by the OEB in December 2023 was not made lightly, with a year-long decision-making process prior to the ruling. This process involved going through tens of thousands of pages of documents in public hearings alongside a breadth of stakeholders, interviews with experts across the energy industry, and deliberation with proper consideration of the provincial government’s policies (2).
Bill 165 would also give the provincial Minister of Energy authority to require the OEB to conduct a “separate hearing on any matter of public interest that could arise during an OEB proceeding” (3). The government says this is meant to improve public participation in regulatory changes, but rather it opens the door for more back-room lobbying by industry, which reduces both transparency and accountability (5). Similarly to the development of the Greenbelt, we are seeing the provincial government prioritize the business of a handful of developers, and in this case, Enbridge, at the expense of Ontarians and their surrounding environment.
Moving further away from the energy transition we so desperately nee
This Bill is also a considerable step back for so-called Ontario, hindering the electrification of homes, the building of a sustainable development plan for the province, and meeting net-zero targets nationally. So-called Canada has pledged to reduce its greenhouse gas emissions to net-zero by 2050, and with 18% of national greenhouse gas emissions stemming from the building sector, and more than 77% of building emissions stemming from heating, the electrification of buildings and homes will play a crucial role in meeting these climate goals (7). Bill 165 removes any incentive for developers to install electrical heat pumps, which are currently the cheapest and lowest-carbon heating option for homes in Ontario (6). Additionally, Bill 165 is expanding infrastructure for methane-heavy natural gas connections to homes, which the Ontario Energy Board argues will result in “an overbuilt, underutilized gas system” as the world moves towards renewable energy (2).
In 2022, global sales of heat pumps grew almost 38 percent from the previous year in the European Union. At the same time, heat pumps outsold gas furnaces in the United States (7). Currently, heat pumps already meet more than 10 percent of heating needs in buildings and homes globally, and this number is set to steadily increase (7). Additionally, electric heating is already commonly used in homes across so-called Canada, as more than six million homes use electric heating, and more than 850,000 of those homes are using heat pumps (7). If Bill 165 is passed, the provincial government can reset payment plans for homeowners with natural gas connection costs to 40 years, meaning Enbridge Gas will be allowed to charge homeowners until at least 2065 (2), 15 years beyond the 2050 net-zero emissions target, taking both the province and country steps back from where we should be.
With electrification technology already being implemented throughout so-called Canada, it is clear that Bill 165 has been introduced for the benefit of corporations and industrial partners of the government. This Bill will be passed at the expense of homeowners in so-called Ontario, democratic and transparent governance in the province, and meeting net-zero emissions targets. It sets the stage for an ongoing battle between renewable and non-renewable energy sources in the province, clearly showing that environmental and sustainability issues are not a priority for the provincial government.
References
- Enbridge. Energy Solutions for municipalities [Internet]. 2024 [cited 2024 Apr]. Available from: https://www.enbridgegas.com/en/municipalities#:~:text=As%20Canada%27s%20largest%20natural%20gas,Ontario%27s%20homes%2C%20safely%20and%20reliably
- Syed F. Ontario government fulfills promise to overrule independent energy board – in favour of Enbridge Gas [Internet]. 2024 [cited 2024 Apr]. Available from: https://thenarwhal.ca/ontario-overrules-energy-board-enbridge/
- Keeping Energy Costs Down Act, 2024.
- McClearn M. Ontario tables bill to overrule provincial energy regulator on natural gas decision, says it would raise cost of New Homes [Internet]. The Globe and Mail; 2024 [cited 2024 Apr]. Available from: https://www.theglobeandmail.com/canada/article-ontario-moves-to-overturn-natural-gas-decision-by-energy-regulator/#:~:text=Ontario’s%20Progressive%20Conservative%20government,heating%20oil%20and%20other%20options.
- Bonasia C. “Unprecedented” bill to overrule Ontario gas regulator alarms experts [Internet]. 2024 [cited 2024 Apr]. Available from: https://www.theenergymix.com/unprecedented-bill-to-overrule-ontario-gas-regulator-alarms-experts/
- Heat Pumps Pay Off, Unlocking lower-cost heating and cooling in Canada. Canadian Climate Institute; 2023 p. 1–55.
- Poirier M, Cameron C. The Case for Building Electrification in Canada. The Transition Accelerator. 2023;
