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Monthly Photo: After a nearly snowless winter, Toronto received one of its biggest snowfalls of the year just in time for spring.
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For this month’s Climate Legacy newsletter, we’re covering Ontario’s proposed Keeping Energy Costs Down Act. If you follow many climate newsletters, you’ve likely seen this name mentioned a lot since the act was announced on February 22nd.
At the risk of putting my reading comprehension into question, I’ll admit the first few times I read about this act I really didn’t understand it. Countless tweets and Facebook posts were telling me I had to call my MPP to fight back, but I didn’t feel like I had a good enough grasp on the issue to act on it.
If you’re in the same boat, this month’s newsletter is for you! In order to get it straight, we went down an information rabbit hole. Our research included a call with Adrian Currie, the Ontario Climate Program Manager for Environmental Defence, to learn more about the act and to share that knowledge with you.
You can find that piece below.
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What Our Members Are up to This Month
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Shift just released their 2nd annual Canadian Pension Climate Report Card. Want to see how your pension is performing? Check out the report.
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On April 16th, For our Kids is hosting a family-friendly action at BMO's Toronto Headquarters. Email gabrielle@forourkids.ca for details.
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The next For our Grandchildren '4RG Meets' virtual event will be May 13th, with a panel discussion from local environmental groups.
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On April 17th, learn about the Ethics of Sharing Great Lakes Water. You can sign up for the webinar here.
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If you haven’t called your MPP yet about Ontario’s Keeping Energy Costs Down Act, here’s why you should
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If you’ve been confused at all by news about the Keeping Energy Costs Down Act, you’re likely not alone. While the act itself may be a bit convoluted, its potential to harm our climate isn’t. If this act is passed, it will guarantee that natural gas will continue raising our energy bills and heating our climate for decades to come.
At the moment, the best thing you can do to slow this act is to call your local MPP and express your dissatisfaction with the bill (and Environmental Defence has created an excellent tool to help you do just that). However, if you don’t feel like you know enough about the act to speak out, the rest of this newsletter is dedicated to breaking down the act and its potential to make Ontario’s emissions even worse than they already are.
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So, what is the Keeping Energy Costs Down Act?
If your home is heated with natural gas in Ontario, you may not realize that a portion of your gas bill pays for natural gas connections in new homes. This subsidy costs Ontario gas customers more than $1 billion every five years, and averages to over $600 per household over that time.
This was set to change when, in December 2023, the Ontario Energy Board (OEB) made the decision to end the subsidy. This meant that as of January 1, 2025, existing gas customers would no longer be paying for new natural gas connections. When building, the developer would have to pay the upfront costs to install natural gas, just like any other heating option.
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This new legislation will determine how thousands of new Ontario homes are heated, and how that heating is paid for.
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Then, the story took a strange turn last month when the Ontario Government announced the Keeping Energy Costs Down Act, which would essentially undo the OEB’s December Decision and bring back that natural gas subsidy. Hearings were quickly scheduled for mid-April, less than two months after the Act was even announced.
“They’re looking to pass this legislation as fast as possible,” says Adrian Currie, the Ontario Climate Program Manager for Environmental Defence. “In a democracy you’re supposed to consult with your citizens, consult with the opposition parties, and work together to put together a bill that reflects everybody’s best interests. And then you can pass legislation.”
Climate Legacy spoke with Adrian Currie to get a better sense of just how unusual this new act is, and why so many climate organizations are organizing against it. As you may expect, the issues with the act go far deeper than how quickly it’s being adopted. Specifically, Climate-conscious Ontarians’ worry that the Keeping Energy Costs Down Act stifles competition and will lock in natural gas pollution for decades to come.
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Because its installation costs are subsidized and most builders are familiar with installing it, natural gas is seen as a sort of 'default' heating source in Ontario.
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Stifling Energy Competition
Overturning an Ontario Energy Board decision is unprecedented. The OEB is an independent regulator whose job is to set the rates for electricity and natural gas, and monitor their performance.
“They don’t support one party or the other – they’re simply there to look at affordability and costs for Ontarians,” Currie explains. Creating an act to undo one of their decisions “has never been done before.”
It was the OEB’s mandate to keep energy affordable that led to their December decision. With Ontario poised to make a major energy transition in the coming years, newly installed natural gas connections could very well be defunct before they are even halfway through their lifespan.
Natural gas is at risk in part because many Canadians have grown wise to how its pollution affects our health and contributes to climate change. As far as affordability goes, natural gas is also being eclipsed by heat pumps. Heat pumps are already the most affordable source of heating for most Canadians, who could save between $700 and $3,500 on annual heating bills once they are installed.
Where natural gas has a significant advantage is in installation costs. Without the subsidy, setting up a heat pump is roughly twice as expensive than installing natural gas. With the subsidy, connecting natural gas to a new home feels almost free, since you’re paying for it incrementally over decades rather than all at once. Natural gas is also an older technology, meaning far more tradesmen have experience installing it in homes. These factors have artificially kept natural gas heating as a sort of ‘default’ energy source in Ontario, even as other northern countries such as Norway heat more than two-thirds of their homes with heat pumps.
Eliminating the natural gas subsidy would introduce more competition into the home heating market. If natural gas costs roughly $4,400 to install, rather than $0, more buyers will weigh the benefits between natural gas and other options such as heat pumps instead of leaping for the option that’s cheapest up front, but most expensive (and polluting) in the long term.
“The fact of the matter is that heat pumps are cheaper to heat homes than gas furnaces,” says Currie. “By overturning the OEB’s decision, they’re going to increase energy bills for existing (gas) customers, and for new homeowners.”
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Installing a heat pump can save homeowners thousands of dollars over time, but the up front cost is greater than natural gas.
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Where does Enbridge fit into this?
In most coverage of the Keeping Energy Costs Down Act, you’ll likely see Enbridge mentioned in the same breath as the proposed bill. That’s because unlike Ontario energy customers, Enbridge stands to make a huge windfall if the OEB’s decision is overturned.
“Enbridge is a monopoly,” says Currie. “Something like 99 percent of Ontarians who have gas use Enbridge. There are no other stakeholders who started a campaign to reverse this decision.”
Because Enbridge is so deeply invested in Ontario natural gas, anything that could cause customers to look at new heating options affects their bottom line. And as Currie stated, before the Keeping Energy Costs Down Act was announced, they’d already pushed to have the OEB’s decision overturned by quickly taking the OEB to court.
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A pivotal moment for global natural gas
Natural gas has long flown under the radar while most climate action focuses on coal and oil. Despite its green-sounding name, natural gas is predominantly made up of methane, which is responsible for about 16 percent of global emissions, and is 28 times more potent than carbon dioxide at trapping heat in the atmosphere.
We cannot meet our emissions targets by simply swapping out oil for methane, and while Canada clings to methane (we’re currently tied for sixth on the list of top 10 global emitters), other nations are starting to take meaningful steps away from it.
In February, the U.S. announced they would pause handing out new permits for liquefied natural gas (LNG) export terminals. This was a major leap that not only has the potential to keep a catastrophic amount of pollution out of the air and atmosphere, but could also sidestep a major increase in energy costs. Heat pump adoption is also on the rise globally, not only in North America and the EU, but notably, in China as well.
Ontario miring ourselves in more years, or even decades, of fossil fuel heating is a step backwards, and one that will cost us.
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Despite its 'clean-sounding' name, natural gas is polluting our air and contributing to climate change.
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What You Can Do
Currie is optimistic about the chances that like Bill 23, which targeted protected greenspace and wetlands, the Keeping Energy Costs Down Act will be defeated with time and concentrated action.
At its current state in the Legislative Assembly of Ontario, there’s not much individuals can do beyond calling their MPPs to express their dissatisfaction with the act, so Adrian Currie and Environmental Defence are encouraging exactly that. They’ve created a helpful page that not only quickly connects you with your MPP over the phone, but also includes a number of talking points to make the conversation easier. You can find that tool at this link.
In the meantime, Currie suggests another helpful action – monitor your gas bill, and encourage friends and family to do the same:
“They will notice that their gas bills are going to go up, and they will know why. It will be an average of $600 over the next five years,” he says. “Enbridge has $16.5B in profit, they don’t need government assistance.”
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Take care,
Eric Murphy
Communications Coordinator, Climate Legacy
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Monthly Poem: The Crow
A fool once caught a crow
That flew too near even for his stone’s throw.
Alone beneath a tree
He examined the black flier
And found upon its sides
Two little black doors.
He opened both of them.
He expected to see into
Perhaps a little kitchen
With a stove, a chair,
A table and a dish
Upon that table.
But he only learned that crows
Know a better use for doors than to close
And open, and close and open
Into dreary, dull rooms.
- James Reaney (1949)
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Have any questions about the climate crisis or what seniors can do to make a difference? Send us your questions and we'll answer them in next month's newsletter.
Let us know any climate news or events in your area and we'll be sure to share them here too. Thank you for reading!
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