Blog Post

No New Energy Initiatives in 2019 Ontario Budget

Overview

On April 11, 2019, the Ontario government introduced its first budget. Notably, the budget does not include any significant new initiatives or measures aimed at energy policy. Instead, the energy-related discussion in the budget repeats previously-issued announcements (see here), and provides some updates. The following paragraphs summarize the main energy-related pronouncements in the 2019 budget.

On the topic of electricity costs, the 2019 budget highlights the government’s plan (through Bill 87) to update the refinancing of the global adjustment costs that were deferred through the Fair Hydro Plan. The government also repeats its plan to “hold average residential electricity bill increases to the rate of inflation” and indicates that it plans to introduce an enabling regulation effective May 1, 2019. On industrial electricity pricing, the government highlights its current consultation process (see here) to review existing programs and then design and develop “new policies to manage electricity costs and help Ontario businesses grow and compete.”

On the topic of conservation programs, the 2019 budget repeats the government’s plan (see here) to phase out “less effective” conservation and energy efficiency programs, with an attendant saving of around $440 million.

The 2019 budget repeats the government’s message that governance and operations at the Ontario Energy Board (OEB) can be improved, and points to the newly-proposed amendments to the Ontario Energy Board Act, 1998 (see here) that will reform the structure and operations of the OEB.

Finally, the 2019 budget confirms that the current government supports the goal of further consolidation of electricity distributors in Ontario. The 2019 budget document indicates that consolidation “could lead to reduced electricity rates and improved services for electricity customers through innovation and efficiency gains” and points to possible benefits of private-sector expertise in the sector. This government had previously announced that reductions in transfer taxes to encourage consolidation and private‐sector involvement in the Ontario electricity distribution sector would be extended to the end of 2022. The new announcement in the 2019 budget is that the government intends to use any transfer tax collected for electricity rate relief.