The Little-Known Ontario Subsidy That Promotes Fossil Fuel And Contributes To The Housing Crisis.

Image source: Catherine McQueen, Getty Images

EDITORIAL COLLECTIVE – It’s hard to find and keep up with all the “perks” built into our energy-industrial complex. For instance, hHow many of us knew that Ontarians have been subsidizing natural gas pipelines while the world is desperately trying to reduce the use of fossil fuels? A provincial subsidy has been specifically benefiting the bottom lines of both Enbridge Gas (Ontario’s largest natural gas supplier) and housing developers.

In other words, the provincial government is quietly sabotaging its own purported climate change actions and contributing to the housing crisis.

In Ontario we have a body called the Ontario Energy Board (OEB). It is mandated to “protect the interests of consumers and deliver public value that contributes to Ontario’s economic, social and environmental development.”

An OEB decision yet to be ratified by the Provincial government, would end a subsidy for methane gas pipelines in new construction developments, effective 2025. But the very morning after the ruling, the Ford Conservative government announced their intention to overturn the decision through legislation.

The subsidy is worth approximately $4,500 per home on average to developers. The OEB decision would mean lower energy bills for existing gas customers, greater affordability for new homebuyers and less CO2 in the atmosphere. Enbridge Gas has asked municipalities to lobby the Ontario Government to pass legislation reversing the decision.

At the same time, Enbridge offers exactly the same amount, $4500, to lower income households to switch to a heat pump. So Enbridge is not losing any money nor doing anyone any favours; it’s just passing on what it gets from Ontario.

What if the Ontario government gave every household, regardless of being an Enbridge customer, that $4500 and lower income households 2 x $4500? That would be a real investment in climate change mitigation.

This moving money around makes no sense as we must rapidly adapt and mitigate at level by reducing fossil fuel emissions and battle a housing crisis at the same time. Natural gas is no longer the cheapest way to heat homes in the short term and in the long term, we must get off fossil fuels altogether. Electric heat pumps have the lowest greenhouse gas emissions, unlike natural gas which causes one-third of Ontario’s CO2 emissions. Heat pumps are more efficient and heat well in cold climates.

Forgoing gas totally in housing development eliminates the cost and time of bringing gas pipes to the site and to each home’s gas meter. It also eliminates the labour costs of gas fitters to install gas pipes inside each home. It would be no more costly for developers to install heat pumps instead of gas furnaces and induction stoves rather than gas stoves. Developers generally do not pay for heating equipment costs. It’s the homebuyer who pays directly through equipment rental agreements. Developers save money by avoiding the costs and time of those gas connections. And homeowners too save money because heat pumps are roughly three times as efficient as gas furnaces and have no fixed monthly charges for a connection, which for gas connection are more than $310 annually.

Added to all those costs is money taxpayers and municipalities pay fossil fuel companies for daily living and operation of services like public and fleet transportation and heating public buildings, money that flows out of the community to continue spewing carbon into the atmosphere.

The OEB decision will help lower energy bills, reduce housing costs and encourage heating systems consistent with local municipal climate targets and plans. See City of Peterborough’s climate plan here. Municipalities cannot achieve net zero without eliminating the use of fossil gas for building heating.

“The Commissioner of Competition recently commenced an inquiry into Enbridge’s deceptive marketing under the Competition Act. Enbridge has been telling Ontarians that gas is the cheapest way to heat homes, which is not true. Heat pumps are the cheapest systems to use… The decision would lower energy bills for existing gas customers by ending the subsidy and cutting capital costs. The savings would be over $2 billion over the five year term of the decision (approximately $600 per customer).”

So watch for Enbridge Gas to roll out opposition to the OEB effort since it sees loss of profits and market share.

We urge you to contact local city Councillors urging them to learn about and support the OEB decision. Writing to your MPP, the Minister of Energy and the Premier may also help. Eliminating this taxpayer subsidy to Enbridge – a private enterprise – will be a win-win-win for existing gas customers, for new homebuyers, and for achieving our local and national climate crisis targets.

The Little-Known Ontario Subsidy That Promotes Fossil Fuel And Contributes To The Housing Crisis. © 2024 by Editorial Collective in the Greenzine is licensed under CC BY-NC-ND 4.0 

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